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Susan Combs††•††Texas Comptroller of Public Accounts

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Hold Procedures
Section 5 – Warrant Hold Offsets

Comptroller Offset Procedures

Overview

The Comptroller’s office is authorized to offset held warrants against state debts and tax delinquencies. Payees on hold are notified by the Notice of State Warrant(s) Held that their held warrants will be applied to their debt 30 days following the date of the notice if no action is taken. If the payee on hold has a bankruptcy record in TINS, the payee will receive a Bankruptcy Notice of State Payment(s) Held. Held warrants issued to payees who have filed bankruptcy are not eligible for offset if the Comptroller’s office has been properly notified of the bankruptcy.

When a warrant is offset, the Comptroller’s office updates the payee’s liability amount in TINS and deposits the funds with the Treasury for the hold source agency. The agency is then responsible for transferring the funds, as described below. If there is any amount remaining after the warrant has been applied to the liability, the Comptroller’s office will issue a separate payment to the payee, called an "overage" payment.

Multiple Holds

Texas Government Code, Section 403.0551 (f), authorizes the Comptroller’s office to determine the order in which offsets are applied when the payee is indebted to multiple hold source agencies.

When a debtor is indebted to multiple hold source agencies, warrants will be offset in the following order:

  1. The Office of the Attorney General (child support delinquencies)
  2. The Comptroller of Public Accounts (tax delinquencies)
  3. Other liabilities in date order, as determined by the oldest date in the HOLD DATE field on the PYHOLD screen in TINS. (If multiple holds share the same HOLD DATE, offsets will be made according to the oldest date in the EFF DATE field.)

Deposit Voucher

After 30 days from the warrant issue date, the Comptrollerís office credits the warrant to the hold source agency by preparing a USAS deposit voucher (D document). The Comptrollerís office also sends the hold source agency an itemized report for each deposit voucher that identifies the entities and amounts to be credited against its state debts.

The following coding block is used to prepare the offset deposit voucher:

Agency T-Code/Title Appropriation Number COBJ Appropriated Fund/Agency Fund/PCA
XXX
(Hold Source Agency)
188/Deposits for Suspense or Funds Held for Others 93211 3790 0900/9016/93211

Each time an offset is processed, the Comptroller updates the liability amount on the Payee Hold Change (PHDCHG) screen in TINS. When an offset results in the elimination of the state debt, the Comptroller deletes the hold record to prevent unlawful holds and offsets on other state payments. If the offset warrant is greater than the debt owed, the Comptrollerís office will issue an overage payment to the entity.

Journal Voucher

Once the offset report is received by the hold source agency, the agency is responsible for transferring the funds from the warrant hold offset account into the correct appropriation and fund to ensure that the debtor is immediately credited for the offset funds.

The hold source agency must transfer funds from the warrant hold offset account to the correct appropriation and fund within 15 business days from the date the offset deposit is received. Hold source agencies must then update their internal systems to ensure that the debtor is immediately credited with the offset funds.

Transfer the funds from the warrant hold offset account with the following coding block with a Journal Voucher (J Document), Batch Type 2:

Agency T-Code/Title Appropriation Number COBJ Appropriated Fund/Agency Fund/PCA
XXX
(Hold Source Agency)
188R/Deposits for Suspense or Funds Held for Others 93211 3790 0900/9016/93211
XXX
(Hold Source Agency)
195/Record Deposit of Revenue in Treasury XXXXX XXXX
(Revenue Object Code)
XXXX/XXXX/XXXXX

If the funds are being offset against a debt owed to local funds, the hold source agency must process a voucher to generate a direct deposit payment to itself for deposit to its local account. The agency shall use the agency’s payee number that is based on its repeating agency number, using the appropriate direct deposit mail code and Document Type 9, Batch Type 4. The coding block is shown below.

Agency T-Code/Title Appropriation Number COBJ Appropriated Fund/Agency Fund/PCA Payee Number
XXX
(Hold Source Agency)
222/Vouchers Payable – Refund of Revenue XXXXX XXXX
(Revenue Object Code)
XXXX/XXXX/XXXXX 3XXXXXXXXXN XXX

Funds must be transferred from the offset account within 15 days of receipt of the offset deposit and report. Refer to Reporting of State Debts and Hold Offset Procedures (APS 028) for more information about this topic.

Updates in TINS

Because the Fiscal Management Division must rely on the information in TINS when processing offsets and adjusting liabilities, it is critical that the liability amounts be as accurate as possible. If a debt has not been reduced in TINS to reflect the current balance owed by the payee, a hold source agency may receive more funds than they are owed and will have to refund the difference to the payee. If the debt has not been increased in TINS to reflect the most current balance owed by the payee, that payee could be released from hold prematurely; and future payments for that debtor could be issued to the debtor in error.

Although the Fiscal Management Division updates TINS when offsets are processed, it is critical that hold source agencies also update any internal systems that maintain hold records reported to TINS.

Child Support Offsets

The Office of the Attorney General (OAG) has the authority to hold all payments due to a child support liability and determine the application (release or offset) of these payments.

The OAG uses two specific release reason codes when releasing a held warrant on hold due to child support debts:

  • Reason code 020, for warrants that are released to the OAG to be offset
  • Reason code 021, for warrants that are released to the payee with the OAG’s consent

When warrants are released to the OAG for offset, they are deposited into Treasury by the OAG instead of the Comptroller’s office. The OAG will also issue any overage payments that are necessary as a result of their offsets.

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Susan Combs
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.state.tx.us
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