Guidelines for the Disbursement of Funds

Advance Payments

Payments should be made after the goods/services are received, so advance payments are an exception to this.

A state agency may not pay for goods or services before their delivery to the agency, unless the advance payment is necessary and serves a proper public purpose. Specific exceptions to this prohibition are:

  • Books: An institution of higher education may pay for books and other published library materials before receiving them if reasonably necessary for the efficient operation of the institution's libraries. Books and published library materials are the only items that may be paid for in advance with higher education assistance (HEA) funds.
  • Cost Savings: A state agency may make an advance payment if significant cost savings would result from making the payment in advance. For help in determining cost savings, please utilize the Discount Cost Effectiveness Calculator on the Fiscal Management Extranet (FMX) website of the Comptroller's office.
  • Expedite Delivery: A state agency may make an advance payment to a federal agency or another state agency for goods purchased from the agency, if the advance payment will expedite delivery of the goods.
  • Lease Costs: An advance payment of annual lease costs for office or building space can be made by the Texas Facilities Commission (TFC) acting on behalf of a state agency, if an early payment discount can be obtained.
  • Leased Space: A state agency may pay rent for leased space no more than seven days before the payment due date.
  • Purchase of Real Property: The Comptroller's office will process a purchase voucher for the purchase of real property anytime during the seven days before the closing date, if the agency submitting the voucher agrees to not deliver the warrant to the seller until the closing date.
  • Rent: The TFC may make an advance payment of rent for a distribution center, an office space or another facility required to accomplish TFC's functions.
  • Specialized Goods/Services: A state agency may make an advance payment to a vendor selling specialized or proprietary goods or services to the agency if the vendor requires the payment to be made in advance.
  • Subscriptions: A state agency may pay the cost of a periodical subscription a maximum of six weeks before it begins.
  • Tuition: A state agency may pay tuition directly to an institution of higher education not earlier than six weeks before the class begins. However, a state agency may not reimburse a state employee for tuition before the class begins.

A state agency that makes an advance payment to a vendor is responsible for ensuring that the vendor provides the goods or services to the agency and for pursuing appropriate legal remedies to recover the payment if the vendor fails to provide the goods or services.

All advance payments should not exceed 6 weeks in advance. If payment is required more than 6 weeks in advance the reason should be documented, e.g. a discount is provided or to reserve high demand space.