The Bailment Contract form (74-190) is an agreement between a state agency and the Comptroller’s office that allows the Comptroller’s office to release payroll warrants to the agency before the pay date. The bailment contract applies to twice-monthly, monthly and any postdated payroll, retirement, payroll deduction and reimbursement warrants.
Texas Government Code, Section 403.072(b), requires the Comptroller’s office to hold payroll warrants until payday. However, Texas Government Code, Section 403.072(c), provides for the Comptroller’s office to adopt rules allowing agencies to receive warrants prior to the pay date for timely distribution. The bailment contract accomplishes this with the condition that the warrants are not distributed until payday.
The Comptroller’s Treasury Operations Division (Treasury Operations) will not honor warrants presented for payment prior to the issue date on the warrant and will report such occurrences to the Fiscal Management Division.
If a first or second violation occurs, the Fiscal Management Division will notify the agency by letter or email. The agency must then submit in writing to the Comptroller’s office the corrective steps it will implement to ensure compliance with the bailment contract. On a third violation within a two-year period, the bailment contract may be terminated immediately. If an agency’s contract is terminated, post-dated payroll warrants will not be available for pickup or mailed to the agency until the issue date on the warrants.
A single violation of the bailment contract is defined by the issue date on the payroll warrants reported by Treasury Operations as having been presented for payment prior to the warrant issue date.
|On Dec. 28 Treasury Operations reports 15 payroll warrants as having been presented for payment before the warrant issue date of Jan. 3.||It is considered one (1) violation.|
|On Dec. 28 Treasury Operations reports two payroll warrants with a Dec. 31 issue date and two payroll warrants with a Jan. 3 issue date as having been presented for payment prior to their issue dates.||It is considered two (2) violations.|
|NOTE: Financial institutions may assess fees when funds are refused by Treasury Operations from the original deposit. Employees may incur fees and other charges from their financial institution if they attempt to deposit a warrant prior to the issue date.|
The bailment contract signed by your chief fiscal officer or agency head is considered a perpetual agreement. However, the contract may be terminated by either party with proper notice. It is a good business practice to resubmit the contract when your agency’s senior management changes. Agencies are required to retain a copy of the completed and signed form.
Without a bailment contract, Payment Services will not distribute post-dated warrants to agencies until the payment date.