Restricted Expenditures — Contracts and Bids
Deposits to Secure Performance of Contracts
A state agency may pay a deposit to an entity or person if the payment is necessary to prevent harm to the state. A deposit ordinarily is forfeited to the holder of the deposit if the agency does not properly fulfill its contractual obligations.
- Money paid by a state agency to a person or entity to secure the agency’s proper performance of a contract with the person or entity.
A state agency that pays a deposit must retain documentation in its files showing how the payment is necessary to prevent harm to the state.