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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Settlement and Judgment Processing Guidelines

FPP E.041

Processing Instructions for the Payment of Settlements and Judgments – Pre-Litigation Settlements

A paying agency’s legal counsel may settle a dispute before a lawsuit is filed; this is known as pre-litigation. All statutory or General Appropriation Act (GAA) references apply to these claims with the exception that they do not require attorney general review or the Governor’s signature. In addition, the following steps are required for pre-litigation claims:

Step Action
1 Pre-litigation claims can be paid with COBJ 7221 and do not require settlement by the OAG or the Governor’s signature. Pre-litigation claims are settlements for which a lawsuit has not been filed in any court.
2

The paying agency enters the payment in the Uniform Statewide Accounting System (USAS) using Document Type 9:

  • Use Comptroller Object Code 7221 for all pre-litigation settlements.
  • Enter N (not confidential), S (some confidential) or Y (confidential) in the CONFIDENTIAL INDICATOR (CONF) field.
  • Enter R in the PAYMENT DISTRIBUTION TYPE (PDT) field to generate a paper warrant.
  • Balance and release the batch.
  • The paying agency employee entering the payment in USAS lists his/her name and phone number.

Note: Agencies are responsible for determining how the payment will be reported to the Internal Revenue Service (IRS).

3 The paying agency submits the following to the Comptroller’s office after an agreement has been reached:
4

The Comptroller’s office reviews submitted documentation. If approved, the Comptroller’s office enters Action Code 550 ("Approved by Audit") into USAS for payment.

The paying agency can review the USAS Document Tracking (S037) screen or DAFR 7700 for the action code 550 to verify when the document was approved.

5

The warrants are available to the paying agency for pickup at the Comptroller’s office the morning of the next business day following the day of the Comptroller’s office approval.

6

The purchase voucher and settlement documents are filed with the Comptroller’s office until the required retention period expires.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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