State Capitol
Frequently Asked Questions

Payment Cards

The considerations discussed above apply to the acceptance of payment card remittances by any means whatsoever. In the case of Web-based transactions, a number of other requirements may apply. The GAO, GITA and the Office of the Treasurer review agency applications to determine whether there are additional steps an agency must take before it implements payment card acceptance.


The first requirement that must be met for a prepayment to be authorized is that such a payment has been established as being an industry standard. For example, if there is a normal industry standard that rent be paid in advance, then the prepayment of rent meets the requirement. The second requirement that must be met is that the prepayment is in the best interest of the State. For example, an agency may have a special order or an item built to specifications (e.g., a uniquely equipped vehicle) which requires a down payment or full payment prior to beginning construction or assembly. The vehicle is critical to the mission of the agency attempting to procure it. The prepayment will guarantee the timely completion of construction and delivery of the vehicle. Therefore, it may be in the best interest of the State to make the payment. Legal opinions indicate that obtaining goods or services at a reduced price does not meet the "in the best interest of the State*" criteria for prepayments. The Department of Administration has authority (A.R.S. § 35-181.01) to approve prepayments. If there are any questions, please see GAO Technical Bulletin 99-2 or contact the ADOA-GAO.

A prepayment is the payment of a claim before receiving the goods or services. Generally speaking, State agencies are prohibited by statute from making prepayments. However, there are instances when it is in the best interest of the State and industry standard requires the prepayment of goods and services. Such instances include insurance payments, rents and subscriptions.

Public Monies

Public monies can not be spent without legal authorization. Applicable laws include (but are not limited to) the following: A.R.S. § 1-254 " "No statute may be construed to impose a duty on an officer, agent or employee of this state to discharge a responsibility or to create any right in a person or group if the discharge or right would require an expenditure of state monies in excess of the expenditure authorized by legislative appropriation made for the specific purpose.*" A.R.S. § 35-154 " "A. No person shall incur, order or vote for the incurrence of any obligation against the state or for any expenditure not authorized by an appropriation and an allotment. Any obligation incurred in contravention of this chapter shall not be binding upon the state and shall be null and void and incapable of ratification by any executive authority to give effect thereto against the state. B. Every person incurring, or ordering or voting for the incurrence of such obligations, and his bondsmen, shall be jointly and severally liable therefor. Every payment made in violation of the provisions of this chapter shall be deemed illegal, and every official authorizing or approving such payment, or taking part therein, and every person receiving such payment, or any part thereof, shall be jointly and severally liable to the state for the full amount so paid or received.*" A.R.S. § 35-196 " "Any state officer or employee who illegally withholds, expends or otherwise converts any state money to an unauthorized purpose shall be liable, either individually or on his bond, for the amount of such money, plus a penal sum of twenty per cent thereof, and an action may be instituted by the director of the department of administration or the attorney general immediately upon the discovery thereof.*" A.R.S. § 35-212 - "The attorney general, in his discretion, may bring an action in the name of the State to enjoin (stop) the illegal payment of public monies, or if such monies have already been paid, to recover such monies plus twenty percent of such amount together with interest and costs, including reasonable attorney fees.*" A.R.S. § 35-301 " "A public officer or other person, including justices of the peace and constables, charged with the receipt, safekeeping, transfer or disbursement of public money is guilty of a class 4 felony who: 1. Without authority of law, appropriates it, or any portion thereof, to his own use, or to the use of another. 2. Knowingly loans it, or any portion thereof. 3. Knowingly fails to keep it in his possession until disbursed or paid out by authority of law. 4. Without authority of law knowingly deposits it, or any portion thereof, in a bank, or with a banker or other person, except on special deposit for safekeeping. 5. Knowingly keeps a false account, or makes a false entry or erasure in an account of, or relating to it. 6. Alters, falsifies, conceals, destroys or obliterates such an account with an intent to defraud or deceive. 7. Knowingly refuses or omits to pay over, on demand, public monies in his hands, upon presentation of a draft, order or warrant drawn upon such monies by competent authority. 8. Knowingly omits or refuses to transfer the money when a transfer is required by law. 9. Knowingly transfers the money when not authorized or directed by law. 10. Knowingly omits or refuses to pay over to an officer or person authorized by law to receive it, any money received by him when a duty is imposed by law to pay over the money.*" Arizona Constitution Article 9, Section 7 " "Public funds are to be expended only for public purposes and cannot be used to foster or promote purely private or personal interests of any individual.*" This section also therefore prohibits the giving of gifts, loans, etc. to individuals. State agencies are responsible for determining that the public benefit is substantially equivalent to or greater than the cost. This documentation must be maintained for audit and record retention purposes.

Refunds and Reimbursements

A refund is cash received due to an over-payment for goods or services or because a good was returned to the vendor. Current year refunds usually result in an expenditure reduction. Prior year refunds must be deposited to the appropriate fund using a specific revenue comptroller object. Refer to the State of Arizona Accounting Manual or contact ADOA-GAO for additional guidance on refunds. A reimbursement is cash received as a repayment for services performed or of other expenditures made for or on behalf of another governmental unit. Federal grant reimbursement would fall into this category. All reimbursements must be deposited in the proper fund. For example, General Fund reimbursements must be deposited in the General Fund. Again, refer to the State of Arizona Accounting Manual or contact ADOA-GAO for additional guidance.