Accounts and Reports

Those agencies choosing to absorb the cost of credit card fees can accept the four major credit cards in their operations. Credit cards may be accepted face-to-face, by website, over the telephone, mail-in, or through interactive voice response systems (IVR). We have been advised that an agency may accept credit cards through one or more of these modes and meet the requirements of K.S.A. 75-30,100 (H.B. 2323 of the 2000 Legislative Session).

Those agencies obligated to charge a fee for accepting credit cards due to budgetary or statutory reasons are more limited in their credit card acceptance policy. As a general rule, if the agency charges an additional fee to recover credit card costs to all customers, licensees or clients, including cash and check payments, any credit card may be accepted. On the other hand, if an agency at a minimum simply wants to comply with the law, Discover Card may be accepted and a convenience or surcharge fee may be charged only to those customers, licensees or clients who pay with the Discover Card.

The procedure for processing credit card transactions through the STARS system will require the creation of a Credit Card Clearing Fund in some agencies. In most cases, this procedure will not apply to those agencies having a fee bank account. Credit card transactions will settle through the fee bank accounts when possible rather than the Office of State Treasurer. Please bear in mind the provisions of K.S.A. 75-4215(b) pertaining to the frequency of depositing state moneys if you process credit card transactions through your fee bank account.

Under this procedure, agency officials may request the establishment of a Credit Card Clearing Fund in their agency. In most situations, where the agency charges a convenience fee for accepting credit cards, this clearing fund will enable agencies to pass on their credit card fees without requesting additional budget authority. The fund will be in the 9XXX series of fund numbers. The fund would only be used for processing credit card transactions and would work as follows:

1. As often as daily, the State Treasurer will process an electronic receipt voucher to deposit revenue from credit card transactions to the Credit Card Clearing Fund.

   • The transaction will use a transaction code (T/C) 606 (Due to other funds and appropriations) and revenue sub-object 6700 (Suspense).

2. Each agency will be responsible for reconciling this deposit with their credit card transaction report and processing a journal voucher to transfer these receipts out of the Credit Card Clearing Fund to the proper budgetary fund(s) within the agency.

   • The journal voucher will use T/C 606R and revenue sub-object 6700 to move the credit card receipts out of the clearing fund and T/C 602 (fund level deposits) or T/C 604 (account level deposits) with the applicable revenue sub-object (example - 2110), to deposit the credit card receipts into the correct fund of the agency.
   • For those agencies charging a convenience fee, a balance sufficient to pay the monthly credit card fees and charges should remain in the clearing fund to allow for the monthly debit processed by the State Treasurer.
   • For those agencies choosing to absorb the credit card fees and for those agencies whose surcharge fee deposits are not sufficient to cover the credit card fees, a journal voucher must be processed. This journal voucher will charge expenditures to the agency's budgetary accounts and transfer cash to the Credit Card Clearing Fund (see Step D).

3. Once each month the Treasurer will debit the Credit Card Clearing Fund to charge each agency the credit card fees debited to the state bank account by each of the three credit card processors - Paymentech, American Express and Discover Card.

   • The transaction is a negative receipt voucher and will use a T/C 609R with expenditure sub-object 2691 (Credit Card Fees and Charges) to charge the credit card fees to your agency Credit Card Clearing Fund.
   • This expenditure will not affect your agency appropriations or expenditure authority.

4. An agency without a sufficient balance in its clearing fund to cover the credit card fees must process a journal voucher to make a balance available.

   • The expenditure portion of the transaction will use T/C 733 and expenditure sub-object 2691. This will be charged to one or more agency funds depending on the allocation of agency credit card convenience fees.
   • The receipt portion of the transaction will use T/C 606 and revenue sub-object 6290 (Other Reimbursements and Refunds) to increase cash in the clearing fund.

5. It is conceivable that those agencies charging a convenience fee will allocate the fee among their cash, check and credit card customers. In other words, if the agency knows it is going to cost them $3.00 to accept a credit card, and they have estimated that one third of their customers will pay by credit card, all customers will pay $1.00 in additional fees to recover those costs. This is because credit card payments cannot be disadvantaged against cash or check payments. When these payments are deposited into the Treasury, the agency will have the choice of depositing the convenience fee portion of the payment directly into the Credit Card Clearing Fund, or into agency budgetary accounts.

   • Convenience fees received in the form of cash, checks or credit cards and deposited to a fund, other than the Credit Card Clearing Fund, should be deposited using revenue sub-object 5912 to identify the fees as convenience fees.
   • If deposited directly to the Credit Card Clearing Fund, the convenience fees should be deposited using T/C 606 and revenue sub-object 6700.
   • When the clearing fund has to be subsidized from the convenience fees directly deposited to budgetary accounts, a journal voucher must be processed.
   • The receipt reduction transaction of the journal voucher will use T/C 602R or T/C 604R (depending on the type of fund) and revenue sub-object 5912 to reduce convenience fee revenue in the budgeted account(s) of the agency.
   • The transaction to increase convenience fee revenue in the Credit Card Clearing Fund will use T/C 606 and revenue sub-object 6700 thus increasing the amount available for the payment of the debit charge processed by the State Treasurer each month.
   • In those instances where sufficient convenience fees are not available in the budgeted funds of the agency, process a journal voucher as outlined in "Step D". When an agency has not collected enough convenience fees to pay its credit card fees, then the agency must use operating moneys to pay the credit card fees.

Please bear in mind the concern of the Legislature for agencies to recover as closely as possible the exact costs for using credit cards. To the extent that the balance in revenue sub-object 5912 for an agency is greater than $0.00, you have collected too much in convenience fees.

The State Treasurer's Office and the Division of Accounts and Reports are partnering in developing an internet journal voucher system similar to the State of Kansas Interactive Internet Interfund (SOKI3+) System. It is anticipated that this system will be available prior to July 1, 2001, in time to expedite the processing of your credit card journal voucher transactions.

The Division of Purchases is conducting informational sessions to answer questions and assist with decisions on the type of equipment best suited to your credit card program needs. Please contact Chris Howe at (785) 296-2374 or e-mail him at chris.howe@da.state.ks.us.

If you would like to contact the vendor in charge of administering the statewide credit card acceptance program, please contact Sylvia Dunham at (303) 399-6985 or e-mail her at sdunham@paymentech.com.

Questions regarding the functions of the State Treasurer's Office in this process may be directed to Peggy Hanna at (785) 296-5464 or e-mail her at peggy@treasurer.state.ks.us.

For questions pertaining to the establishment of a Credit Card Clearing fund or the STARS transactions process, please contact Jerry Serk at (785) 296-2318 or e-mail may be sent to jerry.serk@da.state.ks.us.

DB:JS 

Page last modified on:  June 29, 2012