How does the state pay bills?

Considering all of the discussions about what state obligations the Comptroller can and cannot pay during the budget impasse, it might be beneficial to have a basic understanding of how the state manages its payables.

Though the Comptroller serves as the state’s chief fiscal officer, and as such is responsible for issuing and recording all state payments, the budget officers within the various state agencies do not work for her. That means whenever an agency has an obligation to pay someone these officers must report it to the Comptroller.

A voucher is a file a state agency’s budget officer sends to the Comptroller when they need the state to issue a payment on their behalf.

Vouchers are full of valuable information. Some of it is fairly basic, such as who is being paid, why, and for how much. But the voucher must also give the Comptroller every bit of information she needs to keep an accurate record of the state’s finances.

If the Comptroller has everything she needs to record the payment and the money is available to pay it, then the voucher is issued. The issued document is called a warrant.

A warrant is essentially a check from the State of Illinois. The reason it is not just called a “check” is because payments issued by the state must have the money to fund it. Unlike checks out of a personal or corporate checking account, warrants cannot bounce.

There is sometimes a third file involved in the payment process. Depending on the type of payment, a payee may be required to send the state an invoice. An invoice is essentially a bill; it is how vendors tell the State what was provided and how much they are owed for it.

Agencies do not report invoices to the Comptroller, so there is not a central repository of all the invoices the state receives. That means it is up to the agencies’ budget officers to turn their invoices into vouchers and send them to the Comptroller. Without a voucher the Comptroller cannot issue a warrant.