XII. Expenditures
Guide to Financial Operations

XII.8.E Payment Assignments

XII. Expenditures
Guide to Financial Operations

SECTION OVERVIEW AND POLICIES

This section outlines the procedures agencies should follow to approve the assignment of contract payments to an individual or entity other than the original contract holder. Payment assignments are commonly due to financing arrangements or to fulfill liabilities to subcontractors or other creditors of the contract. For guidance specific to Contract Assignments, refer to the Guide to Financial Operations XI.12.B Contract Assignments.

According to the New York State Lien Law (Article 2, Section 16), payment assignments only become valid when (i) an appropriate “Notice of Assignment” is submitted to the originating agency and the Office of the State Comptroller (OSC) within 20 days of the date of assignment, and (ii) the originating agency approves the payment assignment.

According to New York State Lien Law (Article 2, Section 25), every assignment of moneys, or any part thereof, due or to become due under a public improvement contract shall affirmatively state that the assignor (owner) will hold in trust sufficient moneys to be first applied to the payment of trust claims as defined in section seventy-one of the lien law, and apply such moneys to such payments only, before using the moneys for any other purpose. "Trust claims" means claims of contractors, subcontractors, architects, engineers, surveyors, laborers and materialmen arising out of the improvement, for which the owner is obligated, and also means any obligation of the owner incurred in connection with the improvement for a payment or expenditure defined as cost of improvement.

Process and Document Preparation:

Payment assignments redirect all, or a designated portion of, payments due under a contract from the contractor to another entity. The contractor continues to fulfill all responsibilities under the contract, but assigns their right to payment to another entity. To effectuate a payment assignment, assignors must complete the Payment Assignment Form.

OSC’s Bureau of State Expenditures' Offset Unit must approve the payment assignment before making payment to a new payee, and must gain the consent of the contracting agency. When payment assignments are sent directly to OSC, the Offset Unit will notify the contracting agency of all assignments filed and will provide the agency with a document that includes the following:

  • Assignor name and address
  • Assignee name and address, including the attention to contact for payment
  • Date of assignment
  • Contract number
  • Assignment amount
  • A response due date
  • A section for the agency manager to review the assignment and note its acceptance or rejection of the assignment.

Agencies should respond to the Offset Unit by the date provided on OSC’s correspondence.

The agency manager' must respond, in writing, acknowledging the agency:

  • accepts the payment assignment;
  • rejects the payment assignment, in which case the agency must include a statement explaining the reason why; or
  • did not receive the payment assignment within 20 days of the assignment as required by law.

Agencies must reply in writing, either via email to [email protected] or:

NYS Office of the State Comptroller
Bureau of State Expenditures - Offset Unit
110 State Street - 10th Floor
Albany, NY 12236

If the agency manager rejects the payment assignment or did not receive the payment assignment by the required date, the Offset Unit will notify the assignor that the payment assignment was not properly filed and/or accepted. As appropriate, the assignor will be directed to contact the contracting agency for further information. 

For payment assignment and lien questions, please contact:

NYS Office of the State Comptroller
Bureau of State Expenditures - Offset Unit
110 State Street - 10th Floor
Albany, NY 12236
[email protected]

Guide to Financial Operations

REV. 11/21/2025