40-000-2 CASH (PROCEDURE) General Requirements All cash must be deposited in federally insured bank accounts. Cash may then be transferred to qualifying investments. The governing board shall annually authorize all bank accounts and check signers. The banks shall be immediately notified of all changes of authorized check signers. All personnel handling cash shall be bonded. Cash Receipts Incoming mail shall be opened and receipts listed in duplicate by two or more persons having no access to cash receipts or accounts receivable records. The listing of mail receipts shall be subsequently compared to cash receipts records and authenticated copies of deposit slips by an employee having no access to cash. Checks shall be endorsed "for deposit only" by the individual who opens the mail when received. Pre-numbered cash receipts shall be prepared and contributions, gifts, other remittance data and other support attached. Persons independent of the mail opening and receipt listing function shall enter cash receipts in books of original entry. Receipts (checks and currency) shall be deposited intact within three days of receipt. A sign-out sheet shall be maintained by the person responsible for preparing deposit slips which shall include spaces for initialing and dating the acceptance of the deposit and delivery verification of deposit. The person accepting the deposit for delivery to the bank shall initial and date the sign-out sheet upon receipt of the deposit and likewise, initial and date the sign-out sheet upon returning a deposit verification from the bank or verifying the deposit with the bank through a telephone call if it is a night deposit. Cash receipts shall be kept in a locked container with access limited to authorized personnel from time of mail opening until time of bank deposit. The general cashier function shall be segregated from the general ledger and subsidiary ledger functions. Currency receipts shall be reconciled to the totals of pre-numbered receipts or other devices. The cashing of checks from currency receipts shall be strictly prohibited. Direct Mail Receipts Direct Mail shall follow the same cash receipts procedures listed above. The prepared deposit shall be delivered to the business office and the business office shall verify the amount of the deposit and sign for the receipt of the deposit. The following procedures will also be followed: a. A lock bag will be used to pick up the mail. The person picking up the mail will be designated by the Development Office. b. A lock box with a check out system will be used to control the post office key and lock bag key. c. A cleared table in a private area will be used to open the direct mail. d. Two people will open and view each envelope. e. At least one of the openers will be rotated on regular basis. f. Both persons opening the mail will sign that they agree and concur with the reported deposits. Post-dated checks, disputed items, unidentified receipts, NSF checks, checks charged back by banks, and similar items shall be received and investigated by persons independent of preparation of deposits and posting of accounts receivable detail. NSF checks represent "negative" receipts and should be submitted a second time for possible collection. Upon second rejection, the payer shall be notified and the appropriate revenue or receivable accounts adjusted. Cash Disbursements All disbursements (including payroll), except petty cash disbursements, shall l be made by check. Check stocks: a. Checks shall be pre-numbered and used in sequence. b. Blank check stock shall be stored in a secured container. c. Only persons authorized to prepare checks shall have access to blank checks. Check preparation: a. Checks shall be prepared by specified employees who are independent of voucher/invoice approval. b. Prior to checks being prepared, the purchase order or other document of authorization shall be compared to the vendor invoice. c. Checks shall be prepared from an original vendor invoice only and not from a vendor statement. d. Checks shall be prepared only for approved invoices/vouchers. e. Checks shall be recorded in the disbursements journal when they are prepared. f. All check numbers shall be accounted for. g. Voided/spoiled checks shall be properly mutilated (signature portion removed) and retained. h. Checks shall be made payable to specified payees and never to cash or bearer. i. All supporting documentation shall accompany checks presented for signature. j. All supporting documents shall be properly canceled at time of signature to prevent duplicate payment. Check signing: a. All checks shall require counter-signatures consisting of the President, Vice President of Instruction, and any additional recommendations by the President approved by the Board of Trustees. b. Authorized check signers shall be independent of voucher preparation and approval for payment; check preparation, cash receiving, and petty cash; purchasing and receiving and timekeeping for payroll checks. c. Disbursements that require special approval of funding sources or the governing board shall be properly documented. d. Signing blank checks is prohibited. e. Custody of checks after signature and before mailing shall be handled by an employee independent of all payable, disbursing, cash, receiving, and general ledger functions Reconciliation Bank accounts shall be reconciled within fifteen days after the end of each month. Reconciliations shall be made by someone other than the persons who participate in the receipt or disbursement of cash. A responsible individual (e.g., the president) shall receive the bank statements (with canceled checks, debit and credit advises, etc.) unopened from the banks. The reconciliation procedures for all bank accounts shall include the following with respect to deposits: a. Comparison dates and amounts of daily deposits as shown on the bank statements with the cash receipts journal. b. Investigation of bank transfers to determine that both sides of the transactions have been properly recorded on the books. c. Investigation of items rejected by the bank; i.e., deposits or collection items subsequently charged back by the bank because of insufficient funds, etc., shall be investigated by a person independent of those responsible for receipt or recording cash. The reconciliation procedures for all bank accounts shall include the following with respect to disbursements: a. Comparison of canceled checks with the disbursement journal as to number, date, payee, and amount. b. Account for the sequence of check numbers. c. Examination of canceled checks for authorized signatures. d. Examination of canceled checks for irregular endorsements. e. Examination of canceled checks for alterations. f. Review of voided checks. Completed bank reconciliations shall be reviewed by a responsible official. The review shall be documented by initialing and dating the reconciliation. Checks outstanding for over 90 days shall be periodically investigated. Payment should be stopped and an entry made restoring such items to cash. Payee shall be contacted regarding the status of checks outstanding over 90 days and the possible replacement of lost checks. Petty Cash Responsibility for petty cash fund shall be assigned to only one responsible person. The petty cash funds shall be maintained on an imprested basis. The petty cash fund shall be segregated from other cash. Petty cash disbursements shall not exceed $20. Custodian: a. The custodian of petty cash shall be independent of employees who handle receipts. b. The accounting records shall be inaccessible to the custodian. c. The custodian shall be bonded. Vouchers: a. A pre-numbered voucher shall be used for all disbursements. b. Vouchers shall be completed in full in ink or otherwise in such manner that would make alterations difficult. c. Vouchers shall be approved by a department head or other designated employee other than the custodian of petty cash. d. The amounts on the vouchers shall be spelled as well as written in numerals. e. Vouchers shall be properly supported by invoices or other documentation. f. All items contained in the petty cash fund shall be of a current and usual nature. Reimbursements: a. An adequate review of the reimbursement vouchers shall be completed before reimbursements are made. b. Checks for reimbursement shall be made out to the order of the custodian. c. Reimbursement vouchers and attachments shall be canceled at, or immediately following, the signing of the reimbursing check, so that they cannot be reused. The petty cash fund shall be counted monthly by someone independent of the custodian. Cashing employee checks out of the petty cash fund is strictly prohibited.
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