UACES Facebook C.E.S.P. 15-3: Managing County Financial Transactions

 

System Management: Financial Guidelines

C.E.S.P. 15-3: Managing County Financial Transactions

Date Revised: 3-12-2015
Supersedes: 1-17-2006

Managing County Financial Transactions

The Cooperative Extension Service (CES) has established procedures to conduct county office financial operations so that funds  may be deposited into local depository accounts and the related expenses may be paid from an authorized petty cash checking account. The Associate Director for Finance and Administration has the authority to determine which banks will be used and to maintain the bank relationships. The county bank account will be maintained and managed by the CES Staff Chair in each county. Although funds in the county account come from various sources, all funds in the county bank account are considered University funds and use a University issued ID number.   

  1. Acceptable Accounts

The county bank account should only be used  for program related expenses It must be used for the sole purpose of promoting, supporting and/or enhancing legitimate CES educational programs, projects, events or activities. The Staff Chair should ascertain that the goods and services to be purchased could not be obtained from standard purchasing procedures already established including Extension’s online ordering systems or for those expenses normally paid by budgeted maintenance and operating funds or grant funds.

The following sources of revenue and their associated expenditures are examples of the types of acceptable ledger accounts to be included in this general account:

  1. Funds received from registration/user fees and related expenditures (i.e., room rental, refreshments, prizes, etc.).

  2. Demonstration supplies.

  3. Newsletter subscriptions.

  4. Income and expenditures related to “for-sale” publications.

  5. Certain youth program activities such as registration fees, recognition and awards, and demonstration supplies, if separate from 4-H Foundation funds.

  6. Income and expenditures related to County Extension Council activities.

  7. Donations and gifts contributed to CES for the purpose of enhancing specific education or demonstration work in Agriculture and Natural Resources, Family and Consumer Sciences, 4-H Youth, E.F.N.E.P., etc.

  8. Funds for mailing plant, forage and water samples.
  1. Unacceptable Accounts

This is a University of Arkansas Cooperative Extension Service bank account and all funds are recognized as the property of the University. Extension employees are prohibited from serving as officers with signatory authorization on bank accounts for associations, groups or foundations that are supportive of C.E.S. educational programs.

Examples of bank accounts that are NOT to be maintained and managed by C.E.S. personnel include:

  1. Accounts devoted to the support of private non-profit functions such as local fairs, community/county fund-raising events, civic functions or other similar events or functions.
  2. Accounts to facilitate the activities of farm organizations, commodity groups, marketing associations, homemaker’s clubs and other organized fundraising activities by adult or youth groups. 
  1. Rules for County Checking Account
  1. It is suggested that the account be named _________________County University of Arkansas Cooperative Extension Service Account.

  2. The county checking account requires auditable records, including deposit slips for all income and receipts for all expenditures. Auditable records are those that describe the nature and condition of a transaction and provide support that the transaction occurred as stated.

  3. Travel or personal reimbursement cannot be paid directly by writing a check from the county account.  However, county account funds (fund number 13823) may be used for travel and personal reimbursement but all UACES policies must be followed. 

  4. Funds from the county checking account will NOT be used by county personnel as an advance payment for expenses to be incurred in the future, including travel.

  5. The County Staff Chair will be the signer for all checks. The check signature authority will include the Staff Chair, District Director, Director of Financial Services and the Associate Director for Finance and Administration.

  6. Checks cannot be signed by a non-Extension employee or by an Extension classified employee such as a secretary or a program assistant.

  7. Signing blank checks and/or using a signature stamp is NOT permitted.

  8. Checks may NOT be written to cash.

  9. Extension employees may NOT receive payments of any nature from the bank account other than reimbursement of documented out-of-pocket expenses.

  10. County financial records will be maintained by using Quicken ™ software.

  11. Immediately after all applicable personnel changes, signature authority on the checking account should be updated and

  12. For internal controls, two separate people should perform check writing and record keeping duties. For example, the County Staff Chair will be responsible for writing checks and maintaining the checkbook. The office secretary will be responsible for reconciling the checkbook and Quicken™ software to the bank statement and maintaining appropriate records to support the reconcilement.

  1. County Extension Agent - Staff Chair Responsibilities

The Staff Chair is personally responsible for the full amount of the funds deposited and entrusted to the county office accounts. In addition, the Staff Chair is responsible for ensuring that the county administrative support staff submits the Quicken™ data files electronically to Financial Services by the 17th day of every month. The Staff Chair should also ensure the administrative support staff submits a signed reconciliation report and a copy of the bank statement by the 17th day of the month. 

Example

 

 

 

 

 

 

 

 

If the Quicken™ data files, reconciliation report or bank statement are not submitted to Financial Services within seventeen (17) days, or if disallowable expenses continue to occur after being notified by Financial Services that the transactions are not appropriate, the Associate Director for Finance and Administration may withdraw authorization for the fund. No further checks will be issued and any undocumented or non-reimbursable amounts will be invoiced to the Staff Chair. If necessary, payroll deduction from the Staff Chair will be used to reimburse Extension.

Fund shortages are the Staff Chair’s responsibility. The Staff Chair should immediately report all cash discrepancies to Financial Services and the District Director who will conduct an investigation. If it can be determined who caused the shortage, they will be held personally responsible and will be expected to reimburse Extension. Disciplinary actions may result and include termination.

To manage the checking account and sub-accounts, the Staff Chair should be:
  1. Familiar with all appropriate University of Arkansas Cooperative Extension Service financial policies and procedures.

  2. Provide records adequate to show the source, amount and restriction, if any, of all income/donations.

  3. Provide records that show donated funds were expended in accordance with restrictions (i.e., that funds in the amount of the donation were expended for the restricted purpose.)

  4. Provide records necessary to support all expenditures.

  5. Provide up-to-date check registers and monthly bank reconciliations.
  1. Deposits

An account will be maintained with a local bank and all deposits related to the County Checking Account will be made to this account (the Depository Account). No expenditures shall be made from the Depository Account.

A. Income

  1. Income receipts must be used when collections are received. Receipts should be issued for all money received including Poultry Auctions.  Each county Extension office will be provided an official University of Arkansas Cooperative Extension Service receipt book. This is the only receipt authorized to be issued. The receipt book will be provided by CES Financial Services Department.

(a) Receipts should be pre-numbered and include the date, name of the customer, amount received, whether cash or check was received, reason and the signature of the person collecting the funds. (b) The receipt should be prepared in triplicate, and the original should be given to the customer. One copy must be maintained in sequence in the receipt book as the office copy. The final copy should be sent to the Financial Services office. When deposits are made to the Depository Account, a copy of each receipt included in the deposit should be attached to a copy of the deposit slip and submitted to Financial Services with the monthly reports.  The deposit acknowledgement from the bank can be filed in the county’s monthly file as proof of deposit. The bank deposit forms with receipts should be sent to Financial Services office on a monthly basis.

(c) If an Extension employee turns in money collected from several persons, one receipt may be written directly to that agent if documentation is attached to the receipt, listing
         1. the individuals from whom the agent collected the money,
         2. a description of each collection and restriction and
         3. the amount collected from each individual.

(d) If a receipt is voided, the original receipt should be maintained with the office copy of that receipt.

(e) Copies of all receipts should be maintained for five years.

(f) All income and receipts should be identified by source and restriction, if any. While this information is recorded on the receipt, it is advisable to also record it on the check register beside the deposit entry. Any correspondence and check stubs should be placed in a file set up for that purpose.

  1. All funds must be deposited into the University of Arkansas County Extension Office Depository Account. In no case should cash donations be expended directly or funds be placed in personal accounts.

  2. Funds should be deposited on a regular basis; preferably on the day collected but no longer than three days. Under no circumstances should collections be retained in the office over weekends or holidays.

B. Reconciliations

The Depository Account should be reconciled monthly and sent to Financial Services by the 17th day of every month along with the statement, copy of the Quicken™ data file and copies of the receipts. When the reconciliation is complete, it should be printed and attached to the bank statement. The person preparing the reconcilement should document responsibility by dating and initialing the report. The Staff Chair will review and document approval by dating and signing the reconcilement prior to filing.

 

  1. Expenditures

A centralized Expenditures account will be maintained for each county office.

A. Record Keeping

  1. All expenditures should be documented sufficiently to provide an adequate audit trail. Documentation should include one or more of the following: original invoice, billing statement, receipt, and/or sales slip. Recorded on this documentation should be such information as date paid, check number and program. In addition, the employee making the purchase should initial the supporting document to verify that the cost is a legitimate Extension expenditure. This documentation should be filed in a manner allowing easy retrieval and should be maintained for the five years.

  2. The Staff Chair should sign all checks. The office secretary should not have signature authority over any account. The Staff Chair should not sign any check until documentation has been received and the check completed. Blank checks should never be signed.

  3. When a check is voided, the check should be attached to the check stub, and the signature section of the check should be removed.

B. Allowable and Unallowable Expenditures

  1. The account may not be used to avoid any State of Arkansas or Extension purchasing restrictions, including those expenses that could be obtained by Extension’s online ordering systems or for those expenses normally paid by budgeted maintenance and operating funds or grant funds.

  2. No checks may be cashed from these funds.

  3. Only expenditures specifically authorized under these guidelines will be allowed.

  4. No payroll, payroll advance or related transactions may be made from these funds.

  5. Travel expenses for Extension employees – i.e., toll fees, gasoline or vehicle costs, tips, etc., may never be paid directly by writing a check from these funds. However, county account funds (fund number 13823) may be used for travel and personal reimbursement but all UACES policies must be followed. 

  6. Disbursements made for entertainment or gifts may never be paid from these funds.

  7. Each petty cash transaction must be documented with a receipt, invoice or similar item and subject to periodic audits. If the expenses are not allowable, Financial Services will contact the Staff Chair. In the case where the expenses are not allowable, reimbursement is expected.

C. Replenishing the Account

  1. Expenditures from the account will be replenished from the Depository Account on a monthly basis. A transfer will be made each month by Financial Services to replenish amounts spent by the county office in the previous month. The Depository Account balance must always be sufficient to reimburse the amount of outstanding expenses.

D. General

  1. All checking account transactions (including P-Card expenditures)should be recorded in the check register at the time the transaction occurs. Entries should be as detailed as possible showing income/source, person paid, program and purpose. Bank account balances should be recorded after each day’s transactions.

  2. Signature authority over checking accounts should be updated immediately after personnel changes and this should be communicated in writing to the appropriate District Director and forwarded onto Financial Services. Interim Staff Chairs can have check writing privileges but first must be approved by the District Director. At anytime, the District Director will have signature authority to sign checks.

E. Financial Records

  1. County financial records will be maintained on the Quicken™ computer software program. Training and support will be provided by Extension’s Financial Services and Information Technology department.

  2. The County Financial Reports will be sent to the Financial Services office on a monthly basis in an electronic (tab-delimited) format, as well as hard copies of Finance 401, Bank Statement and Quicken report files.

  3. Quicken™ files should be saved regularly onto diskettes or CDs. Label them and maintain in a safe place in the county office.

F. Records Retention

  1. The minimum retention period for county financial records is five years.

G. Audit Reviews

  1. The Extension district and state office designee will annually conduct periodic reviews of county Extension offices accounts in order to monitor compliance.

  2. Any shortages and/or cash losses must be reported immediately to the District office and Financial Services.
For further guidance related to managing county financial transactions see:
1) Financial Guidelines for Affiliated Groups
2) County Quicken Manual