SECTION E: AUTHORIZED BANK ACCOUNTS

I.  Introduction
 

The Region, with proper authorization, is allowed to establish various types of banking accounts for accomplishing certain regional business office functions.  These accounts, their set-up, and their usages are described in the body of this section.  The general purpose of these accounts is to aid the regional business office in the safe, efficient and effective handling of the College's monies.

 

A. Revolving Funds  
 
  1. Definition

    Revolving funds are imprest funds established at an authorized amount to finance allowable disbursements that, in turn, are reimbursed, thereby ensuring a continuous flow of cash.  Revolving funds include any combination or all of the following - change fund, petty cash fund, and bank checking account.  Revolving funds have been established at various locations at authorized funding levels under the direction and responsibility of designated custodians.  Each custodian has the authority to establish a change fund and/or petty cash fund to satisfy his/her individual requirements.  The custodian has the responsibility to supervise the operation of the revolving fund, to monitor expenditures for use in financing authorized costs, and to maintain the integrity of the fund at all times.  Although the custodian may delegate actual day to day operation of the fund, the custodian retains full responsibility for its administration and supervision.
  1. Authorization

    Revolving fund accounts have been authorized for each regional institute.  The financial officers authorized to approve payments from these accounts are the College Vice President for Finance/Treasurer, the College Assistant Treasurer, and the Vice President/Dean/Chancellor.  In addition, the Vice President/Dean/ Chancellor, with the approval of the Vice President for Finance/Treasurer, may authorize the Executive Dean and/or Executive Director of Finance, and/or other designee, responsibility to sign expenditure checks for the revolving fund account.

    The bank where the account is located requires a resolution approving the signatures.  Such resolution should be approved by the Regional Board of Trustees.
  1. Establishment

    A regional institute's revolving fund account is to be established in the name of:

    Ivy Tech Community College of Indiana
    Revolving Fund - Region XX
    (Address of Regional Institute)


    Bank statements, deposit tickets, and checks are under the control of the authorized revolving fund custodian.

    Assistance in establishing a revolving fund account should be directed to the Assistant Treasurer.  The dollar amount needed to establish and to maintain the revolving fund account must be approved by the Vice President for Finance/Treasurer.
  1. Bank Signature Card

    Evidence of signature approval will be made by the completion of a bank signature card with the signature of:
    • Vice President for Finance/Treasurer - Required
    • Vice President/Executive Dean/Chancellor - Required
    • Assistant Treasurer - Optional
    • Executive Dean - Optional
    • Executive Director of Finance - Optional
    • Other designee - Optional
  1. Maintenance

    The custodian is responsible for maintaining the fund in a businesslike manner on an imprest system.  The fund must be reconciled monthly to its authorized amount.  A statement of Condition of Revolving Fund, as of the end of each fiscal quarter, is required to be filed with the accounting department by the last working day of the month following the end of each fiscal quarter.  Shortages/Overages in the account should be promptly investigated, with recommendations for corrective action included in the quarterly report.

    Designation letters should be prepared establishing the amount of the respective petty cash and change funds and who is held responsible for maintaining them.  These letters are to be signed by the revolving fund custodian, and retained for inspection by Internal Audit.  Each petty cash and each change fund is limited to $250.00. Each regional business director, or designee, should periodically make an unannounced count of each petty cash and change fund.

  1. Usage

    There are various ways in which the revolving fund may be used: Change, petty cash purchases, and local check issuance-- each of these is discussed in detail in the following paragraphs:

    1. Change:

      This usage involves cash held for the sole purpose of making change during registration, or the amount needed to start cash register operations each day.  Since change may be in large amounts, the custodian should take every precaution to ensure its safety, either by an adequate safe on the premises or use of a night depository drop box, or both.  When no longer needed, the change should be deposited back to the revolving fund checking account.  When revolving funds are disbursed for this purpose, adequate documentation must be maintained to assure that the funds consigned to other employees are properly accounted for.

    2. Petty Cash:

      Petty Cash is reserved for use in a fund for incidental and emergency purchases.  Every purchase of supplies or services with petty cash money must be supported by an invoice, cash register tape, sales ticket from the seller, and/or a Petty Cash Voucher receipt.  These supporting documents must provide proof of allowable disbursements, and the individual making the purchase must sign the Petty Cash Voucher.

      The total of all paid disbursements and cash on hand should agree with the established amount of the petty cash.  The balancing of paid disbursements and cash on hand to the established amount of petty cash should occur on a daily basis. 

      Petty cash disbursements are limited to $25.00. Petty cash funds are not to be used for making change or cashing checks.

    3. Bank Checking Account:

      The bank checking account provides for the handling of local and minor disbursements up to $300.  Disbursements are made from time to time as needed supported by proof of disbursement.

      Receipts are to be obtained and detailed records are to be maintained by the custodian, so that proper entries can be made in the College accounting system. 

      When the need arises to process a third-party refund transaction, the custodian of the bank checking account may:

      1. Deposit the third-party check, and split the amount of the deposit between the College depository account (for the assessed fees paid) and the regional revolving fund checking account (for the difference as recorded on the revolving fund check made payable to the student). 

      2. Deposit the third-party check into the regional revolving fund bank account and issue two revolving fund checks; one revolving fund check payable to the College for the amount of assessed fees, and the other revolving fund check payable to the student for the balance remaining.


    The second method identified may be preferable to the custodian when a bank does not allow splitting a deposit between accounts. 

    Travel advances may also be issued from the revolving fund bank checking account, subject to the travel advance requirements.  The preferred process, however, is to issue travel advances using a Voucher Create from the financial accounting system. Revolving funds may not be used for travel mileage reimbursement.  No exception can be made as the College computer systems cannot identify the correct vendor number when expenditures are made in the revolving fund. 

    The custodian will be responsible for excessive travel reimbursement caused by improper handling of travel advancement if it cannot be recovered from the employee who traveled.

  1. Restrictions

    1. Personal funds or other non College funds, including Ivy Tech Foundation funds, are NOT to be intermingled with the revolving fund.
    2. All revenues are to be receipted and deposited on a Cash Receipts form and are never to be added to the revolving fund.
    3. Disbursements cannot be made for:
      1. Sales tax on miscellaneous petty cash purchases.  The College is exempt from Indiana sales tax.
      2. Payments to individuals for wages or personal services performed.
      3. Personal cash advances except approved travel advances.
      4. Cashing personal checks or third-party checks except Veteran's, Pell Grant, or Stafford Loan/Plus checks.
      5. Reimbursement for Employee tuition.
    4. All petty cash and change funds are to be kept in a locked cabinet or locked safe when not in use.
    5. Cash advances may be given to employees for the purpose of petty cash purchases.  Those advances cannot exceed $25.00 and may not be outstanding more than two working days.  The amount of the advance must be documented; the person receiving the advance must sign to acknowledge receipt of the advance; the date the advance is made must be recorded, and the signed document must be retained with the petty cash funds until the purchase receipt is returned.  These documents should then be retained on file for internal audit review.
    6. Where possible one employee should not maintain more than one petty cash or change fund.
    7. Blank checks for the revolving fund should be adequately secured to prevent unauthorized use.
    8. Pre signing of checks is not allowed due to the possibility of unauthorized completion of the checks.
  1. Reimbursement

    To replenish the revolving fund, refer to the Revolving Fund Voucher Reimbursement and Travel Voucher/Check Request documents.

    Funds shall be reimbursed at least once a week, and more often as needed. Less frequent requests for reimbursement indicates an excessive revolving fund amount.

    The authorized amount should be limited to that required for operation for a week, plus the time needed for preparation, processing, and return of the reimbursement.

  1. Non-Sufficient Fund Items and Miscellaneous Bank Debits and Credits

    Regional revolving funds will be used for processing miscellaneous bank charges and non sufficient fund (NSF) checks. A regional revolving fund will be established at each bank where the College has a depository account.

    Procedure

    1. Debit and credit memos and miscellaneous items pertaining to the regional depository account(s) are to be processed through the regional revolving fund.  Charges invoiced by regional depository bank for check printing, when appropriate, should be processed to the appropriate expenditure account as a routine function of the regional revolving fund.
    2. Items created by differences in deposits (i.e., checks totaled incorrectly on bank deposit slips, etc.) should be charged to Over/Short.  All cash overages or shortages must have the approval of either the Vice President/Chancellor, Executive Dean, or Executive Director of Finance (EDF) before the reimbursement voucher is processed in the accounting system.
    3. A copy of all cash over/shorts in excess of $25 must be sent to the Internal Audit Department.  Any cash over/short in excess of $250 must be reported immediately to the Vice President for Finance/Treasurer (designee is the Assistant Treasurer.)
    4. The bank will be requested to automatically redeposit NSF checks when first returned.  The bank will be requested to charge NSF checks, which fail to clear a second time, against the regional revolving fund.
    5. The bank is to forward notices of NSF items (debit memo or returned item memo) together with the NSF check to the regional business office.
    6. Appropriate documentation for reimbursement will be the bank debit memo and a copy of the student's account reflecting the entry to the Student Information System.
    7. When moneys are collected to honor an NSF item, such funds are to be recorded on the Student Information System and deposited with other daily receipts.
    8. The uncollected NSF checks are to be included on the Students Accounts Receivable System and in the annual write-off request, if applicable.  The criteria for write-off is comparable to any account.
  1. Revolving Fund Shortage

    A copy of all cash over/shorts in excess of $25 must be sent to the Internal Audit Department. Any cash over/short in excess of $250 must be reported immediately to the Vice President for Finance/Treasurer (designee is the Assistant  Treasurer).

    Documentation of cash shortages in excess of $250 must be forwarded to the Vice President for Finance/Treasurer for approval prior to processing the reimbursement request to charge the shortage against the Cash Over/Short expenditure account.
  1. Audit

    Revolving fund moneys, bank statement, and other pertinent information are to be made available, upon the request of the College Auditing Department, as necessary to make periodic audits of such funds to aid the custodian and College in proper handling.

 

B. Depository Funds/Depository Accounts
 
  1. Definition

    Depository funds are moneys, currency, checks, and credit card drafts temporarily placed with a banking institution as a general deposit subject to withdrawal in accordance with the terms of the deposit arrangement.
  1. Authorization

    College depository account(s) have been authorized at each of the regional institutes.  Only the College Vice President for Finance/Treasurer and the College Assistant Treasurer have signature authority for expenditures/ transfers and for credit card arrangements from these accounts.  This authorization is from resolution and motion of the State Board of Trustees appointing the College financial officers.  A resolution authorizing the initial establishment of regional depository accounts is available through the Office of the Assistant Treasurer.
  1. Establishment, Control, and Responsibility

    The establishment, control, and responsibility of a College depository account is under the direction of the Office of the Assistant Treasurer and is to be established in the name of:

    Ivy Tech Commnity College of Indiana
    Depository Funds - Region XX
    (Address of Regional Institute)


    (The Y character represents the first letter of the city (town) in which the depository account is located, other than the city of the main location of the regional institute.) .

    Bank statements and checks are under the control of the Assistant Treasurer, with deposit tickets furnished by the regional institute.
  1. Bank Signature Card

    Evidence of authorization will be made by the completion of a bank signature card with the signature of the:
    1. Vice President for Finance/Treasurer
    2. Assistant Treasurer
  1. Usage

    Depository accounts are a collection mechanism which provides concentration of the College collected funds from fee payments and contractual arrangements negotiated by the regional institutes.  Such arrangements provide for immediate safeguard of funds until such funds are transferred to the College's primary bank account.  By statute, the College is required to make deposits within one business day of receipt.

  1. Regional Depository Cash Transfers

    This policy was effective June 1, 1993. 

    Regional business personnel are to initiate a cash transfer to the College's main account:

    1. whenever the regional depository has more than $5,000 in deposits in the account; or
    2. on each Thursday, whenever the regional depository has more than $2,500 in deposits in the account.

    According to bank restrictions, only one data transfer is allowed daily.  A log is to be maintained for all deposits and transfers, with a copy forwarded to the Finance area at Central Office, at the end of each month, to the attention of the Bank Reconciliation office.  Transfers are to be made without regard to whether the Cash Receipts form has been completed or input in FRS. 

    The Cash Receipts form should be prepared and input into the accounting system on a daily basis.

  1. Credit Cards

    Credit Card agreements with the banks are to be approved by the College Vice President for Finance/Treasurer prior to being implemented. 

    To accommodate students wishing to pay their fees by credit cards, arrangements shall be made, where possible, with the banks holding the College depository accounts, for acceptance of credit card sales drafts for the payment of student fees and student purchases of books and classroom supplies. Only credit cards approved by the bank holding the depository account will be accepted for payment by the depositor (regional business office) of the depository bank account.  Each regional business office will provide public notice of credit cards acceptable for payment of fees and purchases.  Each regional business office must follow the procedures required by the bank in utilizing and in submitting credit card sales drafts for deposit into the College depository bank account. (Refer to Cash Receipts form for recording of credit card sales drafts.) Arrangements shall be made to have banks, accepting credit card sales drafts as direct deposits to the College depository accounts, to either invoice the regional business office on a periodic basis for costs incurred in handling credit card sales drafts, or to have the costs incurred processed against the regional institutes respective revolving fund bank account.

  1. Non sufficient Fund Items and Miscellaneous Bank Debits and Credits

    (Reference: Revolving Funds, Item #9)

  1. Dishonored Check Charge

    A charge of $25.00 will be assessed for dishonored checks for each occurrence. Examples of dishonored checks are checks returned because of stop payment, no account, account closed, or non sufficient funds. 

    The regional business office reserves the right to insist on cash, postal money order, or certified check for replacement of a dishonored check.

 

C. General Bank Account
 
  1. Rationale

    The College's general bank account serves as the primary account for all banking transactions. All deposits either direct or transferred from depository accounts are placed into the College's primary account. However, a single disbursement check can be charged to any number of separate funds through the use of proper account coding.
  1. Authorization

    By resolution and motion of the State Board of Trustees appointing the College financial officers, the College Vice President for Finance/Treasurer and the College Assistant Treasurer have signature authority for receipt and disbursement of College funds from this account.
  1. Bank Signature Card

    Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

    1. Vice President for Finance/Treasurer
    2. Assistant Treasurer
  1. Usage

    The primary function of the general bank account is to provide control on activities affecting the cash flow of the College.  Through the control of cash receipts and disbursements, the management has a greater potential for maximizing the pool of cash from which short-term investments are made.

 

D. Payroll Account
 
  1. Rationale

    The College's payroll account is a zero balance type of checking account which is used for disbursement control on employee payroll checks. 

    Each day as payroll checks are presented (cleared by bank), a debit balance is accumulated.  At the close of each day, a credit is automatically generated (by the bank holding the payroll bank account) equal to the day's debit, and applied to the payroll account (bringing the balance back to zero), and a corresponding debit is applied to the primary bank account (the College's general account).

  1. Authorization

    By resolution and motion of the State Board of Trustees appointing the College financial officers, the College Vice President for Finance/Treasurer and the College Assistant Treasurer have signature authority for receipt and disbursement of College funds from this account.
  1. Bank Signature Card

    Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

    1. Vice President for Finance/Treasurer
    2. Assistant Treasurer
  1. Benefits

    The benefits of such a banking arrangement, where one bank account draws on a second bank account for funds to cover only an amount needed for clearing items, allow:

    1. The elimination of an excess balance,
    2. Centralized cash in the primary bank account providing better management for short-term investments,
    3. Extends disbursement flow,
    4. Eliminates overdrafts, as well as the need to fund those accounts.

 

III.  Bank Service Charges
 

It is College practice not to pay bank service charges.  Exceptions are reasonable charges for (1) credit card services; (2) printing of checks and deposit tickets; and (3) transfer checks.  These charges may be invoiced to the College or, with the approval of the Executive Director of Finance, charged to the Region's revolving fund.

 

A. Outdated Checks
 
  1. Rationale

    Checks drawn on College funds, which have been or may continue to be outstanding and unpaid for a period of two (2) or more years as of the last day of December of each year, shall be declared canceled.  No individual bank, trust company, building and loan association, or any other financial institution shall honor, cash, or accept for payment or deposit any check which may be presented for payment, and which has been issued and outstanding for a period of two (2) or more years as of the last day of December of any year (i.e., a check dated January 1997 shall be canceled as of December 31, 1999).
  1. Statutes

    Statutes of the State of Indiana require the College to send a report of outdated checks to the Indiana Attorney General's office for checks outstanding two years or longer as of December 31 of each year.
  1. Procedure

    1. Complete the attached form by January 31 of each year.  Retain one copy for file and forward a copy with check to the Controller's office.  (Check is to be made payable to the Ivy Tech Community College of Indiana).

    2. Cease to include the outdated checks as outstanding items when reconciling bank accounts on which these checks were drawn.  Checks payable to Ivy Tech are a non reimbursable item of the revolving fund since these items have previously been accounted for and reimbursed to the revolving fund.

    3. Outdated checks, two or more years old, are not to be honored or processed as a cashed item against a College account.  Should this occur, the bank holding the account should be advised to credit the account with the amount of any such item cashed.

    4. Persons holding outdated checks, who inquire relative to cashing such items, should be told to contact the Controller's office.  A procedure is available for a claim on such items.
IV.  Cancellation of Outstanding Checks
B. Undeliverable Checks
 
  1. For campus based and entitlement financial aid programs.

    Campus based and entitlement financial aid checks, which have not been claimed, are to be returned to the Office of the Assistant Treasurer no later than fifteen (15) days after the end of the semester of issuance.  These checks will be deposited and recorded to a revenue account identified as program recovery.
  1. All non deliverable checks (excluding campus based and entitlement financial aid checks).

    All other non deliverable (unclaimed) checks are to be returned to the Office of the Assistant Treasurer after seven (7) days of the date of the check.  These checks will be housed in a place of safekeeping for the length of time stipulated for abandoned property, following return by the regional business office or U.S. mail.  A report of the amount of money attributed to the non deliverable checks will be forwarded annually to the Indiana Attorney General's office.
   end of Section E