Local Agency Funds

Presented to Virginia Cooperative Extension:•September 21, 2010•September 24, 2010•September 28, 2010•October 14, 2010

Objectives

• Session 1– Local Agency Fund Update and Audit Results

• Session 2– UAAs Reconciliations

Background

• Transition to Local Agency Funds– Updates– Acknowledgements

• Process improvements were noted for the Extension offices visited as disbursements were not made from checking accounts but through HokieMart or purchase cards, which provided an additional level of scrutiny. (August 2010 Internal Audit Report)

Audit Findings and Training Emphasis

• Need to emphasize the following areas:– Independent Deposit Certification– Local Agency Funds policy guidance– P-card pre-approval process– Identifying and Depositing Donations (when to use

VT Foundation)– Policy guidance on funds handling and conflict of

interest– Reconciliation training

Independent Deposit Certification

• Separation of Duties is Critical– Deposits should be routinely certified by someone other

than the cash handler/depositor. • Audit FindingThis is not being done. In six of the ten units audited, there was

no indication that the deposit had been certified.• Your office MUST certify the deposit either before or after it has gone to the

bank. How to do this?– Someone, other than the cash handler/depositor must compare the deposit slip to the pre-

numbered receipts. The best practice is to certify before the deposit is made. This should be done by the Unit Coordinator.

– The certification can be done by someone else in the office, as long as the deposit slip is certified to the pre-numbered receipts. However, it is the unit coordinator’s responsibility.

• Finance Office will be incorporating this as part of our monthly review process.

Local Agency Funds – Policy Guidance9 out of 10 offices reviewed did not consistently adhere to the VCE Local Funds Policy

• Areas that we need to focus on improving:– Timeliness of Deposits

• Deposits must be made within 24 hours when funds exceed $400 or at a minimum of weekly when funds are on-hand. 31% of deposits tested did not meet the standard.

– Tracking receipt of funds• Your unit must have a pre-numbered receipt book and you must use it to record incoming funds.

– This is a necessary tool when certifying your deposits. You must compare this to your deposit slip as part of the process.

• Note: a mail log is not necessary if you have a pre-numbered receipt book.

– Voided Receipts• For all voided receipts you must provide an explanation for the void. No exceptions.• For all voided receipts you must have the initials of the supervisor (UC) approving the void. No

exceptions.

– Endorsing Checks• Checks must be endorsed immediately upon receipt. Do not set the check aside and wait to

endorse it later. A stamp can be purchased for endorsement purposes.

– Posting a returned check fee sign• Units using Wachovia – You must post a sign in your office indicating a $25 fee for returned

checks.• Units using other banks – You must post a sign in your office indicating the corresponding fee that

your bank charges for returned checks.

Purchasing Card: The Pre-approval Process• All P-card transactions are subject to pre-approval.

This pre-approval must be documented and retained on file in your office.– This is an internal VCE requirement. Not a VT requirement.

Why do we require this?• What level of pre-approval is necessary?– Always consult your district office. If there is a district

guideline, that is the one to use. Otherwise:• Pre-approval per transaction• Pre-approval per event• Pre-approval per time-period

Purchasing Card: Refresher

• Please make sure to retain your receipts for all purchases.

• Please make sure that your p-card log is prepared.

• Please make sure that you get the certification form and original statement to the controllers office in a timely manner.

• For more information, go to:– http://www.purch.vt.edu/Department/Procedures/ge.html

Local Agency Funds v. Foundation

• Gifts from individuals who are seeking to claim that gift as a charitable contribution MUST be deposited into the Virginia Tech Foundation.

• Local Agency Funds can account for other transactions.

• We will be working on more extensive training in the coming months as the 4H club tax status issue begins to take shape.

Other Training

• Policy guidance on funds handling.– Currently working with the Bursars Office on the funds

handling plans and what accommodations can be made for VCE. Work within the existing VCE funds handling guidelines until further notice.

• Conflict of Interest.– Training will be forthcoming to address the VT conflict of

interest policy. Anticipate some training on this in Winter 2011.

• Reconciliations– Up next for UAAs (provided by Julia Gregory)

Questions?