The purpose of this administrative rule is to establish minimum standards for the proper receipt, handling, disbursement, and safeguarding of cash.
Authority for this administrative rule is established in the City Charter and City Code. This administrative rule has been approved by the City Council.
The Accounting Division of the Bureau of Financial Services of the Office of Management and Finance (Accounting Division) will periodically monitor bureaus to assess compliance with the minimum standards of this rule. As instances of non-compliance are identified, bureaus will be required to develop and implement a corrective action plan. The Accounting Division will provide assistance to bureaus, if requested, to develop this plan. The Controller will report all instances of non-compliance annually to the Chief Financial Officer (CFO) and City Council.
“Automated Clearing House (ACH) Network” means the nationwide electronic funds transfer system operated by the Federal Reserve and Electronic Payments Network. ACH Network transactions include direct deposits, direct payments, business-to-business payments, E-checks, E-commerce payments, and Federal, state, or local tax payments.
“Cash” means currency, coins, negotiable checks and money orders, electronic funds transfers, bankcard payments, demand deposits, and other accounts having demand deposit characteristics.
“Demand deposit” means accounts from which funds may be deposited or withdrawn at will by the owner without penalty.
“Electronic Funds Transfer (EFT)” means a transfer of funds, with no paper money changing hands, from one bank account directly to another. EFT may be used for both electronic payments and collections.
“Fedwire” means a real-time electronic transfer through a system owned and operated by Federal Reserve Banks. Fedwire is more expensive than ordinary EFT and is most often used to handle large-value, time-critical payments such as the purchase, sale, and financing of securities transactions; disbursement or repayment of loans; and settlement of real estate transactions.
“Restrictive endorsement” means a signature or stamp specifying the transfer of the check under certain conditions, such as the commonly used endorsement “For Deposit Only.”
“Segregation of Duties” means that one individual may not perform two or more accounting control functionssuch as authorization, receipting, disbursement, and reconciliation.
“Returned check” means a check that is returned unpaid to Treasury by the city’s depository banks.
Cash Internal Controls
1. Internal controls shall be established and maintained to provide management with reasonable assurance that cash and cash-related transactions are properly accounted for and controlled.
2. Duties relating to the handling of cash transactions shall be adequately segregated so that no single person shall handle a cash transaction from beginning to end.
3. Collections, deposits, purchases, disbursements, bank reconciliations, approvals, and recording of transactions shall be segregated to the optimum extent possible.
4. Where segregation is impractical, alternate compensating controls shall be arranged through the Accounting Division. Such controls may include additional managerial review, unannounced audits, periodic reassignment of duties, or verification by other staff.
5. At the end of each accounting period, Treasury shall prepare a written reconciliation of bank statements to Treasury cash records, and the Accounting Division shall prepare a written reconciliation of Treasury cash records to the general ledger.
Receipt and Deposit of Cash
1. Cash receipts shall be deposited and recorded promptly in order to ensure accurate records, reduce the chance of loss or theft, and allow the city to maximize interest income.
2. Written acknowledgment of receipt shall be provided to customers at point of sale locations and receipt copies shall be retained at the collection site, including copies of voided receipts.
a. Receipt acknowledgments may be cash register tapes, official pre-numbered receipt forms, or other such appropriate documentation.
b. The numerical sequence of pre-numbered receipts forms, including voided receipts, shall be accounted for on a regular basis.
3. A daily listing of checks received shall be generated at all sites where checks are collected, including mail rooms. Checks shall be restrictively endorsed upon acceptance at the collection site.
4. Deposits shall be made using preprinted City deposit slips prepared in duplicate.
5. Deposits shall be intact, meaning that all cash and checks shall be deposited in their entirety and shall not be used to pay expenses, make adjustments to accounts, or cash personal checks.
6. Bureaus shall, on a daily basis, reconcile deposit detail, including credit card receipts and ACH activity, to daily sales receipts or other point of sale documentation.
a. Discrepancies shall be investigated promptly, and if material, reported immediately to both bureau management and the Accounting Division.
b. Any cash overage or shortage shall be charged to the appropriate account and shall not be netted to the deposit.
7. Deposits shall be made in a timely manner as follows:
a. Daily receipts totaling $250 or more shall, within one business day of receipt, be either delivered to the Treasury Department for deposit or deposited directly from the collection site into a Treasury-designated financial institution.
b. Daily receipts totaling less than $250 may be held and deposited no less than weekly, but only if the receipting location possesses adequate facilities for securing such receipts. Receipts may be accumulated and secured until the total exceeds $250. At that point, a deposit shall be made within one business day.
8. Receipting entries applying the deposited cash shall be prepared and submitted to Treasury within 10 working days of deposit. Entries shall, to the greatest extent possible, identify appropriate and accurate account codes for revenue and other cash sources.
9. Bureaus shall adopt specific cash deposit procedures that promote and insure the safety of employees.
1. Treasury shall establish accountability for checks returned by the bank, such as checks that are returned for insufficient funds (NSF).
2. Treasury shall either handle and resolve such items or distribute them to the appropriate bureau in accordance with agreed upon arrangements with that bureau.
3. Bureaus shall adopt specific procedures for the handling, recording, and collection of returned checks.
4. In accordance with ORS 30.701(5), bureaus may charge up to $25 per returned check to cover the cost of such processing.
1. All disbursements, with the exception of petty cash disbursements only, shall be by check or electronic transfer.
2. Disbursements shall be only for authorized purposes, within legal appropriations.
3. Proper fund and account shall be charged for all disbursements.
4. Disbursements shall be made in accordance with payment terms specified by invoice or contract thereby preventing the incurrence of interest and penalties for late payment.
5. Disbursements shall be authorized only by personnel acting within the scope of their prescribed authority and responsibility, and those persons authorizing shall neither prepare or sign checks nor reconcile such disbursements to bank statements.
6. For all disbursements, documentation such as original invoices or payroll records shall be retainedin accordance with City policies and retention schedules published by the City Auditor.
7. Checks shall be issued in numerical order. Void checks shall be retained, and the numerical sequence of checks, including voided checks, shall be accounted for on a regular basis.
8. Bureaus shall maintain written procedures for handling and processing payment documents. Bureaus may consult with the Accounting Division for assistance in developing such guidelines.
Safeguarding Cash and Checks
1. Cash on hand, including petty cash and change accounts, shall be secure at all times.
a. During operating hours, cash shall be locked in a cash register, drawer, or box.
b. During non-business hours, cash shall be locked in a more secure location such as a locking file cabinet or safe.
2. Unused check stocks shall be stored in a locked and secure area at all times. Only authorized personnel shall have access to this area.
3. Check-signing equipment, including signature plates, shall be maintained in a locked and secure area at all times and shall be accessible to and operated only by authorized personnel.
4. In accordance with City code Section 7-105, checks, exclusive of petty cash checks, shall be signed by both the Mayor and the City Auditor. For more information relating to petty cash check, see Accounting Administrative Rule FIN-6.09.
5. EFT transactions shall be initiated and completed only by authorized personnel.
a. Duties for initiating, releasing, and reconciling electronic transactions shall be appropriately segregated.
b. Unique passwords shall be issued to each individual having access to electronic accounting records or transactions. Such passwords shall not be shared and shall be periodically changed.
Resolution No. 36435, adopted by Council September 6, 2006.