Chapter 8 Cash Disbursements and Checks

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1 Chapter 8 Cash Disbursements and Checks All disbursements from internal funds must be in the form of approved pre-numbered checks, with the exception of disbursements from change funds. Internal funds may not be used to cash checks to accommodate individuals, make any kind of loans, pay any form of compensation directly to employees, or extend credit. If a school is in a situation that requires payment by electronic transfer, the request must be submitted to the Treasury Department for processing through approved and established banking channels. The principal is fully responsible for all purchases and purchase commitments requiring present or future disbursements from internal funds. All purchases from internal funds require the advance approval of the principal, and it is up to each school administration to establish a method of granting advance approval. Teacher/sponsors may not make unauthorized purchases without first routing them to the principal for approval to confirm their compliance with district purchasing guidelines and policies. Purchases of goods and services are subject to the spending limitations outlined in Board Policy, state statute, and other authoritative rules and regulations. When the district has a bid in place, purchases of items covered by those bids should be made from the bid-awarded vendor. Requests to use an alternate vendor for items on school district bids must be approved by the Director of Purchasing prior to placing the order. Requesting Purchases from Internal Funds Schools should use budgeted funds for the general operation of the school to purchase equipment, supplies, forms and postage for curricular or classroom use, but may use internal funds for those purposes when the budget has been depleted. Purchases for extracurricular clubs, sports, music and other student activities are financed through internal funds, and are subject to the guidelines outlined in the Internal Accounts Manual Chapter 23, Purchasing Guidelines. The general guidelines that apply to purchases from internal funds are outlined below. There may be different requirements for documentation and approval based on the size of the purchase and the nature of the item being purchased. Schools may not separate purchases into smaller orders to avoid the issuance of a written purchase order or avoid district-level approvals. All internal purchases must be approved by the principal in advance and the appropriate paperwork must be completed prior to obligating the school for any expenditure. To obtain commodities (materials, supplies, equipment, etc.) using internal funds, the following purchasing thresholds apply: o Use bid-awarded vendors for items that have been competitively bid. Requests to purchase a bid-awarded item from a non-bid vendor must be submitted to the Purchasing Director prior to placing the order. o Orders totaling less than $1,000 Written purchase orders are not required. Schools have the option to place a direct order with the vendor, issue an Internal Accounts PO (PBSD 1882), use a district P-Card, or place an order using the PeopleSoft Marketplace. Direct purchases and internal accounts POs will be paid to the vendor by school check. Internal Accounts Manual 1 Chapter 8

2 PeopleSoft orders and P-Card purchases will be paid to the vendor by a District check and invoiced to the schools upon completion through the Accounts Receivable/Billing process. Principals are authorized to approve these commodity purchases, and Purchasing Department approval is not required. o Orders totaling $1,000 or more Written purchase orders are required, and schools have the option to issue an Internal Accounts PO (PBSD 1882) or request a PeopleSoft PO. Internal accounts POs will be paid to the vendor by a school check. PeopleSoft POs will be paid to the vendor by a district check and will be invoiced to the schools upon completion through the PeopleSoft Accounts Receivable/Billing process. o Not all commodities and supplies are on bid; if annual purchasing with a non-bid vendor exceeds $5,000 per vendor per year, schools must obtain three competitive quotes and select the best vendor. The principal can set the criteria for determining which vendor is best, and may include factors other than price, such as customer service, quality, delivery time, etc. when determining the best vendor. o Principals are authorized to spend $15,000 per vendor per year for commodities and supplies. When spending with a vendor exceeds this level, subsequent purchases must be submitted to Purchasing for quotes. However, the $15,000 spending restriction does not apply to purchases of graduation supplies, cap and gown, class rings, Project Graduation, dances, or items schools purchase for resale as part of a fundraiser. Curricular-related travel should be paid from budgeted funds. Travel to seminars, conferences, and other staff inservice or professional development activities are not payable from studentgenerated funds unless students are attending and participating in the event. If students are not participating, these activities may be paid from the Administrative Courtesy Account or other designated trust accounts. All travel is subject to Policy 6.01 Authorized Travel Expense Reimbursement, which outlines the approvals, documentation requirements, and reimbursement policies that govern district travel. No expenditures for travel may be made without an approved Leaves/Temporary Duty Elsewhere (TDE) Application (PBSD 0032). Curricular-related professional, technical, or consulting services may not be paid from internal funds unless budgeted funds have been depleted. Principals are authorized to sign consultant contracts up to $5,000 per vendor per year. When contracted services exceed $5,000 per vendor per year, the contract must be submitted to the Area Superintendent and to Purchasing for additional signatures. All contracts for services are subject to the approval processes, spending limits and documentation requirements outlined in the Purchasing Manual, Chapter 13 Consultant Agreements. No expenditures related to consultants may be made without a completed and approved School District Consultant Agreement Packet (PBSD 1420). o Consultants or other vendors working on campus during school hours must be fingerprinted and cleared in accordance with the provisions of the Jessica Lunsford Act, and shall present a picture ID badge issued by School Police prior to entering the campus. o District-level employees and substitutes may not work as consultants. School-based employees may work as consultants under their business name, but may not be hired to perform services at their home school. Internal Accounts Manual 2 Chapter 8

3 Personal memberships or subscriptions are not payable from internal funds. Memberships, dues and subscriptions in the name of the school are allowable, but any payments of dues and memberships must be confirmed against the Compliance List prior to payment. The Compliance List is maintained in the district s Accounts Payable Department. Articles for the personal use of any student, employee or other person (except items which are given in recognition of outstanding achievement as rewards or incentives) are not generally permitted from internal funds, except as specifically permitted elsewhere in this manual. Salaries or other compensation for employees are not permitted from internal accounts. Loans, credits, or personal accommodation purchases are not permitted from internal funds. No purchase shall be made unless sufficient financial resources are available, except items purchased for resale as part of an approved fundraising campaign. All fundraising must be approved by the principal in advance by completing a Fundraising Application/Recap (PBSD 0153). Expenditures related to field trips may not be made without an approved Field Trip/Activity Planning Report and Approval Request (PBSD 1894). Revenue derived from vocational academy production shops may be used for the general operations of the vocational program. Purchases of supplies, equipment, travel, consultants, and equipment repairs may be paid from these funds. However, those purchases are subject to the guidelines outlined in Chapter 23, Purchasing Guidelines. For more specific information on purchasing commodities and supplies (Chapter 23) or consultants (Chapter 24) please consult the appropriate chapter of the Internal Accounts Manual. Requesting Payments from Internal Funds All purchases from internal funds require appropriate documentation for the expenditure. A vendor invoice, cash register receipt, or other sales document from the vendor is required when making payments to outside vendors. Additional documentation may be required in some instances (a copy of the PO, contract, fundraising application, field trip request form, or approved TDE form, for example) but invoices or receipts must always be original documents to prevent duplicate payments. Invoices or receipts will show the vendor name, a detailed list or description of the items purchased, the date of purchase, and the invoice total. Teacher/sponsors are responsible for obtaining appropriate invoices or receipts from the vendor, reviewing invoices for accuracy and completeness, and confirming that the goods or services were satisfactorily received prior to requesting payment from internal funds. If payment is in order, the teacher/sponsor shall complete a Check Requisition (PBSD 0181) and attach the necessary documentation to the form to request the issuance of an internal funds check. The teacher/sponsor s role in the cash disbursement process is to: o Review the invoice for accuracy and completeness, and confirm that the goods or services were delivered. o Complete the Check Requisition in ink pencils, crayons, etc. are not permitted. Fill in the school name, the name of the internal account and the account number, the check amount and a brief description of the items purchased or an explanation of how the Internal Accounts Manual 3 Chapter 8

4 o o o items will be used. If more than one invoice is submitted, enter each invoice number as part of the description. Sign the check requisition and submit it to the bookkeeper for review and processing. Confirm the accuracy of payments by reviewing account transactions periodically. Assist the bookkeeper in obtaining payment information (name, address, and possibly a SSN or EIN) for new vendors or service providers who must receive a 1099 form at the end of the year. The bookkeeper s role in the cash disbursement process is to: o Review the check requisition for accuracy, completeness, and compliance with District policies and procedures. Incomplete check requisitions may be returned to the teacher/sponsor for completion or referred to the principal if necessary. o Enter the disbursement information into the School Cash Accounting system and issue the check. o Establish new vendors and categories in School Cash in accordance with the provisions outlined in Chapter 4 and Chapter 5 of the Internal Accounts Manual. o Sign the check in accordance with the provisions outlined in Chapter 3 of the Internal Accounts Manual. o Route checks to Principal for second signature. o Note the check number and check date on the Check Requisition form. o Cancel all invoices PAID. o Distribute or mail checks to the vendors or other recipients. o File check requisitions numerically by check number. o Retain disbursements files for five years. The principal s role in the cash disbursements process it to: o Review and approve purchasing requests from teacher/sponsors. o Review and approve check requisitions for accuracy, completeness, and compliance with District policies and procedures. o Sign the check in accordance with the provisions outlined in Chapter 3 of the Internal accounts Manual. Entering Invoices into School Cash Check requisitions submitted by teachers and other activity sponsors must be verified by the bookkeeper, entered into the computerized accounting system, and a check must be issued and distributed to the payee. The following series or steps constitute the recommended best practice for verifying data and issuing checks from School Cash. 1. Review the documentation for completeness and compliance with district policies and procedures. Is the check requisition complete and is it signed by the sponsor? Are original itemized invoices attached to the check requisition? Are copies of any additional documentation necessary to fully explain the disbursement request included? Examples of Internal Accounts Manual 4 Chapter 8

5 additional documentation would be copies of contracts, copies of field trip forms, copies of purchase orders, and other order forms. 2. If receipt or invoice copies are submitted, contact the teacher/sponsor for originals or perform a Ledger Inquiry in School Cash to confirm that the copies were not previously paid. From the main menu select Ledger Inquire and click the gray Search tab. Specify Check as the Transaction Type, then search for the transaction by Account Name (to review all payments for a single category) or by Vendor Name (by entering the name of the payee in the Description field to review all payments to a specific payee) or by Amount (by entering the invoice amount in the Debit field). Initial the invoice copy to signify that a previous payment was not identified by the Ledger Inquiry. 3. Enter the invoice into School Cash and charge it to the category listed on the Check Requisition form. From the main menu select Issue Checks and enter the appropriate information, working on the Detail View tab Check Requested by - enter the name of the teacher/sponsor or select it from the pick list by entering the first few characters of the sponsor s name. Being consistent when entering the sponsor names and using the pick list feature will result in less typing and fewer entries in the pick list. Pay to the Order of enter the name of the vendor or select it from the pick list by entering the first few characters of the vendor s name. New vendors can be added to the database by clicking on the Update Suppliers button at the top of the screen to enter the vendor s name, mailing address, contact information, and SSN or EIN as shown on the vendor s W-9 form. Vendors that exist on the database can be selected from the pick list, and the address will be automatically inserted into the address/city/state/zip fields, eliminating the necessity of entering it each time. Addresses should be confirmed against the invoice and updated in the system if necessary. If other invoices are currently entered for the same vendor, School Cash will generate a pop-up box and offer the option to combine all invoices or one check or issue a separate check for each invoice. Date The date of the check School Cash automatically defaults in the current date. If checks will be issued another day, you will have the opportunity to change this date later during the actual check-writing routine. Amount enter the invoice amount. If multiple invoices are included on one check requisition, enter each invoice#/invoice amount as a separate form so each invoice number and amount will print on the vendor s check stub. Re: - this is an optional field that prints on the vendor s check stub and can be used to communicate special instructions or information to the vendor. Invoice# - enter the invoice number from the vendor s invoice. If multiple invoices are approved on one check requisition, enter each invoice individually and list each invoice number separately. That way each invoice number and invoice amount will print on the vendor s check stub and they will be able to use that information to apply the payment against the correct invoice numbers in their accounting system. Internal Accounts Manual 5 Chapter 8

6 Attention Optional field that prints on the vendor s check stub which can be used to route the payment to a specific individual in the vendor s office. Account# - Optional field that prints on the vendor s check stub that can be used to identify the school s account number in the vendor s accounts receivable system. Category Name or Category Number enter or select the account that will fund the expenditure as stipulated on the check requisition. Click in either field to enter a partial name or account number and select the correct category name or category number from the pick list. You may also enter the entire category number directly from the check requisition, which will automatically display the category name for verification purposes. Amount enter the amount to be paid against the category number. If multiple categories will be used to pay an invoice, finish the first line and click the Insert New Row icon to specify another category for this invoice. For split-funded payments, confirm that the invoice is balanced and the Difference shows $0.00. Reason describe the purpose for the check by scrolling to the right and entering an explanation as noted by the teacher/sponsor on the check requisition. This field is searchable in the Ledger Inquire module of School Cash and can be used to further identify the reason for the disbursement. Internal Accounts Manual 6 Chapter 8

7 Click Forms, Add Form to save the current form (invoice) and generate a new blank form. Follow the same procedure to enter each invoice individually into School Cash. A one-to-one correspondence between each vendor invoice and each School Cash check form is recommended as the best practice. This allows the duplicate payment detection feature of School Cash to operate most efficiently. The system will issue an alert whenever an invoice number already exists in the database for a particular vendor within the same fiscal year. Confirm the Data Entry and Print the Checks When the data entry for checks is completed, print a Statement to preview the checks. Select the Print button from the top of the page and select Statement from the drop-down menu. Print the statement to review the check numbers, payee names, invoice amounts, and other pertinent information that will print on the checks. Compare the Statement against the check requisitions from the sponsors and make any corrections by going back to the data entry screen associated with the check number and making the correction. Reprint the Statement to assure that the changes (if required) were successful, and proceed with the check printing process. Confirm that the check numbers shown on the Statement correspond with the check numbers preprinted on the check stock. If this is the first time printing checks, print a test form to review and make any corrections to the check layout. Load the check stock into the printer according to the manufacturer s instructions and select the Print button from the top of the page and select Checks to begin the check writing routine. Review the checks to verify that they printed correctly, and if so, click the Add to Ledger button to add the disbursements to the School Cash general ledger. Prepare the Disbursements for Signature and Filing Assemble the check packets for signature by temporarily attaching the check requisitions (including invoices and other supporting documentation) to the printed checks. Enter the check number and check date on each check requisition to avoid losing any of the documentation. Keeping the checks in numerical order will make it easier to file them at the end of the process. Forward the checks and supporting documentation to the principal, who will review and approve the expenditures (by signing the check requisitions) and sign the checks on the top signature line. Any checks not approved by the principal will need to be voided from the system and the teacher/sponsor will need to be notified. After the principal signs and approves the disbursements, the bookkeeper must do the following tasks: 1. Review the check requisitions for principal s signature and completeness. Staple the supporting documentation to the check requisition, and if multiple invoices/check requisitions were paid by one check, staple them together by check number. 2. Cancel the invoices with the PAID stamp. 3. Sign the checks. 4. Mail or otherwise distribute the checks to the payees. 5. File the completed check requisitions in numerical order by check number. Internal Accounts Manual 7 Chapter 8

8 Voiding Checks in School Cash From time to time it may be necessary to void a check that was issued in School Cash after it has been added to the ledger. This may happen with checks that are disapproved by the principal or issued in error, and in instances where a check is destroyed or defaced, lost by the payee, or stale dated. From the main menu in the General Activities section, select Reconciliation and click the CONTINUE button. Use the gray Search tab to locate the check. Specify Transaction Type Check and enter the check number in the Transaction# field and perform the search. This will highlight the check data and display the check data in the Outstanding Transactions tab. With the data line highlighted, click on the Void Check tab to begin the process. Enter the reason for the void (Stale Dated, Destroyed, Lost, Not Approved by Principal, etc.) and specify the date of the void (generally the current date) and click Continue to complete the process and record the void in the system. Bank reconciliations must be current or schools will not be able to access the void check feature in School Cash. To be eligible for voiding by the bookkeeper, a check must be outstanding on the current month s bank reconciliation. Checks issued after the current reconciliation date must be voided by District staff or voided by the bookkeeper after the bank reconciliation is completed. Voiding a check creates a reversing transaction in the current fiscal year. At the end of the year, all outstanding checks in School Cash are moved to a Year End Transactions account number as part of the standard end-of-year rollover process. Void checks from prior fiscal years must be modified to reflect the original account number in order to restore funds to the original account. This change can be made at the time the check is voided. All voided checks must be listed on the Prenumbered Document Inventory Register (PBSD 0160) and retained for inspection at audit time in a Void Check file as part of the school s year-end financial records. Voided checks should be stamped with a VOID stamp and defaced by cutting out the signature section of the check to eliminate the possibility that voided checks could be processed back through the banking system. Records Retention Requirements As with all financial documents, it is important to file the documents promptly so they don t get lost, and to maintain them in a neat and organized manner. Most schools have a file drawer for disbursements, with hanging files labeled with the months of the year and the check requisitions for each month are filed in numerical order within the hanging file. All disbursements and voided checks must be retained for five years. At the close of the fiscal year, they may be boxed and stored in the file room in a secure location on campus. When the new year s files come into the file room, the oldest files (from six years back) can be rotated out of storage and disposed of in accordance with the District s records disposal guidelines. Records retention and disposal information can be found at the FORMS link at the top of the District s main webpage. Internal Accounts Manual 8 Chapter 8

9 School Cash Online Resources Bookkeepers have three online options available to assist with issuing checks in School Cash. Tip Sheets short illustrations of specific tasks click on the Information icon at the top of the page to get step-by-step instructions from the School Cash experts. Enter user ID SCN and Password CASH to access the tip sheets. Resource Center from the main menu go to My School Information and click on the Resource Center to see an indexed list of questions and answers from end users and video clips demonstrating specific tasks in School Cash Accounting. User Guide - Located at the bottom of every page Check issuing guidelines are covered in Chapter 5 of the online user guide. Enter user ID SCN and Password CASH to access the online user guide. Internal Accounts Manual 9 Chapter 8