ASSETS Cash Wings may place funds in checking accounts, savings accounts, certificates of deposit (CDs), and/or money market accounts. All funds must be readily available without loss of principal. All other investments must be pre-approved by NHQ CAP/FM. Signature cards for all bank accounts must be current and on file at the wing. Before opening new accounts the wing must verify the rating of the financial institution at www.bankrate.com. The financial institution must be rated one star or more. The following guidelines apply to these types of funds. Checking Accounts A wing should have the minimal number of checking accounts necessary to function effectively. The following are guidelines for checking accounts: Checks should be printed with the line void after 90 days to avoid long-term outstanding checks Checks should be printed with two signature lines Wings should use QuickBooks or another brand of checks that are compatible with QuickBooks (i.e., not handwritten) Wings must use commercially-printed, pre-numbered, three-part checks, i.e., checks are printed in the top third of the page and two vouchers are printed below Wings will not print their own check stock, i.e., buying blank check stock and then printing numbers on those blank checks Cancelled checks, either the original or an imaged copy, must be kept on file. If imaged copies are available on-line, these must be printed and maintained at the wing. Special activity accounts may use carbon-copy checkbooks or photocopy checks Special activity accounts must have at least two signers on the account who are members of the finance committee. Additional signers on special activity accounts do not have to be members of the finance committee. If the checking account has sub-accounts, make sure all transactions are recorded to the appropriate sub-account, not the lead account Savings Accounts / Certificates of Deposit / Money Market Accounts If the wing has cash funds above what they feel is a safe reserve in their checking account, they should consider depositing the funds in a higher-interest savings or CD account. The following are suggestions for savings and CD accounts: All accounts require two signatures to withdraw, close or transfer funds to an account in another financial institution. The wing finance committee may authorize transfers of funds to wing accounts within the same financial institution using a single signature, but 37
will complete CAPF 172, Consolidated Finance Authorizations, to authorize these transfers with limits on the amount that may be transferred without finance committee approval. All authorized signers must be members of the finance committee. All funds must be in federally insured accounts. All cash accounts must be reconciled when statements are received, i.e., if quarterly statements are received then the account must be reconciled quarterly. Outstanding Checks Any check that is outstanding more than six months should be researched. The wing should either void and reissue a new check, or write the check off completely. Any stale checks at the end of the fiscal year will be written off. Voiding Checks Written in the Current Fiscal Year If you need to void a check in the current fiscal year, follow these steps. Select Banking, then Use Register Select the appropriate checking account Find the check and click anywhere on the check s transaction line Right click your mouse and choose Void Check Click Record on the bottom right This method preserves the check number while making the check amount zero Note: this will put the bill associated with this voided payment back in accounts payable to be paid again. If you wish to void the entire transaction, you must void the bill you created. If the check was misprinted or voided outside of QuickBooks it must be recorded in QuickBooks. To accomplish this: Select Banking Select Use Register Select the appropriate checking account Scroll to the bottom of the register and enter the date and the check number of the missing check Enter Void or Voided Check as the name. Enter $1.00 as the amount and 9302000 Miscellaneous Expense as the account number Right click your mouse and choose Void Check Click Record on the bottom right This method has no effect on the bank reconciliation 38
Voiding Checks Written in a Prior Fiscal Year If you need to void a check from a prior fiscal year, contact your wing financial analyst to assist you. Returned Checks If you receive a deposited check back from your bank marked insufficient funds, make a journal entry debiting the appropriate income account where the income was credited on the initial deposit and crediting the bank account used for the amount of the check. Within the same journal entry, you can record the bank fee by debiting account 9303000 Bank Expense - to record the returned check bank fee and crediting the appropriate bank account for the same amount. When the funds for the NSF check are repaid, you will deposit the check as originally deposited, making sure that the reimbursed bank charge is recorded as income against account 9303000 Bank Expense. Restricted Funds Restricted funds are monies which are restricted by the donor for a specific purpose. Examples of restricted funds include: 1. Minor maintenance funds received from flying time 2. Donations restricted in writing by the donor for specific purposes, i.e., cadet encampments, scholarships, etc. These restricted funds must be tracked. Any restricted funds unused at year-end will be restricted on the wing s balance sheet. When restricted funds are received, they should be recorded using one of the restricted income accounts. You may also want to set up a class for the specific donation so you can track the income and expense associated with the donation. Some choose to establish a sub-bank account for these restricted funds also. If the restricted donation is received for a unit, track the expenses noting any unused funds from the donation. A copy of the letter from the donor restricting the donation must be attached to the deposit and uploaded to SmartVault. All unit donation checks may be deposited locally, but a copy of the check and supporting information must be sent to wing to allow them to send the donor an acknowledgement letter. Donations (Contributions) All cash donations over $250 must be acknowledged by the wing commander per CAPR 173-4. All donations over $5,000 must include the donor s name and address for audit purposes. Please refer to CAPR 173-4 for more information on fundraising and donations. Non-cash donations may include items such as uniforms, vehicles, vehicle repairs, 39
copiers, raffle items, etc. CAPR 173-4 contains information for acknowledging non-cash donations and rules for accepting them. Reconciling Bank Accounts From the Banking menu, choose reconcile to begin the reconciliation. In the beginning reconciliation window, select the bank account to reconcile by clicking the drop down arrow next to the account line and select the desired bank account. Remember to select the lead account to perform the reconciliation on any account that has sub-accounts. Input the closing statement date from the bank statement you are reconciling into the statement date drop down box The opening balance shown on your bank statement should be the same as the beginning balance in the beginning reconcile window Input the ending balance listed on your bank statement into the ending balance field If the bank statement lists a service charge, input the amount into the service charge box as well as the date the charge was listed on your statement. In the account drop down box, select 9303000 Bank Expense. If the account you are reconciling has sub-accounts you cannot enter bank service charges here because they will post to the lead account, which is a non-posting account. You must enter these with a journal entry. 40
If the account earns interest, input the amount into the Interest Earned box, enter the date the interest was posted to the account in the date box and select the income account 5410000 Interest Income. If the account you are reconciling has subaccounts you cannot enter interest earned here because it will post to the lead account, which is a non-posting account. You must enter this transaction with a journal entry. Select continue The reconcile window will now display all the checks and deposits that have not been previously reconciled. Using your bank statement, click each check listed in the reconciliation screen that appears on your bank statement. Do the same for your deposits. When you click on these items, a check mark will appear indicating this item has cleared your bank account. You can use the two numbers in the lower left-hand corner as check figures which should match the totals on your bank statement, unless you have extra journal entries. Once all the checks and deposits listed on your bank statement have been checked in QuickBooks, the amount listed in the lower right corner as difference should be zero. NEVER click reconcile now unless the difference is zero. If the difference is not zero and you have marked all checks and deposits as cleared, then you must determine what is missing and correct the error before you can reconcile 41
To leave temporarily to research items, select leave. You may also double click on a transaction to open it in a new window. Once your difference is zero, click reconcile now A new screen will appear with a selection box. Always select detail and display. Once the report is on the screen, click on File in the upper left-hand corner and then select Print. Once the Detailed Reconciliation Report is printed, it should be attached to the corresponding month s bank statement and maintained on file. All bank reconciliations must be reviewed and signed by a member of the finance committee other than the person who completed the reconciliation and uploaded to SmartVault. Sertifi signatures are recommended. When reviewing the bank reconciliation, review uncleared checks and deposits. Uncleared checks dated more than 6 months ago need to be researched and voided. Uncleared deposits older than a few days should be researched also. This could be an error or a bank mistake. Accounts Receivable The accrual system of accounting is used by all CAP units. Accrual accounting means the income is recognized at the time it is earned rather than at the time the funds are actually received. To accomplish this, entries to QuickBooks are made with the date the event occurred, not when the deposits are made at the bank. The following instructions detail the entries where accounts receivables are recorded. Recording Accounts Receivable Make sure that members understand the importance of the finance section receiving all information as it is transmitted to NHQ or other customers. As information is received, it should be input into the QuickBooks system as receivables. The invoice form in QuickBooks is used to record accounts receivable. To record an invoice for accounts receivable: Select customers and create invoices Select the customer name No class is required at the top Choose account 112000 Accounts Receivables List the day the income was earned (in the case of rebates or monthly flying, choose the last day of the applicable month) The invoice number would be a reference to the type of income, May12 rebates, May12Flying, Control number, or something similar Select the appropriate item for the income In the memo section, describe the event or income Enter the amount of the income or that portion of income 42
Click save and close or save and new if you plan to enter more invoices. Once you receive payment on an invoice: Select customers and receive payments Choose account 112000 Accounts Receivables Select the appropriate customer in received from Type in the amount of the payment Enter the date the money is received Select the payment method Make certain that the deposit is going into the correct checking account Ensure the correct invoice is checked Click save and close, or save and new. The deposit will be listed in your checking register and the invoice will be stamped PAID. Funding From State and Other Government Entities As the methods and amounts vary widely from state to state, please work with your wing financial analyst (WFA) in this area. Invoices must be created if the state is invoiced for charges and the wing is paid directly. If the state pays the vendor directly, a journal entry will record the income and expenses in QuickBooks. The tail number must be entered for aircraft minor maintenance income received and expenses paid by an outside agency if a wing is not on the Consolidated Maintenance Program. Member Flying Income Either the aircraft custodial unit collects all checks for the month and they are deposited by the unit or the checks are sent to wing. A member is responsible for paying for nonreimbursable flights at the time of the flight to include fuel. The aircraft custodian for the unit completes the monthly flying report and either forwards all the checks to wing with the report or deposits the checks into the unit bank account. All reports and checks are due to Wing HQ by the 15th of the succeeding month. All checks should be made payable to Civil Air Patrol. When the flying report and check(s) are received at wing HQ, the original report is sent to the Wing Director of Operations for review. A copy of the report and check(s) is sent to FM. The FM records an invoice for each check received. The minor maintenance portion is credited to the income account 5225201 Flight Activities Aircraft Minor Maintenance while the fuel portion (if applicable) is credited to account 5225202 Flight Activities Aircraft Fuel. The amount may be classed by aircraft tail number and the month the flight occurred should be recorded in the memo field. If the unit deposits the checks, an accounts receivable should have been created based on the monthly flying report using the income account 5225201 Flight Activities Aircraft Maintenance. When the unit deposits these funds, they should be applied to the receivable. 43
The checks are recorded as received against their respective invoices (see Receive Payments). The money is then deposited into the correct bank account either the unit s sub account or the wing account. At year-end, the money received for September flying must be recorded in September. An invoice will be entered for September to accurately show money due and payable for September flying hours. Not all wings will handle their member flying in this manner. However, all wings need to develop a system that allows the wing to accurately track the income collected from members against their respective aircraft tail numbers. Members must be charged at least the Air Force reimbursement rate as listed in CAPR 173-3. This rate must be applied uniformly to all corporate aircraft by type. Members should pay for their own fuel on all non-reimbursable missions. Wings may draft back the minor maintenance funds from the units without further approval but they must send a notification to the affected unit informing them of the impending draft back. The date and amount of the draft back must be listed in the notification. Recording the draft back in QuickBooks requires several steps. Create an invoice using the unit name as the customer and use the item associated with Income from Units Below Proficiency Flying Account 6513010. Date the invoice the last date of the month in which the flights occurred. Create a bill using Wing as the vendor and post to Expenses with Wings Proficiency Flying Account 9520010. Date the bill the last day of the month in which the flights occurred. If a wing writes checks to transfer funds between units and wing, pay the bill entered above through the pay bills function, then receive the deposited funds through the receive payments function. If you are going to do an online bank transfer of funds perform the next three steps: o Transfer the funds at the bank, but do not use the transfer function in QuickBooks o Select pay bills under vendors; put a check mark next to the correct unit s bill; at the bottom select the correct date; select the unit s sub-account under the unit checking account making sure that assign check number is selected, not print checks. Pay the bill. When the next screen appears, enter EFT for the check number. o In QuickBooks, using the date you transferred the funds at the bank, receive payments from the unit customer and select the wing bank account in the Deposit To box. Click on the correct invoice. Select Save and Close. Recording Deposits To record a deposit in QuickBooks, select Make Deposits or Record Deposits. Select the correct bank account. Use the same date as the deposit. In the memo field, use any 44
descriptive information regarding the transaction. In received from, choose the customer. In From Account, choose the income account for this deposit. Record the check number, if applicable. Record the amount for each deposit item. 45
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