BUSINESS SERVICES DIVISION PROCEDURES MANUAL REVOLVING FUND CHECKING ACCOUNTS REVISED DATE 8/03 INTRODUCTION Revolving fund checking accounts are authorized with payments not to exceed $75.00 per purchase. A department may establish a revolving fund checking account up to the maximum established by the Board of Directors for making purchases that are of an emergency nature or not readily provided for by regular requisitions and which are necessary for the operation of the program. PROCEDURES Requesting/Increasing/Decreasing Revolving Funds 1. Send a memo to the Finance Department requesting to establish, increase or decrease a revolving fund (Attachment A). 2. Explain the reason you want to establish, increase, or decrease a revolving fund checking account in the memorandum request. 3. After the Finance Department has reviewed the request, you will be notified of the decision. Opening the Revolving Fund Checking Account After the Board of Directors has approved a revolving fund, it may be opened by issuing a warrant from the General Fund. A resolution authorizing the maximum amount of the revolving fund must be approved by the Board of Directors before the Finance Department can write a check payable to your department and establish the checking account. When to Use the Revolving Fund Checking Account The revolving fund checking account is to be used for making purchases that are of an emergency nature or not readily provided for by regular requisitions. Expenditures are not to exceed $75.00. Planning & Construction, due to the nature of their business, may be exempted from this threshold. District policy and procedure determine which payments should be made R:\BSD\REVOL.doc 1 SECTION 2.14
through the District's accounts payable system and which payments should be made through the revolving fund checking account. Some other things to consider before using the revolving fund checking account are: 1. Bids: The Purchasing Department may have bids or contracts that require some products be purchased from a particular vendor. Call the Purchasing Department to determine what items fall into this category. 2. Wages: All employee wages must be paid through the District payroll system. 3. Personal Services: Independent contractors are frequently considered employees by one or more regulatory agencies. Check with the Finance Department before agreeing to pay any individual as an independent contractor. 4. Sales Tax: Purchases from out-of-state vendors usually do not include state sales tax, since these vendors are not registered with the Washington State Department of Revenue. The District must pay compensating tax directly to the Department of Revenue on these purchases. The Accounts Payable section pays this tax when they process your revolving fund checking account replenishment. Indicate on your request for replenishment which payments should include compensating tax. How to Use the Revolving Fund Checking Account Each expenditure made from the revolving fund checking account must have prior approval of the student council. Payments must be made from original itemized vendor invoices only. Do not pay from statements. Approval and original itemized vendor invoices must be included with the claim for reimbursement, which is kept on file in the Finance Department for each revolving fund check written. Each check must be recorded in a check register by check number. All checks, including voids, must be accounted for in the register. All voided checks must be kept on file. All voided checks must have signature area removed. Completing the Replenishment Claim Form 1. You need not replenish your revolving fund each month. If less than 20% of the total account has been spent, you do not need to do a revolving fund checking account replenishment request. 2. Do not overdraw your imprest fund checking account. R:\BSD\REVOL.doc 2 SECTION 2.14
3. If you do not replenish the revolving fund each month, you must do a reconciliation form and attach a copy of the monthly bank statement. The reconciliation forms are available through the stock catalog. 4. When replenishing the revolving fund, submit a reconciliation form, copy of the bank statement and a reimbursement claim that includes the total of all revolving fund checks that were written during that month. 5. In the space provided on the claim form for listing of vendor - enter your department name and the words REVOLVING FUND, plus name of department head. 6. The paragraph must appear in the description area of the claim. 7. Submit claim form with only the total showing in the right hand side column and proper accounting breakdown at the bottom of form. 8. Prepare the replenishment claim in duplicate. Retain the duplicate copy for your records. 9. Forward original claim with supporting documentation in check number order to the Finance Department for payment. Supporting documentation is to be itemized - list check number, payee, purpose and accounting. 10. Attach approval forms for all payments. 11. Revolving fund charges are accounted for in the same manner as requisitions. Indicate on the itemized documentation the accounting to be charged for the purchase. 12. If the tax rate on the sales slip is different than the current City of Tacoma tax rate (e.g. Seattle), please indicate this. 13. All revolving fund claims for reimbursement must be signed by the department head in the space provided. No exceptions. 14. If minor corrections to the claim are made in the Finance Department, a copy of the revised document will be forwarded to you along with the replenishment warrant. If significant corrections are required, the claim will be returned to the originator for revision. R:\BSD\REVOL.doc 3 SECTION 2.14
15. Schools are responsible for follow up in writing to payees for outstanding checks. Two weeks after notices are sent to the payees, outstanding checks should be voided if there are no responses from the payees. 16. Voided checks must be adjusted on the next claim. Processing of Replenishment Claim Form Accounts payable is processed weekly. If your revolving fund replenishment claim reaches the Finance Department by Wednesday, it will be paid Thursday of the following week. Depositing Into the Revolving Fund Checking Account 1. Once reimbursement has been received, endorse and deposit warrant to revolving fund bank account. Prepare revolving fund deposit slips in duplicate, retain second copy for your file. 2. The only deposits allowed in your revolving fund checking account are your replenishment warrants and/or a return of change fund. Revolving Fund Reconciliation Form/Copy of Bank Statement 1. Monthly, reconcile revolving fund bank statements to check register. 2. The bank reconciliation should be completed by someone other than an authorized signer of the revolving fund checking account. 3. Use the revolving fund reconciliation form (Attachment B) to detail the status of your revolving account. A reconciliation form is required for each revolving fund claim for reimbursement. 4. A copy of reconciled bank statement that shows the balance for the period, as noted on the form, must accompany the first claim submitted after you receive the monthly bank statement. 5. If no activity has occurred during a monthly period, simply send a completed revolving fund reconciliation form, along with the bank statement copy to the Finance Department (one form per monthly period is required - due by the 10th working day of the month). R:\BSD\REVOL.doc 4 SECTION 2.14
ATTACHMENT "A" Date: To: From: Re: Finance Department Department Head's name Revolving Checking Account Please authorize increasing the total amount of the revolving checking account from $1,000 to $1,500. We often experience a shortage of funds needed to reimburse employees for necessary emergency expenses. Thank you for your consideration. Approved: Finance Office Date: R:\BSD\REVOL.doc 5 SECTION 2.14