Welcome. Custodian Funds Training Cash Management Accounting Services Spring 2018

Transcription

1 Welcome Custodian Funds Cash Management Accounting Services Spring 2018

2 Presented by Rochelle Cushman Cash Management Supervisor Sara DeMuri Senior Accountant 2

3 Agenda 1 Introduction and Background 2 Types of Custodian Funds 3 Cash Management Updates & Reviews 4 Compliance 5 Reconciliations 3

4 Resources in Packet Custodian Funds PowerPoint Count of Custodian Funds by Department Summary of Types of Accounts and Glossary of Terms Life Cycle of Custodian Funds Updated Worksheets with Directions Four Reconciliation Examples 4

5 1 Introduction and Background 5

6 Internal Control Initiative Overarching Goal: Attain excellence in financial stewardship APR Report on Cash Handling 6

7 UW System s Internal Audit on Cash Handling Monitoring Separation of Duties AUDIT FINDINGS Compliance 7

8 Response to Internal Audit Findings Updated Policies & Procedures Cash Mgmt Reviews Monthly Reconciliations MOUs for Custodian Funds* * MOUs = Memorandums of Understanding MOUs will be required to be updated and signed annually 8

9 Custodian Funds Life Cycle and Framework Opening an Account Maintaining an Account Closing an Account 9

10 2 Types of Custodian Funds 10

11 Which Types of Funds Do You Use? Funds for Research Participant Studies Other Bank Accounts Other Funds Replenishable Checking Account Contingent Checking Account Change Fund Temporary Fund Target/Transaction Banking Account (TBA) Administrative Bank Account Petty Cash These have bank accounts 11

12 Number of Bank Accounts (As of mid-august 2017) Type Count Replenishable/Research 60 Contingent 8 TBA 15 Administrative 6 TOTAL 89 Number of Other Accounts Type Count Temporary/Research 153 Change Fund 25 Petty Cash 2 TOTAL

13 Replenishable/Research & Contingent Replenishments FY2017 Data Count Total Amount of Replenishments 551 $1,136,002 Count Total Authorized Amounts Temporary/Research Requests 539 $778,535 Bank Accounts Opened 7 $23,900 Bank Accounts Closed 8 $58,750 13

14 Replenishable Bank Accounts Checking accounts used for Research Participant Studies that are for more than one year. Memorandums of Understanding (MOUs) for: Custodian Signers Reconciler 14

15 Role Definitions: Custodian UW-Madison employee responsible for: Monitoring the cash advance for research participant studies. Example: For bank accounts for research participant studies, a custodian would be an administrative resource for the study and would be independent of the signers and reconciler. 15

16 Role Definitions: Signer UW-Madison employee responsible for: Writing and signing checks to the appropriate recipient Ensuring all checks are logged and accounted for. Example: For bank accounts for research participant studies, a signer would be the principal investigator (PI) or their research designee responsible for coordinating the participation of study participants independent of the custodian and reconciler. 16

17 Role Definitions: Reconciler UW-Madison employee responsible for: Performing and submitting monthly reconciliations Example: For bank accounts for research participant studies, a reconciler would be an individual responsible for requesting replenishment funds for the account and would be independent of the custodian and signers. 17

18 OPEN Replenishable Bank Accounts MAINTAIN CLOSE Justification Letter (explaining purpose of study and how it is linked to the project) Custodian Fund Request Form Custodian Fund Agreement Form Custodian Fund Budget Form New Bank Acct Info Form Check Order Form Bank Acct Website Access Form MOUs US Bank Signature Form (Request from Cash Management.) Monthly Reconciliations Custodian Fund Accounting Form Research Participant Log (Ensure HIPAA information is not included.) Custodian Fund Accounting Form Research Participant Log (Ensure HIPAA information is not included.) Check Shred Confirmation 18 19

19 Temporary Funds Temporary Funds are used for research participant studies that are for less than one year. Temporary Funds are opened for three months or less. An example: 19

20 OPEN Custodian Fund Request Form (include justification of purpose of study and how it is linked to the project) Custodian Fund Agreement Form Custodian Fund Budget Form Temporary Funds MAINTAIN Research Participant Log (Ensure HIPAA information is not included.) Review Account Code 6167 CLOSE Custodian Fund Accounting Form Research Participant Log (Ensure HIPAA information is not included.) Personal check if full amount of Temporary Fund is not used See Notes Below Documentation for closing the Temporary Fund is due to Cash Management within 30 days of the end of the Temporary Fund Past Due Notices are sent if closing documentation is not received by Cash Management within the 30-day deadline

21 Unique Circumstances: Research Studies in Foreign Countries Department is asked to: 1) Contact Cash Management well in advance to determine a solution. 2) Prepare a procedure document to explain separation of duties. 3) Meet with Cash Management to review/discuss procedure document. 21

22 Other Custodian Funds Other Bank Accounts Other Funds Contingent Checking Account Change Fund Target/Transaction Banking Account (TBA) Petty Cash Administrative Bank Account These have bank accounts 22

23 Contingent Checking Account Contingent Checking Accounts are used to pay authorized vendors by check when the purchasing card cannot be used and when the Accounts Payable process is not an option. Memorandums of Understanding (MOUs) for: Custodian Signers Reconciler 23

24 OPEN Contingent Checking Account MAINTAIN CLOSE Justification Letter (explaining purpose of account) Custodian Fund Request Form Custodian Fund Agreement Form Custodian Fund Budget Form New Bank Acct Info Form Check Order Form Bank Acct Access Website Form MOUs US Bank Signature Form (Request from Cash Management.) Monthly Reconciliations Custodian Fund Accounting Form Expense Log Invoices Custodian Fund Accounting Form Expense Log Check Shred Confirmation 24 25

25 Target/Transaction Balance Account (TBA) A deposit bank account for tracking specific department deposits. The deposits are transferred to UW-Madison s main deposit account at the end of each day. Memorandum of Understanding (MOU) I m responsible for signing the US Bank Signature Form. Custodian Reconciler Departments must request US Bank Signature form from Cash Management. 25

26 Target/Transaction Balance Account (TBA) OPEN MAINTAIN CLOSE Justification Letter (explaining purpose of account) Custodian Fund Request Form Custodian Fund Agreement Form Bank Deposit Slip Order Form New Bank Acct Info Form Bank Acct Website Access Form MOU US Bank Signature Form (Request from Cash Management.) Monthly Reconciliations Contact Cash Management 26 27

27 Administrative Bank Account Administrative Bank Accounts are used by departments within Business Services. For example, UW-Madison s main deposit bank account is considered an Administrative Bank Account. Memorandums of Understanding (MOUs) Custodian Signer Reconciler Note: If you need UW-Madison s bank account information for incoming wires or ACHs, contact Cash Management via at cashmgt@bussvc.wisc.edu. 27

28 Change Fund Change Funds are used to operate retail operations and cash registers. 28

29 OPEN Justification Letter (explaining purpose of change fund) Custodian Fund Request Form Custodian Fund Agreement Form Bank Deposit Slip Order Form MOU Change Fund MAINTAIN Perform daily reconciliations by reconciling to the authorized advanced level. Document reconciliations. Follow the coin request procedures to replenish. Review Account Code 6167 CLOSE Contact Cash Management 29 30

30 Petty Cash Petty Cash is set up for handling small purchases that cannot be effectively handled by a purchasing card or check. Cash Management will review Petty Cash Funds at least annually. 30

31 OPEN Justification Letter (explaining purpose of petty cash) Custodian Fund Request Form Custodian Fund Agreement Form MOU Petty Cash MAINTAIN Complete weekly reconciliations Complete replenishments Review Account Code 6167 CLOSE Contact Cash Management 32 31

32 Reminder Only include the last five (5) digits of a US Bank account number on forms and any correspondence. Account Number Example: XXXXXXX

33 3 Cash Management Updates and Reviews 33

34 Improvements/Changes NR Number Generator Late Notice Procedure for Monthly Reconciliations for Replenishable Bank Accounts and Contingent Bank Accounts Periodic Reviews Conducted by Cash Management Departments may receive questions based on reviews Updated Policies, Procedures, and Forms 34

35 NR Number Previous NR Number NR followed by a maximum of 7 digits (letters or numbers) Identifier for all types of Custodian Funds Created by each department NEW Current NR Number NR followed by 7 numbers Unique identifier for all types of Custodian Funds NR Number Generator for campus departments 35

36 NR Number Generator To be used for all Custodian Fund requests Campus departments need to generate a NR number to be used on all paperwork for opening any type of Custodian Fund. The generated NR number will then be used on all paperwork for the Custodian Fund type that is opened. Link for NR Number Generator 36

37 NR Number Generator On the NR Numbers page, click Create NR Number Select Department from drop down 37

38 NR Number Generator You can start typing the department ID when you have the drop down selected, so you don t have to scroll through the entire list. If the UDDS is not listed, please contact Cash Management via cstdnfnd@bussvc.wisc.edu and ask us to add the UDDS to the Custodian Funds System. 38

39 NR Number Generator Click the Create NR Number button Unique NR Number will be generated 39

40 4 Compliance 40

41 Compliance HIPAA Tax W-9 Form - Request for Taxpayer Identification Number (TIN) and Certification Policy & Procedure: 601 Tax Compliance, Reporting, and Withholding on Non-Salary Payments W-9 Compliance Requirements Policy 103: Payments to Research Participants 41

42 Custodian Funds Support Websites Cash Management Policy 301 Custodian Funds Contacts Sara DeMuri, Rochelle Cushman,

43 What questions do you have about Custodian Funds? 43

44 Custodian Funds Annual Certification Complete training Receive follow-up with link to final assessment Complete final assessment within two weeks Receive electronic certificate 44

45 Thank you for your participation. 45

46 5 Reconciliations 46

47 Monthly Reconciliations: Replenishable Bank Accounts & Contingent Funds Within 30 Days from Month s End February 2018 reconciliations will be due by March 30,

48 New Late Notice Procedures: Replenishable Bank Accounts & Contingent Funds If reconciliation has not been received, Cash Management will send out: First Notice Sent at the beginning of the month after the monthly reconciliation is due. Second Notice Sent in the middle of the month after the monthly reconciliation is due. It will indicate that the account will be closed if the reconciliation is not received by the end of the month. Note: Generally, late notices will be sent to the custodian, reconciler and your Business Office. 48

49 Example of Late Notice Procedure: Replenishable Bank Accounts & Contingent Funds June 2017 Reconciliations: Due Date Second Notice First Notice 49

50 Monthly Reconciliations: Replenishable Bank Accounts & Contingent Funds Updated Bank Reconciliation Worksheet 50

51 Monthly Reconciliations: Replenishable Bank Accounts & Contingent Funds Updated Check Register Worksheet 51

52 Four Reconciliation Examples Replenishable Bank Accounts and Contingent Checking Accounts Examples use updated Bank Reconciliation Worksheet Check Register Worksheet 52

53 Reconciliation Example #1 April 2017 Reconciliation Replenishable Bank Account for Research Fund Authorized Balance = $2,000 Total of 6 checks written in March & April for a total of $150 1 of the checks for $20 from March cleared 1 of the checks for $30 from April cleared None of the checks have been replenished by Cash Management. 53

54 Reconciliation Example #1 Completed Check Register Worksheet 54

55 Reconciliation Example #1 Completed Bank Reconciliation Worksheet 55

56 Reconciliation Example #1 Completed Bank Reconciliation Worksheet 56

57 Reconciliation Example #2 February 2017 Reconciliation Replenishable Bank Account for Research Fund Authorized Balance = $1,500 Check written in January 2017 for $140 Check written in March 2017 for $130 The check written in January 2017 cleared None of the checks have been replenished by Cash Management. 57

58 Reconciliation Example #2 Completed Check Register Worksheet 58

59 Reconciliation Example #2 Completed Bank Reconciliation Worksheet What s Incorrect? 59

60 Reconciliation Example #2 Completed Bank Reconciliation Worksheet What s Incorrect? 60

61 Reconciliation Example #2 Completed Bank Reconciliation Worksheet 61

62 Reconciliation Example #2 Completed Bank Reconciliation Worksheet 62

63 Reconciliation Example #3 February 2017 Reconciliation Replenishable Bank Account for Research Fund Authorized Balance = $2,000 One check was written per month for $24 from January 2017 to March The check that was written in January 2017 cleared. The check that was written in February 2017 was voided. None of the checks have been replenished by Cash Management. 63

64 Reconciliation Example #3 Completed Check Register Worksheet 64

65 Reconciliation Example #3 Completed Bank Reconciliation Worksheet What s Incorrect? 65

66 Reconciliation Example #3 Completed Bank Reconciliation Worksheet What s Incorrect? 66

67 Reconciliation Example #3 Completed Bank Reconciliation Worksheet 67

68 Reconciliation Example #3 Completed Bank Reconciliation Worksheet 68

69 Reconciliation Example #4 December 2016 Reconciliation Contingent Checking Account Authorized Balance = $5,000 4 checks written in November & December for a total of 8 checks, each for $50. 2 checks written in November cleared. 1 check written in December cleared. 2 checks written in December had stopped payments placed on them. None of the checks have been replenished by Cash Management. 69

70 Reconciliation Example #4 Completed Check Register Worksheet 70

71 Reconciliation Example #4 Completed Bank Reconciliation Worksheet 71

72 Reconciliation Example #4 Completed Bank Reconciliation Worksheet 72

73 Custodian Funds Support Websites Cash Management Policy 301 Custodian Funds Contacts Sara DeMuri, Rochelle Cushman,

74 What questions do you have about Custodian Funds? 74

75 Custodian Funds Annual Certification Complete training Receive follow-up with link to final assessment Complete final assessment within two weeks Receive electronic certificate 75

76 Thank you again for your participation. 76