CASH BALANCING Two Schools of Thought:

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1 2017 V. G. Young Institute of County Government School for County Tax Assessors- Collectors November 14-16, 2017 CASH BALANCING Two Schools of Thought: HOW DO YOU HANDLE OVERAGES AND SHORTAGES? Constitutional Responsibility The County Tax Assessor-Collector has personal liability for funds under the Constitution of the State of Texas. This liability may only be released by an audit of financial records of the assessor-collector s office that relates to the assessor-collector s administration of public funds during a term of office by the Comptroller of Public Accounts or a District Judge. 1

2 Overview Illustrate the different policies and procedures within County Tax Offices Montgomery County CASH BALANCING POLICIES & PROCEDURES Financial Responsibility All team members are financially responsible to the Montgomery County Tax Assessor-Collector. Any and all losses are considered to be the responsibility of the employee. A team member with a shortage is required to reimburse the shortage the following day. Under certain conditions, if warranted, a payment plan or extension of reimbursement may be granted for large shortages, with prior approval from the Tax Assessor- Collector. The County Auditor is notified and receives a copy of the payment arrangement and all payments. 2

3 Shortage Procedures All receipts MUST be verified to ensure there are no discrepancies and to determine the accurate change was given. Amount of the shortage MUST be reflected on the closeout. Shortages include: Cash discrepancies Checks written for the incorrect amount, numerical and written amounts do not match, incorrect payee, check not signed Credit card errors Voided transactions that have more funds due when reentered 3

4 Overage Procedures Amount of overage MUST be indicated on closeout. All checks written over (in-person) for $5.00 or less will be refunded at the time of the transaction. All checks written for $5.01 or more will be automatically refunded to the payer one month after acceptance. All unknown overages are held for one year and then remitted to the County General Fund. (TC???) Overages include: Cash discrepancies Checks written for the incorrect amount, numerical and written amounts do not match, incorrect payee, check not signed Credit card errors Voided transactions that have less funds due when reentered 4

5 Disciplinary Policy Limit of 3 balancing errors per quarter Must Follow Montgomery County Civil Service Progressive Disciplinary Action All balancing errors are monitored and recorded on a daily basis. Excessive errors (more than 3 per quarter) will result in disciplinary action up to and including termination (when necessary). Balancing Errors include: Cash overages and/or shortages Checks written incorrectly Credit card errors Credit Card processed for incorrect amount Payment declined, but still processed the transaction Payment not processed Payment processed under incorrect bureau code Voided Transaction that resulted in an overage or shortage when re-entered Document Document Document 5

6 Nueces County CASH BALANCING POLICIES & PROCEDURES Cash Balancing Policy All balancing errors will be researched and investigated, most of the errors can be found and corrected. Categorical levels and consequent actions are to be followed for outages (defined as over or short). Outages are to reported by the supervisory staff to the Tax Assessor-Collector AND the Chief Deputy that exceed $ Here s how we do it: 6

7 Variance Account A variance account is set up in conjunction with the County Auditor s office. An opening cash balance of $3, is established and transferred from the county s general fund to the over and short variance account established for the County Tax Assessor- Collector s office. Make the Effort Every effort is to be made to determine if an overage can be linked to a customer. When it cannot be determined, overages are deposited to the Over and Short fund. In the event of a variance, The Accounting Assistant completes the Variance Form for reporting overages and shortages, and the form is ed to the Finance Manager. Sample Variance Report 7

8 Making it Balance The Finance Manager enters debits and credits into, and out of the variance account through cash manager. Shortages are then transferred from this account into the respective accounts Property, Motor Vehicle, TABC, etc. for making the deposits whole with the respective entities. Inspect what you expect! Weekly and Monthly reports are to be generated with each department head receiving a report by clerk for overages and shortages in compliance with the cash management policy. Violation Categories The various categories are determined by the amount and timeframe in which they occur. Category I Outage of $10 or more, but less than $50; and/or aggregated amount ($10-$49.99) within a 30 day period Category II Outage of $50 or more, but less than $200; and/or aggregated amount ($ ) during a 30 day period Category III Outage of $200 or more, but less than $300; and/or aggregated amount ($ ) during a 90 day period 8

9 Violation Categories Category IV Outage of $300 or more, but less than $400; and/or aggregated amount ($ ) during a 180 day period Category V $ or greater in aggregated amount over 12 month period Actions for Violations Verbal Warning First time Category I violation and for subsequent violations if occurring 6 or more months after each verbal warning Written Warning Second time Category I violation First time Category II violation 90 Day Probation Fourth time Category I violation Third time Category II violation First time Category III or IV violation Actions for Violations Termination Fifth time Category I violation in a 6 month period from date of first infraction Fourth time Category II violation Third time Category III violation Second time Category IV violation First time Category V violation Any further violations while on 90 day probationary period for disciplinary actions outlined above History/record of routine violations that exceed the parameters of these rules 9

10 Shared Policies & Procedures Employees are expected to be good stewards of taxpayer s money. Each employee is assigned their own cash drawer (MoCo- locking cash drawers) Employees are required to close-out or place in cash drop when cash in drawer reaches $5,000 Record proper method of payment, i.e. cash, check, debit/credit card Employee shall not balance cash drawer prior to end of shift/day As you can see there s two philosophies to cash balancing in the Tax Office. This is a personal decision that must be made by each independent elected official. You should consult your own legal counsel to determine which method you will adopt. 10

11 CONTACT INFORMATION Tammy McRae, PCAC Montgomery County Tax Assessor-Collector 400 N. San Jacinto, Conroe, TX Kevin Kieschnick Nueces County Tax Assessor-Collector 901 Leopard Street, Room 301, Corpus Christi, TX