Policy Title
Policy Number
Version
Contact
Effective Date
Approved By
Cash and Cash Management
302
DRAFT 0
Candy Shin, Chief Financial Officer
Cash and Cash Management
Policy
IRIS will establish and maintain proper internal controls for cash management to
ensure the efficient utilization of funds in a manner consistent with IRIS strategic
goals.
Purpose
This policy establishes requirements for opening, closing, updating, and maintaining
IRIS’s bank accounts. This policy applies to all bank accounts opened by or for the
organization or any affiliated organization, or with use of IRIS’s tax identification
number.
Procedures
A. Banking
A. 1. Opening and Closing Accounts: In accordance with IRIS’s bylaws, bank
accounts may only be opened and closed by the authorization of IRIS’s Board of
Directors. This authorization has been formally delegated to IRIS’s President.
A. 2. Purpose of Accounts: An IRIS bank account may only be used for legitimate
and allowable revenue and/or expense activities of IRIS or its affiliates.
A. 3 Bank Accounts: At present, IRIS maintains its primary banking relationship
with PNC Bank.
The following bank accounts for the indicated purposes have been authorized by the
IRIS Board of Directors and the IRIS President.
Bank
Type
Headquarters, Washington, DC
PNC Bank
Business Checking
PNC Bank
Sweep Account
Operating Account
Unrestricted Account
DMC Office, Seattle, WA
Wells Fargo Bank
Business Checking
Petty Cash Account
PASSCAL Instrument Center, NM
Bank of America
Business Checking
Petty Cash Account
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Purpose
The Operating Account is the primary operating account, receiving funds drawn on
IRIS’s federal funding sources, and disbursing funds for related expenses.
The Unrestricted Account is the active account for IRIS unrestricted funds (from
sources such a member fees, and cooperative agreement management fees).
Payments for any unallowable expenses are made from this account.
See Policy 315 (Program Bank Accounts) for additional information on the bank
accounts administered outside of IRIS Financial Services
A. 4. Interest Earned on Bank Balances: To the extent practical, IRIS funds are
maintained in interest-bearing accounts. In accordance with Federal requirements,
interest earned on Federal funds in the Operating Account is accumulated and
periodically remitted to the government (see Federal Cash).
A. 5. Deposit Protection: Funds are maintained in Federal Deposit Insur¬ance
Corporation (FDIC)-insured banks and receive insurance protection in accordance
with applicable law.
A. 6. Bank Statements: Monthly statements from the Operating and Unrestricted
accounts are received unopened by the President, who reviews and initials the
statements and forwards them to the Director of Finance and Accounting. Bank
statements are reconciled in a timely manner by the accounting staff.
[need to add section on on-line access]
B. Signature Authority
This policy designates authorized signers on IRIS bank accounts, with respect to
checks and wire transfers.
B. 1. Checks: The following IRIS personnel have authority to sign checks drawn on
the following bank accounts:
Individual
Title
Level of Authority
IRIS PNC Operating Account and PNC Unrestricted Account
Candy Shin
CFO
High, default signer
David
W. President
High, backup signer
Simpson
Robin Morris
Business Projects Manager
Low, backup signer
Tim Ahern
DMC Wells Fargo Checking Account
DMC Program Manager
High, default signer
PASSCAL Instrument Center, Bank of America Checking Account
As designated by the Transportable Array Program Manager
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No individual may sign a check payable to him/herself, or to an account controlled by
the individual.
B. 2. Wire Transfers: The following IRIS personnel have the authority to execute
wire transfers from the following bank accounts:
Individual
Title
Level of Authority
IRIS PNC Operating Account and PNC Unrestricted Account
Candy Shin
CFO
High
At present, wire transfers are executed only by telephone. The transaction requires
confirmation of a personal PIN number.
B. 3. ACH Transactions: The following IRIS personnel have the authority to
participate in ACH transfer transactions through the on-line banking system,
according to the level of authority below:
Individual
Title
Level of Authority
IRIS PNC Operating Account and PNC Unrestricted Account
Candy Shin
CFO
High, Releaser
Nicole Tatro
Accounting Manager
High, Releaser
Josephine Aka A/P Accountant
Low, Preparer
C. Bank Reconciliations
IRIS will at all times maintain appropriate controls over all cash accounts; will
complete monthly reconciliations of bank statements in a timely manner; and will
identify and account for any differences between statement balances and book
balances as reflected in the general ledger.
C. 1. Bank Statements: Monthly bank statements are received unopened by the
President, who reviews and initials the statements and forwards them to the Business
Office.
C. 2. Timing: Reconciliations must be completed within 30 days of the end of the
month.
C. 3. Responsibility: The monthly bank reconciliations will be performed by an
employee of the Business Office, whose responsibilities do not include bank signature
authority.
C. 4. Basic Procedures: Procedures to be performed include, but are not limited to
the following.
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Each cash receipt and cash disbursement item in the general ledger will be
compared on an item-by-item basis with the details reported on the bank
statement. Mismatches shall be investigated.
A list of all outstanding checks and a list of all outstanding deposits will be
prepared.
Any book reconciling items such as interest and bank charges will be noted,
and a journal entry to record the amounts will be prepared and recorded in
accordance with current policy.
The beginning book balance will be adjusted to arrive at the ending book
balance; the bank statement balance will be adjusted to include outstanding
checks and deposits in transit to arrive at the adjusted bank balance.
The ending book balance and the adjusted bank balance must be equal, at
the end of the reconciliation process.
C. 5. Review and Approval: The bank reconciliations will be reviewed and approved
by the Director of Finance & Accounting.
C. 6. Documentation: The bank statement and the reconciliation, along with the
supporting documents (outstanding check list, deposits in transit list, etc…) will be
maintained in the Business Office files.
D. Petty Cash
This policy sets certain requirements to ensure that (1) handling of petty cash funds is
subject to sufficient internal controls, and (2) reimbursement of business expenses
through petty cash is made in accordance with established guidelines. This policy
encompasses all petty cash transactions within IRIS.
D. 1. IRIS Headquarters: A small amount of cash, approximately $200, is kept on
hand at IRIS headquarters to reimburse personnel for small business expenses. This
petty cash fund is maintained by the designated petty cash custodian in a locked cash
box in the Business Office.
A business expense of $25 or less may be reimbursed through Petty Cash. Expenses
for amounts in excess of $25 should be made by check through the normal cash
disbursements process. Advances from the fund are ordinarily not allowable.
All payments are recorded in a Petty Cash Log. When an employee seeks
reimbursement for a business expense, the employee gives the approved receipt to the
fund custodian, who accesses the fund and gives the employee the appropriate
amount of cash. Since an employee cannot approve his own petty cash transactions,
when the employee seeking reimbursement is the fund custodian, a second person is
asked to serve as temporary custodian, review the transaction and record it on the log.
On occasion, employees reimburse IRIS for small personal expenses, (e.g., personal
postage or shipping charges). All cash received by the fund custodian is added to the
cash box immediately. All deposits are recorded in the Petty Cash Log.
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From time to time, based on the volume of activity, additional funding is required to
bring the petty cash balance up to the $200.00 level established as sufficient for
immediate cash needs. At such times, a check request is prepared and processed
through the accounts payable cycle, then cashed and deposited in the cash box.
The petty cash fund is reconciled from time to time, but at least annually, with all
activity, both withdrawals and deposits, recorded on a voucher for recording in the
accounting system. The supervisor of the petty cash custodian reviews and approves
the reconciliation and the related check request.
D. 2. DMC - Seattle Office: A petty cash account for the Data Management Center
is maintained in a business checking account at a local bank. The maximum
authorized amount in the account is $5,000.00. The DMC program manager is the
only authorized signer on the account.
Disbursements from the account are recorded by the DMC office manager. On a
monthly basis, the office manager submits the following documentation to IRIS
headquarters to allow proper recording of the petty cash account transactions:
• Bank statement for the checking account;
• Printout of disbursement transactions; and
• A check request, when needed to replenish the account.
D. 3. PASSCAL Instrument Center - New Mexico: A petty cash account for the
PASSCAL Instrument Center office is maintained in a business checking account at a
local bank. The maximum authorized amount in the account is $10,000.00. There
are multiple signers on the account, as established from time to time.
Monthly, receipts for all disbursements from the account are submitted to IRIS
headquarters, along with a description of each transaction. At headquarters, a
voucher is prepared to record the activity in the accounting system. The bank
statement for the account is received directly at headquarters and reconciled. When
necessary, a check request is prepared and a check is cut to replenish the account.
In addition, the office has a small imprest petty cash fund of $50.00 in the office. The
fund is monitored by the assigned custodian on a weekly basis. All activity is
recorded on a Petty Cash Log. From time to time, based on activity, the fund is
reconciled and replenished from the office petty cash bank account.
E. Stale Checks
Checks drawn on IRIS bank accounts that remain on the outstanding check list after
ninety days will be considered stale dated, and will not be honored by IRIS’s bank if
presented for payment.
During the bank reconciliation process, Business Office staff attempt to contact
payees of checks outstanding longer than 60 days. If the payee cannot be located, the
check will be considered unclaimed property after the appropriate dormancy period
has elapsed.
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F. Unclaimed Property
IRIS complies with the requirements of the District of Columbia’s Uniform
Disposition of Unclaimed Property Act (DC code section 41-101 et seq.) which
require organizations to annually review their records and determine whether they
hold any funds, or other properties that have been unclaimed for the required
dormancy period, and to file an annual report with DC’s Unclaimed Property Unit by
November 1 of each year.
Generally, the only type of unclaimed property IRIS is likely to hold is uncashed
checks. IRIS evaluates such checks annually, reports them to the District, and remits
the associated funds to DC in accordance with the requirements, as appropriate.
G. Check Stock
IRIS recognizes that proper control and handling of check stock is a crucial
component of the internal controls and part of an effective fraud prevention strategy.
To this end, IRIS uses prenumbered, preprinted check stock with multiple embedded
security features.
Check stock is maintained in a locked cabinet in the Business Office. The key to the
cabinet is in custody of the Director of Finance & Administration or, on occasion, a
designee.
The Director of Finance & Administration is responsible for reordering check stock
when needed. Check stock will be obtained from a reputable printing company or
through the bank. Stock will be reordered from time to time; generally the maximum
supply on hand should not exceed 12 months worth of checks.
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