SUBJECT
Check Cashing Change Fund (From Benefit Fund)
PURPOSE
To specify procedures for check cashing change funds established from benefit funds.
AUTHORITATIVE REFERENCES
| K.S.A. 75-3728e |
K.S.A. 75-3728f |
|
In an opinion dated April 5, 1977, the Chief Attorney of the Department of
Administration recommends that the Check Cashing Change Fund be funded out of
the Benefit Fund.
GENERAL INFORMATION
Check Cashing Change Funds are limited to a maximum of $5,000.00.
Definitions:
Canteen Fund - the moneys and other assets used for
operation of a canteen. K.S.A. 75-3728e(b).
Benefit Fund - the moneys and other assets available to provide property,
services or entertainment for persons in a state institution. K.S.A. 75-3728e(c).
Trust Funds - distributed funds identified as belonging in specific
amounts to each individual client (unless otherwise specifically identified).
Benefit Funds - undistributed funds belonging to an entire group (communally)
without specific allocation to individual members of the group (unless otherwise
specifically identified).
Moneys in any Check Cashing Change Fund are restricted specifically to the
cashing of checks or approved Trust Fund withdrawal requests initiated by or
made payable to a client (patient or inmate) of the institution. Such funds
are not to be used for employee check cashing or loan purposes or for petty
cash.
Generally accepted accounting principles regarding internal controls should
be practiced to the fullest feasible extent. This can be accomplished by appointing
different persons to perform the various functions of cashiering, accounting,
auditing, or safekeeping of the fund.
Other Policy and Procedure Manual References:
Change Funds are discussed in PPM filing 9,100.
Petty Cash Funds are discussed in PPM filing 10,752.
Imprest Funds are discussed in PPM filing 10,802.
Trust Funds are discussed in PPM filing 10,852.
PROCEDURES
| Responsibility |
Action Step |
| Agency |
- Prepare form DA-74A, "Application to Establish Check Cashing Change Fund."
- Appoint a custodian, alternate custodian, supervising employee, auditor,
and any others needed. Notify the Division of Accounts and Reports promptly
whenever substitution appointments are made.
- Send two copies of the application form DA-74A to the Division of
Accounts and Reports.
|
| Accounts and Reports |
- Review form DA-74A and approve or disapprove as appropriate.
- Return the original application to the agency.
- Maintain file of approved DA-74A forms to monitor the existence of
all such funds outstanding by agency.
|
| Agency |
- Upon receipt of the approved form DA-74A, prepare a check on the appropriate Benefit
Fund, payable to the "Custodian of the Check Cashing Change Fund" in the
amount approved.
- Cash the check and exercise the security described in the application.
- Cash checks as presented by inmates, patients, students, or other
members of the institution, excluding employees. (The member of the
institution must be the maker or final endorser of every check cashed.)
- Weekly, and more often if necessary, endorse and cash all checks on
hand in the Check Cashing Change Fund at the custodial bank of the Benefit
Fund and return the cash to the safekeeping of the custodian. Fully
restore the fund in cash on June 30 each year.
- On the last day of each month, the auditor named in the application should prepare
form DA-75A, "Reconciliation of Check Cashing Change Fund." This reconciliation
should be maintained at the agency and available for review by the Division of Accounts
and Reports upon request.
- When a check is returned by the bank as uncollectible, pay the bank
cash for it. Until settlement is accomplished, carry the value of the
check in the lower section of the reconciliation.
- If the maker or endorser of the returned check is still a client
of the institution, attempt collection directly. Such effort can include
the transfer of funds from an individual Trust Fund if one exists.
- If the maker or endorser of the returned check is no longer a client,
make extensive effort by personal contact, telephone, or mail, as appropriate,
to effect collection. PPM filing 8,001, Management of Receivables, describes
minimum collection procedures required.
- When the minimum collection procedures referred to in Action Step
14 have been exhausted, the returned check should be liquidated by writing
a check on the parent Benefit Fund payable to the Check Cashing Change
Fund. When the check is cashed, give the cash to the custodian for safekeeping.
Attach the returned check to the voucher copy of the check on the Benefit
Fund for audit identification.
- When the Check Cashing Change Fund is no longer needed, convert all
checks on hand to cash as described in Action Step 10. Deposit the entire
cash sum back into the parent Benefit Fund from which it came.
- Prepare a final reconciliation showing the total amount returned
to the Benefit Fund and send the original report to the Audit Services
Team of the Division of Accounts and Reports.
|
CONTACT SOURCES
Questions regarding check cashing change funds should be directed to:
Division of Accounts and Reports
Administrative Operations Section
