Interfund Balances Between Current Fund and Endowment Fund
Cash receipts from gifts for endowment, income on endowment investments, and other sources of cash designated for endowment are normally deposited into the bank account in the current funds. This gives rise to non-interest earning interfund balances. At the end of each month, the Finance Office will review the balance of endowment funds invested in the short-term cash management pool of the College to determine if any of these funds should be reallocated to the College’s Endowment investments or, conversely, to ascertain if any funds should be transferred from Endowment investments to reimburse the cash management pool.
Interest income will be paid monthly to endowment funds invested in the cash management pool at the average monthly rate of the Rhodes Fund shares. Earnings will be computed on the simple average of the beginning balance and the adjusted ending balance.
Handling Contributed Securities
Regarding unrestricted security donations, the broker should be informed of the contribution at the time the security is received by the Finance Office and instructed to liquidate the investment at the Comptroller’s discretion; however, it should be understood that this would anticipate liquidation within a relatively short period of time subject only to the broker’s ability to execute orders in a favorable manner.
The Assistant Director of Accounting shall maintain a list of all securities on hand in the Finance Office along with all securities contributed during the fiscal year, the market value of the securities at the date of receipt, and the income realized from securities liquidated during the fiscal year. A copy of this summarization should be furnished to the President, and to the chair of the Investment Committee to keep them informed of the securities currently being held in the Finance Office as well as the proceeds from liquidated securities. All investment certificates received in the Finance Office that are not sold in a relatively short timeframe should be placed in the College’s lockbox that is held at a local bank as soon as possible.
Funds received from liquidation of these securities should be deposited in the appropriate accounts in accordance with the College’s policy on cash management.
Petty Cash and Bursar’s Office Funds
Petty Cash funds enable offices and department to offer services to pay cash for minor expenditures. All offices or departments requiring a petty cash fund must contact the Bursar’s Office. All requests for petty cash will be signed by the department chair or manager. These requests will be kept on file in the Bursar’s Office.
Department’s Petty Cash Fund. Funds are disbursed through a Bursar’s voucher and charged to the petty cash Fund 111000, Account 110011. Departments will be held financially responsible for their funds. To keep each fund active, as purchases are made, a bursar’s voucher must be completed with receipts attached and presented to the Bursar’s Office for replenishment of the fund (See Internal Audit below).
Bursar’s Office Fund. Check Cashing Service: Checks are cashed for students, faculty, and staff with a limit of $100 per check. Checks are totaled and deposited daily to Fund 111000, Account 110011 “checks for cash.”
Vouchers. Bursar’s vouchers are used to reimburse departments for cash purchases of $100 or less. Vouchers are used by departments instead of establishing a petty cash fund in cases where purchases are infrequent. Vouchers must be approved by the department chair. Account numbers and receipts must be attached.
Audit. Surprise cash counts of the Bursar’s Office will be conducted by the Comptroller at least once each year. Surprise audits of department petty cash funds will also be conducted approximately once each year. The audit will include not only petty cash funds but checks receipted on miscellaneous and students receipts as appropriate. Auxiliary enterprises which handle cash receipts from programs for the general public should consult with the Comptroller about proper record keeping and cash handling.
Transferring Budgeted Funds to Restricted Fund Balances
Generally accepted accounting principles do not allow the College to transfer money from current fund budgeted income and expense accounts. Similarly, such transfers of money cannot be made out of appropriated or restricted fund balances into current fund budgeted income and expense accounts. Also, gifts may not be made from departmental budgets (such as memorials) and transferred to the College Annual Fund, restricted accounts, or the Endowment.
Appropriated and restricted fund balances can be set up or increased only in the following ways:
- An outside gift to the College restricted for a specific purpose.
- Transfers from other restricted or appropriated fund balances set up previously.
- Transfers from the current fund unrestricted and unappropriated fund balance (the net excess of all prior years revenues over expenses less transfers; i.e. year end surplus).
Appropriated and restricted fund balances can be decreased in the following ways:
- Charging invoices and other expenses which are for the designated purpose of the account directly against the appropriated or restricted fund balance.
- Transfers to other appropriated or restricted fund balances.
Departments which realize that they have incorrectly charged an invoice against one of their current fund budgeted expense accounts should send a memo directly to the Accounting Manager similar to the model below:
- On (date), I incorrectly charged invoice (number) paid to (vendor name) in the amount of $(amount) to account (account number and name). This entire invoice (or part of this invoice in the amount of $ amount) should be charged against account (account number and name). Please correct this error.
Financial Information and Controls Review
It is a standard function of the Finance office to conduct periodic reviews of financial information and related controls. Financial information includes the College’s trial balance, quarterly financial statements, annual financial statements, and any selected financial data and ratios that the Finance office may distribute, both internally and externally. All financial statements and data should be reviewed and any values or results that are materially different from expectations should be investigated and resolved prior to the release of the information.
The College’s trial balance should be reviewed periodically during each fiscal year. All balances that vary significantly from expectations should be investigated. Additionally, the trial balance should be reviewed for deficit fund balances in appropriated and restricted funds, and a resolution should be determined for any deficit balances.
Wire transfers/ACH reviews should be conducted to ensure that all wires/ACHs were for an appropriate business purpose and had the proper approvals. At random times during the year, a second level review should be performed on the College’s monthly bank reconciliations.
In addition to the recurring procedures described above, other areas may be examined as circumstances dictate and as resources allow.