City of Carmel-by-the-Sea
Check Issuance Policy and Procedures
Policy C2007-1
Purpose
These guidelines establish the City of Carmel-by-the-Sea’s basic policy and procedures for issuing checks from the City’s bank accounts.
Objectives
- To ensure the safety and control of check stock and signature plates.
- To ensure that disbursements are made with proper documentation.
- To establish check signature procedures.
- To establish expiration dates for checks.
Policy and Procedures
Check Stock and Signature Plates
Check stock is ordered using a vendor that has the approved stock specifications. Check stock orders are placed by the Administrative Services Director or designee. Check stock is stored in a locked storage area. Periodic physical inventories of blank stock is performed by the Finance Specialist.
A check signing machine with signature plates is used to sign checks issued for less than $25,000. The keys for the signing machine and the signature plates are kept in a locked storage area, separate from the check stock. The keys are kept with the Administrative Services Director and a designated person as backup.
Disbursements
Disbursements from the general account are substantiated by proper documentation, including original invoices or sales slips and purchase orders approved by department managers. All payments are made to a specific person, company, or organization. No checks are made payable to “cash”.
Disbursements from the payroll account are based on approved Personnel Action Forms, approved Memorandums of Understanding, and time sheets approved by department managers. All payments are made to specific employees, or to federal, state, or employee benefits administrators. No checks are made payable to “cash.”
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Disbursements from the workers compensation account are made by the workers compensation benefit administrator. A list of checks to be issued by the benefit administrator is reviewed by the Administrative Services Director or designee. All payments are made to a specific person, company, or organization. No checks are made payable to “cash”.
Signatures
Checks issued for less than $25,000 are signed using the check signing machine.
When the machine is used, both the Finance Specialist and the Administrative
Services Director or designee sign off on a log that is used to record the check dates, the beginning and ending check numbers, and the beginning and ending check machine counter numbers.
General and payroll checks issued for $25,000 or more are signed by two individuals who are authorized persons on the bank account signature forms.
Expiration of Checks
A check in the amount of under $200 which has not been cashed and has not cleared the City’s bank account within six months of the date of issuance is considered no longer valid. The Administrative Services Director places a stop payment with the bank and voids the check. It is the responsibility of the payee to request that the uncashed check be reissued.
A payee of a check in the amount of $200 or more that has not been cashed and has not cleared the City’s bank account within six months from the date of issuance is notified in writing and is requested to contact the City within thirty days. If the City has not been contacted by the payee at the expiration of the thirty-day notification period, the Administrative Services Director places a stop payment with the bank and voids the check. After the thirty-day notification period, it is the responsibility of the payee to request that the uncashed check be reissued.
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