Section 40-49 Fiscal Services
40-000 Fiscal Goals and Objectives (Policy)
40-000.1 Accounting System (Procedure)
40-000.2 Cash (Procedure)
40-000.3 Receivables (Procedure)
40-000.4 Inventories (Procedure)
40-000.5 Property and Equipment (Procedure)
40-000.6 Debt (Procedure)
40-000.7 Computer Controls (Procedure)
40-000.8 Student Organization Funds (Procedure)
40-001 Fiscal Year (Policy)
40-100 Purchasing (Policy)
40-100.1 Purchasing (Procedure)
40-100.2 Shipping and Receiving (Procedure)
40-100.3 Expenditures for Goods and Services (Procedure)
40-100.4 Payroll and Related Liabilities (Procedure)
40-100.5Expense Reimbursement (Policy and Procedure)
40-200Depreciation (Policy)
41-000 Establishment of Budgets (Policy)
41-001 Indirect Cost (Policy)
42-000 Financial Assistance Application (Policy)
43-000 Reports and Statements (Policy)
43-001 Annual Audit (Policy)
44-000 Endowment/Investment (Policy)
44-00.1Endowment/Investment (Procedure)
45-000 Lakota Center for Science and Technology Enterprise Fund (Policy)
40-000
FISCAL GOALS AND OBJECTIVES (POLICY)
The purpose of this Fiscal Management Policy Manual is to provide guidelines for general fiscal management and specific accounting policies for Oglala Lakota College. The principles and policies incorporated into this manual are in accordance with Generally Accepted Accounting Principles (GAAP), OMB Circular No. A-87, CFR 34, and any other federal regulations that apply. This manual should be reviewed and updated by the central business office personnel and the Board of Trustees on a continual basis to insure all policies fulfill the intended purpose.
General Fiscal Policies
Adoption and Implementation of Policies:
The Board of Trustees has the ultimate responsibility of adopting and enforcing all fiscal management policies. The administrative personnel and staff of the central business office, along with the District Directors, have the responsibility of implementing the policies on a day to day basis. The local District Boards have the authority to modify specific accounting policies to meet the local District's needs provided such modifications do not violate the integrity and efficiency of the overall internal control system.
The central business office has the authority to establish procedures for implementing the policies.
40-000.1
ACCOUNTING SYSTEM (PROCEDURE)
A chart of accounts will be maintained. Major categories of expenditure are:
Personnel Supplies
Fringe Benefits Contractual/Consultant
Travel Fixed Assets
Other
Separate funds will be maintained in accordance with rules and regulations of the funding source.
40-000.2
CASH (PROCEDURE)
General Requirements
All cash must be deposited in federally insured bank accounts. Cash may then be transferred to qualifying investments.
The governing board shall annually authorize all bank accounts and check signers.
The banks shall be immediately notified of all changes of authorized check signers.
All personnel handling cash shall be bonded.
Cash Receipts
Incoming mail shall be opened and receipts listed in duplicate by two or more persons having no access to cash receipts or accounts receivable records.
The listing of mail receipts shall be subsequently compared to cash receipts records and authenticated copies of deposit slips by an employee having no access to cash.
Checks shall be restrictively endorsed "for deposit only" by the individual who opens the mail when received.
Prenumbered cash receipts shall be prepared and contributions, gifts, other remittance data and other support attached.
Cash receipts shall be entered in books of original entry by persons independent of the mail opening and receipt listing function.
Receipts (checks and currency) shall be deposited intact within three days of receipt. A sign-out sheet shall be maintained by the person responsible for preparing deposit slips which shall include spaces for initialing and dating the acceptance of the deposit and delivery verification of deposit. The person accepting the deposit for delivery to the bank shall initial and date the sign-out sheet upon receipt of the deposit and likewise, initial and date the sign-out sheet upon returning a deposit verification from the bank or verifying the deposit with the bank through a telephone call if it is a night deposit.
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Cash receipts shall be kept in a locked container with access limited to authorized personnel from time of mail opening until time of bank deposit.
The general cashier function shall be segregated from the general ledger and subsidiary ledger functions.
Restricted funds shall be deposited to separate bank accounts. Other accounts may be used based on source of receipts (e.g. direct mail account) or expenditure purposes (e.g. payroll accounts).
Currency receipts shall be reconciled to the totals of prenumbered receipts or other devices.
The cashing of checks out of currency receipts shall be strictly prohibited.
Direct Mail Receipts
Direct Mail shall follow the same cash receipts procedures listed above. The prepared deposit shall be delivered to the business office and the business office shall verify the amount of the deposit and sign for the receipt of the deposit.
The following procedures will also be followed:
a. A lock bag will be used to pick up the mail. The person picking up the mail will be designated by the Development Office.
b. A lock box with a check out system will be used to control the post office key and lock bag key.
c. A cleared table in a private area will be used to open the direct mail.
d. Two people will be opening and viewing each envelope.
e. At least one of the openers will be rotated on regular basis.
f. Both persons opening the mail will sign that they agree and concur with the reported deposits.
Post-dated checks, disputed items, unidentified receipts, NSF checks, checks charged back by banks, and similar items shall be received and investigated by persons independent of preparation of deposits and posting of accounts receivable detail. NSF checks represent "negative" receipts and should be submitted a second time for possible collection. Upon second rejection, the
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payer shall be notified and the appropriate revenue or receivable accounts adjusted.
Cash Disbursements
All disbursements (including payroll), except petty cash disbursements, shall be made by check.
Check stocks:
a. Checks shall be pre-numbered and used in sequence.
b. Blank check stock shall be stored in a secured container.
c. Only persons authorized to prepare checks shall have access to blank checks.
Check preparation:
a. Checks shall be prepared by specified employees who are independent of voucher/invoice approval.
b. Prior to checks being prepared, the purchase order or other document of authorization shall be compared to the vendor invoice.
c. Checks shall be prepared from an original vendor invoice only and not from a vendor statement.
d. Checks shall be prepared only for approved invoices/vouchers.
e. Checks shall be recorded in the disbursements journal when they are prepared.
f. All check numbers shall be accounted for.
g. Voided/spoiled checks shall be properly mutilated (signature portion removed) and retained.
h. Checks shall be made payable to specified payees and never to cash or bearer.
i. All supporting documentation shall accompany checks presented for signature.
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j. All supporting documents shall be properly canceled at time of signature to prevent duplicate payment.
Check signing:
a. All checks shall require counter-signatures consisting of the President, Vice President of Instruction, Vice President of Business Affairs and any additional recommendations by the President approved by the Board of Trustees.
b. Authorized check signers shall be independent of voucher preparation and approval for payment; check preparation, cash receiving, and petty cash; purchasing and receiving and timekeeping for payroll checks.
c. Disbursements that require special approval of funding sources or the governing board shall be properly documented.
d. Signing blank checks is prohibited.
e. Custody of checks after signature and before mailing shall be handled by an employee independent of all payable, disbursing, cash, receiving, and general ledger functions
Reconciliation
Bank accounts shall be reconciled within fifteen days after the end of each month.
Reconciliations shall be made by someone other than the persons who participate in the receipt or disbursement of cash.
A responsible individual (e.g., the vice president of the business office) shall receive the bank statements (with canceled checks, debit and credit advises, etc.) unopened from the banks.
The reconciliation procedures for all bank accounts shall include the following with respect to deposits:
a. Comparison dates and amounts of daily deposits as shown on the bank statements with the cash receipts journal.
b. Investigation of bank transfers to determine that both sides of the transactions have been properly recorded on the books.
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c. Investigation of items rejected by the bank; i.e., deposits or collection items subsequently charged back by the bank because of insufficient funds, etc., shall be investigated by a person independent of those responsible for receipt or recording cash.
The reconciliation procedures for all bank accounts shall include the following with respect to disbursements:
a. Comparison of canceled checks with the disbursement journal as to number, date, payee, and amount.
b. Account for the sequence of check numbers.
c. Examination of canceled checks for authorized signatures.
d. Examination of canceled checks for irregular endorsements.
e. Examination of canceled checks for alterations.
f. Review of voided checks.
Completed bank reconciliations shall be reviewed by a responsible official. The review shall be documented by initialing and dating the reconciliation.
Checks outstanding for over 90 days shall be periodically investigated. Payment should be stopped and an entry made restoring such items to cash. Payee shall be contacted regarding the status of checks outstanding over 90 days and the possible replacement of lost checks.
Petty Cash
Responsibility for petty cash fund shall be assigned to only one responsible person.
The petty cash funds shall be maintained on an imprest basis.
Petty cash fund shall be segregated from other cash.
Petty cash disbursements shall not exceed $20.
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Custodian:
a. The custodian of petty cash shall be independent of employees who handle receipts.
b. The accounting records shall be inaccessible to the custodian.
c. The custodian shall be bonded.
Vouchers:
a. A prenumbered voucher shall be used for all disbursements.
b. Vouchers shall be completed in full in ink or otherwise in such manner that would make alterations difficult.
c. Vouchers shall be approved by a department head or other designated employee other than the custodian of petty cash.
d. The amounts on the vouchers shall be spelled as well as written in numerals.
e. Vouchers shall be properly supported by invoices or other documentation.
f. All items contained in the petty cash fund shall be of a current and usual nature.
Reimbursements:
a. An adequate review of the reimbursement vouchers shall be completed before reimbursements are made.
b. Checks for reimbursement shall be made out to the order of the custodian.
c. Reimbursement vouchers and attachments shall be canceled at, or immediately following, the signing of the reimbursing check, so that they cannot be reused.
The petty cash fund shall be counted monthly by someone independent of the custodian.
The cashing of employee checks out of the petty cash fund shall be strictly prohibited.
40-000.3
RECEIVABLES (PROCEDURE)
The accounts of all pledges and receivables shall be recorded when received or earned. Accurate recording to the correct receivable is crucial to maintaining the integrity of records.
Billings shall be mailed within thirty days of recording the receivable. Reminder billings should be sent to aid in collecting past due receivables.
A schedule of aged accounts receivable shall be maintained to aid in the determination of an allowance for doubtful accounts.
Loans to employees and governing board members are strictly prohibited.
40-000.4
INVENTORIES (PROCEDURE)
Inventories shall be adequately safeguarded against loss, theft, physical deterioration or misuse by being kept in appropriate enclosures, access to which is granted only to authorized personnel.
Responsibilities for quantities shall be fixed by assigning custody of inventories to specific individuals.
The individual responsible for receipt, storage, and issuance of goods shall be independent of responsibility fro purchases, sales, and inventory records.
Personnel shall be required to report on obsolete, unusable, and overstocked items, and approval shall be required before such inventories are disposed of.
Perpetual inventory records shall be maintained, both in dollars and in quantities, and periodically balanced to control accounts.
Periodic physical inventories shall be taken and balanced to the perpetual records.
a. Written instructions shall be made for such counts.
b. Material differences shall be investigated and explained.
Adjustments to the inventory record shall require approval of management.
Inventories shall be covered by insurance, and employees with access to significant inventories shall be bonded.
Employees with inventory, shipping, and receiving responsibilities shall be required to take vacations and other employees shall be required to perform those functions when an employee is absent.
Access to computerized inventory records shall be limited to those with a logical need for such access.
40-000.5
12-02 and 9-30-03
PROPERTY AND EQUIPMENT (PROCEDURE)
PROCUREMENT:
Property and equipment shall be classified as expendable and non-expendable. Expendable property and equipment shall be described as items with an estimated useful life of less than one year or an acquisition cost of less than $5,000 per unit. These items will be treated as current year operating expenses. Property and equipment with an estimated useful life of more than one year and an acquisition cost of more that $5,000 shall be classified as non-expendable and presented on the balance sheet as long-term assets.
For the purpose of determining insurance replacement cost, a listing of all property and equipment shall be maintained which indicates the items on hand that have been expensed and thus not included in the value shown on the balance sheet.
Purchases of equipment may be initiated by the department or program personnel in accordance with the approved department budgets and be approved by the supervisor for purchases up to $1,000. Any equipment purchases over $1,000 must also be approved by the department head. Any equipment purchases of $3,000 or more must also have the approval of the President. Purchase of equipment (including vehicles) of $10,000 or more shall also be approved by the Board of Trustees. Three or more formal bids or quotes shall be obtained through written advertisements for purchases of $25,000 or more.
Negotiated purchases may be made when:
a. The need will not permit the delay due to advertising
b. The equipment needed is available from only one vendor.
c. No acceptable bids have been received after formal advertising.
d. Otherwise authorized by laws, rules, or regulations.
In furtherance of the Indian Self-determination and Educational Assistance Act, the Oglala Lakota College shall maintain a positive effort to utilize Indian organizations and economic enterprises in the awarding of any contracts and subcontracts.
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Formal governing board approval shall be required for disposal of property and equipment which had an original cost in excess of $5,000.
Items which increase the useful life or substantially increase the efficiency of an asset shall be accounted for as capital purchases. Items which do not accomplish either of the above criteria and are ordinary in nature shall be accounted for as repairs and maintenance.
Items below $5,000 shall be expensed unless otherwise indicated by the President.
RECORDKEEPING:
Detailed property and equipment records shall be maintained that include description, date purchased or received by donation, cost or fair value at donation, donor or funding source restrictions on use or disposition, etc.
Detailed property and equipment ledgers shall be reconciled to the control account.
At least annually, a physical inventory of property and equipment shall be taken and compared with subsidiary records.
a. Reconciliations shall be prepared and any discrepancies immediately followed up and explained.
b. Reconciliations shall be reviewed by a responsible person.
The accounting department shall be informed of any material changes in the status of items of property and equipment (such as moves, sales, scrapping, obsolescence, etc.).
SAFEGUARDING:
Equipment shall be properly identified by numbered metal tags or other means of identification.
Items shall be adequately safeguarded from loss due to fire, theft, or misplacement.
Periodic reviews and appraisals shall be made relative to insurance considerations.
40-000.6
DEBT (PROCEDURE)
Debt agreements and lease documents shall be kept in the custody of a responsible official and updated for any changes.
All borrowing (including interfund) shall be authorized by the governing board.
There shall be established policies with respect to legal or donor prohibitions against interfund borrowings of restricted funds.
There shall be adequate accounting records to reflect debt transactions, including source, description, maturity, interest rate, debt-service payment dates, collateral, etc.
There shall be periodic review procedures to determine compliance with debt agreement restrictions and procedures.
There shall be adequate procedures for control over interest payments and accruals, including interest, if any, on interfund borrowings.
There shall be periodic review of the collectibility of interfund borrowings and the propriety of classification as borrowings versus transfers.
Interfund borrowings and receivables shall be periodically reconciled between the funds involved.
Detailed records shall be kept of periodic payments due to beneficiaries under life income and annuity gifts and the termination of such payments.
Effective procedures shall be in place to identify on a timely basis material contingent or other liabilities that should be recorded. Example: A contingent liability would be recorded if the probability of an unfavorable outcome for a pending litigation suit was probable. No liability would be recorded if the possibility of unfavorable outcome were merely possible or remote.
40-000.7
COMPUTER CONTROLS (PROCEDURE)
To safeguard the security of the system, certain procedures shall be in place as follows:
Organization Controls
- The EDP department shall be independent of the client departments and EDP personnel may not initiate or authorize transactions, nor initiate changes to master files. EDP personnel may make error corrections only when the error originated in the EDP department.
- All changes made to master files shall be reported to the initiating departments.
- Duties and data control functions shall be separated between programming and computer operations.
- Computer operators shall take at least one week continuous annual leave and his/her duties shall be rotated periodically.
- An internal audit shall be in place to ensure that the accounting system can be used to prepare accurate financial statements.
Access Controls
- EDP security shall be the responsibility of one employee and access to
the computer room shall be restricted to authorized personnel.