Policy Title Cash and Cash Management Policy Number



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Policy Title

Cash and Cash Management

Policy Number

302

Version

DRAFT 0

Contact

Candy Shin, Chief Financial Officer

Effective Date




Approved By





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


  1. 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

Purpose

Headquarters, Washington, DC

PNC Bank

Business Checking

Operating Account

PNC Bank

Sweep 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

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.
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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. Simpson

President

High, backup signer

Robin Morris

Business Projects Manager

Low, backup signer










DMC Wells Fargo Checking Account

Tim Ahern

DMC Program Manager

High, default signer










PASSCAL Instrument Center, Bank of America Checking Account

As designated by the Transportable Array Program Manager

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.

• 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.
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.
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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