| This section describes general accounting requirements for any cash advance account including Reconciliations, Shortages, Overages, and Outstanding Checks. Also presented are guidelines for consolidating agency cash advance checking accounts into a single bank account.
GENERAL ACCOUNTING REQUIREMENTS
Advance accounts are subject to the same general accounting requirements and other standard internal controls as are described in Section 3.0200 of this manual including proper supervision, qualified personnel, adequately separated duties, complete supporting documentation and accurate record keeping. Especially critical are monthly bank account and fund reconciliation procedures.
A common failure in accounting for advances involves poor record keeping practices. Finance officers should not rely on the memory of employees, informal lists, scraps of paper, or piles of documents to account for transactions. Formal cash receipt and disbursement journals are necessary with clear and complete explanations, timely postings, and the retention of all relevant supporting documentation.
Agencies will be asked to complete an annual Confirmation and Reconciliation Form to confirm cash advance account balances on file with OSC. In preparation for this annual request, agencies should periodically perform a reconciliation of cash advance account balances when they perform their monthly bank reconciliation. The procedures for performing this reconciliation are as follows:
Col 1. Bank Balance direct from banks statement. If possible, separate the reconciled cash in bank accounts into amounts that match sub-ledger accounts. The reconciliation may also be calculated in total for all outstanding subledger accounts within the same bank account.
Col 2. Add vouchers to be prepared as of reconciliation date. (This amount includes outstanding checks and cancelled checks not yet vouchered.)
Col 3. Add vouchers in process with OSC. (Vouchers sent but not reflected in the bank statement balance.)
Col 4. Add in any change funds, permanent travel advances, bank or OSC errors in need of correction, etc. and make note of details on annual reconciliation.
Col 5. Subtract outstanding checks as of reconciliation date.
When these steps are completed, the resulting balance or balances for each sub-ledger account must match the cash advance subledger account balances on file with OSC as shown on the LED060 report. All unexplained variances should be investigated and documented. A copy of the LED060 may be obtained by calling the Revenue Processing Unit, (518) 474-4018.
SHORTAGES & OVERAGES
Any shortages or overages must be investigated and documented to the extent possible.
All shortages, explainable or not, should be included in the next reimbursement voucher to make the account whole and to bring the account in balance. If the shortage is less than $250.00, documentation explaining the shortage should be submitted to the Director of State Expenditures with a copy attached to the special charge reimbursement voucher. If the shortage is $250.00 or greater, documentation explaining the shortage should be submitted to the Deputy Comptroller - State Services (in accordance with the New York State Accounting System User Procedures Manual, Volume XI, Section 7.0200; Theft/Loss/Misuse of State Assets) with a copy to the Director of State Expenditures and a copy attached to the special charge reimbursement voucher. The documentation should include the steps that will be taken to prevent this from happening in the future.
In rare instances, overages can be accounted-for as 'unearned' check payments to payees where such check payments are canceled or voided after the advance account has been reimbursed. For example, many agencies issue advance account checks for witness fees for individuals subpoenaed to testify. If the witness fails to appear, or if subsequent to the issuance of the subpoena, the witness' appearance is excused, the liability of the State and the issued check is canceled. Similarly, a partial payment check issued to secure future goods or services (e.g. deposit placed with an order) must be voided if the order cannot be filled or is canceled for any reason. Whenever the advance account has already been reimbursed for canceled check issuances, the proceeds of such cancellations that are due to ' unearned ' payments must be returned to the State Treasury following the Refund of Appropriation Expenditure procedures outlined in New York State Accounting System User Procedure.
Manual , Volume IV, Section 5.
If unexplained overages exist for less than $250, reduce the next reimbursement voucher to bring the account in balance. Excess funds of $250 or more must be remitted to the state Treasury pursuant to Section 121 of the State Finance Law:
" .. every state officer, employee, department, institution, commission, board or other agency of the state receiving money for or on behalf of the state from fees, penalties, forfeitures, costs, fines, refunds, reimbursements, sales of property or otherwise, shall on the first day of each month pay into the state treasury all such moneys received from the first through the fifteenth day of the preceding month and on the fifteenth day of each month pay into the state treasury all moneys received from the sixteenth day through the last day of the preceding month.."
Excess funds should be deposited, using subledgers assigned for the cash advance, on a Report of Monies (AC909) received per the instructions in the New York State Revenue Procedure Manual, Volume IV, Section 4.1100 or refunded to the appropriation (AC1286) from which such excess funds were derived as provided in the New York State Revenue Procedure Manual, Volume IV, Section 5.1100.
Outstanding checks must be written-off after one year of the date of issuance. Procedures governing the disposition of uncashed checks are published in the Controls and Special Procedures Manual, Uncashed State Checks, Volume XI, Section 7.050. Special note must be taken for uncashed checks issued for good or services not received.
CONSOLIDATION OF ADVANCE ACCOUNTS
In the past, agencies maintained separate bank accounts for each advance (petty cash, travel, other). However, a pilot program at selected agencies showed that these checking accounts could be consolidated and cash allocated among the various advance purposes as needed. Consolidation is preferred because it reduces the total amount of cash needed by agencies.
Guidelines for consolidating advance accounts follow.
(1) Request permission from OSC to establish one advance checking account entitled "AGENCY ADVANCE ACCOUNT". (Option: change the title of one existing checking account to "AGENCY ADVANCE ACCOUNT" and close all remaining accounts.) Once the new account has been opened, close all existing advance checking accounts.
(2) To help reduce the aggregate amount of the advance, agencies will be allowed to allocate the advance at their discretion, except for the Family Care advance. When an authorized advance level must be exceeded, agencies should show that advance with a negative balance on their records, but always report the advance at the authorized limit for year-end roll-over purposes.
(3) Notify OSC, Pension Investment and Cash Management Unit and the Bureau of Accounting Operations, Revenue Section of the bank name and account numbers of the new and closed accounts and the subledger codes for the cash advance accounts that are closed and/or consolidated.
(4) Destroy all old check stock in a proper manner and maintain documentation of the destruction for audit purposes.
(5) Distinctly record receipts and disbursements for each type of advance (petty cash, travel, other).
(6) Monitor account activity and reduce cash advances to the lowest amount possible to cover needs.
Questions concerning this Section should be directed to:
Bank Account Information - Bureau of Cash Management
ATTN: Director, Cash Management
Cash Advance Account Procedures - Bureau of Accounting Operations
ATTN: Manager, Revenue and State Receivables
>> Cash Advance Account Confirmation & Reconciliation Form