COUNTY OF YOLO

CASH ACCOUNTING MANUAL

Auditor-Controller's Office December 2002

COUNTY OF YOLO CASH ACCOUNTING MANUAL

TABLE OF CONTENTS

1.

PURPOSE OF MANUAL 1.1 1.2 1.3

Page

Uniform Accounting Procedures .......................................................................1 Internal Controls ..............................................................................................1 Scope ..............................................................................................................1

2.

CASH COLLECTIONS 2.1 2.2 2.3 Recording ........................................................................................................2 Depositing ........................................................................................................3 Reporting .........................................................................................................4

3.

CASH REVOLVING FUNDS 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Definition and Purpose .....................................................................................4 Establishing Revolving Funds ............................................................................4 Safeguarding Cash Funds .................................................................................5 Use of Revolving Funds ....................................................................................6 Reimbursements from Revolving Funds .............................................................8 Replenishment of Revolving Funds ....................................................................8 Annual Reporting ..............................................................................................9

4.

CASH DIFFERENCE FUNDS 4.1 4.2 4.3 4.4 Definition and Purpose .....................................................................................9 Establishing Cash Difference Funds ...................................................................9 Use of Cash Difference Funds 10.10 Replenishment of Cash Difference Funds ........................................................10

COUNTY OF YOLO CASH ACCOUNTING MANUAL

5. OTHER CASH FUNDS 5.1 5.2 6. Definition and Purpose ...................................................................................10 Administration of Other Cash Funds ...............................................................11

CASH LOSSES 6.1 6.2 6.3 6.4 Definition .......................................................................................................11 Reporting .......................................................................................................11 Preventing Cash Losses ..................................................................................11 Replacing Cash Losses ...................................................................................12

7. REVIEW AND AUDIT 7.1 7.2 7.3 Record Retention ...........................................................................................12 Review by Management ..................................................................................12 Audit by Auditors............................................................................................13

APPENDICES A. B. C. D. E. F. G. Administrative Policy Manual Section 4-6.1.....................................................14 Summary of Applicable Laws and Board Resolutions ......................................17 Internal Control Questionnaire for Cash ..........................................................20 Deposit Permit Process...26 Sample Formats for Cash Reconciliations .......................................................32 Sample Annual Report ....................................................................................33 Guidelines for Reporting Cash Losses and Suspected Fraud .............................35

COUNTY OF YOLO CASH ACCOUNTING MANUAL

1. PURPOSE OF MANUAL 1.1 Uniform Accounting Procedures The main purpose of this accounting manual is to prescribe uniform accounting procedures for County departments pertaining to cash collections, cash revolving funds, cash difference funds, other cash funds and cash losses in accordance with generally accepted accounting principles, laws and regulations and incorporates Administrative Policy Manual Section 4-6.1 (see Appendix A). A summary of applicable laws is in Appendix B. 1.2 Internal Controls The cash accounting manual is intended to help County departments improve internal controls over cash. The Auditor-Controller's Office promulgated a handbook on internal control standards in May 1999. The handbook contains a questionnaire on internal controls over cash collections and cash funds. The questionnaire has been revised and is reproduced in Appendix C of this manual. County employees who have responsibility for and handle cash funds shall review this questionnaire annually to determine the adequacy of the internal controls in their department. In this manual, no distinction is made between accounting procedures and internal control procedures. 1.3 Scope This manual provides procedures covering all cash funds and cash transactions under the control of County officials or employees excluding detailed procedures related to cash disbursement functions. Cash includes coins, currency, checks, money orders and deposits at financial institutions; cash transactions include transactions involving cash as defined above but do not include electronic transmission of funds or investment of funds by the County Treasurer.

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2. CASH COLLECTIONS 2.1 Recording All cash collected over the counter shall be promptly recorded and receipted, either by cash register or on pre-numbered cash receipt forms. Receipts shall be issued to all customers at time money is received. If pre-numbered receipt forms are used, the receipt books issued to receipting locations shall be approved by the Internal Audit Division within the Auditor-Controllers Office per the Administrative Policy Manual Section 4-6.2 in order to establish accountability for receipt usage by the department. Used receipt books shall be filed and all receipts shall be accounted for. Voided receipts shall be retained and marked cancelled and filed with the used receipt books and recorded in the cash receipt journal citing the voided receipt number. All checks received in the mail shall be recorded on a mail log showing all relevant information including the date, name of payor, amount, client account to be credited, and the general ledger account to be credited. All checks shall be restrictively endorsed immediately upon receipt. For each cashier, cash collected shall be counted daily and reconciled i writing to n receipt records to identify any overage or shortage. Reconciliations shall be reviewed by an employee independent of the receipting function. Cash collections shall be summarized daily on a cash receipt journal showing date receipted, amount receipted, and revenue or other accounts to be credited. When the receipts are deposited, the cash receipt journal shall be used to note the deposit dates and deposit permit numbers. Cash collections received in payment of departmental billings shall be properly recorded in the accounts receivable subsidiary ledger. Undeposited collections shall be kept locked up with access limited to authorized personnel.

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2.2 Depositing All collections shall be deposited promptly and intact into the County Treasury or authorized bank accounts. "Promptly deposited" generally means making deposits daily or when the amount collected on hand exceeds a safe and reasonable threshold but no less frequently than weekly. This threshold is usually in the $500-$1,000 range and depends on the composition of the cash (currency versus checks) and the physical controls over cash. For those departments in which receipts are transported from branch locations to headquarters for deposit, accountability over collections must be maintained through the use of a transmittal log or slip. The log shall be signed by the courier at the time receipts are picked up and signed by the employee to whom they are delivered. Headquarters shall forward a copy of the log or slip to the branch to verify that the receipts were properly received. Branches shall follow up if a copy of the transmittal log or slip is not returned to them in a timely manner acknowledging that collections were received. When depositing directly into the County Treasury, the department shall enter the deposit on-line into the Yolo County financial system (Genled). See Appendix D for the deposit permit process. The deposit shall indicate the amounts for checks, currency and coin on a calculator tape with a system generated deposit entry number (DE) stated on the face of the tape and/or check. The department then takes the deposit and the deposit permit to the Treasurers office for deposit. The County Treasurer will access the on-line deposit by the assigned DE number and approve the entry based upon the cash counted. The County Treasurer will provide a deposit permit to serve as the official transaction document for the department. The department will reconcile the deposit permits to the cash receipts journal. If a checking account is used, bank balances shall be reconciled to cash collection records. Bank reconciliations shall be reviewed by a person independent of the related process. The department will be notified of any rejected checks by the Treasurer. It is the responsibility of the department to follow-up and collect on checks rejected by the bank. Cash overages shall not be netted against cash shortages. Overages shall be deposited into general ledger account 82-7720 (Cash Overage). Shortages shall be listed on a log showing all relevant information including the date, amount, cashier, and an explanation for the shortage. The log shall be reviewed by department management on a regular basis. The department shall enter an on-line claim using the general ledger account 862365 (Cash Shortage) to replenish a shortage of cash collections.
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Alternatively, the cash shortage can be replenished through a Cash Difference Fund. See Section 4 Cash Difference Funds. 2.3 Reporting All collections of accounts receivable shall be reported to the Auditor-Controller's Office in accordance with the Billing and Accounts Receivable policies. 3. CASH REVOLVING FUNDS 3.1 Definition and Purpose Revolving funds are established by the Auditor-Controller for specific operational needs to facilitate certain expenditure and cash transactions throughout the County departments under the authority delegated to him by the Board of Supervisors. The most common types of revolving funds are change funds and petty cash funds. These may be kept in cash or in a checking account. The amount established is the accountable balance and may not exceed $250,000. When the balance of the fund is low, it is replenished up to the accountable balance by request to the AuditorController's Office. Revolving funds are established for specific operational needs in a department. 3.2 Establishing Revolving Funds A department in need of a revolving fund shall write to the Auditor-Controller requesting the establishment of the fund. The request shall state the purpose of the fund, the amount and the custodian of the fund. The custodian is the department head or designee who is ultimately and personally responsible for the fund. Revolving and cash difference funds of up to $1,000 will be established at the discretion of the Auditor-Controller upon receipt of a written request from a County official or department head. Revolving funds of over $1,000 and up to $5,000 will be established at the discretion of the Auditor-Controller with the approval by the County Administrative Officer. Incremental increases or reductions of up to $1,000 in existing funds may be made at the discretion of the Auditor-Controller with the fund balance not to exceed $5,000. Incremental increase or reductions in excess of $1,000 can be made to existing funds with the approval of the County Administrative Officer with the fund balance not to exceed $10,000.

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The Board of Supervisors must approve requests in excess of the above limits. If the request is granted, the Auditor-Controller will respond with a letter order establishing the fund, describing the authorized use of the fund and specifying the custodian. A County warrant, made payable to the custodian, in the established amount of the fund will accompany the letter order. The department head shall notify the Auditor-Controller whenever the custodian changes to ensure proper transfer of accountability to the new custodian. If the department wishes to add or delete a purpose for the fund, it shall request in writing that the Auditor-Controller's Office authorize the new use of the fund. If the request is approved, a letter order will be issued authorizing the modified use of the fund. If a fund is no longer required for its established purpose, the custodian must request full replenishment of the fund and shall return the total accountable balance to the AuditorController's Office. Cash shall be hand-delivered directly to the Auditor-Controller and shall not be sent through the messenger mail. The custodian will be provided with a receipt and release of accountability. Management shall monitor the level of usage of the cash funds on a regular basis to determine whether the accountable balance is too high or too low for the needs of the department. If required, the department shall request an increase or decrease in the accountable balance of a cash fund from the Auditor-Controller. 3.3 Safeguarding Cash Funds The following are procedures to follow for safeguarding cash funds: 1. For each department or budget unit, a control list shall be maintained of all funds for which a County official is accountable. The list shall include the location and amount of the funds and the designated custodian and sub-custodian for each fund. The custodian shall sign a voucher or log acknowledging receipt and accountability for the fund. In the case of change funds, if a receipting location has more than one cashier, the change fund shall be broken down into sub-funds and each sub-fund assigned to a cashier in order to establish accountability. 2. Funds maintained at department offices shall be kept locked-up with access limited to authorized personnel. If there is more than one fund, the funds shall be secured in separate bags or lock-boxes. Cash funds shall never be Page 5

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commingled and monies from one fund shall not be loaned to or used by another fund. 3. Funds may be maintained in an authorized bank checking account. The checkbook shall be kept locked-up. A list of authorized check signers shall be on file with the bank and shall be kept current. All transactions including disbursements and replenishments shall be recorded in a timely manner on a ledger, showing all relevant information (e.g. date, check number, payee, description, amount). Cash on hand shall be reconciled to the accountable balance and to the bank balance on a monthly basis. The reconciliation shall be documented and signed by the preparer and the reviewer. If the person having custody of the funds prepares the reconciliation, it shall be reviewed by an independent person. Regular reconciliation and review will detect errors or irregularities in a timely manner. Reconciliations shall be filed and kept in accordance with the departments record retention schedule. In the case of change funds, cashiers shall reconcile cash on-hand to the receipts and the accountable balance of the fund daily. The reconciliation shall be reviewed by an independent person. Management shall conduct u nannounced cash counts to verify the amount of cash on hand and to ensure that the funds are being used for authorized purposes. For proper separation of duties, the person having physical custody and control of the fund shall not be authorized to approve expenditures or sign checks.

4.

5.

6.

7.

3.4

Use of Revolving Funds A revolving fund may be used for various purposes as authorized by law, Board resolution or letter order which established the fund. The most common types of revolving funds are change funds, petty cash funds, and special purpose funds. The department shall have written policies and procedures governing the use of the fund including expenditure limits consistent with the Board resolution or letter order that established the fund. The following used for: 1. 2. 3. restrictions apply to all revolving funds. Revolving funds are not to be Illegal purchases. Cashing checks. Making loans to employees. Page 6

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4. Making up cash shortages or cash losses. 5. Purchases of items for personal purposes including travel expenses. 6. Circumventing the Countys purchasing policies as described in Administrative Policies Manual Section 2-3.1. Change Funds: Change Funds are established to make change for cash tendered by the public in exchange for County services. The request to establish a change fund shall show the amount of the fund that will be maintained at each location. Each cashier shall be required to balance total cash at the close of the business day and report any cash overage or shortage. If a department location no longer needs to make change or if the balance on-hand is more than required for the volume of receipting, the excess funds shall be returned to the Auditor-Controller's Office and the accountable balance shall be reduced. Petty Cash Funds: Petty Cash Funds are used to make small purchases or payments in a timely manner for the operational needs of the department. The fund may be used only to pay for those items which are necessary, reasonable and directly related to the operations of the department. Special Purpose Funds Special Purpose Funds are requested by individual departments based on specific needs that cannot be met using the normal claim or petty cash fund processes.

3.5

Reimbursements from Revolving Funds Reimbursements from revolving funds must be based on the following procedures: 1. 2. 3. 4. The custodian shall obtain paid receipts from the employee prior to reimbursing him or her for authorized expenditures. The custodian shall ensure that only authorized expenditures are reimbursed. At the time of reimbursement, the custodian shall cancel the receipts to prevent duplicate payment. The employee shall sign for the reimbursement in order to establish

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accountability for funds disbursed. 5. 3.6 Authorization forms and the paid receipts shall be retained to support the disbursements recorded on the ledger.

Replenishment of Revolving Funds Replenishment of revolving funds must be based on the following procedures: 1. The fund shall be reconciled at the time the replenishment is requested from the Auditor-Controller's Office to ensure that cash on hand plus expenditures since last replenishment equal the accountable balance (Appendix E). A claim shall be submitted to the Auditor-Controller's Office, General Accounting. In order to maintain proper separation of functions, the request for replenishment shall be made by an employee independent of the custody and recording function. The claim shall indicate the general ledger accounts and amounts to be charged. Authorization vouchers and receipts supporting the request for replenishment shall be submitted along with a claim for payment. The custodian shall monitor the book balance of the fund on a regular basis to ensure that replenishment is done on a timely basis. For funds in a checking account, the outstanding checks shall be monitored on a regular basis for stale-dated checks. If required, future replenishment requests shall be adjusted by the amount of stale-dated checks. The custodian shall monitor advances to ensure that receipts are received and any unexpended funds are returned within a reasonable period. Replenishment shall only be requested for the amount of the advance expended, which shall be supported by paid receipts.

2.

3. 4. 5. 6.

7.

3.7

Annual Reporting Each revolving fund custodian will submit an annual report by July 31 to the AuditorController. A sample report format is located in Appendix F.

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4. CASH DIFFERENCE FUNDS 4.1 Definition and Purpose Cash difference funds are established by the Auditor-Controller under the authority delegated by the Board of Supervisors, for the purpose of replenishing cash shortages. A cash shortage is the amount that should be added to the actual cash collected to equal the amount that should have been collected. Cash shortages arise from simple errors by clerks or customers during the cash collection process and are usually not traceable to specific transactions. A cash overage is the amount of actual cash collected in excess of the amount due. Cash overages arise from simple errors by clerks or customers during the cash collection process. Although amounts may be traceable to specific transactions, the amounts are minor and do not justify the cost to reimburse the customer. 4.2 Establishing Cash Difference Funds The procedures for establishing a cash difference fund, increasing, decreasing, or returning a cash difference fund are similar to those for a revolving fund (see 3.2). 4.3 Use of Cash Difference Funds The following guidelines govern the use of cash difference funds: 1. Shortages may be replenished from the cash difference fund if the amount does not exceed the accountable balance of the fund. 2. Overages shall be deposited in the genled account 82-7720 and shall not be netted against shortages or deposited into the cash difference fund. 3. If the department does not have a cash difference fund or if the amount of the shortage exceeds the accountable balance of the fund, the shortage must be replenished through a request to the Auditor-Controller. 4. Shortages shall be recorded on shortage reports, which show the date of the shortage, the cashier that incurred the shortage, and the amount of the shortage. Management shall review and approve the shortage reports prior to replenishment and investigate any unusual entries or trends.

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5. When cash shortages occur for any of the following reason, the department shall notify the Auditor-Controller immediately: a. Missing cash due to suspected criminal activities b. Shortages of $100 or more in one day at the same location c. Shortages of $300 or more in one fiscal year at the same location. 4.4 Replenishment of Cash Difference Funds The cash difference fund shall be reconciled to ensure that cash on hand and shortages since last replenishment equal the accountable balance. A request for replenishment signed by the custodian or sub-custodian and approved by management shall be submitted to the Auditor-Controller. The request shall identify the cash fund involved and the dates and amounts of shortages replenished from the cash difference fund. 5. OTHER CASH FUNDS 5.1 Definition and Purpose There are other cash funds maintained by officials and staff throughout the County that are subject to applicable Board resolutions or other rules and regulations. These funds include those that receive revenue from the public via donations, fundraisers, vending machines (canteen funds), or any other means. In general, County officials are accountable to the Board of Supervisors and the public for any monies received or managed in an official capacity or in accordance with Board resolutions or Code requirements. County officials are not accountable for funds which originate from County employees and which are managed by employees for the benefit of employees. 5.2 Administration of Other Cash Funds County funds shall be administered and expended according to established County policies and procedures and the guidelines outlined in this manual. Special non-County funds are subject to Board resolutions and other guidelines. Good cash handling practices, as detailed in other sections of this manual, shall be observed. (See Cash Collections - Section 2; Internal Control Questionnaire for Cash Appendix C)

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6. CASH LOSSES 6.1 Definition A cash loss refers to money that is missing after it has been recorded, and it is usually the result of theft, fraud or negligence. A cash loss is generally detected by comparing records of cash received (cash receipts, register tape, etc.) with the actual amount on hand. Often, for practical reasons, immaterial cash losses (under $10) are considered cash shortages and do not follow the reporting guidelines for cash losses. 6.2 Reporting Cash loss shall be reported to the District Attorney in a confidential memorandum, with copies to the Risk Manager, and the Auditor-Controller. The guidelines for reporting cash losses are described in Appendix G. 6.3 Preventing Cash Losses A strong internal control system will help to minimize cash losses. The principles that underline a good internal control system are: a. b. c. d. e. 6.4 Authorization - All transactions shall be properly authorized. Segregation of Duties - No individual shall be have complete control over a transaction or an asset. Recording - All relevant details of a transaction shall be accurately recorded. Physical Safeguarding of Assets - Assets shall be secured and access shall be restricted. Periodic Reconciliation - The existence and value of assets shall be periodically verified and reconciled with recorded accountability.

Replacing Cash Losses The department's cash difference fund can be used to replace the loss if the loss does not exceed the accountable balance of the fund and if the loss has been reported to and investigated by the District Attorney's Office and if the amount of loss has been confirmed by an audit and if replenishment is approved by the County Risk Manager. If the department does not have a cash difference fund or the amount of loss exceeds the accountable balance of the cash difference fund, the department shall request

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replacement from the Auditor-Controller subject to the limitations specified in section 3.2. 7. REVIEW AND AUDIT 7.1 Record Retention A record of cash shortages shall be maintained for a period of five years and shall be made available to the Auditor-Controller's Office on request. Review by Management Management is responsible for safeguarding the funds in the revolving, change, cash difference and special purpose funds. Management can fulfill this responsibility by 1. enforcing the requirements contained in this manual, 2. conducting surprise cash counts and 3. completing the internal control checklist in Appendix C annually. 7.3 Audit by Auditors The reconciliations and supporting can be audited at the request of the AuditorController. In addition, the Auditor-Controller can conduct surprise cash counts and at his discretion request, additional information about the revolving, change, cash difference and special purpose funds as needed.

7.2

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APPENDIX A Administrative Policy Manual Section 4-6.1 Cash Revolving and Difference Funds October 22, 2002 A. PURPOSE The main purpose of the policy on revolving funds is to prescribe uniform accounting policies for County departments pertaining to cash revolving funds, cash difference funds, other cash funds and cash losses in accordance with generally accepted accounting principles, laws and regulations. B. APPLICABILITY This policy is in accordance with Government Codes 24350-24353; 29321-29330 and 29370-29390.1 and supercedes Administrative Policies 4-6.1-Imprest Cash and Change Funds dated November 26, 1996 and 4-6.3- Unexplained Cash Shortages dated May 25, 1993 which are incorporated in this policy. The policy applies to all funds for which County officials and department heads are held accountable. C. Definitions: 1. Cash includes coins, currency, checks, money orders and deposits at financial institutions; cash transactions include transactions involving cash as defined above but do not include electronic transmission of funds or investment of funds by the County Treasurer. 2. Revolving Funds are established by the Auditor-Controller for specific operational needs to facilitate certain expenditure and cash transactions throughout the County departments under the authority delegated to him by the Board of Supervisors. The most common types of revolving funds are change funds and petty cash funds. a. Petty Cash Funds are used to make small purchases or payments in a timely manner for the operational needs of the department. The fund may be used only to pay for those items which are necessary, reasonable and directly related to the operations of the department. b. Change Funds are established to make change for cash tendered by the public in exchange for County services. c. Special Purpose Funds are requested by individual departments based on specific needs that cannot be met using the normal claim or petty cash fund processes. d. Cash Difference Funds are established by the Auditor-Controller under the authority delegated by the Board of Supervisors, for the purpose of replenishing cash shortages and accumulating cash overages. e. Cash Loss refers to money that is missing after it has been recorded, and it is usually the result of theft, fraud or negligence. Page 13

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D. Policies: 1. Revolving and cash difference funds of up to $1,000 will be established at the discretion of the Auditor-Controller upon receipt of a written request from a county official or department head. Revolving funds of up to $5,000 will be established at the discretion of the Auditor-Controller with the approval by the County Administrative Officer. Incremental increases or reductions of up to $1,000 in existing funds maybe made at the discretion of the Auditor-Controller with the fund balance not to exceed $5,000. Incremental increase or reductions in excess of $1,000 can be made to existing funds with the approval of the County Administrative Officer with the fund balance not to exceed $10,000. 2. The following restrictions apply to all revolving funds. Revolving funds are not to be used for: a. Illegal purchases. b. Cashing checks. c. Making loans to employees. d. Making up cash shortages or cash losses. e. Purchases of items for personal purposes including travel expenses. f. Circumventing the Countys purchasing policies as described in Administrative Policies Manual Section 2-3.1. 3. The department shall adopt strict control through written policies and procedures governing the use of the fund including expenditure limits consistent with the Board resolution or letter order that established the fund. 4. Officials and department heads are strictly and personally accountable for the specified total amount of the Revolving Fund authorized to him the by Auditor-Controller. 5. Cash loss shall be immediately reported to the Auditor-Controller in a confidential memorandum, with copies to the District Attorney, and the Risk Manager. 6. All cash shortages must be made up through the cash difference fund to the extent of available balance. 7. Each revolving fund custodian will submit an annual report to the Auditor-Controller July 31. 8. All officials or department heads will follow the procedures prescribed in the AuditorControllers Cash Accounting Manual for the use of revolving funds.

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COUNTY OF YOLO CASH ACCOUNTING MANUAL APPENDIX B

SUMMARY OF APPLICABLE LAWS 1. Laws Pertaining to Cash Collections Government Code Section 24350 Fees collected by each County department or judicial district shall be deposited into the County Treasury on or before the fifth day of the following month in all cases. Government Code Section 24352 All fees received shall be recorded at once and in detail, and the record shall be open to public inspection during office hours. Government Code Section 24353 Money collected by each County department or judicial district shall be deposited into the County Treasury in the form and at the time required by the County Auditor. 2. Laws Pertaining to Revolving Funds Government Code Section 29321 The Board of Supervisors may by resolution establish a revolving fund not exceeding $250,000. Government Code Section 29321.1 The Board of Supervisors may, by ordinance or resolution, authorize the County Auditor to perform the functions of the Board in establishing, increasing, reducing, or discontinuing any revolving funds. Government Code Section 29325 Revolving funds may be used for making change if authorized by the Board of Supervisors. Government Code Section 29326 Revolving funds shall only be used for services or materials that are a legal charge against the County.

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Government Code Section 29327 Any expenditure in excess of $1 shall be supported by a receipt showing the date, the purpose of the expenditure and the amount expended. Government Code Section 29328 Requests for replenishment of revolving funds from the County Auditor must be supported by receipts. Government Code Section 29329 The County Auditor or Board of Supervisors may require the officer entrusted with the revolving fund to give an accounting of the fund. Government Code Section 29330 The Board of Supervisors may at any time increase, reduce or discontinue any revolving fund. 3. Laws Pertaining to Cash Difference Funds Government Code Section 29370 The Board of Supervisors may, by resolution, establish a cash difference fund. Government Code Section 29370.1 The Board of Supervisors may, by resolution, authorize the County Auditor to perform the functions of the Board in establishing, increasing, reducing, or discontinuing any cash difference fund. Government Code Section 29373 Any person who receives and disburses money placed in his custody shall submit a written report of cash deficit or overage to the department head at the close of each business day. Government Code Section 29373.1 The cash difference fund, when authorized by resolution of the Board of Supervisors, may be used to increase the amount tendered to any county officer so as to equal the amount due the County, for any account when a difference in an amount of $10 or less exists. Government Code Section 29374 Cash deficit may be reimbursed from the cash difference fund if the amount does not exceed the accountable balance of the fund.

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Government Code Section 29375 Overage shall be immediately deposited in the County's Overage Fund. Government Code Section 29375.1 Excess payment not exceeding $10 received by a County department or judicial district may be deposited in the County's Overage Trust. Otherwise, it will be refunded to the payor. Government Code Section 29376 The County Auditor or Board of Supervisors may require the officer entrusted to the cash difference fund to give an accounting of the fund. Government Code Section 29377 Application for replenishment of the cash difference fund shall be submitted to the Board of Supervisors. Each cash deficit shall be itemized as to amount, date of occurrence and the name of the person whose account was reimbursed from the fund. (See also Section 29380.1) Government Code Section 29379 The Board of Supervisors may discontinue the cash difference fund at any time. Government Code Section 29380.1 The Board of Supervisors may authorize the County Auditor to perform the functions of the Board to replenish the cash difference fund. Government Code Section 29390 The Board of Supervisors may relieve County officers and employees of accountability for cash shortages in their accounts, where there is no proof of fraud or gross negligence in connection with the shortage and where the loss is not covered by insurance. Government Code Section 29390.1 The Board of Supervisors may authorize the County Auditor to perform the functions of the Board to replenish shortage.

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APPENDIX C
YOLO COUNTY INTERNAL CONTROL QUESTIONNAIRE FOR CASH These are recommended internal controls to ensure accountability for cash in a mediumsize County department. Cash includes coins, currency, checks, money orders and deposits at financial institutions. CONTROLS YES/NO/COMMENTS

Objective 1: Cash collections are authorized, supported and accounted for. 1.1 Are the following duties performed by at least two individuals? Authorize cash collections Record cash collections Deposit cash collections Reconcile cash collections Are only cash remittances that are identified as amounts owed to the County automatically accepted? Are remittances that are not amounts owed to the County specifically authorized before acceptance? Are unidentified remittances immediately returned to the payers or deposited promptly into a suspense account for further research? Are electronically transmitted remittances preceded by verbal or written notices identifying the payor, amount and purpose? Is documentation required to indicate the purpose of the cash remittance to the County? Are collections for different cash funds physically separated? Is cashing of personal checks from cash collections prohibited? Page 18

1.2 1.3 1.4

1.5

1.6 1.7 1.8

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CONTROLS 1.9 1.10 1.11 1.12 1.13 1.14 Are currency and checks accounted for separately? Are checks restrictively endorsed immediately upon receipt? Are checks reviewed for accuracy and authenticity before acceptance? Are checks with incorrect amounts or payees or which show alterations returned immediately to payers? Are cash collections recorded immediately upon receipt by means of cash registers? Does the cash receipt show the following information: Date? Payor? Amount? Method of payment? Purpose of payment? Cashier's name? Is a receipt issued for every payment? Are receipt forms periodically accounted for? Are cash collections balanced to receipts on a daily basis? Are cash shortages reported and made up from the cash difference fund? Is a fee levied on all returned checks? YES/NO/COMMENTS

1.15 1.16 1.17 1.18 1.19

Objective 2: Cash disbursements are authorized, supported and accounted for. 2.1 Are the following duties performed by at least two individuals? Authorize disbursements Have custody of cash Record disbursements Reconcile cash disbursements

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CONTROLS 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 Are authorized disbursements clearly defined? Are all disbursements supported by properly approved claims? Are cash advances prohibited unless specifically authorized by the Auditor-Controller? Are disbursements made only from authorized cash funds, bank accounts or through warrant requests? Is the use of County warrant stock authorized by the Auditor-Controller? Are blank checks, warrants and signature plates safeguarded in physically secure areas? Do only authorized personnel sign checks and claims? Do check and claims signers review supporting documentation before signing? Are signed checks and warrants immediately mailed out by someone not involved in their processing? Are disbursements by means of electronic transmission specifically authorized by the Auditor-Controller? Is each electronic disbursement confirmed with the intended recipient? Are disbursements immediately recorded with all relevant detail? Are supporting claim/request documents immediately canceled as paid? YES/NO/COMMENTS

Objective 3: Cash is physically safeguarded. 3.1 3.2 Is cash on hand safeguarded in physically secure areas? Are cash collections deposited promptly?

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CONTROLS 3.3 3.4 3.5 3.6 Are bank accounts authorized by laws, the Board, AuditorController or Treasurer? Are bank accounts established in the names of authorized County officials? Is cash in bank protected by FDIC insurance, i.e. does not exceed $100,000 per account? Are cash losses promptly identified and reported to the proper authorities according to Countywide guidelines? YES/NO/COMMENTS

Objective 4: Cash collections are promptly placed under the custody of the County Treasurer. 4.1 4.2 4.3 Are collections transmitted from branch offices to home office through secure means within a reasonable time? Is the cash verified at both ends of the transmission? Are collections deposited intact and promptly (at least weekly) into the County Treasury?

Objective 5: Cash transactions are accurately recorded and reported to the Auditor-Controller's Office. 5.1 5.2 5.3 5.4 5.5 5.7 Are daily collections promptly summarized and recorded in a cash receipt journal? Are deposits promptly recorded? Are deposits reconciled to collections? Are disbursements promptly recorded and summarized in a cash disbursement journal? Is an authorized chart of accounts used to apply cash collections and cash disbursements? Are deposit records reconciled to the general ledger?

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CONTROLS Objective 6: All cash funds are properly maintained. 6.1 6.2 6.3 Are cash funds and trust funds established only pursuant to Code, Board resolution or Auditor-Controller's letter order? Is an inventory of all cash funds maintained? Are procedures for the use of cash funds clearly established, including: Clear definition of authorized uses? Prior approval of expenditures? Restriction on amount and type of purchase? Reimbursement only upon submission of receipt? Cancellation of receipt upon reimbursement? Is an authorized chart of accounts used to charge disbursements? Are replenishment requests based on actual expenditures? If a checking account is used, are book balances reconciled monthly to bank statements? Are cash funds periodically counted and verified by supervisors? Is the level of usage monitored to detect and close inactive funds? Is an annual report of accountability submitted to the AuditorController? YES/NO/COMMENTS

6.4 6.5 6.6 6.7 6.8 6.9

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COUNTY OF YOLO CASH ACCOUNTING MANUAL APPENDIX D

DEPOSIT PERMIT PROCESS Definition/Use: A deposit permit is used to deposit money in the County Treasury. The permit is entered and approved on-line. Screens: There are two entry screens and one approval screen. - Deposit Permit-template - Detailed Deposit Permit-when specific fields (i.e. revenue number, vendor) must be entered - Approve Deposit Permit Procedure: Deposit Permit Template
MODE:E ACTION: R,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,T . D E P O S I T P E R M I T E N T R Y . 02/16/00 GLD704 F,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,G Q;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;#;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;W : Department AUD AUD-CONT . Budget Unit 1051 AUD-CONT : !,,,,,,,,,,,,,,,,,7,,,,,,,,,,,,,,,,,,,,8,,,,,,,,,,,,,,,,,,,,,,,,,,7,,,,,,,,,,,," : Permit DE027788 . 01 Description . 02 Addl? : !,,,,,,,,,,,,,,,,,8,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,8,,,,,,,,,,,," : 03 Cash Checks Other Total : : Entry Total : A;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;S Fund B/U C/C Account Account Name Program Description Amount 04 110-1051-826110 ASSESSMENT & TAX 05 110-1051-826120 AUDITING & ACCOU 06 221-760160 HOPTR 07 221-760060 OTHER IN LIEU 08 221-760080 HIGHWAY PROP REN 09 201-760300 VISION CARE 10 188-1881-826399 PREMIUMS 11 201-769000 PERS HEALTH INSU 12 13 14 Enter the mode, which is E, F or S.

Entry: 1. Access the Deposit Permit screen under the entry screen section of your GenLed menu. 2. Action fieldEnter E in the action field, return 3. Budget unit fieldEnter the budget unit for the template you wish to access 4. DE (deposit entry) number will be assigned. Write this number down for future reference. This is the number the Treasurer will need to pull up your deposit. 5. Field 01Enter description of deposit you are making (what its for)

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6. Field 02Enter Y, return. Enter any additional description (who its from, check number, issue date, etc,) 7. Field 03Enter amounts in proper field(s). The total shall be the total deposit. 8. Field 04-14Enter accounting information, description and amounts on the correct template lines. If the correct accounting information or description is not on your template, you can override or go to a blank line. You may need to go to the action field and come back down to the line number. To go to the action field enter//, in the first positions of the fund or description field, enter. Then enter the line number of the field you wish to change, or enter A in the action filed to go to a blank line. 9. When you have completed your line entry, the entry total shall equal the deposit total. 10. Return to action fieldEnter //in the first positions of the fund or description field, enter. 11. Update Enter U in the action field before continuing to the next screen, or UN if you will be entering another deposit, or UR to return to your menu. Detailed Deposit Permit
MODE: R,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,T . D E P O S I T P E R M I T E N T R Y . 02/16/00 GLD700 F,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,G Q;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;#;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;W : Department . Budget Unit : !,,,,,,,,,,,,,,,,,7,,,,,,,,,,,,,,,,,,,,8,,,,,,,,,,,,,,,,,,,,,,,,,,7,,,,,,,,,,,," : Permit . 01 Description . 02 Addl? : !,,,,,,,,,,,,,,,,,8,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,8,,,,,,,,,,,," : 03 Cash Checks Other Total : : Entry Total : 199999999999999999999999999999999999999999999999999999999999'9999999999999999992 : Fund B/U C/C Account Account Name . Sub Line Item : : 04 . 05 : !,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,7,,,,,8,,,,,,,,,,,,,,,,,," : 06 Program . 07 Work Order : !,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,8,,,,,,,,,,,,,,,,,,,,,,,," : Revenue Number (optional) Title Line Receivable : : 08 : !,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,7,,,,,,,,,,,,,,,,,,,,,,,,,,," : 09 Vendor . 10 Amount : !,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,8,,,,7,,,,,,,,,,,,,,,,,,,,,," : 11 Ledger Description . 12 Addl Desc? : A;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;$;;;;;;;;;;;;;;;;;;;;;;S Enter the mode, which is E, F or S. ACTION:

Entry: 1. Access the Deposit Permit screen under the entry screen section of your GenLed menu. 2. Action fieldEnter E in the action field, return 3. Budget unit fieldEnter the budget unit for a reference 4. DE (deposit entry) number will be assigned. Write this number down for future reference. This is the number the Treasurer will need to pull up your deposit. 5. Field 01Enter description of deposit you are making (what its for) 6. Field 02Enter Y, return. Enter any additional description (who its from, check number, issue date, etc.) Page 24

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7. Field 03Enter amounts in proper field(s). The total shall be the total deposit 8. Field 04Enter accounting information (Fund, B/U, C/C, Account) 9. Field 05Skip 10. Field 06Enter program (if applicable) 11. Field 07Enter work order (if applicable) 12. Field 08Enter Revenue Number and line (if applicable). See Revenue Master process 13. Field 09Enter only if depositing refund from vendor paid on a County warrant. (Note: County warrant shall be referenced in description). 14. Field 10Enter amount for this line item 15. Field 11Enter ledger description (or dup from field 01 by skipping field) 16. Field 12Optional -enter additional notes you dont want to print on the deposit permit or show in the ledger. (Note: this field is rarely used) 17. Action FieldEnter U to continue with next line item, or UN if you will be entering another deposit, or UR to return to your menu.

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COUNTY OF YOLO CASH ACCOUNTING MANUAL

Approval: This approval screen is used for deposit and detailed deposit. ?? MODE: ACTION: ? APPROVE ? 02/16/00 ?D E P O S I T P E R M I T ? GLD707 ???????????????????????????????????????????????????? ????????????????????????? ? Department ?Budget Unit ? ???? ? Permit ? Description ?01 Addl? ? ??? ? Cash Checks Other Total ? ? Entry Total ? ???????????????????????????????????????????????????? ???????????????????????????? Fund B/U C/C Account Account Name Program Description Amount - - - - - - - - - - - - - - - - - - - - - - Enter the mode, which is either F or S. 1. 2. 3. 4. 5. Access the Deposit Permit approval screen under the entry screen section of your GenLed menu. Action fieldEnter f in the action field, return PermitEnter the DE number in this field Verify all information is correct Action fieldEnter APP to approve and U to update.

Deposit with Treasurer

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Take the deposit with DE number to the Treasurer. The Treasurer will access your on-line deposit by your DE number. After their acceptance, they will produce your deposit permit, which will now have a DP number. This DP number is the official document number. To find DP number using DE number You can search for a deposit permit (DP) number using the deposit entry (DE) number only after the deposit has been posted by the Auditors Office. The Auditor usually posts the deposits the next day after the Treasurer has approved them. This process may be delayed due to time constraints.
MODE:S ACTION: R,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,T 03/14/01 . D E P O S I T P E R M I T . GLD720 . I N Q U I R Y . Q;;;;;;;;;;;;;;;;;#;;;;;;;;;;;$;;;;;#;;;;;;;;;;;;;;;;;;;#;;;;;$;;;;;;;;;;;;;;;W : Permit . Department . Budget Unit . 01 Entry # : !,,,,,,,,,,,,,,,7,8,,,,,,,,,,,,,,,,,8,,,,,,,,,,,,,,,,,,,8,,,,,,,7,,,,,,,,,,,,," : Date . 02 Description . 03 Addl? : !,,,,,,,,,,,,,,,8,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,8,,,,,,,,,,,,," : Cash Checks Other Total : : Created by Approved by Posted by : A;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;S Fund B/U C/C Account Program Description Amount 9999999999999999999999999999999999999999999999999999999999999999999999999999999 04 05 06 07 08 09 10 11 12 13 Enter ID-numbers for select values or press NEXT DATA to start data retrieval.

Process: Access the deposit permit inquiry screen from the inquiry section of your General Ledger Main Menu. Use the F8 function key to return to the action field. Enter S for the search mode, hit the enter key twice. This will take you back to the action field. At the bottom of the screen you will be prompted to enter ID numbers for select values. Enter 01 in the action field. This will take you to the Entry # field. Enter the DE number in the entry # field, hit the enter key twice. The system will retrieve the deposit permit and it will appear on your screen. Page 27

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Troubleshooting: If the system can not find a DP number from what you entered, a message will appear at the bottom of your screen No records were found matching index/selection values. This means either: 1. The Auditor has not posted the deposit for which you are searching, or 2. An invalid DE number was entered. There are two reports that may also be helpful: Access your report menu from the Other menus section of your General Ledger Main Menu. Enter 04 in the action field for Outstanding Deposit Entry List Enter 05 in the action field for Posted Deposit Permit List

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COUNTY OF YOLO CASH ACCOUNTING MANUAL APPENDIX E

SAMPLE FORMATS FOR CASH RECONCILIATIONS Petty Cash Reimbursement Example: Assume that a department has a $200 petty cash fund. On 6/22/XX, when the balance is $37.58, the custodian submits a request to the Auditor-Controller's Office for replenishment. The custodian shall reconcile the fund to ensure that cash on hand and unreimbursed expenditures equal the accountable balance. Reconciliation of Cash on Hand to Accountable Balance Cash on hand, 6/22/XX Unreimbursed expenditures (Note 1) Accountable Balance, 6/22/XX $ 37.58 162.42 $ 200.00 ======= Note 1: The total unreimbursed expenditures of $162.42 must be supported by receipts or vouchers. Revolving Cash Checking Account Reconciliation Example: If the $200 petty cash fund is maintained in a checking account, the bank balance shall also be reconciled to the book balance on a monthly basis. This is in addition to the reconciliation to the accountable balance in the prior example. Assume that the bank balance and book balance are $24.34 and $167.23, respectively, on 6/30/XX. A reconciliation shall be performed to account for the difference in cash balances. Reconciliation of Bank Balance to Book Balance Bank Balance, 6/30/XX Add: Deposit in Transit (Note 2) Less: Outstanding Checks (Note 3) 1124 $ 9.29 1125 10.24 Balance per book, 6/30/XX $ 24.34 162.42 $ 186.76

19.53 $ 167.23 ====== Note 2: Represents reimbursement received from the Auditor-Controller's Office and recorded in book but not shown in the bank statement. Note 3: Represents checks written but not cleared by the bank.

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COUNTY OF YOLO CASH ACCOUNTING MANUAL APPENDIX F ANNUAL REPORT FORMAT

The following is a suggested format for your annual report of imprest cash account balances To: From: Date: Subject: Howard Newens, Auditor-Controller Name, Department Annual Report of Imprest Cash

In compliance with the Yolo County Administrative Policy Manual section 4.6.1, we are hereby submitting the department names annual report of the imprest cash fund balances as of June 30, 2002. Change and Cash Difference Funds _________________________ $XXX.XX

Custodian Balance:

There were no shortages or overages in the change fund during the year (or during the year the total shortage (or overage) was $XX.XX resulting from _______ (give reason)).

Revolving Cash Fund Custodian _________________________ Balance: Cash on hand at 6/30/XX Claim submitted on XX/XX/XX Accountable Balance6/30/XX

XX.XX XX.XX XXX.XX

There were no shortages or overages in the petty cash fund during the year (or during the year the total shortage (or overage) were $XX.XX resulting from _______(give reason)). If the fund is maintained in a checking account, please attach a copy of the June 30 bank reconciliation.

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Special Purpose Fund Name of Fund________________________ Custodian _________________________ Bank Balance, 6/30/XX Add: Deposit in Transit (Note 2) Less: Outstanding Checks (Note 3) Check # Check # Total outstanding checks Balance per book, 6/30/XX Attached is a copy of the bank statement as of June 30, XXXX There were no shortages or overages in the trust account during the year (or during the year the total shortage (or overage)) were $XX.XX resulting from _______(give reason)). Note: If you do not have a type of fund mention below please respond N/A

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COUNTY OF YOLO CASH ACCOUNTING MANUAL APPENDIX G GUIDELINES FOR REPORTING CASH LOSSES AND SUSPECTED FRAUD
PURPOSE: These are guidelines for reporting cash losses, suspected fraud, and similar irregularities involving loss of County assets. The guidelines were adopted by a committee comprised of representatives of the District Attorney, Sheriff Department, County Risk Manager, and Auditor-Controller.

1. 2.

Upon becoming aware of cash losses or indications of fraud or embezzlement department personnel shall immediately notify the department head. The department head or designee shall report the circumstances to the District Attorney and the Sheriffs Department Investigations Section supervisor in a confidential memorandum with copies to the Risk Manager, and the Auditor-Controller. The Sheriffs Department conducts the initial investigation and determines which other law enforcement agencies shall be notified. The District Attorney notifies the Auditor-Controller and the County Risk Manager of the results of the investigation. After clearance by the District Attorney, the department conducts an internal investigation to assess the extent of the loss, and files a Property Loss Report with the County Risk Manager. Upon notification by the County Risk Manager, the District Attorney and Sheriffs Department perform a crime prevention review at the site and makes recommendations for improving security. A copy of the report is sent to the County Risk Manager. The Auditor-Controller verifies the loss, reviews internal controls, and makes recommendations to replace lost funds and strengthen internal controls. A copy of the report is sent to the County Risk Manager. The County Risk Manager follows up on the recommendations made by the District Attorney, Sheriffs Department and Auditor-Controller, and, if satisfied that proper corrective action has been taken, recommends approval of requests for funds replacement.

3.

4. 5.

6.

7.

The contact persons at the above-mentioned three departments are listed on the following page.

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COUNTY OF YOLO CASH ACCOUNTING MANUAL

REPORT CASH LOSSES AND SUSPECTED FRAUD TO: DEPARTMENT DISTRICT ATTORNEY COUNTY RISK MANAGER AUDITOR-CONTROLLER SHERIFF-CORONER CONTACT PERSON Chief Investigator Pete Martin Risk Manager Tim Huntley Auditor-Controller Howard Newens Detective Sergeant Rich Williams 8420 8119 8217 5212 EXT.

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