PENN STATE COOPERATIVE EXTENSION

Financial Guidelines for County Extension Accounts

1. To the extent possible, no one employee should be responsible for all aspects of cash handling and record keeping duties.

   Under no circumstances should the bank reconciliation statements be received by office personnel. The CED must receive and review the bank statements.

   The following are suggested divisions of responsibilities for one- and two- (or more) secretary offices:

   1. One-Secretary Office — Secretary should receive cash, prepare pre-numbered receipts, prepare deposits, and record all activity on the ledgers. The County Extension Director or another staff member should receive all of the unopened bank statements, review canceled checks, and trace recorded receipts from the ledger (on a test basis) to recorded bank deposits.
      
      
   2. Two-Secretary Office — One secretary should receive cash, issue pre-numbered receipts, and prepare deposits. Another secretary should maintain the ledger, verify deposits to recorded receipts, and reconcile all bank statements after they have been received by the CED.
      
      
2. Pre-numbered receipts must be prepared for all payments received over the counter. A log may be prepared for mail payments, with one receipt written for the total transactions at the time of the deposit preparation. Similarly, if registration fees are collected on-site for meetings or workshops, attendance sheets may be prepared and the total transferred to one pre-numbered receipt. The attendance sheets/mail logs must be retained for verification.
   
   
3. Deposits should be made when receipts equal $100 or at the end of every week, whichever occurs first.

   All receipts should be deposited intact in the form received (i.e., cash or check). In no instance should personal checks or those of customers be cashed from undeposited funds.

   All checks should be restrictively endorsed immediately upon receipt. That is "For Deposit Only county extension office."

4. A written reconciliation of the bank statement balance to the ledger balance should be prepared each month. Outstanding checks and deposits in transit should be noted. If checks are outstanding for more than three months, check the circumstances and consider stopping payment.
   
   
5. Signature authorizations for bank accounts should be kept current and should include only the minimum number of employee authorizations necessary for good office operations. If only one signature is required, it should be that of the CED. If two signatures are required, the other may be that of a senior staff member. In no case should the CED pre-sign a number of checks in advance; however, another staff member may also be authorized to sign in the CED's absence. Signature stamps are not permitted on any financial documents.
   
   
6. Accepting custody of funds from outside organizations such as individual groups and 4-H clubs is strongly discouraged. If the CED believes there is no acceptable alternative for safekeeping the funds, such funds should be receipted and deposited to a separate account. An officer of the associated organization should then request in writing transfer of the funds to the organization. A separate category (sub-account) should be established on the ledger for each organization. This does not include 4-H DevelopmentFunds. These funds are to be accounted for and maintained in the County Cooperative Extension Office and are subject to all financial guidelines within this document. A separate account should be maintained and called the 4-H Development Account.
   
   
7. If a petty cash fund is needed, it should be established and maintained on an imprest basis (i.e., cash in the fund plus receipts for reimbursed expenditures should equal the total amount of the fund at all times).

   Reimbursement should be supported by a cash register tape or sales slip. Such receipts should be approved and marked paid after reimbursement. The recipient should also sign the receipt as evidence of receiving reimbursements.

   Cash receipts should not be withheld from deposits to establish such funds. The petty cash should be examined and balanced periodically (on a surprise basis) by a person independent of the cash handling function.

   The person in charge of the petty cash fund must have the approval of the CED to be reimbursed.

8. A vendor invoice or receipt is necessary to provide independent evidence of the nature of each expenditure. The use of a voucher that is approved prior to purchase is a desirable instrument. For proper segregation of duties, the person who prepares checks must not be the sole signatory or reconcile the bank statement. If there is only one clerical employee available to perform these functions, the CED should perform a complete, detailed review of bank statements and canceled checks.
   
   
9. Expenditures that are solely for the benefit of extension staff such as flowers, coffee, refreshments, cards, office parties, personal subscriptions, and individual membership fees are unacceptable expenditures from County Cooperative Extension Office supervised funds.