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HomeMy WebLinkAboutTR-76-81 - (ql MEMORANDUM TO: The Chairman and Members of the Finance and Administration Committee FROM: Kathryn Campbell , C.A. , B.Com. , Treasurer DATE: September 8, 1981 SUBJECT: Accounting Procedures ITEM: TR-76-81 RECOMMENDATION: For your information. REPORT: Attached are the Accounting Procedures which have been developed to assist in the uniform operation of our various departments. I have discussed these procedures with each department in turn, and have received their concurrence. This manual is the beginning of what, I hope, will be a comprehensive set of operating procedures which can be put in place throughout the Municipality and provide us with uniformity throughout all our operations. K. Campbell . R81-TP-1 TOWN OF NEWCASTLE June 16, 1981 ,p Mail Handlin Procedures - Ail locations Mail received at each location will all be opened by one person. The exception is mail marked Personal or Confidential . It will be forwarded to the addressee U ened._ All opened mail is to be date stamped on the Bice of the document. Unopened mail is to be date stamped on the envelope. All non-financial mail is to be sorted and distributed to the appropriate locations. _.__._ Any monies received through the mail is to be stamped, immediately, "For deposit only to the credit of the Corporation of the Town of Newcastle" . A list of cash receipts is to be prepared to be sent to Treasury. The list, the monies received and all supporting documentation is to be sent promptly to Treasury for the preparation of the deposit and recording of the receipts into the Accounts , All invoices or documents to be processed for payment are to be sent to the Accounts Payable Clerk at each location for further processing. IV TOWN OF NEWCASTLE June 29, 1981 Cash Collection Procedures . . . . Cash Receipts through the Mail The person responsible for opening the mail at each location will prepare a detail list of the cash receipts. All cheques will he stamped "for deposit only to the credit of the Town of Newcastle" immediately upon receipt.. The list, tide cash receipts and backup documentation indicating the accounts to be credited will be sent promptly to Treasury. Upon receipt of the monies in Treasury, they will be counted and verified with the appended list. The daily mail cash record will be prepared for the Treasurer. The list will be maintained by the person verifying the correctness of the receipts to the list. The monies and any supporting documentation will be used by another person to prepare the three-part prenumbered cash receipt. The preparation of the cash receipt includes the checking or making of the account allocal-Dons' 'rnd append-1119 the supporl;inO documontal'Jon to the appropriate cash receipt. 'rile copies of the cash receipt are distributed as Iollows: 1 . White - to the payee 2. Pink - to the department concerned , if requested, or the Treasury numerica file. 3. Yellow- to the person who prepares the deposit for the bank. The Yellow copies should be totalled and balanced to the original list of cash receipts which is held by this person for this purpose. This procedure ensures all monies received in the mail have been receipted. TOWN OF NEWCASTLE: June 29, 19£31 Cash Receipts_ over_the Counter For locations (primarily arenas, pools & Town Nall ) which receive cash over the counter, a three part prenumbered receipt should be prepared for all monies received. The detail in the cash receipt should be sufficient to enable someone unfamiliar with the particular transaction to subsequently review the account allocations which have been made. An exception to the aforementioned procedure would be the cash received from the sale of entrance tickets to the various facilities. In this case a summary of the number of tickets sold times the entrance price, the date, type of event, and account code would be sufficient to support those particular cash receipts. The distribution of the three-part prenumbered cash receipt form would be the same as that described for cash receipts through the mail , Locations remote from the gown hall which have significant daily cash receipts will continuo to, regularly, deposit the funds directly to the bank to the credit of the Town of Newcastle. Cash should not be maintained on any premises longer than necessary. Regularly, these deposit slips with the yellow copy of the cash receipts appended should be forwarded to the Treasury for review and posting to the accounts. TOWN OF NEWCASTLE June 26 , 1981 Bank Deposits Deposits will be made regularly as requi red , determined by the amount of receipts on hand. The cash drawers will be cashed out and the deposit balanced to the cash receipts on hand. Once prepared the deposit will be transmitted to the bank promptly, The deposit sheets, appended cash receipt forms and other source documents will be filed by date in the Treasury department. TOWN OF NEWCASTLE June 29, 1981 Invoicing Procedures Invoices issued from each department will he comprised of a three-part prenumbered. form, distributed as follows: Copy 1 - To the invoiced party Copy 2 - To Treasury with the accounts to which the revenue is to be credited. Copy 3 - Department file copy. This system of invoicing will allow Treasury to institute some controls over accounts receivable and more easily follow up on unpaid accounts, It will also facilitate the processing of each receipt by providing a source document with background information when the cash is physically received. All amounts invoiced will be remitted directly t.o the Treasury Department in Qowmanville Departments. will be advised of the receipt of payment, if Treasury is requested to do so. Upon receipt of the Treasury copy of the invoice, the account allocations will be reviewed for correctness and the invoice initialed to indicate the completion of the review. The Treasury copy of the invoice will be filed in a numerical file by department. When the cash is received, the invoice will be marked paid and the appropriate accounts credited. The Treasury invoice copy will be placed in a numerical paid invoice file by department. Monthly the numerical sequence of the invoices by department will be verified to ensure copies of all invoices issued have been forwarded to Treasury. A review of unpaid invoices will also be made and the invoicee contacted for payment. Iv -0) TOWN OF NEWCASI LL Juice 16, 1981 Accounts Payable Processing - All locations All invoices and other documents to be processed for payment received by the Accounts Payable Clerk should have a verification stamp on the face of the document, if possible. All items to be processed for payment are to be reviewed for payment date. Invoices with discount dates are to be red flagged for early payment. The Accounts Payable Clerk will do the following functions prior to the documents going out to the various Department Heads for approval . 1. Enter supplier number or have the Accounts Payable Clerk in Treasury assign a supplier number, if the supplier is not on the current list. 2. Complete the checking of the clerical accuracy of the documents (additions and extension) and intital the verification stamp in the appropriate box. 3. Enter the invoice number on the vertification stamp. This invoice number provides a reference point for the supplier when he is crediting the payment! to our account. 4. Enter the account code to be charged, if known. 5. Enter the amount to be paid, if known. All items to be processed for payment will he sent to the Purchasing Agent. The following functionswill be performed by the Purchasing Agent prior to the documents going out to the various Department Heads for approval . 1. The items to be processed for payment will be matched with the purchase orde The purchase order should have been matched with the receiving slips to ensure all goods ordered Have been received. The pink copy of the purchase order is to be attached to the documents to be processed for payment. The blue copy of the purchase order is maintained in a numerical file with the receiving :clips in the Purchasing Agents office. 2. The Purchasing Agent will enter the purchase order number on the verification stamp. 3. The Purchasing Agent should perform a price check with his records, if he has the information available, and initial the verification stamp indicating its completion. Any discrepancies in the price from the purchase order or other records used in the verification of the prices will be brought to the attention of the department head concerned. - 2 - ✓ ' l�� TORN 01F NEWCASTI f June 16, 1981 Accounts Payable Processing - All Locations - cont'd. . . . documents to be processed for payment will go to the various department The I I Y heads for their approval . The department heads should receive a document which has had the following functions performed, as a minimum. 1. Supplier number entered. 2. Clerical accuracy checked 3. Invoice number entered. 4. Purchase order number, entered, if applicable, and the pink copy of the purchase order attached to the document to be processed for payment. 5. The price check should have been completed if the purchasing agent had the information available i .e. an approved purchase order. The department head will review the documents to be processed for payment and any attachments and perform the following fuctions: 1. Note any red flagged invoices which have discount dates to ensure they are returned to Treasury five days prior to the discount date to be processed for payment. 2. Enter the amount(s) and corresponding account code(s) to be charged, if not already completed, and the total amount to be paid. 3. Check the prices of goods purchased or services rendered, if not already completed by the Purchasing Agent. The appropriate box on the verification stamp is to be initialled to indicate this function has been completed. 4. The verification stamp must be initialled by the department head to allow it to be processed to the accounts upon its return to Treasury. Documents without this prior department head approval will not be processed for payment. The assistant to the department head may review and approve documents for payment up to a certain level as set by the department head. The approved documents to be processed for payment are to be returned to Treasury for payment. Any items which the department head wishes to question are to be returned to Treasury with a memo for further action to be taken by the Treasury Department. TOWN Of NLWCA`tLl- June 29, 1981 Ac on it Piqill)1C I�rOC('SSvill� w 71'l'il`iUY'y All approved documents to be processed for payment are to be forwarded to the Accounts Payable clerk in Treasury. All documents will be reviewed, upon receipt, for4he proper approvals and completeness of the various clerical ('unctions. Any clerical functions not completed will now be completed by the Accounts Payable Clerk in Treasury. The documents are now ready for processing to the accounts and will sorted by payment dates, with particular note made of any discount dates to be met. Once a week the approved documents to be processed for payment will be batched. A voucher number must be assigned to each document to provide an audit trail from the General ledger to the paid supplier invoice files. The regular processing of the accounts payable should minimize the number of manual cheques issued in any one month Once batched and input, the Accounts Payable Clerk will enter the batch number and initial the appropriate box in the, verification stamp to indicate the function has been completed. The computer reports which must be generated to accompany the cheques when returned from the data centre on a weekly basis are: 1 . Hal 18 - List of Invalid accounts . 2. Hal 5 - Accounts paid by supplier. 3. Hal 8 - General Ledger by Account Number. 4. Hal 50 - Input Records. 5. Hal 52 - Batch Records . The Accounts Payable Clerk will review the Hal 18 for invalid account numbers and prepare adjusting journal entries as required. The journal entries must be approved prior to being re-input to the computer to correct the original error. The returned cheques will be reviewed by the Accounts Payable Clerk for errors . The cheques are to be matched with any enclosures for mailing, the corresponding voucher and other documentation. The Accounts Payable Clerk will cancel the documents processed for payment by recording the cheque number of the face of the related documents. The cheque copies should be filed numerically. This procedure will help to eliminate the possibility of a duplicate payment; of any individual invoice. All of the documentation will then go to the person responsible for the signing of the cheques . A review of the appended documentation will be made by this person prior to the cheques being signed. The documents are to be initialled indicating the completion of the review. TOWN OF—NEWCASTLE June 29, 19£31 Accounts Pay able Processing •-, Treasury con t'd. . . The unsigned cheques and any enclosures for mailing are to be separated from the documents for filing. The cancelled documents are to be returned to the Accounts Payable Clerk who will file them in alphaba ical supplier riles. Two of the people responsible for the keys to the cheque signer will process the cheques and make the entries to the log book, when completed. The signed cheques and the enclosures for mailing are to be sent to someone who has not been involved in the approval or processing of the documents. Any items notmailed immediately are to be kept in the vault until their release. On a monthly basis the bank accounts are to be reconciled by a member of the Treasury staff. The reconciliation and any resulting journal entries are to be reviewed and initialled by the Treasurer or Deputy Treasurer. TOWN OF NEWCASTLE June 29, 19£ 1 Reconciliation of the Bank Account A member of the accounting staff having no cash receipt or disbursement functions will reconcile the bank accounts monthly. The procedures to be followed by this staff member are set out below: 1. The bank statements and paid cheques wi11 be received directly from the bank. . 2. The cancelled cheques will be compared to the entries on the bank statements and the cash disbursement: records as to the cheque number, date, payee and amount. 3. All cheques should be examined for proper authorized signatures. 4. All cheques should be examined for proper endorsements and cancellations by the bank. 5. All cheques should be examined for any evidence of alterations of any part of the cheque. 6. A complete listing of any charges against the bank statement not supported by a cancelled cheque should be made. All such items must be supported by a bank memo which adequately explains its existence. The main reasons for these charges are interest charges , bank charges, returned cheques , bank transfers , coupons and debentures, term deposit purchases , repayment of loans , etc. The deposits shown on the bank statements mutt be compared to our deposit records , and cash receipts records, to determine the outstanding deposits. Any items not included in our deposits (i .e. ) tax deposits, loan advances , interest on the account term deposit receipts cashed etc. must be listed for inclusion in the bank reconciliation. Once the aforementioned procedures have been completed, the balance per the bank statement can be reconciled to the balance per the books. A journal entry to adjust all debits and credits to cash should be prepared for submission to the Treasurer or Deputy-Treasurer with the bank reconciliation for review and approval . The bank reconciliation and the appended journal entry should be initialled to indicate the completion of the review and the approval . Notes: re: Bank Reconciliation Review Cheques which remain outstanding for long periods of time to the point of being stale dated should be cancelled and a stop payment put on them, Upon investigation with the payee, the cheque should be reissued under the same account number. Any cheques which are not properly signed or endorsed should be brought to the attentionof the Treasurer or Deputy-Treasurer. Any bank charges which are irregular in nature should also be brought to their attention. TOWN OF NEWCASTLE June 29, 1981 Procedures for the Preparation and Posting of Journal Entries Persons initiating journal entries are to sign the journal entry and provide an adequate explanation to accompany it. The support documentation for the entry will either be filed with the journal entry or the file reference number where the information can be found recorded on the journal entry. Journal entries are to be taken to the Account Payable Clerk, who will check the account coding of the journal entry and initial it, indicating the correctness of the allocation. All journal entries must be approved by the Treasurer or the Deputy-Treasurer , prior to being input to the accounting records. Initialling the journal entry shall serve as evidence of the approval of the entry and the allocations. The journal entries will be input to the accounting records along with the regular weekly processing, as is necessary.