Utilizing University of Minnesota Bank Accounts

POLICY STATEMENT

The University of Minnesota's standard methods of payment are to issue payment centrally through the AP system or provide payment through the procurement card process. Departmental bank accounts are another means for disbursing funds for purchases that cannot be paid for by using one of the University's standard payment methods. Department bank accounts do not replace the current central disbursement process, but give flexibility to departments when the central disbursement process cannot meet special expenditure needs. All expenses that are not unique in nature and do not require immediate payment are required to be issued centrally through the Accounts Payable system and mailed to the recipient.

All activities related to the use of a University of Minnesota financial institution account are the responsibility of the University Treasurer. University departments and staff are not authorized to open or close any such accounts. Financial accounts are defined as follows: banking to include checking, savings, depository, money market, certificates of deposit, zero balance, control disbursement, etc. Requests for access to a financial account (i.e. bank account) must be submitted to the Office of Investment and Banking. The Office of Investment and Banking will work with a department to determine whether an account is appropriate and what services are required (i.e. positive pay) in order to best protect the University's assets and meet financial reporting requirements.

Use of departmental bank accounts is granted only when the benefits of using them outweigh the advantages of using the central disbursement process.

Official U Bank Account Requirements

All official accounts of the University must be approved, opened and accessible to the University Treasurer. All accounts must remain under the control of the University Treasurer. The Office of Investments & Banking is responsible on behalf of the University Treasurer for all University bank accounts.

Departments must act in a fiscally responsible manner and must follow all University policy and procedures. The account may only contain University funds. The account cannot be used for personal gain.

REASON FOR POLICY

This policy creates a standardized process on the appropriate usage of Departmental bank accounts in order to minimize financial loss to the institution. The vast majority of payments should be issued centrally through the AP system or through the procurement card process. Using the central disbursement process provides the best methods for the University to meet federal 1099 IRS reporting responsibilities and internal controls to protect the University's assets against fraudulent activity and fulfill fiduciary responsibilities. Expenses paid centrally follow normal procedures for proper recording and tracking of expenses in the University's general ledger. Centrally recorded expenses are easier to identify and track for escheatment purposes.

PROCEDURES

FORMS/INSTRUCTIONS

APPENDICES

FREQUENTLY ASKED QUESTIONS

CONTACTS

DEFINITIONS

Reconciliation

The process of comparing information that exists in two systems or locations, analyzing differences and making corrections so that the information is accurate, complete and consistent in both systems or locations. For financial reporting purposes, the process includes comparing the local unit's record of financial information to the general ledger.

Unique, Unusual, or Atypical Expenses

Expenses that cannot be paid using the normal university purchasing options such as a procurement  card or the centralized AP system. Examples include payments for research subjects and some international projects. Payments which should NOT be issued from the department bank account, without exceptions:

• Payroll replacement checks
• Payments to reimburse employees
• Monthly/recurring/utility/phone/insurance and other service payments
• Long term rent or lease payments
• Wine and alcohol payments
• Payments to entertainers
• Payments for office and lab supplies
• Payments to vendors that already exist in PeopleSoft
• Payments for capital assets

RESPONSIBILITIES

Department

Complete routine maintenance to include; maintaining an accurate check register, performing monthly reconciliations, and daily monitoring of check clearing activity. Respond within 24 hours during month end closing cycles to fix errors on check register, if they exist. Notify The Office of Investments & Banking and Treasury Accounting of personnel changes, contact information, update authorized signers and account documentation as necessary. Perform required escheatment related activity. Complete all requests and documentation required by the Office of Investment & Banking and Treasury Accounting . In some cases departments will be required to pay for the costs of the additional banking services.

Office of Investments and Banking

Approve, administer and oversee all University bank accounts. Open, maintain, and close bank accounts. Assist departments with bank account maintenance and track department's compliance with their duties. Maintain all documentation and authorized signers for all University bank accounts.

Treasury Accounting

Monitor, track, and document department's compliance with required duties. Assist departments with bank account maintenance. Allocate bank fees if necessary. Submit necessary reports to state and federal authorities. Assign location numbers for users. Reconcile monthly bank activity. Work with Accounting Services and departments regarding the escheatment process.

Accounting Services

Responsible for University of Minnesota unclaimed property process. Work with departments and Treasury Accounting regarding the multiple state escheatment requirements.

Office of the General Counsel

Review all domestic and international bank account contracts.

RELATED INFORMATION

There is no related information associated with this policy.

HISTORY

Amended:

October 2014 - Comprehensive Review, Minor Revision; Reflects the merging of Domestic and International bank accounts information. The change reduced the number of procedures in half. Changes include updating title, document names, and other details to improve accuracy.

Amended:

July 2008 - Updated for Enterprise Financial System.

Amended:

April 2007 - Clarified definitions and responsibilities.

Amended:

May 2006 - Added Exhibits A through H as appendices. Added instructions for getting the "Request for Authorized Access to the ZBA Account" form from OAM.

Effective:

December 2005

Supercedes:

Zero Balances and Permanent Advances Financial Policy