Maintaining or Discontinuing Use of a Legacy Bank Account

Overview:

The University maintains two controlled-disbursement zero balance domestic bank accounts, for making on-demand payments via a manual check. The bank accounts and their respective procedures are considered legacy processes.  Manual check writing practices are less efficient and carry more operational and financial risks. Therefore, requests for new access to these accounts is no longer granted.  In lieu of manual check writing access, units are directed to use one of the University’s preferred payment methods; system generated checks, ACH (automated clearinghouse electronic funds transfer), procurement card, travel card, and stored-value card programs for payment of goods and services.

The University maintains two, controlled disbursement zero balance bank accounts for manual check writing purposes:

• Contingent Account: Primarily utilized by system campus cashier offices and regional extension centers, for unique and atypical payments
• Research Subject Payments Account: Primarily utilized for on-going research projects, which began prior to the implementation of the stored-value card payment program

Procedures for monthly maintenance or the discontinuance of access to a legacy bank account provides a framework for the systematic administration and uniform controls required to facilitate appropriate stewardship of financial assets.  Units with access to the accounts are required to follow all procedures in order to maintain access.  Failure to follow University policies regarding the use of funds, procedures outlined in this document, or any misuse of the check writing capacities granted to the unit, may result in the OIB revoking a unit’s access to the account.

Procedures

Maintaining:

Units granted access to a legacy bank account are assigned a location number.  In some cases, a unit will have multiple location numbers.  The location number is printed on the MICR line of each check.  Each location::

• Maintains a list of authorized signers within the unit (units are no longer required to provide a list to OIB)
• Provides Accounting Services with the name and contact information of the current individual acting as the custodian. Sends updates as necessary to [email protected], including the unit name and location number, and the individual’s contact information.

On a daily basis, each unit::

• Records all checks issued and checks paid in a check register (i.e. Excel spreadsheet)
• Reviews daily reverse positive pay check clearing report for authorized signatories, payee, dollar amount, for preventing fraudulent activity. Check clearing reports are sent via email by OIB to the individual identified as the custodian. Fraudulent activity is time sensitive.
• Notifiesy OIB in a timely manner, as instructed on the check clearing report. Failure to notify OIB timely will result in the unit’s financial responsibility for all fraudulent checks presented for payment for their location number.

On a monthly basis, each unit:

• Enters a journal entry in EFS to transfer funds to the clearing account, in order to monetarily fund the checks issued
• Sends their check register to Accounting Services at [email protected]
• Respondis to all questions and inquiries from Accounting Service in order to facilitate the bank reconciliation and monthly close process

Discontinuance of Use (Close):

The individual acting as the account custodian:

• Sends a notification letter to OIB and Accounting Services to include:
  • Unit name
  • Study name (if applicable)
  • Location number
  • Custodian’s name and contact information
  • Unused check stock numbers destroyed. Two individuals in the unit must witness the destruction of the unused check stock, and sign the letter attesting to the destruction
• Provides a final check register to Accounting Services
• Works with Accounting Services concerning outstanding checks and escheatment requirements

Physical Security:

The custodian  coordinates with the authorized signatories to safeguard all check stock held by the unit. Access should be restricted and difficult for unauthorized individuals to obtain. 

Restrictions: 

Misuse of a bank account for purposes not authorized in the original request, or failure to comply with all relevant University policies and procedures may result in the automatic suspension of access to the account.

Discrepancies and Theft:

Discrepancies due to misuse or theft are the responsibility of the unit.  Discrepancies must be followed up on and resolved immediately. In case of theft, units must notify the University Police Department and OIB.   A copy of the police report with accompanying documentation must be submitted to OIB and Accounting Services.