Maintaining or Discontinuing Use of a Legacy Bank Account

Overview

The University maintains two controlled-disbursement, zero-balance domestic bank accounts for on-demand payments by manual check. These accounts and their associated procedures are legacy processes. Manual check writing is less efficient and carries greater operational and financial risk; accordingly, no new access requests are granted. Units should use a university preferred payment method instead.

The University maintains two legacy accounts available for manual check writing:

• Contingent Account: Used primarily by system campus cashier offices and regional extension centers for non-standard payments. Contingent checks are a payment method of last resort for which all university preferred payment methods are not accepted
• Research Subject Payments Account: Used for ongoing research projects that predate the stored-value card program

This procedure governs monthly maintenance and discontinuance of access for legacy bank accounts. Units with access must follow all requirements in this document to retain that access. Non-compliance with University policies, failure to follow procedures or misuse of check-writing authority may result in the Office of Investments and Banking (OIB) revoking account access.

Procedures

Maintaining

Each unit is assigned one or more location numbers, which are printed on the MICR line of every check. Each location:

• Maintains an internal list of authorized signers (no longer required to submit this list to OIB).
• Provides Accounting Services with current custodian contact information; sends any updates, including unit name and location number, to [email protected].

On a daily basis, each unit:

• Records all checks issued and paid in a check register (e.g., Excel spreadsheet)
• Reviews the daily reverse positive paycheck clearing report for authorized signatories, payee and dollar amount to identify fraudulent activity. OIB emails clearing reports to the custodian. Response is time-sensitive.
• Notifies OIB promptly, as instructed on the clearing report. Failure to notify OIB promptly makes the unit financially responsible for all fraudulent checks paid under their location number.

On a monthly basis, each unit:

• Enters a journal entry in EFS to transfer funds to the clearing account to cover issued checks.
• Submits the check register to Accounting Services at [email protected].
• Responds to all inquiries from Accounting Services to support bank reconciliation and monthly close process.

Discontinuance of Use (Close)

The account custodian:

• Sends a written notification to OIB and Accounting Services including:
  • Unit name
  • Study name (if applicable)
  • Location number
  • Custodian’s name and contact information
  • Destroys all unused check stock. Two-unit staff members must witness the destruction and sign the notification letter.
• Provides a final check register to Accounting Services.
• Coordinates with Accounting Services on outstanding checks and escheatment obligations.

Physical Security

The custodian coordinates with authorized signatories to safeguard all check stock. Storage must be secure and access restricted to authorized individuals only.

Restrictions

Misuse of an account for unauthorized purposes, or non-compliance with applicable University policies and procedures, may result in suspension of account access.

Legacy accounts may only be used for their approved purpose. Access to the account may not be used for:

• Paying wages (regular or overtime) to any employee
• Making personal loans
• Purchasing alcohol
• Reimbursement of local or out-of-state travel-related expenditures (e.g., parking fees) or to provide a travel advance
• Paying for prizes, awards, small gifts of appreciation, floral arrangements, donations to charities/foundations
• Making purchases that would not be approved under any other University policy.

Discrepancies and Theft

Units are responsible for all discrepancies, whether due to misuse or theft, and must resolve them immediately. In the event of theft, the unit must notify the University Police Department to file a report and notify OIB, Accounting Services and Internal Audit in alignment with Administrative Policy: Reporting Suspected Misconduct.