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Contents

CHAPTER 7: Cash Control of School Funds Guiding Principles . . . . . . . . . . . . . . . . MCPS Policies and Regulations . . . . . . . . Definition of Terms . . . . . . . . . . . . . . . . Contact Information . . . . . . . . . . . . . . . Roles and Responsibilities . . . . . . . . . . . Cash Holding Authority . . . . . . . . . . . . . Separation of Duties . . . . . . . . . . . . . . . Security of Funds . . . . . . . . . . . . . . . . . Shortages, Discrepancies, or Loss of Funds . Remittance and Receipting of Funds . . . . . Deposit of Funds . . . . . . . . . . . . . . . . . Bank Accounts and Investments . . . . . . . Petty Cash Funds . . . . . . . . . . . . . . . . . Change Funds . . . . . . . . . . . . . . . . . . . Prohibited Activities . . . . . . . . . . . . . . . Frequently Asked Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1 . 7-1 . 7-1 . 7-1 . 7-2 . 7-2 . 7-2 . 7-3 . 7-3 . 7-3 . 7-3 . 7-4 . 7-5 . 7-6 . 7-6 . 7-8 . 7-8

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Chapter 7

Cash Control of School Funds


Guiding Principles The following principles are general guides meant to direct decision making and actions for controlling school funds: 1. Independent Activity Funds (IAF) of a school belong to the current enrolled student body at the school unless specifically designated otherwise. 2. The principal is responsible for the control of all school funds. 3. Students are not permitted to transport IAF funds. 4. Funds should be safeguarded at all times. 5. Funds must be counted and receipted when transferred from one staff person to another. 6. Sponsors are not allowed to retain collected funds overnight and therefore must promptly remit funds to the financial agent. 7. Funds must be deposited into the schools bank account in a timely manner to reduce potential for loss or theft of funds and to comply with the limit on funds authorized for retention in the school overnight. 8. Funds in excess of those necessary to meet current monthly expenses should be invested in the Centralized Investment Fund (CIF). 9. No MCPS employee, parent, or student should ever attempt to thwart a robbery in the school or any other location. 10. No disbursement will be made directly from funds collected. 11. No check should be cashed from funds collected. MCPS Policies and Regulations Regulation DMB-RA Control of Admission Receipts Regulation EIA-RA Regulation JNA-RB Insurance/Self-Insurance Management Collection of Student Debts or Obligations Definition of Terms Cash Paper and coin money. Cash Equivalent Check, money order, gift card, or other negotiable instrument. Cash Holding Authority (CHA) The amount of funds a school is authorized to hold overnight. Centralized Investment Fund (CIF) A consolidation of school independent activity funds invested collectively to earn a higher rate of interest than would be achieved by investing individually. Change Fund An amount of cash held by a fund custodian used to provide change to a customer purchasing goods or services. Corpus Original principal amount of a fund distinct from income or interest. Deposit An amount of funds placed in a schools account at a financial institution or the act of placing funds in a schools account at a financial institution. Fund Custodian An MCPS employee who is designated the responsibility for the corpus of either a change fund or petty cash fund and the implementation of appropriate internal control procedures for safeguarding the fund. Funds Cash or cash equivalents. Intact Complete and unchanged. A deposit of funds should be made without any changes to the funds, including but not limited to exchanging cash for checks or making change, to avoid exposure to risks. This is considered keeping a deposit intact, exactly as it was received.

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Internal Control Process of interconnected policies, regulations, procedures, and attitudes and actions of employees that work together to provide a system of checks and balances to achieve proper authorization of expenditures and safeguarding of assets. Liquid Asset Cash and all other assets that can be converted to cash relatively quickly. Petty Cash Fund An amount of cash held by a fund custodian used to reimburse the purchase of incidental items of nominal cost. Receipt Written acknowledgement that funds have been received. Remit Convey funds to an individual authorized to receive funds. Remitter A school sponsor or other authorized individual who remits funds to a financial agent. Separation of Duties The involvement of two or more persons in a process so that no one person controls all aspects of the process from start to finish. Contact Information Internal Audit Unit . . . . . . . . . . . . . . . . . . . . . .301-444-8650 Department of Financial Services . . . . . . . . . .301-279-7265 Division of Controller . . . . . . . . . . . . . . . . . . . .301-279-3115 Chief Investment Officer . . . . . . . . . . . . . . . . . .301-517-5822 Roles and Responsibilities Principal/Program Coordinator A principal/program coordinator is the individual who has the overall fiduciary responsibility for the IAF. Unless prohibited, a principal/program coordinator may delegate in writing the authority to transact financial business in his/her name to a subordinate individual; however, the principal/program coordinator remains ultimately responsible for that individuals actions. Delegation should be considered carefully so internal controls (separation of duties to have multiple
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individuals involved with receipt of cash and reconciliation of accounts) are not compromised by reducing the oversight of fiscal management. Financial Agent Each financial agent is responsible for being familiar with MCPS rules and regulations, as well as any applicable law; communicating requirements to staff; and verifying that procedures are followed. In the event that the financial agent determines that a requirement is not being met, the financial agent is obligated to inform the principal/program coordinator so that appropriate action can be taken. Fund Custodian Each fund custodian is responsible for adhering to MCPS policies and procedures pertaining to either a change fund or petty cash fund and the implementation of appropriate internal control procedures for safeguarding the fund. Internal Auditor The internal auditor evaluates controls designed to assure the proper procedures for fiscal responsibility of school funds and other assets are being followed. During evaluation, the internal auditor is directly concerned with the prevention of fraud in any form or extent in any activity reviewed. The Internal Audit Unit is authorized to conduct a count of any school funds or examination of financial records without advance notice given to the principal/ program coordinator, financial agent, or fund custodian. Activity Sponsor An activity sponsor is a school staff member who has received principal approval to plan and execute an event for students, such as a field trip, fund-raising event, etc. Each activity sponsor is expected to follow MCPS policies and procedures, as well as any additional applicable guidance provided by the financial agent, required for appropriate internal control procedures for the specific activity conducted by the sponsor. Cash Holding Authority Cash Holding Authority (CHA) is the amount of funds a school is authorized to hold on its premises overnight. The amount of a schools CHA is the total of all funds to include cash, cash equivalents, petty cash fund, and change funds. The maximum CHA is $50 for a school using a locked cabinet and $250 for a school using a combination safe for securing its funds. CHA may be temporarily exceeded when funds are received after regular school business hours (such as receipts from a night athletic
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event) and it is determined by the principal to be the better option for the safety of staff and security of funds to retain the funds overnight at the school rather than to transport the funds to the bank night depository. Any funds retained overnight due to this exception will be deposited into the schools bank the following business day. Funds should never be taken home by staff or students. Separation of Duties Since cash is a liquid asset, internal controls are very important. The potential for inappropriate activities and fraud make the cash area a critical part of any audit. The most important internal control over the handling of funds is the separation of duties so that no one person controls all aspects of a process from start to finish. The involvement of two or more persons in each process enhances integrity and accuracy because each person acts as a check on the work of the other. This control is particularly important in the handling of cash. The requirements for the issuance of pre-numbered receipts whenever funds are received, timely reconciliation of the bank account by someone independent of the record keeping, and control over cash receipts are based on this principle of internal control. Security of Funds Any funds stored overnight at a school must be adequately secured in either a locked cabinet or a combination safe. It is recommended that any lightweight safe be set in concrete or in a wall to make difficult its removal and increase the protection of funds. The combination to a safe or the key to a locked cabinet shall be given only to those persons with a continuous need for access to it. The number of such persons should be kept to a minimum. The safe combination shall not be left at any location on the school premises. Doing so risks the danger of the discovery of the combination by unauthorized persons. The safe combination should be changed immediately whenever a person who has the combination leaves the school or no longer has a need to access the safe. Sponsors collecting school funds are not authorized to retain them overnight. They must remit all funds on the same day collected to the financial agent or to the supervising evening event administrator, when applicable. MCPS employees, parents, and students should be instructed to never attempt to thwart a robbery in the school or at any other location.
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Shortages, Discrepancies, or Loss of Funds Any shortage or other discrepancy in IAF assets, receipts, or accounts that comes to the attention of the principal must be reported promptly by the principal to the Office of Shared Accountabilitys (OSA) Internal Audit Unit for investigation. The principal also shall advise his/her direct supervisor of the investigation. OSA shall provide the principal with a written report documenting the results of the investigation that will become a permanent part of the IAF records. Depending on the nature and seriousness of the discrepancy, OSA also may furnish a copy of the report to the chief operating officer, the deputy superintendent of schools, and the associate superintendent for human resources and development. MCPS provides insurance for robbery protection covering the loss of school system money within the premises or by a messenger because of a threat of violence by the perpetrator. Coverage also is provided for loss of funds due to employee dishonesty. The insurer may take legal action against a dishonest employee to reimburse its loss for a claim paid to MCPS. There is no insurance coverage provided for loss of funds as the result of a burglary. If any loss of funds occurs due to the failure of a sponsor to remit the funds on the same day collected to the financial agent, the sponsor may be held liable to make restitution for the amount of the loss of school funds. The principal is ultimately responsible for the safeguarding of school funds, and may be held jointly liable with a sponsor if the loss or theft occurred due to negligence in supervision of staff. Remittance and Receipting of Funds Funds are conveyed to a teacher/sponsor authorized to receive funds. For example, a student gives cash or check to an authorized sponsor to pay for a field trip. The sponsor, in turn, remits these funds on the same day received from the student to the financial agent for recording in the appropriate general ledger account and then for deposit into the school IAF bank account. The teacher/ sponsor will document remittance of funds to the financial agent using MCPS Form 280-34: Independent Activity Fund Remittance Slip. Each school shall use pre-numbered receipt forms. At a minimum, an original and one copy of each receipt shall be used. More copies may be required in secondary schools. Receipts shall be issued in strict numerical sequence. If the receipts are computer generated, access to the controls for printing them must be limited. To improve internal control, the stock of any additional

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receipt books other than the one currently in use shall be secured in the custody of someone other than the financial agent. Cash and checks collected by sponsors and other authorized individuals for IAF activities shall be remitted promptly and intact to the financial agent on the same day they are received to minimize the risk of loss or theft. Also, a check not remitted for deposit in a timely manner increases the possibility that the check may not be redeemed and will be returned to the school due to insufficient funds in the check writers bank account. Every MCPS Form 280-34 should be completed and must indicate: ateofremittance(dateremittedtofinancial D agent) mountoffundsremitted(separatetotalsindicatA ing amount of cash and checks) ourceoffundsreceived(personorentityremitS ting funds) eneralLedgerAccount(accounttitleandnumber G to receive credit for remitted funds) easonforcollection(whetherornotcourseR related fee) istofstudentsfromwhomfundswerecollected L with amount of cash or check ignatureofremitter S ignatureoffinancialagentreceivingthefunds, S date received, and receipt number If detailed information is provided on backup documentation attached to a remittance slip, such as MCPS Form 280-41: Field Trip Accounting, the detail need not be duplicated on the remittance slip. The financial agent will count the remitted funds in the presence of the remitter. A pre-numbered receipt shall be completed by the financial agent, and the original shall be given to the person who remitted the funds. This establishes documentary evidence for both parties that provides a written record of the source and amount of the funds for accounting purposes. In the event funds cannot be counted immediately upon remittance, the remitter will seal the funds in an envelope in such a manner that tampering will be evident and either place the sealed envelope in the business office drop safe or receive written acknowledgement that a sealed envelope was provided to the financial agent. A count of funds in the presence of the remitter will be conducted as soon as possible thereafter.
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Once a receipt has been written, it shall not be erased or altered. Should an error be discovered, the receipt shall be marked Void and another receipt issued. All voided copies shall be retained in the receipt book (elementary schools) or files (middle and high schools). All checks received will be made payable to the school and will be endorsed immediately with a restrictive endorsement containing the words For Deposit Only and the name of the school. In no case should checks be made payable to an individual employee. Every receipt should be completed promptly by the financial agent and must indicate: Receipt number (pre-numbered) aterecordedinGeneralLedger D ourceoffundsreceived(personorentityremitS ting funds) eneralLedgerAccount(accounttoreceivecredit G for remitted funds) easonforcollection(activityoritem) R mountoffundsremitted(separatetotalsindicatA ing amount of cash and checks) ignatureoffinancialagentreceivingthefunds S After completion, receipts shall be attached to the remittance slip and any other source documentation and be filed in sequential order together with a copy of the deposit slip receipted by the bank. All funds remitted to the school must be receipted to the schools records before deposit into the school checking account. Students are authorized to handle school funds only while under the direct supervision of a staff member who is the account sponsor for the respective funds. Only the financial agent or other school staff member shall transport school funds. Students are not authorized to perform this function. Deposit of Funds The IAF funds will be deposited and held only in a schools checking account or in the MCPS CIF. School independent activity funds in excess of current needs should be invested in the CIF to earn interest commensurate with safety. Deposits into the CIF will be made by check drawn on the schools checking account. Withdrawals from the CIF will be deposited into the schools checking account before being used to make disbursements.
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Funds received by the financial agent must be deposited promptly into the schools bank account to reduce the possibility of loss or theft. Additionally, all remittance of funds in excess of CHA received by the financial agent must be deposited on the last working day of each month and before each weekend or holiday. Funds receipted by the financial agent must be deposited intact. This means that the total amount of cash and checks remitted to the financial agent must equal the same total amount of cash and checks deposited. Personal checks must not be cashed from cash receipts for anyone, including staff or students, and no disbursements may be made from cash receipts. Bank Accounts and Investments Bank Accounts A school will have only one checking account maintained in a federally insured financial institution for its IAF. The only exception to this requirement is the example of when a principal desires to close the schools account at one bank in order to open an account at another bank. In this example, the school maintains two separate accounts simultaneously but only for as long as it takes all outstanding checks to clear the account at its former bank. Once all outstanding checks clear its former account, the principal will notify the bank in writing to close that account. The school then will have only one checking account. All bank accounts and investments must be in the name of the school, not in the name of a school employee or any other individual. The school shall not maintain a checking account in any financial institution that does not provide access to copies of cancelled checks. School checks must be imprinted with the following statement: Void after 90 days. Opening a Bank Account MCPS does not recommend any specific financial institution to be used for holding IAF funds. However, the principal must open a checking account only with a federally insured financial institution. When selecting a bank, consideration should be given to proximity to the location of the school and any bank service fees that might be charged. Before granting the school an account with a financial institution, a bank official might request a letter of

determination to classify the school as a nonprofit entity. Because MCPS schools are part of the local government, they do not fit the Internal Revenue Service definition of a nonprofit 501(c)(3) organization, and therefore there is no determination letter to provide. The federal tax identification (ID) number 52-6000989 identifies all MCPS schools as a political subdivision of Montgomery County for federal tax purposes. This ID number must be on the checking account for all IAFs. If a bank requires an additional letter, contact the chief financial officer. Under Section 326 of the USA Patriot Act of 2001 (Patriot Act), the U.S. Department of the Treasury required banks to have a customer identification program (CIP) implemented by October 1, 2003. Many banks already had identification verification procedures in place but they didnt require as many identifiers as the Patriot Act now requires. To open a new Independent Activity Fund (IAF) bank account, a bank may require school staff to provide documentation not previously requested prior to October 1, 2003. Banks must use several documents to verify a customers identification. Identification information includes the customers name, date of birth, address, and identification number. For U.S. citizens, the identification number is their taxpayer ID number, which is their social security number (SSN). School staff may use the MCPS employer identification number (EIN), 52-6000989, in lieu of their SSN when opening a school IAF bank account. CIPs vary from bank to bank, but banks also may require a drivers license or other form of photo identification. Banks are required to keep a record of the identification documents used for verification. Originally, when the Patriot Act was signed in October 2001, the legislation required banks to keep photocopies of the documents. That rule was changed with the final CIP rules in May 2003, and now banks are required to keep only a written record of the documents used to verify identification. Banks must record the name of the document, date it was issued, and expiration date in their records. Banks must keep the information for five years after the account is closed. Investments The principal is responsible for ensuring that funds in excess of current needs are invested in a manner that will earn a reasonable rate of return commensurate with safety. The only authorized investment is in the CIF. Schools may not invest directly in stocks, bonds, or other

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commercial paper. If a school receives a donation of stocks or bonds, they should be promptly converted to cash for deposit into the schools checking account. Contact the MCPS chief investment officer within the Department of Financial Services for assistance with conversion. Petty Cash and Change Funds Petty Cash Fund A petty cash fund is an amount of cash (generally $100 or less) used to make purchases for items of nominal dollar amounts that do not justify the cost of writing a check. Any purchase made using petty cash must be supported by a receipt. The petty cash fund is replenished periodically as incidental expenses are incurred that reduce the amount of cash on hand. At all times, expenditure receipts plus cash on hand and any vouchers representing cash advances must equal the authorized amount of the petty cash fund. A petty cash fund is not to be used to cash checks for or to make loans to employees or students and may not be used as a change fund. If cash or receipts from a petty cash fund are lost or stolen due to the negligence of the custodian, the custodian may be required to make restitution. To reduce the amount of cash held in a school and the need for a petty cash fund, best business practices recommend the use of the MCPS purchase card for making purchases of nominal dollar amounts. Change Fund A change fund is a reasonable amount of cash used in a business operation to complete the sale of items when customers do not have the exact amount of cash to purchase the items. Business operations such as a school store or ticket admission events may require establishment of a change fund. A change fund is not to be used as a convenience for a person to exchange a large denomination of cash for smaller denominations of cash and will not be authorized for that purpose. At all times, the cash on hand must equal the authorized amount of a change fund. The cash in a change fund will never be used to make a purchase. If cash from a change fund is lost or stolen due to the negligence of the custodian, the custodian may be required to make restitution. A change fund is not to be used to cash checks for or to make loans to anyone.

Establishing and Closing a Change Fund The sponsor of an event requiring a change fund should submit MCPS Form 280-54: Independent Activity Funds Request for a Purchase, to the principal. The amount of the change fund may vary based on the justification of the sponsor requesting it but should not exceed the minimum necessary to transact business for the activity for which it is to be approved. Upon approval by the principal, Form 280-54 should be submitted to the financial agent. A check then may be drawn and the amount recorded in any available account in the 690-699 series, creating a negative balance in the selected account. When the event requiring the change fund is concluded, the custodian must remit the change fund separately from proceeds of the event. The financial agent will receipt the change fund into the selected 690 series account to eliminate the negative balance previously created. Other remittances will be receipted into the appropriate account(s). All school change funds must be closed no later than the end of the fiscal year. Request for a Petty Cash Fund To establish a petty cash fund, the principal will submit a memorandum to the Division of Controller for approval. The memorandum request for a petty cash fund requires the following information: undTitle(e.g.,ABCHighSchoolPetty Cash F Fund). mountrequested.The recommended amount of A a petty cash fund should not exceed $100.00. urposeofthefund(e.g.,reasonthefundis P needed). hysicallocationofthefund:pettycashorchange P funds shall be located on property owned or leased by MCPS. P lans for safeguarding the fund (e.g., locked in safe). eneralLedgerAccountnumberforfund(990for G IAF). ustodianofthefund:name,jobtitle,and C employee identification number of the person in whose custody the cash will be kept. (The principal also may want to designate an alternative custodian for contingency purpose.) fthefundwillbeofshort-termduration,include I the dates for which it is needed.

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Establishing a Petty Cash Fund After Approval When a petty cash is approved, the financial agent will prepare MCPS Form 281-46: Independent Activity Fund Transfer and MCPS Form 280-54: Independent Activity Funds Request for a Purchase, for principal approval. Form 281-46 will indicate transfer of the approved amount from the checking account to a petty cash fund account. Form 281-46 together with the approval memo will be attached to Form 280-54 to document issuance of a check to the custodian establishing a petty cash fund. The establishment of a petty cash fund or change fund does not create an expense. It is merely an accounting entry transferring funds from one account to another accountwithintheGeneralLedger. A copy of the memorandum approving any petty cash or change fund will be retained in the school business office for review during an IAF audit. Any request to change the amount, custodian, or location of a petty cash or change fund will follow the same memorandum procedure as an initial approval request indicated above. Closing a Petty Cash Fund The custodian of a petty cash fund retains the corpus until it is closed at the direction of either the principal or the controller. When a petty cash fund is closed, the funds will be returned to the financial agent for deposit to the bank. MCPS form 281-46: Independent Activity FundsTransfer will be prepared to reverse the entry that originally established the fund. When a petty cash fund is closed at the direction of the principal, the principal will notify the controller by memorandum of this action. Procedures for Handling Petty Cash Funds The following procedures must be followed for each fund. The principal is responsible for ensuring that these procedures are followed. Non-compliance with these procedures will result in immediate dissolution of the fund. nlyoneperson,thecustodian,shouldhavephysiO cal custody of the fund. efundisnottobeusedtopayindividualsfor Th work performed or services rendered. ecustodianshouldcountandbalancethefund Th each day it is used, with a minimum of one count and balance performed monthly. Documented reconciliations should be kept in the business office. Any discrepancies identified should be investigated

and promptly reported to the principal for any further action deemed necessary. evenuesshouldneverbeusedtoestablishor R increase the size of a petty cash fund. eprincipalorhis/herdesigneeshouldphysically Th inspect (count) the fund at least quarterly to determine that the above procedures are being followed and the fund is being controlled adequately; the amount of the fund is adequate but not excessive; and the need for the fund continues to exist. The principal should document this quarterly review and maintain the documentation in the business office for review during an IAF audit. Petty Cash Funds Only maximumsingledisbursementamountistobe A established by the principal for the fund. The principal must approve and document any disbursements over the maximum amount. The recommended maximum single disbursement amount without prior principal approval is $50. henmakingdisbursementsfromthefund,the W custodian must obtain from the recipient a properly authorized receipt, paid invoice, or other supporting documentation, prepared in ink or typed, listing the amount and account to be charged. xpensesthatarenotwithinthescopeofthefunds E purpose may not be paid from the fund. All disbursements must comply with all MCPS policies and regulations. epettycashfundcustodianwillsubmitdocuTh mentation supporting payments made from the fund during the month to the financial agent to reimburse the fund to its original authorized amount at least once each month. ecashandreceiptsmustbemaintainedunder Th lock and key in the physical location noted in the memorandum approving the fund. The Internal Audit Unit is authorized to conduct unannounced audits of petty cash and change funds to verify their balances and to verify that internal control procedures are being followed for safeguarding the funds. Accounting for a Petty Cash Fund at Fiscal Year End At the end of each fiscal year, all remaining receipts in a petty cash fund will be reimbursed so that the corpus equals the original authorized amount of the fund in cash.

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Gift Cards Giftcardsarecashequivalents.Assuch,thedollarvalueof gift cards on hand is considered part of the schools daily total amount of overnight CHA. The giving of a gift card to an individual is considered the same as giving cash to the individual. The purchase of gift cards using IAF to give to students is highly discouraged. The purchase of gift cards using IAF to give to MCPS staff is prohibited. The Internal Revenue Service interprets the giving of a gift card to an employee as income. Any income for an MCPS employee must be processed through the MCPS payroll system. Prohibited Activities tudentsarenotauthorizedtoconveyschoolfunds S to a financial agent. nMCPSemployeemaynotbepaiddirectlyfrom A an IAF for personal services. eextensionofaloanorcredittoanMCPS Th employee for any reason using IAF funds is not authorized. hecksmustneverbecashedforanyonefromcash C receipts, change funds, petty cash funds, or any other school funds. isbursementsmustneverbemadefromcash D receipts. choolfundsarenevertobeinthepossessionofan S individual overnight. choolfundsarenevertobedepositedintoordisS bursed from a bank account that is not in the name of the school. IAF funds are never to be invested other than in the CIF. Frequently Asked Questions Theft of funds: There was a burglary at my school resulting in the theft of IAF funds. Will MCPS reimburse my school for the loss? No. MCPS insurance coverage is provided only for loss of funds by threat of force or violence or employee dishonesty. Liability for Monies: Can I as an MCPS employee be held liable for the loss of school funds? No unit member shall be held responsible for the loss of money in his/her custody, unless it is demonstrated that the loss is due to the negligence of the unit member. Unit members shall not take school funds home.

Personal Vehicle Damage: Can I get reimbursed from MCPS for the damage to repair my vehicle and/ or my insurance deductible amount? While using my personal vehicle to deposit school funds at the bank, the driver of another vehicle struck my vehicle resulting in damage to it. No. You cannot get reimbursed from either MCPS or the school IAF. Any claim for reimbursement for damages must be filed through your insurance company or directly with the negligent party. Opening a Bank Account: The bank where I am opening an account requires additional authorization. Who should I contact? Contact either the controller or the chief financial officer. Does the Division of Food and Nutrition Services (DFNS) follow the same cash control procedures as outlined in this chapter? Due to the nature of an enterprise fund, DFNS follows cash control procedures that vary from those described in this chapter. These procedures are contained in the DFNS Standard Operating Procedures (SOP) manual. When I was in the process of making a deposit into my schools IAF bank account, the teller informed me that some of the money I wanted to deposit was counterfeit currency. What do I do? You can report the receipt of counterfeit currency to either your local police department or the United StatesSecretServicefieldoffice.GototheUSSecret Service website and follow their directions. www. secretservice.gov/money_receive.shtml It is July, but my annual financial report is not due to the Internal Audit Unit for another week. Can I write a few checks and date them June 30th to reduce my accounts payable for the fiscal year just ended? No. Under most circumstances, backdating a check is fraudulent and illegal. Doing so could also put you at risk of creating a negative book balance in your IAF checking account. This would be noted as an audit finding by the MCPS external auditors and reported to the Board of Education.
This chapter maintained by the Internal Audit Unit. Last Update: April 2012

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Montgomery County Public Schools

Index
A B
Activity Sponsor 2 Bank Accounts 5

Cash 1, 2, 3, 4, 5, 6, 7 Cash Equivalent 1 CHA 1, 2, 5, 8 See alsoCash Holding Authority Change Fund 1, 6, 7 CIF 1, 4, 5, 8 Closing a Petty Cash Fund or Change Fund 7 Counterfeit Currency 8 Corpus 1

IAF 1, 2, 3, 4, 5, 7, 8. See alsoIndependent Activity Fund Intact 1, 4, 5 Internal Auditor 2 Internal Control 2 Investments 5

LiquidAsset 2 LossofFunds 3

Petty Cash 2, 6, 7 Petty Cash Fund 2, 6, 7 Principal 2 Prohibited Activities 8

Deposit 1, 4 Deposit of Funds 4 Division of Food and Nutrition Services 8

Financial Agent 2 Fiscal Year End 7 Fund Custodian 1, 2 Funds 1, 3, 4, 5, 6, 7

Receipt 2, 4 Receipting of Funds 3 Remit 2 Remittance 3 Remittance and Receipting of Funds 3 Remitter 2 Request for a Petty Cash Fund 6

GiftCards 8

Security of Funds 3 Separation of Duties 2, 3

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