HomeMy Public PortalAboutResolution 2020-07, Revising 2016 Cash Management Policy RESOLUTION 2020-07
A RESOLUTION REVISING THE 2016 CITY OF RIVERDALE CASH MANAGEMENT POLICY
WHEREAS, the City of Riverdale, Iowa ("City") is a Municipal Corporation, organized and
operating under the laws of the State of Iowa;
WHEREAS, the City Council has the right and obligation to adopt and revise rules of
procedure; and;
WHEREAS, the City Council previously adopted Resolution 2016-20 which created a
Cash Management Policy for the purpose of ensuring that sound business judgment is
utilized in the handling of revenue and cash transactions; and;
WHEREAS, the City Council desires to make a change to that policy to allow for a cash
drawer with a starting balance and to provide that City staff can give change to
customers paying cash for bills owed to the City, and;
WHEREAS, the City will use the attached revised Cash Management Policies effective
immediately;
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of Riverdale, Iowa that
the attached revised Cash Management Policy is adopted.
Passed and approved this 28th day of January, 2020.
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1 ,
ichael Bawden, Mayor
ATTEST:
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Mary rances Blevins, City Clerk-Treasurer
City of Riverdale,Iowa 110 Manor Drive, Riverdale, Iowa 52722•(563)355-2511 •www.riverdaleiowa.com
City of Riverdale, Iowa Cash Management Policies
Adopted by the City Council on September 20, 2016
1.0 CASH MANAGEMENT POLICY
1.0 Introduction
The Council of the City of Riverdale "Council" is the trustee of the public revenues which it collects, and it therefore has
an obligation to the community to ensure that the City of Riverdale, Iowa's "City's" cash resources are managed
effectively, efficiently and as economically as possible. This policy represents principles and practices that follow
generally accepted accounting principles which should be used to help the City maintain financial stability.
The support of and commitment to the City's credit control policy, by the Council and City's Officials, is an integral part
of proper cash management, and by approving this policy the Council pledges itself to such support and commitment.
1.1 Compliance with City Policy & Procedures
All City Employees are responsible for complying with the policies and procedures outlined in this document.
The Mayor and Treasurer are available for consultation and review of departmental procedures. Supervisors are
responsible for training designated employees in fund handling policies and procedures.
Historical practices shall not constitute justification for deviation from the policies and procedures set forth in this
document.
The material contained in this document supersedes any previous policies and procedures regarding the handling of
cash. The Council reserves the right to make interpretations and exceptions to the policies contained in this document.
2.0 CASH COLLECTION AND DEPOSIT
2.1 Purpose
This section of the document defines and outlines City policy with respect to the handling, receiving, transporting and
depositing of cash. The term cash includes currency, checks, and money orders. (Credit cards and debit cards are not
accepted at this time)
City funds are monies received from contracts and grants, (delivery of) revenues from city services, state and federal
appropriations, gifts and all other sources of revenue or expense reimbursements, whether restricted or unrestricted as
to purpose or use. All checks made payable to the City of Riverdale are considered City funds.
The collection and control of cash at the City are very important functions. Changes in the City's cash handling policies
and procedures may be made from time to time, and will be communicated in writing and approved by Council.
2.2 Cash Collection
All monies due to the City must be collected as soon as possible, either on or immediately after due date, and deposited
as per Guidelines for Frequency of Deposits listed in 3.03.
Payments made in currency may only be made at City Hall in the exact amount due or the overage will be given as
change from the City's cash drawer dit +h
currency. If a Refunds is necessary it will only be made with regular scheduled warrants (1st and 3' Tuesdays of each
month).
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Any delinquent amounts should be pursued vigorously in any legal manner to include:
• Utility shut offs as provided by ordinance and state law
• Certification to taxes through the Scott County Treasurer
The respective responsibilities of the Treasurer and other employees are defined in this document. All receipts should be
handled by the City Clerk's office.
Documentation for all deposit procedures is included within this policy. Deposits are to be taken directly to the bank in a
deposit bag that has been provided to the City Treasurer.
2.3 Segregation of Duties
There must be a separation of duties between the person receiving cash and the person responsible for maintaining the
accounting records (e.g., General Ledger (from which Budget Statements are printed), utility billing, Accounts
Receivable).
Cash receipt activity should be reconciled to the Budget Statements monthly. The reconcilement should be reviewed by
someone independent of the cash handling or recording functions with each person initialing each document.
The following responsibilities should be distributed among personnel so one person is not responsible for all aspects:
Opening mail (should be stamped received with date and initials)
Endorsing checks (should be stamped with For Deposit Only Riverdale account number)
Preparing deposits (should be initialed by 2 staff)
Reconciling to budget statement (should be initialed by 3 staff)
Billing and collection duties distributed among personnel
2.4 Safekeeping of Funds
All forms of Cash (currency, checks, and money orders) should be physically protected through the use of City safe,
locked cash drawers, locked metal boxes, etc.
All checks are to be endorsed immediately upon receipt. Receipts are to be kept in a secure location restricted to
authorized personnel until deposited at the bank.
It is the responsibility of each office employee to make whatever provisions are necessary to properly safeguard the cash
receipts. Amounts under $200 should be maintained in the safe, locked file cabinet, locked cash box kept in file room.
Cash should not be retained in desk drawers or standard file cabinets since they are easily accessed with minimal forcing
or readily available keys.
2.5 Transfer of accountability
Transfer of accountability must be recorded, (initials, date, and amount). The deposit should be initialed and reviewed
by a 2' person other than the person preparing and transporting the deposit. All transfer logs should be retained for the
current fiscal year plus 5 fiscal years. All documents should be maintained in such a manner as to provide suitable audit
trail for all transactions.
• Cash box readings are to be recorded at the end of each day the office is open on the cash reports and reconciled to
deposits.
• All currency receipts and invoices will be pre -numbered and accounted for to ensure all sales are billed and recorded.
• Accounts receivables reconciled to General Ledger monthly.
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2.6 Employee Reimbursements
Employee receipts should be properly classified as employee reimbursements. All employee receipts should be
processed as soon as possible.
3.0 Depositing Cash To The Bank
3.01 Purpose
This section of the document summarizes the proper procedures for depositing funds to the bank.
3.02 Requirements for Deposits
Deposits are to be made in a timely manner (see chart below) to insure proper posting of accounts and to insure the
safety of City employees and citizens.
Bank deposits should be made weekly and/or in compliance with Cash Handling Policies & Procedures guidelines.
Cash deposits taken to the bank should not conform to any regular time or day of the week schedule. Such deposits
should be irregular, subject to change.
3.03 Guidelines for Frequency of Deposits
Cumulative Receipts
Up to $200
Minimum Frequency of Deposit Delivery to the Bank
$200 or more
Within 5 business days
Within 2 business days
If a large portion of cumulative receipts on hand is comprised of currency, deposits should be made more frequently
than outlined above.
3.04 Where to Make Deposits
Deposits are to be made at the City's bank that is established by Resolution.
3.05 Control of Municipal Bank Accounts
The Treasurer of the City must administer all of the City's bank accounts, and is accountable to the City Council for the
City's bank accounts, and must enforce compliance with City purchasing policies.
3.06 How to Transport Deposits
• Care in transporting funds to the bank must always be a high priority.
• The deposit should go directly from the office to the bank with no other stops made before the deposit. (example:
no stopping at post office, gas station etc. before the bank)
• Deposits containing currency may never be sent by mail.
4.0 RECEIPT AND COLLECTION OF CASH
4.01 Purpose
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This section of the document summarizes the proper procedures to collect currency, checks, and money orders.4.02
Methods to Record Cash Receipts
Incoming checks and currency must be recorded in Summit Accounting Software for each transaction.
Cash collected should be balanced each business day and recorded. At day's end or as expeditiously as possible, the
whole deposit is to be transported to the bank and posted to the General Ledger (City Budget Statements) according to
frequency table.
The maintenance of a numerical file of all receipts is the responsibility of the City Treasurer. Receipt are pre -numbered
and printed in duplicate batch format. Receipts should be delivered in sealed boxes or bound with in a book. Since all
pre -numbered receipts must be accounted for, all original copies of voided receipts should be stapled together and must
be retained. Copies of transaction receipts are to be retained and attached to the copy of the CASH RECEIPT TICKET
(CRT).
Records of the inclusive receipt and total amount for which the receipts were written should be kept. Deposits to the
bank should also reflect the inclusive receipt and the total amount collected.
Proceeds should be kept in a locked metal box or cash drawer at all times.
Accountability over transaction proceeds should be assigned to a specific individual or individuals so there is a means of
establishing accountability.
4.03 Form to be Used
Currency deposits should be recorded using the paper Cash Receipt Ticket (CRT). The form is used to record,
communicate and document receipts in preparation of the bank deposit.
4.04 Money Deposited Intact
Money should be deposited promptly and intact to the Bank. Cashing personal checks from City deposits, borrowing
cash for personal use, lapping receipts to cover shortages in cash receipts, withholding checks for deposit in order to
float checks, commingling of personal and City funds, and modification of cash records are all serious offenses and may
result in immediate discharge from employment and/or prosecution.
4.05 Utilizing a Cash box or Cash Drawer
The City will utilize a cash drawer that has starting cash in the amount of $200.
Management should ensure that employees use a balancing worksheet and the cash balancing procedure. The Cash box
or Cash Drawer must have
• Duplicate pre -numbered receipts to record all transactions.
• A cashier must not have the ability to void a transaction without a supervisor's approval.
• Supervisors should perform and record periodic, unannounced cash reconciliations of the cash register.
4.06 Procedures for Cash Box or Cash Drawer Receipts
• All receipts should be recorded through the pre -numbered receipt book or accompanied utility stub. This provides:
(1) a record of the amount of funds received
(2) a printed receipt to be given to the customer or a visible record of the amount registered for the customer's
examination
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(3) a safe place for holding un-deposited receipts
• The cash drawer or cash box should never be left open unless a transaction is being processed.
• All drawer or box totals should be balanced at the end of the day.
• Accountability over proceeds should be assigned to specific individuals, which means that only one employee may
operate out of the same cash drawer at a time and should be assigned his/her own cash drawer or box. Funds should
not be commingled between cash drawers.
• The cash drawer and/or cash box should be closed out and total cash receipts should be reconciled on a daily basis.
• Overages and shortages should be fully reported and explained to the Mayor as soon as possible. Corrective action
should be taken when occurrence is more than 3 times.
• All corrections should be explained in writing. The journal tape should be marked to indicate the action taken.
Management should review and approve all corrections.
4.07 Procedure for Check Acceptance
Checks to the City are to be written payable to "The City of Riverdale".
• All checks must be drawn on a local United States bank or credit union in U.S. Dollars.
• No foreign checks will be accepted.
• Look for any messages pre-printed on the check; i.e., "not valid after 90 days" "not valid over $500.00", etc.
• Check the date. No stale date (older than 90 days). No postdate (dated in the future).
• Written amount and numerical amount must be the same.
• Check must be signed.
• Restrictively endorse immediately with the City's bank deposit stamp. Payment by Check in Person
• Checks should have the customer information pre-printed on the face of the check.
• Starter/blank checks may not be accepted without approval by an authorized supervisor. Proper identification (Driver's
License) must be presented and name, address and phone number will be noted on the face of the check before being
approved by a supervisor. Social Security Number should also be obtained.
• The payor's telephone number(s) should be written on the face of the check.
• The individual receiving the funds is to initial the face of the check as evidence of personal responsibility for complying
with all information and identification requirements.
4.08 Limitations on Acceptance of Payments by Check
City employees are not authorized to return currency to the payor in the event that the check exceeds the amount due
but may issue a credit on the account for the difference.
All checks received must be deposited with the exception of currency or checks received, as a refundable deposit for
community room rental. Those funds may be held in the cash drawer in lieu of depositing the funds and returned to the
renter after room has been checked for damages.
4.09 Endorsement of Checks
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The Federal Reserve has established a regulation to standardize check endorsements. All depositors' endorsements are
limited to the top 1.5 inches on the backside of the check, at the trailing edge of the check. This is where endorsements
are normally placed. If you look at the face of the check, the endorsement area is directly behind where "Pay to the
Order of" is printed.
Any marks below the 1.5 inches on the check may obscure the bank routing number, cause delays in returning checks,
and forfeit the City's right to recovery. The purpose of this regulation is to speed collection and returns. Failure to follow
the above instructions may result in charges to the City. An adding machine or calculator tape must accompany deposits
containing three or more checks. The tape should have a zero total at the top and be totaled at the bottom.
All checks should be restrictively endorsed to the City of Riverdale immediately upon receipt. This protects the check if
lost or stolen. The endorsement must include the following:
For Deposit Only
City of Riverdale
(bank account number)
4.10 Returned Check Procedures (see also, Resolution 2014-5 A Resolution Establishing A Fees And Procedure Policy
For Payments Received )
Any checks returned by the banks as uncollected are sent to the Clerk's Office. Examples of returned checks include;
non -sufficient funds (NSF), account closed, payor's signature missing, refer to maker and postdated or stale dated
checks.
The Treasurer prepares a deposit adjustment, debiting the originating fund's account for the amount of the check and at
the same time assessing a service fee (currently $25.00).
It is the Treasurers responsibility to notify the check writer and use due diligence to collect the amount of the check and
the service charge from the payor.
Generally, restitution should be in the form of currency, money order, cashier's check or certified check. All charge -backs
are made to the fund where check was originally deposited and Revenue Source. When restitution is obtained, the
Treasurer should prepare a CASH RECEIPT TICKET (CRT) crediting the same account that was debited by the City.
If after proper due diligence is performed, collection problems exist, the Mayor or Council may be consulted regarding
returned items which remain uncollected after 90 days from the date of debit.
5.0 Forms and Procedures to Balance, Record & Deposit Cash Receipts
Following are various forms and procedures to assist in balancing cash drawers, accounting for voids, and deposit of
funds for same.
Copies of all these reports should be kept as well as any generated by the cash drawer with a copy of the CASH RECEIPT
TICKET (CRT).
These records should be kept intact and retained for seven (7) years.
• Void Transaction — Documentation of Voids prepared during business or afterward during balancing
• Payment Processing Log is done through Summit Accounting Software, printed and placed in a binder with receipts
then scanned into Laserfisch software.
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" C A S H D E P O S I T R E C E I P T T I C K E T ( C R T ) A n r e c e i p t f r o m t h e b a n k u s e d t o r e p r e s e n t a n d r e c o r d y o u r b a n k d e p o s i t t o
t h e G e n e r a l L e d g e r ( f r o m w h i c h y o u r B u d g e t S t a t e m e n t s a r e p r i n t e d )
5 . 0 1 C a s h R e c e i p t T i c k e t ( C R T )
T h e C R T i s u s e d t o c o m m u n i c a t e d e p o s i t i n f o r m a t i o n t o t h e G e n e r a l L e d g e r . A f t e r t h e c o r r e c t l y p r e p a r e d b a n k d e p o s i t i s
d e p o s i t e d a t t h e b a n k , i t w i l l m a t c h t h e S u m m i t S o f t w a r e a n d p o s t t o t h e G e n e r a l L e d g e r .
" S p e c i f y t h e m e d i a / t e n d e r t y p e s i n t h e M e d i a l i n e s o n t h e C R T .
" E n t e r t h e d e p o s i t r e f e r e n c e n u m b e r f o r e a c h c a s h , c h e c k , a n d A C H l i n e i t e m .
" W h e n y o u t r a n s p o r t y o u r b a n k d e p o s i t , y o u w i l l r e c e i v e a r e c e i p t f o r t h e d e p o s i t b a g .
5 . 0 2 P r e p a r i n g a B a n k D e p o s i t
" T h e p e r s o n m a k i n g t h e b a n k d e p o s i t s h o u l d h a v e a s e c o n d p e r s o n r e v i e w a n d i n i t i a l t h e d e p o s i t b e f o r e a n d a f t e r
r e t u r n i n g f r o m t h e b a n k .
" U s e a p r i n t i n g c a l c u l a t o r .
" E n t e r d a t e o n b a n k d e p o s i t s l i p .
" C o u n t t h e c u r r e n c y , l i s t i n g t o t a l s b y d e n o m i n a t i o n o n c a l c u l a t o r . P l a c e a r u b b e r b a n d a r o u n d t h e t a p e a n d b i l l s . L i s t t h e
a m o u n t o n t h e b a n k d e p o s i t s l i p .
" C o u n t a l l c o i n s a n d p l a c e i n s m a l l e n v e l o p e a n d l i s t o n t h e b a n k d e p o s i t s l i p .
" R u n a c a l c u l a t o r t a p e o n a l l c h e c k s . P l a c e r u b b e r b a n d o r p a p e r c l i p a r o u n d c h e c k s . L i s t t h e t o t a l o n t h e f i r s t l i n e f o r
c h e c k s .
" R u n a c a l c u l a t o r t a p e o f a l l t o t a l s a n d e n t e r t o t a l o n b o t t o m l i n e a n d a g a i n w h e r e i t i n d i c a t e s "