6100 Accounting

Initial Date of Approval: 2/27/07

Revision Date(s):  2/9/21

Administrative Responsibility: Vice President of Administrative Services

PURPOSE

To establish the responsibility and requirements of the college to account for revenues received.

REFERENCES

• State Board for Community and Technical College Fiscal Affairs Manual, Sections 40.50, 40.10.20 and 40.10.40
• RCW 28B.50.320 Fees and other income—Deposit—Disbursement.
• RCW 39.58 Public Funds—Deposits and Investments—Public Depositaries
• RCW 42.26 Agency Vendor Payment Revolving Fund—Petty Cash Accounts
• State Administrative and Accounting Manual (SAAM), issued by OFM, 85.20 and 85.50
• SAAM, Chapter 20, Internal Controls

POLICY

The policy of the college is to receipt and record all revenue officially received by the district in accordance with general accepted accounting practices and principles of internal control.

PROCEDURES

Revenue Accounting
Revenues are cash receipts and receivables from tuition, sale of goods, rendering of a service, interest earned on investments, etc. Cash receipts and receivables are recorded in the applicable funds when the revenues are recognized.

Cash Receipts
Cash receipts are any cash items, e.g. cash, check, money order, or credit card payments received by the college for any intended purpose. The college records all cash received on pre-numbered cash receipts forms which document the date, amount, mode of payment (cash, check, credit card, etc.), and identification of the preparer.

Collections of cash made at the Cashier’s Office are receipted through our automated cashiering system. Collections in the field are documented by issuance of an official Skagit Valley College pre-numbered receipt. Each pre- numbered receipt must be accounted for. Daily, cash is counted and reconciled to cash receipt records reflecting the day’s transactions and deposits made.

In handling receipts as authorized above, the following internal control principles are adhered to:

• Recording of receipts—cash collections are recorded daily
• Separation of duties—only one employee shall be assigned to each change fund and responsible for cash collections and receipts in that change fund.
• Complementation of duties—financial duties are checked by another employee.
• Auditing—periodic verification of transactions are conducted by persons not involved with the functions of receiving or depositing cash.

Change Fund and Petty Cash Fund
The college maintains two types of cash accounts within the petty cash regulations. These consist of change funds and petty cash accounts. The college adheres to petty cash regulations as prescribed in RCW 42.26 and procedures are in accordance with OFM’s prescribed regulations and procedures.

Change funds are used solely for making change in across-the-counter cash transactions. Petty cash accounts are used to make payments when issuing a check is not practical or timely. The Business Office maintains on file a letter designating the individual assigned as custodian for the account and the amount of the change or petty cash account.

All change funds and petty cash must be physically secured in a safe, vault, or other locked locations.

The use of the petty cash account shall be restricted to miscellaneous petty or emergency expenditures. The items purchased cannot be expediently paid through regular payment procedures. Petty cash may be used for payment of postage due, minor miscellaneous materials and supplies, and other authorized uses of petty cash found in SAAM 85.50.60b. Petty cash and change accounts are not used for cashing personal and/or payroll checks.

All disbursements from petty cash accounts are to be documented and supported by receipts or vouchers bearing the signature of the payee. The document must include the date, name of payee, purpose of disbursements, amount paid, and signature of the person authorizing disbursement and the proper account to be charged. The total cash on hand, plus the amount of the expenditures according to the documentation is to equal the authorized balance of the petty cash account. Petty cash accounts are to be reconciled at least monthly.

To replenish a petty cash account for disbursements made, a purchase requisition is to be prepared. All documents substantiating the reimbursement are to be attached. Petty cash accounts are to be reimbursed monthly, unless the reimbursable amount is less than $100. If the reimbursable amount is less than $100, replenishment shall be made the following month.

The Vice President of Administrative Services has the authority to abolish a petty cash account. When the need for the account no longer exists and the petty cash fund is to be reduced or abolished, reconciliation should be performed and the money returned to the fund from which it was advanced.

Deposit of District Funds
All cash receipts are deposited at our local bank account within 24 hours of receipt, unless total cash receipts on hand are less than $500. If total cash receipts are less than $500, we are not required to deposit within 24 hours and we will deposit at least weekly. Deposits are controlled and documented by the use of bank deposit slips. On a daily basis, cash collected is counted and reconciled with cash receipt records and local account deposit slips. Any differences between the deposits and records of receipts are investigated and resolved immediately.

Accounts Receivable Collections
Past due receivables are followed up promptly by the college. Most students are dropped from classes for nonpayment of tuition by the due date for the quarter. However, we do incur receivables for students that sign Tuition Payment Plans, or make other special arrangements, that are unpaid after the tuition due date.

The Registration Office obtains an Unpaid list for the quarter after the tuition due date. A block is immediately placed on the student’s account so the student is unable to further register for classes. The students are contacted by mail three times to make payment and they are notified that the debt may be assigned to a collection agency if the debt is not paid. If the account is still in unpaid status after the three letters are sent, the account is turned over to the Business Office for collections. The account is then forwarded to a private collection agency.

Upon notice of NSF Checks by the bank, a block is immediately placed on the student’s account. An NSF handling fee is then charged to the student account and the account is then turned over to a letter writing service to pursue collection.

Receivables are determined to be uncollectible after two years and are then written off. The Accounts Receivable accountant determines accounts that are uncollectible and forwards those to the Controller for approval. The receivables are then written off the accounting system.