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Policy & Procedure
Policy Title :
Bank Accounts and Reconciliation Policy
Policy Number :
IV.A-5
Responsible Party :
Financial Affairs
Effective Date :
28/11/2013
Revised Date :
_______________________

Purpose

This policy sets out requirements for use of banks, including opening, closing authorization variations to terms and conditions, reconciliation of bank accounts transactions.

Statement :
Procedure :
  1. Opening Bank Accounts

    Any new bank accounts to be opened for the business must have the authorization of Chair of Trustees, University Rector and Director of Financial Affairs.
    For each new bank accounts, then Financial system must be updated and the bank account registered by the Head Cashier and Chief Accountant.
  2. Bank Accounts Authorizations

    For monies withdrawn from any bank accounts, whether by check, EFT or other online payment method, there must be 2 persons authorizing for each payment. The authorized persons for the bank accounts payments are:
    1. University Rector
    2. Director of Financial Affairs
    3. Head Cashier
    Each payment made must be supported by invoice, receipt or other appropriate documentation and the authorizations must be attached to this documentation prior to payment.
  3. Variations to Bank Accounts Terms and Conditions

    Any variations to banking arrangements can make or varied by the Rector and Director of Financial Affairs.
    The Head Cashier and Chief Accountant are responsible for updating the financial system and/or bank account registered with the little information.
  4. Closing Bank Accounts

    Where it is decided that a bank account is no longer necessary, the Chief of Trustees, Rector and Director of Financial Affairs will authorize the closure of the bank account.
    The head cashier and Chief Accountant will then be required to complete the following:
    1. Ensure all the transactions with respect to the account (including cheques drawn) have been completed.
    2. Lodge with the bank a letter, signed by the Rector and Director of Financial Affairs as authorized signatories advising the closure of the account;
    3. Meet the bank’s requirements with respect to account closure; and
    4. Update the financial system and bank account register.
  5. Bank Account Transactions

    All deposits received must be banked within 2 days.
    Unallocated direct deposits of more than 30 days will be investigated fully to determine source of deposit.
    Checks outstanding for more than 6 months will be relocated back to the business through the financial system.
    Where a payment stop on a check is required, this will be authorized by the Director of Financial Affairs.
    The Head Cashier will be responsible for carrying out the following duties in regards to payment stop on a check:
    • Ensuring the check has not already been presented at the bank;
    • Getting authorization to action the stop payment using appropriate forms from the bank;
    • Ensuring the bank receives notification of the stop payment notice;
    • Receiving confirmation of action from the bank of stop payment; and
    • Ensuring the details of the stop payment are kept in the stop payment folder.
  6. Bank Account Reconciliation

    • Check the opening balance per book and per bank to ensure that the adjustment was made after the previous reconciliation.
    • Open the cash in Bank Account data from the system and the transfer the data to the excel file.
    • Open the previous bank reconciliation and save as to create another file.
    • Open the new file of bank reconciliation and open the extracted file from the system and then copy the data to the new bank reconciliations working paper. All credits at the extracted data should be added to the payments not yet cleared or debited by the bank and all the debits should be added on the previous collections not yet credited by the bank to our account.
    • All the items presented or appeared in the bank statement should be matched to the bank reconciliation working paper. Post the amount credited or debited by the bank to the working paper to ensure that the amount booked per general ledger received and paid agree with the amount appeared on the bank statement.
    • After posting all the amounts in the bank statement with the records in the general ledger, the schedule of payments received not yet credited by the bank and the payments we made not yet debited by the bank on our account can be prepared.
    • All items appeared in the statement but not recorded in the book should be considered or reported as bank reconciling items. A review of these items should be made to determine of the items are the bank errors or unrecorded payments of collections.
    • Print the bank reconciliation for the month with supporting schedules and forward to Director of Financial Affairs for review.