“Establishing Internal Financial Controls”

Presented by: Fred Thomas, Bureau Chief of Administration

Cash Management Procedures

PURPOSE

To provide instructions to the fiscal staff governing cash management activities and promote consistent accounting practices.

BACKGROUND

The Federal Government requires the minimal time elapse between the transfer of funds from the U.S. Treasury and the disbursement of payments by the City of Shreveport.

SUMMARY

1) Cash Management establishes procedures for Government agencies to follow to ensure prudent cash management practices when developing and implementing regulations, systems, and instructions.

2) These procedures include billings, collections, deposits, disbursements, cash held outside the cash account of the Department of the Treasury and financial data reporting.

3) These procedures require the use of timely methods, principally electronic funds transfer for the collection, deposit, and disbursement of funds.

General Requirements

• When an Entitlement Grant or Letter of Credit is executed for the city, it is governed by City Council Ordinance.

• A budget ordinance must be prepared by the receiving department of the city for the funds to be appropriated.

General Requirements

• The appropriation process requires the city council to conduct a First and Second reading of the Budget Ordinance before council approval. This process occurs over a four week period.

General Requirements

• Following City Council approval, the City Administration is required by law to wait for a period of 10 days before any action can be commenced on the approved appropriation.

• This means that the funds can not be down loaded to the city’s accounting system for disbursements.

General Requirement

• After the allotted times, funds are then inputted to the city’s accounting system.

• Allocations can now be used for program expenditures.

General Requirements

• The City is on a reimbursement system.

• This means that the city pays for the program expenditures up front and is reimbursed when draws are made.

PROCEDURE:

1. The fiscal staff will prepare drawdowns as close as possible to disbursements.

2. The department’s fiscal staff will draw funds not less than twice a month.

3. Drawdowns will be approved by authorized representatives.

4. Upon approval, drawdowns will be submitted to the appropriate Grantor agency.

Financial Management Control System

PURPOSETo set forth a sound financial reporting process to ensure that reported costs are fully supported by accounting records.

Policy RequirementsOMB Circular 85.20 Standards for

Financial Management Systems

SECTION (a)(2)(b)(2)Accounting Records

• Grantees and subgrantees must maintain records which adequately identify the source and application of funds provided for financially-assisted activities.

• These records must contain information pertaining to grant or sub grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.

SECTION (a)(b)(3)Internal Controls

• Effective control and accountability must be maintained for all grant and subgrant cash, real and personal property, and other assets.

• Grantees and subgrantees must adequately safeguard all such property and must assure that it is used solely for authorized purposes.

PROCEDURE1. When an invoice is received in the office, it is logged in and forwarded to the

appropriate staff for servicing

2. The staff reviewing the invoice will determine if the expenditures are allowable and what funding source should be applied to pay the cost.

3. The reviewer will identify the funding source on the invoice and then affix his or her name on the document for approval.

4. The document is then ready to be processed by the fiscal unit.

5. Upon receipt of the invoice, the fiscal unit staff will verify that the invoice is an original copy or a stamped copy with the appropriate signature, funding source identified, correct totals, and any other required documentation.

6. After the document is verified, the invoice is processed for payment.

Pay Documents

REQUEST FOR PAYMENT

CONTRACTOR’S PAYOUT REQUEST

PAYMENT AUTHORIZATION FORM

QUESTIONS AND ANSWERS

THANK YOU FOR

YOUR TIME!