107 BANK ACCOUNT AND PETTY CASH REGULATIONS


The following section explains regulations for use of bank accounts by parishes and schools.

107.1 One Checking Account Limit:

Only one checking account shall be used to deposit income and pay expenses.

Procedure:

A) Each parish and school should have only one checking account into which every cash receipt is deposited and from which every cash disbursement is made.

B) A separate payroll checking account used exclusively for payroll is permitted. This type of account operates through transfers from the regular checking account.

C) Additional sets of books, bank reconciliations and the consolidation of the activity of the accounts are all complications of having more than one checking account.

D) Savings accounts can be used to receive transfers of funds from the regular checking account when a parish or school wishes to separate certain funds.

107.2 Savings Accounts:

There is no limit to the number of savings accounts that a parish or school can have.

Procedure:

A) Savings account balances should be recorded in the General Ledger and adequate documentation to support the current balances should be maintained.

B) Cash receipt deposits should never be made directly into savings accounts, and disbursements for expenses should never be made directly from savings accounts.

C) Activity in savings accounts should be entered as transfers to or from the regular checking account.

D) The interest on savings accounts should be recorded monthly.

107.3 Titling of Accounts:

All financial and investment accounts must be registered only in the name of the parish or school corporation and at its legal address.

Procedure:

A) For parishes, the Archbishop, the Vicar Bishop, the parish pastor/ PLD, the associate pastor and/or corporators should be named as an authorized signer on all parish financial and investment accounts.

B) For parish schools, the Archbishop, the Vicar Bishop, the pastor, associate pastor, principal, assistant principal, and/or the school board president should be named as authorized signers on every school financial and investment account.

C) For incorporated schools, the Archbishop, the Vicar Bishop, the principal, assistant principal, school board chair, and/or finance committee chair should be named as authorized signers on every school financial and investment account.

D) Facsimile signature stamps should not be used at parishes or schools.

E) Dual signatures should be required on checks over a predetermined amount.

107.4 Reporting Bank Accounts:

All financial and investment accounts must be reported to the Archdiocese of Baltimore as part of the Annual Financial Report, which is due by August 15th of each year.

Procedure:

When reporting accounts as part of the Annual Financial Report, all parishes and schools must include the name of the financial institution, type of account, what the account is used for, the account number and the balance in the account at year-end.

107.5 Bank Reconciliation:

Written bank reconciliations must be prepared and maintained monthly.

Procedure:

A) The bank balance of cash at month-end must be reconciled to both the checkbook balance and the general ledger cash balance on the same date.

B) Discrepancies should be investigated, documented and properly corrected.

C) A copy of the completed reconciliation, along with the outstanding check listing and the deposit in transit listing, should be maintained and should be dated and initialed by the person completing it. Additionally, a copy of the balance sheet should be attached as of the date of the bank statement.

D) The completed reconciliation, signed and dated by the preparer, should then be forwarded to the pastor or other appropriate member of the parish or school (i.e., a finance committee member or corporators) for their review.

E) The reconciliation should also be initialed by the person that reviews it.

F) The parish or school shall obtain copies of all cancelled checks and maintain them in accordance with the record retention policy, available here.

107.6 Petty Cash Fund:

A parish or school may use a petty cash fund for small purchases subject to the following procedures.

Procedure:

A) Only one person, the designated custodian, shall be responsible for and have sole access to the petty cash fund.

B) To establish the fund, a check to the custodian of the fund must be drawn in an amount adequate to maintain the fund. Ordinarily, the amount of the petty cash fund will not exceed $500.

C) An imprest system – whereby a set amount is maintained by replenishing only amounts spent – should be used for all petty cash funds.

D) Petty cash funds should be stored in a secure location, ideally a small lock box or locked cabinet or drawer.

E) As money is used, invoices/receipts are attached to a petty cash voucher slip which is completed in ink and signed by the person receiving the money. The voucher slip shall indicate the amount withdrawn, the date, the reason for the expenditure, and an account number.

F) All petty cash expenditures should be supported by invoices and vouchers.

G) At the end of the month, or sooner if the fund is low, the voucher slips are collected, reviewed, and expenditures are approved and totaled.

H) A check made payable to the custodian of the fund, equal to the total of all voucher slips, is drawn. The check is then cashed into bills and coins and the petty cash container is replenished.