Accounts Payable

5.1 Intent

To provide procedures that will be in compliance with the objectives as stated in the Lone Star College System Policy Manual, Section CFF (Legal).

5.2 Scope

The scope of this section is to outline specific procedures necessary to process Accounts Payable and make payments on behalf of the District. These procedures will identify and outline the specific functions to be performed, the regularity that those functions must be performed and the designated responsible individuals involved from both the College and District Business Offices.

5.3 General Guidelines

5.3.1 Designation of Responsibilities

The College is responsible for:

1. Verifying that there are adequate budgeted funds in accounts that requisitions are applied against.

2. Assigning appropriate account numbers and entering, into the computer, the necessary information to print Purchase Orders or Check Requests at District.

3. The receipt, inventory, decaling and distribution of goods shipped by vendors.

The District Office is responsible for:

1. Printing, Approving and Distributing Purchase Orders.

2. Verifying the accuracy of all accounts payable information entered into the computer.

3. The input and audit of all information entered into the computer.

4. The printing and distribution of Accounts Payable checks.

5. The printing and mailing of appropriate year end tax reporting documents to vendors and to the proper taxing authorities.

5.3.2 Calendars & Timing

Accounts Payable checks are issued continually. A monthly calendar is prepared and given to each College Business Office outlining the individual college deadlines and check printing dates. A sample of this calendar can be located at the end of this section.

1. The College District is exempt from payment of Federal, State and City taxes on purchases, except in certain prescribed cases. An exemption certificate can be furnished to any supplier upon request. Nothing that is purchased by an employee with cash or by personal credit card is tax exempt. (Tax Code Section 151.309(4)). See Contractor exemptions below.

2. It is the policy of the District to purchase on a tax-free basis whenever possible. Each individual college should establish and encourage a purchasing environment that complies with District Purchasing policy and actively seeks tax-free purchasing methods. However, the District recognizes that circumstances exist where paying sales tax is the most expedient and efficient method of purchasing. Examples include meals purchased with a District purchasing card or supplies and materials purchased for District use by employees on a reimbursement basis.

3. The College District must collect tax on sales of goods and services, with the following exceptions:

   1. Seminar Materials

   2. Furnishing student transcripts

   3. Documents furnished under the Open Records Act.

   4. Mailing lists

   5. Services provided by students or other voluntary participants, where no one is paid for this service.

   6. Services performed by students or especially for the teaching/learning of students.

4. The College and employees on official business are exempt from Texas State Hotel Taxes only if the hotel bill is paid by college check or credit card. A tax exempt certificate must be provided to the hotel by the employee. All local hotel taxes must be paid by the individual or College. Groups or clubs within the College are not allowed hotel tax-exempt status. (Tax Code Section 156.103(d)). All taxes must be paid to hotels outside the State of Texas.

5. While traveling, all services, parking, meals, fax, telephones and any other charges are taxable unless they are directly billed to the College, under the College name. The employee name can not appear on the charges. (Tax Code Section 156.103(d)).

6. Vending machines, snack bar, candy and soft drink sales are taxable.

7. College student organizations affiliated with an institution of higher education may each month hold a one-day, tax-free sale. The college student organization must have a primary purpose other than engaging in business or performing an activity designed to make a profit. The primary purpose of the one-day sale must be to raise funds for the college student organization. Texas Tax Bulletin, Exemptions: Sales Tax Information for Nonprofit Organizations, August 1995 (www.window.texas.fo/taxpubs/tx94_125.html)

8. The College is allowed two tax free sale days per year.

9. TIF (Telecommunications Infrastructure Fund) fees are assessed on all telephone, modem and internet lines. This is not a tax and, therefore, cannot have an exemption. It can, however, be passed along to third parties, such as student/employees, where applicable.

10. All vehicles owned or leased by the College must be legibly marked with the College’s name to retain its tax exempt status if vehicles bear exempt plates. (Tax Code Sections 152.001(7), 152.082 and 152.083).

11. Rental cars are only tax exempt when rented by the College, in the College name. The billing for the rental must be directly to the College. The employee name can not be listed as a renter on the contract (except for insurance purposes). A credit card with the employee name or cash can not be used. All personal property taxes must be paid at the time of rental, there is no exemption for this.

12. A contractor who is contracted to improve College Real Property can purchase expendable items on a tax-exempt basis: materials used in construction (bricks, nails, etc.) and items that are used up in the construction (water, electricity, gasoline, etc.). Equipment, repairs or rental of, are not tax exempt, such as saws, blades, hammers, etc.

13. Surplus goods are taxable. Auctioned goods must have sales taxes collected on the sale. When an auction service handles the auction, they are liable for the taxes.

The following disbursements will be made through accounts payable:

1. Vendor Purchases - Payments made against Purchase Orders for a purchase authorized by the College District, requested by the employee and approved by the Department Head and the College Business Office.

2. Petty Cash Reimbursements - Reimbursements to employees for emergency out of pocket expenses (refer to item 5.3.5, below, for guidelines).

3. Travel Advances - Advance payments made to the employee prior to approved College travel (refer to item 5.4.2.2, below, for guidelines).

4. Travel Reimbursements - Payments made to employees upon the return of College related travel (refer to item 5.4.2.2, below, for guidelines).

5. Check Requests - Payments made for emergency purchases, purchases outside of the normal purchasing procedure and other expenses as outlined in item 5.4.5, below. Requests must be made by the employee and approved by the Department Head and the College Business Office.

6. Utilities - Payment for all utility services of the Colleges and District Office. Original monthly statements are to be mailed to the District Office to be paid against a Blanket Purchase Order and a copy of the paid statement will be forwarded to the respective College Business office for review.

7. Contracted Services - Payment made against a Blanket Purchase Order for a service contract, maintenance contract or rental of equipment, under a yearly contract.

8. Prepaid Purchase Orders - Payment made for a District approved purchase, when the vendor requires payment prior to shipment. This pre-payment must be pre-approved by Purchasing (refer to item 5.3.5, below, for guidelines).

9. Bookstore Purchases Payment of bookslips that are processed through the College Financial Assistance Office for payment of student expenses (i.e. instructional supplies as required by Faculty) against prior approved grants.

10. Grants/Scholarships/Loans/Financial Assistance - Payments to students for approved assistance made according to Financial Assistance, Federal and State guidelines. Requests for payments originate in the College Financial Assistance Offices.

11. Student Refunds (Check and Credit Card) - Refunds generated by the College Business Office and approved by the Student Financial Records Department, for dropped or canceled classes and fee adjustments as authorized.

12. Debt Service Payments - Payments for outstanding bond issues, made in accordance with the terms of the related bond indentures. Requests for Debt Service Payments originate in the Finance Department.

13. Other Payments - Payments for banking charges, credit card charges, collected sales taxes and other expenses not dealt with elsewhere.

General

Travel by employees of the District is recognized as an essential element of the District’s operations and is authorized by the Board of Trustees. Travel to represent the institution’s interests and for professional development may be paid for with public funds.

Travel is considered as a necessary means in order that institutional interests are represented and that employees might receive professional development. Requests for travel may not be approved by the LEO if it is determined that travel, and not professional development or institutional representation, is the primary objective of the request. Examples include cruises, sightseeing tours and travel to out-of-country destinations. The LEO may make exceptions by documenting that the travel is clearly in the District’s and public’s best interests.

While it is anticipated that family members will at times accompany the employee, the District is not responsible for the expenses incurred by family members of the employee. In most cases, however, overnight travel will require that the employee be separated from home and family.Every effort should be made to minimize any disruption to the employee’s personal life.

Expenses as a result of travel which are reimbursable may not be excessive and must reflect reasonable and prudent judgment.Determination of what might be excessive and not reimbursable is the responsibility of the Location Executive Officer (LEO).The LEO has the right to deny reimbursement for expenses he/she determines are excessive or inappropriate.

The guidelines which follow apply to all approved travel supported by public funds.However, if a granting agency uses different guidelines for approved travel, the employee should use the more restrictive guidelines.

1.  Daily Travel

Generally, District business within our service area, or brief out-of-town meetings, will result in expenses incurred for one day of travel. (However, see Overnight Travel guidelines for further information about “local” travel.)

1) Mileage is reimbursed at the approved rate per mile published by the Internal Revenue Service. The District Finance office will announce new rates and their effective dates, as the information is received. Daily miles traveled must exceed the employee’s normal daily driving distance between home and the regular work location.Reimbursement will be for the excess distance traveled (home to location minus home to work mileage). Refer to the approved mileage between Lone Star College System locations for mileage calculations. This mileage information is distributed by the District Facilities office.

2)  Parking and toll road charges will be reimbursed when original receipts are attached.However, an employee may request reimbursement at the reduced EZ Tag rate for toll road charges, without submitting receipts.

3)  For reimbursement, a Personal Vehicle Mileage Reimbursement Form (sample form available in Forms Appendix 5.6) should be completed.

Approved mileage from each Lone Star College System location is as follows:

PLEASE CHOOSE A START LOCATION.
(If Traveling roundtrip, also look up the return trip mileage. The two directions can differ in mileage.)

District Services & Training Center
Lone Star College-North Harris
Lone Star College-North Harris - Carver Center
Lone Star College-North Harris - Lone Star College-Greenspoint Center
Lone Star College-Kingwood
Lone Star College-Kingwood - EMCID Center
Lone Star College–Tomball
Lone Star College–Tomball - Lone Star College–Willow Chase Center
Lone Star College–Montgomery
Lone Star College–Montgomery - Lone Star College–Conroe Center
Lone Star College–CyFair
Lone Star College–CyFair - Lone Star College–Fairbanks Center
The University Center

Registration fees and meals that have been included in the convention or seminar registration package will be reimbursed using a Travel Expense Voucher (sample form available in Forms Appendix 5.6). Reasonable meal expenses associated with non-overnight travel may be approved by the LEO.

2.  Overnight Travel

Any assignment/job away from the main place of work that is temporary (lasting less than 30 days) or seminar/workshop that is out of the city or general business area is considered overnight travel. This type of travel must be accounted for on a District approved Travel Reimbursement Form, with a signed Leave of Absence Form attached (samples of these forms available in Forms Appendix 5.6). See item 2 below, for a description of the types of travel expenses that are appropriate for reimbursement.

1) Procurement Cards (P-Cards) will be issued at each District location. The P-Cards will be restricted for use at only travel-related vendors (i.e., airlines, transportation companies, food establishments, hotels, etc.).

2) Once the employee returns from the overnight travel, a Travel Reimbursement Form should be completed.Original receipts for all expenses must accompany the form.

3) Every effort should be made to submit completed forms and documentation within three business days.However, failure to return all required documentation within five business days may result in loss of future issuance of District P-Cards to the employee.

B. Reimbursable Travel Expenses (NOTE: THE LEO HAS THE RIGHT TO DISALLOW ANY TRAVEL EXPENSES THAT ARE DEEMED INAPPROPRIATE OR EXCESSIVE.)

1)  Overnight Stays – Overnight stays in the greater Houston area can be authorized by the LEO.Examples include when traveling home could be dangerous (i.e., late at night), when the employee is a host committee member, when it is not reasonable to expect the employee to commute, or when travel would restrict the employee from participating in professional development activities.

2)  Airfare – All airline tickets for approved out-of-district travel must be purchased online. Whenever possible, airline reservations and ticket purchases should be made sufficiently in advance to take advantage of any available discount fares.The lowest fare available should be purchased, even if it requires additional overnight accommodations (assuming the savings is greater than the hotel charges).

3)  Hotel

a)  Payment for hotel costs should be made with the P-Card, or with personal funds that will be reimbursed upon completion of travel.

b)  Charges for lodging in hotels within the State of Texas are exempt from state taxes, and therefore these taxes are not an allowable expense.A Texas Hotel Occupancy Tax Exemption should be presented to the hotel upon arrival.All taxes will need to be paid to hotels outside the State of Texas.

c)  Allowable charges to the hotel bill include the cost of the room, local taxes, parking, telephone, meals, and hotel business services (fax/copying).

d)  Expenses that are not reimbursable include fitness/spa treatments, room service for items other than meals, sundry purchases from hotel gift shop, and movies or other forms of entertainment.

4)  Meals

a)  Cost of meals must be reasonable.Because different areas of the state and country have a higher cost-of-living than others, questions about reasonable costs for meals should be directed to the LEO.

b)  The use of per diem for meals will not be accepted.Meal reimbursement requires a receipt.The receipt is not required to be itemized; however, the LEO may require additional information or documentation for costs that appear to be inappropriate or excessive.The LEO reserves the right to disallow meal expenses that are deemed inappropriate or excessive.

c)  Public funds may not be used for reimbursement for the purchase of alcoholic beverages unless beverages are served as part of an official function which has been previously approved by the LEO.

d)  Payment for meals should be made with the P-Card, or with personal funds that will be reimbursed upon completion of travel.

5)  Other Transportation – Other expenses such as taxis, shuttles, and parking are allowable and should be paid with the P-Card, or with personal funds that will be reimbursed upon completion of travel.Original receipts are required to be submitted with the Travel Reimbursement Form.

6)  Registration Fees – Registration fees should be paid with the P-Card, or with personal funds that will be reimbursed upon completion of travel.

7) Airport Driving/Parking Arrangements

a) The most economical means of transportation to and from the airport should be arranged.If overnight parking is required at the airport, economical parking facilities should be used: for example, long-term shuttle or long-term extended parking facilities as opposed to short-term parking facilities.

b) Round-trip taxi or shuttle service may be used in lieu of airport parking and mileage.The maximum amount allowed for such expenses will be the lesser of the normal daily rate for economy parking times the number of days traveled, or the actual cost for round-trip taxi or shuttle service.

c) These expenses should be paid with the P-Card, or with personal funds that will be reimbursed upon completion of travel.Original receipts are required to be submitted with the Travel Reimbursement Form.

8)  Automobile Travel

a)  The total mileage cost (including en route lodging and meals) or the lowest round trip coach airfare will be allowed, whichever is lower.

b)  Mileage can only be reimbursed upon the presentation of an approved Travel Reimbursement Form with actual miles driven indicated.

9)  Rental Cars

a)  A rental car may be authorized when other forms of ground transportation are deemed not to be effective and economical.In determining the necessity for a rental car, the employee should consider the distance between hotel and conference center, alternate forms of affordable transportation (cabs, courtesy vehicles, etc.), number of persons traveling together, etc.In all cases, the least expensive method of ground transportation should be used.

b)  An employee must meet the following requirements in order to request approval for the use of a rental car.

• Minimum age of 25 years old
• Possess a valid driver’s license
• Must rent vehicle in the name of Lone Star College System
• Purchase the Loss Damage Waiver (LDW) for loss of or damage to the rented vehicle.Some rental companies use the term Collision Damage Waiver (CDW).
• Do NOT purchase liability insurance supplement (LIS), Personal Accident Insurance (PAI), or Personal Effects Coverage (PEC)

c)  Use of a rental car MUST be approved in advance by the LEO.

d)  Rental cars should be paid with the P-Card, or with personal funds that will be reimbursed upon completion of travel.Original receipts are required to be submitted with the Travel Reimbursement Form.

10)  Other Covered Items

a)  Telephone – All actual telephone expenses for District business will be reimbursed.  An 800 number is available and should be used for Internet access.  Personal calls to the employee’s home are authorized unless they are excessive in number and length of time.

b)  Gratuities – Gratuities may be reimbursed, if itemized and reasonable in amount. The LEO reserves the right to deny reimbursement, if the gratuities are deemed inappropriate or excessive.

3.  International Travel

Any travel that is outside of the 48 contiguous states, Canada, or Mexico, is considered international travel for purposes of this policy.  All international travel is required to be approved by the LEO, who will then notify the Chancellor's office of the approved travel.

      a.     Advances are requested on a Check Request Form, with an approved Request/Authorization for Leave of Absence Form attached. This should be done with enough time to allow for the processing of a check. Approximately 15 days is needed for processing.

      b.     On the Check Request Form, the Employee clearly itemizes the amount of advance requested and the budget account number(s) to be charged.

      c.      The employee must obtain appropriate signatures, on both forms, to process the request.

      d.      New Procedure (eff. 9/1/97) - Each College Departmental Cost Center will electronically enter the request for advance (similar to the pre-paid purchase order).

      e.      College Departmental Cost Center sends request to College Business Office with Leave form.

       f.      College Business Office notifies Purchasing of request.

       g.     College Business Office files Leave form in tickler file.

       h.      Accounts Payable processes request for payment.

       i.       Accounts Payable sends request for payment to District A/P.

       j.        A/P prints check: (1) 5 working days prior to travel date or (2) Hot file when needed.

      k.     A/P send check to College Business Office, next business day interoffice mail.

      l.       Employee presents receipts with Travel Expense Voucher to College Business Office (with-in ten (10) working days after completion of trip).

      m.     College Business Office pulls original Leave form: (1) marks the forms complete and (2) forwards the form to District A/P.

      n.      District A/P zero vouchers and completes the file.

      o.      District A/P files completed Leave form with request for advance.

      p.      New Procedure (eff. 9/1/97) - College BO reviews the Advance Account on a weekly basis to look for missing receipts.

      q.      New Procedure (eff. 9/1/97) - District A/P reviews the Advance Account prior to the issuance of any new advance to make sure all previous advances have been cleared.

      r.       New Procedure (eff. 9/1/97) - District A/P reviews the Advance Account on a quarterly basis, for auditing purposes, and advises the College BO of any advance over 60 days in age.

a. Within ten (10) working days from the date of return from travel, a Travel Expense Reimbursement Form (sample form available in Forms Appendix 5.6) must be submitted to the Business Office with proper approvals and with original documentation of actual expenditures. Supporting documentation is to include but not be limited to the following: travel agency invoices and copy of airline tickets; lodging receipts; all receipts for meals and sundry items; ground transportation and parking; registration fees (receipt). All advances must be reflected and only original receipts will be reimbursed.

1. If the College credit card is used, the original credit card receipts are to be included on the travel form which is forwarded to the Business Office with the budget code.

2. The Travel Expense Reimbursement Form covers five (5) days. An additional report should be completed for a trip of more than five (5) days. The two forms should be totaled on the second page.

3. As long as a travel advance is outstanding, no additional travel advances can be issued.

b. For mileage reimbursement, a Monthly Personal Car Mileage Reimbursement Voucher (sample form available in Forms Appendix 5.6) must be submitted to the Business Office with proper approvals. This is applicable for In-District Travel only. For a more detailed discussion of mileage, refer to Section 5.4.2.1.1.a, above,.

5.4.3 Procedures for Receiving Merchandise and Invoices

5.4.3.1 Receiving Merchandise

1. Merchandise should be received according to specific instructions outlined in the Purchasing section of this manual.

2. The Receiving (goldenrod) copy of the purchase order will be sent to the College Receiving Department and the blue copy will be sent to the Originating Department.

3. When merchandise is received, College Receiving will verify that there is no apparent damage and that all boxes are accounted for, on the goldenrod copy.

4. The items (boxes) will be forwarded to the Originating Department. Some College Central Receiving Departments will forward the goldenrod copy to the responsible party while others will retain it awaiting verification from the responsible party.

5. After inspection and verification of the quantity and quality of the merchandise has been made, the responsible individual taking actual receipt of the shipment will sign the Receiving (goldenrod) copy of the Purchase Order, if complete, or a partial receiving report.

6. The signed goldenrod or partial receiving report (see an example in Forms Appendix 5.6) will be forwarded to the District Office Accounts Payable immediately after receipt is acknowledged.

7. From the goldenrod copy, the District Accounts Payable will receive the items in the "system".

8. The A/P Clerk will have previously filed the yellow copy of the Purchase Order.

9. The goldenrod copy is matched to the yellow copy and filed to await receipt of an original invoice.

5.4.3.2 Receiving Invoices

1. All original invoices should be sent directly to the District Accounts Payable Office.

2. The District Accounts Payable Department matches original invoices to purchase orders.

3. Invoices without Purchase Orders will be referred to the originator. In cases where the originator is not known, the vendor will be contacted.

4. Please Note: For Invoices received against Blanket Purchase Orders, see procedure 5.4.3.3, below.

5. When original invoices are received but the merchandise is not, after 30 days, a memo is sent from the Accounts Payable Department to the Ordering Department.

5.4.3.3 Invoices Received Against Blanket Purchase Orders

1. When original invoices are received against a Blanket Purchase Order, the Vendor should be instructed to include that PO Number on the invoices.

2. When the number is not known, the PO number will be looked up and written on the invoice before preceding further.

3. When the original invoice is for Contracted Services, the Purchase Order number is all that is required to proceed to vouchering.

4. Otherwise, the original invoice is sent to the originator for approval.

5. When the original invoice and packing slip are returned to A/P with approval, Accounts Payable will proceed with the vouchering process.

5.4.4 Payment of Bills and Check Processing Procedures

5.4.4.1 Matching Invoices to Documentation for Approval

1. Purchase Orders will clearly indicate that vendors should mail all invoices to the District Business Office regardless of the shipping location.

2. The "open" Invoice and "open" Purchase Order bins are compared daily.

3. When all three are received: the original Invoice, the goldenrod receiver and the yellow control copy; the invoice is checked, by line item, against the PO and goldenrod for accuracy in dollar amount and receipt of merchandise.

4. The A/P Clerk will verify that:

   1. All back-up and receiving documentation is accounted for and is correct.

   2. Appropriate taxes have been eliminated from the invoice.

   3. Amounts and extensions are correct and in agreement with the Purchase Order.

   4. The Fixed Asset Department is notified of equipment received and placed in use and Decal number is noted on goldenrod.

5. The information is filed into a bin to be "vouchered" for payment. Please refer to the vouchering process 5.4.4.2, below.

6. When the original invoice, PO or Receiver do not match, the Originator and/or the Vendor will have to be contacted. Usually, one of the following resolution paths will be followed:

   Problem	Resolution
   Price overage or return/canceled items.	Originator submits PO Change notice to Purchasing or credit memo to A/P.
   Shipping Charges	A/P adds/subtracts to/from voucher as separate line item as appropriate.
   Partial shipment received on campus.	Copy of goldenrod attached to PO in open bin awaiting receipt of other items.

7. Upon resolution, the original invoice and supporting documentation are approved and filed into the bin to be "vouchered" for payment. Please refer to the vouchering process below.

5.4.4.2 Vouchering Process

1. All vouchers are prenumbered by the computer.

2. As noted above, each College Business Office inputs check requests for vouchering and records the voucher number on the request.

3. The District A/P Department inputs District check requests and grant checks for vouchering.

4. All original invoices matched to purchase orders are input for vouchering by the District Accounts Payable Department. The voucher number is noted on the invoice and the amount to be paid is circled.

5. A Voucher Summary Report is printed which is used to reconcile all entries.

6. All original invoices and check requests are put into the PO folder to await check selection, printing and processing, as outlined below.

1. Checks are selected to be printed according to the Check Print Schedule (see an example in Forms Appendix 5.6). The College Business Office will receive monthly a copy of this schedule from District A/P. "Emergency" requests (hot file) can be accommodated on a limited basis.

2. All original invoices are required to be paid within 30 days but usually are processed and paid as soon as all documentation is complete. Where applicable, discounts for early payment will be taken.

3. Proper and complete documentation is verified for each check to be issued.

5.4.4.4 Printing, Signing and Issuing Checks

1. Checks are printed, signed and issued by the District A/P Department.

2. All checks are disbursed either to the Colleges via Interoffice Mail, in a locked bag, or through the U.S. Mail.

3. A distribution list accompanies each check run, and an additional copy of the distribution list is kept at the District Accounts Payable Office.

4. The original distribution list, with original signatures, will be retained at the College Business Office as an official record.

5.4.5 Academic Refunds and Financial Assistance Checks

1. The procedure for Academic Refunds ("50") and Financial Assistance Checks ("21") is essentially the same except where noted.

2. Checks are selected to be printed according to the Check Print Schedule (see an example in Forms Appendix 5.6). The College Business Office will receive monthly a copy of this schedule from District A/P. "Emergency" requests (hot file) can be accommodated on a limited basis.

3. Documentation is provided from the Student Financial Records Department for both with the Financial Assistance Department originating the financial assistance information.

4. The documentation is date stamped when received in Accounts Payable and sorted by Term/AP Type (location).

5. For Academic Refunds, a determination needs to be made if the refund is to be by check or credit card.

6. If credit card, A/P will refund after proper approvals.

7. If check, the procedure follows the steps outlined, above, under 5.4.4.4 Printing, Signing and Issuing Checks.

8. To void/reissue an Academic Refund or a Financial Assistance Check, the procedures noted below under 5.4.7 Void Check Procedures will apply.

5.4.6 Manual Check Procedures

1. Since provisions have been made to process emergency (hot file) checks on a daily basis, it is unnecessary to manually prepare checks (an exception to this would be a computer system failure).

2. The A/P Supervisor is to be contacted, by telephone or E-Mail, when an emergency check must be printed.

3. An expense under the amount of $75 can be paid from petty cash rather than by check, with proper approval.

5.4.7 Procedure for Unclaimed Checks

1. Checks returned and/or unclaimed are handled according to the type, as outlined below:
   (1) Student Financial Assistance, (2) Student Refunds, (3) A/P Vendor Checks, (4) Retirement and (5) Payroll.

2. All checks returned are given to the Accounting Clerk in the General Accounting Department who date stamps the envelope and makes a copy of the check before forwarding it to the responsible person, as noted below.

3. The timely and proper disposition of all checks is monitored through the reconciliation process performed by the Accounting Department.

5.4.7.1 Student Financial Assistance

1. The original returned check is given to the Finance Department Secretary (FS) to create a list of the Financial Assistance return checks. This list is E-mailed to the Accounting Clerk, the Internal Audit Department, the Business Office at each College and the Financial Assistance Department at each College.

2. The check is forwarded to the Internal Audit Department to research the reason for the return.

3. The check is forwarded to the Business Affairs Secretary to send to the appropriate College Financial Assistance Office via locked bag.

4. The Financial Assistance Department will review their files for other addresses and notify the student. The Financial Assistance Department will change the Official Address on file for the student and make any tuition adjustments due to residency reclassification.

5. The check is kept in the vault and can be picked up by the student after proper identification has been provided.

6. The FS is notified to remove the name from the list.

5.4.7.2 Student Refunds

1. The Accounting Clerk prepares a spreadsheet of all unclaimed Student Refunds and E-mails each College Business Office.

2. The Accounting Clerk will research the reason for the return and will make address corrections.

3. The Accounting Clerk will notify District A/P to void and reissue, where appropriate.

4. Occasionally, the check will be forwarded to the College Business Office to be picked up by the student with proper identification.

5. After the check is either reissued or picked up, the Accounting Clerk is notified to remove the name from the list.

6. After checks go unclaimed for 5 years, the checks are voided and reissued to the State Treasurer’s Office along with a list. The State will post public notification of funds that are being held and may be claimed with proper identification.

5.4.7.3 A/P Vendor

1. The original A/P Vendor checks are returned to A/P to research for the reason for the return.

2. The check will either be mailed to the correct address, voided and reissued as appropriate or held to be turned over to the State, as above.

5.4.7.4 Retirement

1. Part-time faculty will have an amount withheld from their paychecks for retirement, with retirement paperwork expected to follow.

2. These amounts are reported and remitted to the State by the Human Resources Department.

3. In cases where the employee elects not to have retirement withheld, the State will refund these amounts back to the District.

4. The check will be sent by the State to the Human Resources Department where it will be identified by Employee Name and Social Security Number.

5. The check will be forwarded to the Finance Department to make a copy and instruct the FS to deposit to a special holding account.

6. The Finance Department will instruct District Accounts Payable to issue a check to the employee from the special holding account.

7. After checks go unclaimed for 5 years (due to incorrect address on file for terminated employees, etc.), the checks are voided and reissued to the State Treasurer’s Office along with a list. The State will post public notification of funds that are being held and may be claimed with proper identification.

1. The original payroll checks are returned to the District Payroll Department to Research for the reason for the return.

2. The check will either be forwarded to the employee, voided and reissued as appropriate or held to be turned over to the State, as above.

5.4.8 Void Check Procedures

1. Checks can be either "voided without reissue" or "voided with reissue".

2. For this reason, the Check void procedure is separate from the Voucher void procedure. The Voucher Number must be kept active in the system if the check is to be reissued.

3. All action must be initialized on a four (4) part Request For Check Action form (a sample available in Forms Appendix 5.6).

4. The Originator of the Request For Check Action will send the form, the original check, where applicable, and any other supporting documentation to the Director of Accounting.

5. The original check will be defaced by writing void across the face and by destroying the signature. The original voucher and vendor number will be written on the face of the check to allow for tracking through the system.

6. When applicable, the Finance Department will request a stop payment to be issued. The request will be held until notification is received from the bank that the stop payment is in place.

7. The form will be distributed as follows:

   Copy	Where Distributed
   White Original	Retained in Accounting Department.
   Yellow	Forwarded to Accounting along with the original check for reconciliation purposes.
   Pink	Forwarded to A/P or Payroll.
   Goldenrod	To be used for reissuing or to be retained in College Business Office.

8. Upon receipt of the pink copy, A/P will void the check. This will void the Check number but will leave the Voucher open.

9. At this time, the A/P Supervisor will note whether the check is to be reissued or not.

10. If the check is to be reissued, the goldenrod copy of the Check Action form and a copy of the Voided Check or Stop Payment Form must be attached.

11. If the check is not to be reissued, the voucher number will be voided.

5.4.9 Funding of Accounts & Fund Transfers/Charges

1. All checks are paid through a Controlled Disbursement Account and monitored electronically on a daily basis by the Finance Department.

2. The Finance Department will electronically make cash transfers between funds to cover the checks as they clear the bank(s).

3. The Finance Department will prepare and enter Journal Entries for the transfers made between the funds on the General Ledger to balance the Due To/Due From accounts.

4. A more complete set of procedures for this process can be found in the Treasury - Investments section of this manual.

5. Accounts Payable will provide the Finance Department with prior notification of any single check to be released which is in excess of $50,000.

1. Regularly, throughout the year, the Accounts Payable Supervisor will create an Outstanding Purchase Order List.

2. A review will be made of open purchase orders to clear such items as freight, canceled shipments, etc. that may prevent purchase orders from closing.

3. A comparison of Check types by Volume and Purchase Orders by location is performed on a quarterly basis.

5.4.11 Year End Procedures for Accounts Payables/Encumbrances

1. Accounts Payable - At the end of the fiscal year, an Outstanding Voucher List will be printed to include all unpaid invoices or purchase orders where merchandise or service has actually been received or performed prior to August 31. This list will contain: Purchase Order Number, Vendor, Invoice Number and Date, Expense account to be charged, and Amount (invoice or receiving ticket).

2. Encumbrances - Encumbrances include all outstanding purchase orders or commitments for merchandise or service not received or performed as of August 31. This list will contain: Purchase Order Number, Vendor, Expense account to be charged, and Amount.
   The Manager, General Accounting will make an annual one-sided entry to correct the encumbrance balance.

5.4.12 Year End Procedures for Tax Reporting (1099’s)

5.4.12.1 General Guidelines

1. Form 1099-MISC, Miscellaneous Income must be issued at the end of the year to each person to whom payments have been made for at least $600 in services (including parts and materials).

2. The 1099-MISCs will be created from information provided by the W-9s on file in the Purchasing Department. However, where information is incomplete, the Accounts Payable Department will contact the Vendor and payment will not be made until such missing information has been provided.

3. Please note the following exceptions:
   1. Payments to corporations are not reportable

   2. Payments for merchandise alone are not reportable

   3. Payments to employees for services rendered must be paid through payroll, even if the service provided is not part of the employee’s regular job description

   4. Payments to employees for business expense reimbursement are generally not taxable. However, if they are taxable, they are to be included on the employee’s W-2 for the year.

4. Form 1099-B, Proceeds from Broker and Barter Exchange Transactions must be issued at the end of the year to each person to whom payments have been made for sales of artwork and other items on behalf of that individual. There is no dollar limitation on this reporting requirement. Occasionally, the District will hold sales of artwork and other items created by the students and will remit to the student the proceeds from that sale less a brokerage fee.

5.4.12.2 Reporting Procedures

1. The Accounts Payable Supervisor will review all requests for payments to vendors to determine if 1099 reporting is applicable.

2. Payment will be withheld when information is missing on vendors.

3. The A/P Supervisor can either "flag" an individual payment as reportable or all payments to a vendor as reportable.

4. At the end of the calendar year, the A/P Supervisor will run a report for all 1099’s to be processed.

5. This report will be reviewed for correctness before the printing of the 1099s and the final report.

6. The deadline for mailing 1099’s is January 31.

7. All reports with any changes and a copy of the 1099s are kept in a file. One copy of the 1099s is sent to the vendors and one set is transmitted to the IRS.

8. All completed Forms 1096 and 1099 are due to the IRS by the last day of February.

5.5 Process Maps

5.6 Forms

1. Check Print Schedule

2. Office Supply Order Form

3. Petty Cash Voucher

4. Purchase Requisition

5. Purchase Order

6. Check Requisition

7. Travel Expense Voucher

8. Monthly Personal Car Mileage Reimbursement Voucher

9. Request and Authorization for Leave of Absence

10. Travel Planning Form - Example

11. Partial Receiving Report - Example

12. Request for Check Action

13. Toll Road Authority Detailed Usage Statement