Administrative Procedures

Banking Relationships

1. Purpose

This procedure describes the procedures to establish, change, close, and maintain College bank accounts.

2. Scope 

This procedure applies to all College bank accounts with the exception of imprest bank accounts. Please see Administrative Procedure 5.4.21-P for procedures for establishing imprest bank accounts. 

3. Procedure

3.3.1 - Regulations Concerning Bank Accounts and Deposits

Kentucky Revised Statutes require that all receipts to be placed in appropriately designated bank accounts. Specifically:

1. Unless otherwise expressly provided by law, no receipts from any source of State money or money for which the State is responsible shall be held, used, or deposited in any personal or special bank account, temporarily or otherwise, by any agent or employee, to meet expenditures or for any other purpose.
   
   
2. No representative of any agency, department, or institution may cash, even for the purpose of a deposit, any check or other instrument of value payable to the Commonwealth or any agency thereof.
   
   
3. Records shall be kept that report each amount received, from whom received, and the date received.  Records shall be easy to reconcile.

3.3.2 - Establishing and Maintenance of College Bank Accounts

The KCTCS Board of Regents has designated the KCTCS President, the Vice President, Administrative Services, and the Assistant Vice President for Treasury and Accounting Services & Assistant Treasurer as authorized officers of KCTCS to establish and maintain banking and other financial relationships on behalf of KCTCS.

The responsibilities of each organizational level of KCTCS and the procedures to establish, change, close, and maintain College bank accounts, are as follows:

1. Complete the Bank Account Request Form (FORM TM2) to establish, change, or close an account, change an account number, change an account name, or change banks.
   Note: All college accounts are clearing accounts only - - that is, established for the express purpose of collection and transferring of receipts and collections to the KCTCS central depository bank. The only debits processed against these accounts are electronic fund transfers (transmitting funds collected to the KCTCS central depository bank), bank fees, and debit deposit corrections.
   
   
2. Send FORM TM2 to the Assistant Vice President for Treasury and Accounting Services & Assistant Treasurer in the System Office for approval.
   
   
3. The Assistant Vice President for Treasury and Accounting Services & Assistant Treasurer will contact the depository bank to initiate and complete the establishment, change, or closing of the account as requested and approved.
   1. The Assistant Vice President for Treasury and Accounting Services & Assistant Treasurer will notify the Director of Accounting of new or closed bank accounts to facilitate establishing or inactivating general ledger accounts, as applicable.
      
      
4. The Assistant Vice President for Treasury and Accounting Services & Assistant Treasurer will establish the electronic fund transfer process and transmit electronic transfer instructions to the chief business officer of the college that establishes a new account or changes an existing account.
   
   
5. The college shall be responsible for contacting the bank to purchase all supplies (deposit tickets, deposit bags, etc.) and shall be responsible for the cost of all supplies.
   
   
6. The college shall be responsible for payment of all fees associated with the bank account.
   
   
7. The Assistant Vice President for Treasury and Accounting Services & Assistant Treasurer will grant the college inquiry capability on accounts established for the college.  The college shall be responsible for receiving all bank correspondence, such as monthly statements and advices.  The college shall be responsible for resolving all routine banking matters as they arise.

3.3.3 Electronic Fund Transfer of Cash Balances

Each college shall be responsible for transferring appropriate cash balances from their local depository bank to the KCTCS central depository bank on a timely basis.

Each college can maintain a compensating balance of up to $10,000 to cover bank fees, returned checks charges, and debit deposit correction charges.  A college with a bank account balance greater than $10,000 will transfer the amount greater than $10,000 to the central depository bank by electronic transfer within 2 business days.

The Assistant Vice President for Treasury and Accounting Services & Assistant Treasurer may approve a compensating balance greater than $10,000 or less than $10,000 for a particular college as circumstances warrant.

The KCTCS Office of Treasury will post all electronic transfers of the college to the central depository bank in the general ledger.  The college will post all other transactions to the general ledger.