Policy Number: 5.3.3-P
Current Effective Date: 07/01/2013
Original Effective Date: 07/01/2008
Revision Dates: 07/01/2013
Revision Number: 1
Responsible Official: System Treasury
- Section 3.3.1 - Regulations Concerning Bank Accounts and Deposits
- Section 3.3.2 - Establishing and Maintenance of College Bank Accounts
- Section 3.3.3 - Electronic Fund Transfer of Cash Balances
Section 3.3.1 - Regulations Concerning Bank Accounts and Deposits
Kentucky Revised Statutes requires that all receipts to be placed in appropriately designated bank accounts. Specifically:
- 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.
- 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.
- Records must be kept to report adequately each amount received, from whom received and the date received, and be easily reconcilable.
Section 3.3.2 - Establishing and Maintenance of College Bank Accounts
The Kentucky Community and Technical College System (KCTCS) Board of Regents has designated the President, Vice President of Finance and Treasurer, and Assistant Treasurer as the 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:
- Complete Treasury Form "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.
- Send the completed TM2 form to the System Office of the Assistant Treasurer for approval.
- The Assistant Treasurer will contact the depository bank to initiate and complete the establishment, change, or closing of the account as requested and approved.
- If an account a new account is being established or an existing account changed, the Assistant Treasurer will establish the electronic fund transfer process for the account and transmit the appropriate instructions to the College’s chief business officer.
- The college will be responsible for contacting the bank for purchasing all supplies (deposit tickets, deposit bags, etc.) and will be responsible for their cost.
- Fees associated with college bank accounts are an expense of the college and are to be paid by the college.
- The college will be granted inquiry capability on accounts established for the college and will be responsible for receiving all bank correspondence, such as monthly statements and advices, and will be expected to resolve all routine banking matters as they arise.
Note: The above procedures do not apply to the establishment of imprest bank accounts. Please refer to Business Procedure 4.24 for establishing imprest bank accounts.
Section - 3.3.3 Electronic Fund Transfer of Cash Balances
Each college will be responsible for transferring appropriate cash balances from their local depository bank to the KCTCS central depository bank on a timely basis:
Each college depository bank account will be allowed to maintain an ongoing compensating balance of up to $5, 000.00 to cover bank fees, returned checks charges, and debit deposit correction charges. The college will transmit by electronic fund transfer all funds in excess of the compensating balance amount when the bank account balance exceeds the compensating balance by $5,000, or at least weekly, whichever occurs first. The Assistant Treasurer may approve a compensating balance other than $5,000.00 for a particular college as circumstances warrant. Please contact KCTCS Treasury for details.
It is not necessary to record in the general ledger an entry for the electronic transfer of funds to the central depository, this entry will be posted by the KCTCS Office of Treasury. Note: The college will be responsible for ensuring that all other transactions posted to their bank accounts are recorded to the general ledger in a timely manner.