Establishing and Closing University Bank Accounts
All funds belonging to Iowa State University must be deposited in an Iowa State University bank account. Bank accounts used to conduct University business must be approved by the Treasurer of Iowa State University, who is the only individual authorized to open bank accounts. The use of personal checking or other bank accounts for depositing University funds is prohibited.
University employees should not be dealing directly with any financial institution regarding the opening or closing of bank accounts. Only the University Treasurer or his/her delegates have the authority to enter into or modify banking agreements on behalf of Iowa State University.
Procedures for Petty Cash Funds Requiring Checking Accounts for Disbursements
- The Treasurer of the university will determine the financial institution where the checking account is to be established. The name of the account should be "Iowa State University--(Name of the Project)."
- The Treasurer of the university must be included as one of the authorized signatures on the account. The signatures must be updated as needed. Only current designated employees and the Treasurer can be signers for the account.
- The funds deposited to this bank account are only available for the requested purpose, bank charges, and cost of checks. The use of these funds for any other purpose would have to be authorized in advance of the disbursement(s).
- Replenishment of the petty cash funds deposited to this bank account should occur on a timely basis. The replenishment should follow the procedures identified in Procedures for Replenishing Petty Cash Funds. It is expected that a reconciliation will be submitted to Accounting on a monthly basis, consistent with the bank statement cycle.
- When the need for the checking account no longer exists, the University Treasurer is to be notified of the intent to close the bank account. All unused checks should be turned over to the Treasurer, along with a current bank reconciliation. It will be the responsibility of the employee to formally close the account and appropriately transfer all funds remaining in the account.
- Occasionally, a check may remain outstanding for an extended period of time. If it is expected that the check will not be cashed by the subject (outstanding at least 180 days), the amount of the check(s) should appear as a credit on the next petty cash voucher submitted by the employee. The effect of the credit will be to reduce both the expenses charged against the university fund account and the amount of the replenishment. When a check is written off in this manner, it must be added back to the checkbook balance and eliminated from the outstanding check total used in reconciling the bank account.
- When a check must be reissued to a subject; (e.g., the original check was lost or possibly stolen), a stop payment notification must be communicated to the financial institution with whom the bank account is maintained. Such checks should not appear on any future replenishments of the account.
- Any interest earned on the account, net of bank fees, should be recorded to the Treasurer's temporary investment account (950-10-01, class 056-50). If the funding source was federal, contact the Sponsored Programs Accounting Office for the appropriate account number to credit.
- In order to provide adequate separation of duties, the bank reconciliations should be prepared monthly by someone other than the person writing the checks. A copy of the bank statement and the reconciliation should be submitted to Accounting. The department is responsible for reconciling both the checkbook balance to the bank balance and the bank balance to the amount of the petty cash advance. These reconciliations should be done no later than ten working days after receipt of the statement. Should you require any assistance with the reconciliation process, please contact Accounting at 4-5124.
