Business Policies and Procedures Manual
Chapter 30: Finance
Unrecorded Funds in WSU Bank Accounts
For more information contact:
University Accounting Banking Reconciliation Team
509-335-2013 / firstname.lastname@example.org
- 1.0 Overview and Purpose
- 2.0 Applicability
- 3.0 Responsibilities
- 4.0 Procedures
WSU receives both domestic and international funds on a daily basis in the form of wire transfers, Automated Clearing House credits (ACH), checks, and cash deposits. These funds are deposited into the WSU’s operating accounts at Bank of America and US Bank. The recipients of these funds are various departments across campus.
Departments that receive non-grant funds are required to submit a Record Cash Sale business process in Workday, which is subject to approval by the University Accounting Banking Reconciliation Team and Bursar’s Office. For grant funds, Sponsored Programs Services records a Customer Payment using the Workday Record and Apply Customer Payment business process. These cash sales and SPS customer payments are then deposited by the Bursar’s Office and reconciled by the University Accounting Banking Reconciliation Team. (See the following Workday materials for instructions: Record Cash Sale and Record and Apply Customer Payment.)
Proper internal controls over financial reporting require that all transactions impacting University resources be recorded to Workday in a timely manner. In addition, University funds are to be used for University purposes and cannot remain unrecorded and undistributed for a lengthy period of time.
This policy addresses the treatment of unrecorded and, consequently, undistributed funds held in the operating accounts at Bank of America and US Bank. In particular, this policy specifies:
- The length of time unrecorded deposits are reported as reconciling items on the bank reconciliation;
- The process for recording the deposits to the accounting system, and
- The timeline and process for sweeping these funds to a centrally-held program maintained by Finance and Administration to redistribute according to University priorities.
The following requirements provide the authority for this policy:
- Proper internal controls over financial reporting require that all transactions impacting University resources be recorded to Workday in a timely manner. See BPPM 30.02 and 30.06.
- All University units collecting cash must develop and implement procedures that address the following elements of cash receipts:
- All receipts from approved sales of goods and services must be deposited into the University bank account using a Cash Sale in Workday. See BPPM 30.52, 30.53, and 30.56.
The University Accounting Banking Reconciliation Team and Treasury Services make every reasonable effort to determine the owner for unrecorded funds received by the bank. See the procedures for central Finance and Administration in Section 3.1.
Unrecorded deposits impact the University’s accounting records in the following ways:
- Deposits received by the bank but not recorded in Workday are carried as reconciling items on the bank reconciliation, and require tracking over time until the funds are recorded
- Deposits received by the bank but not recorded in Workday understate the balance for the cash general ledger account in Workday representing this bank account
When recipients claim their deposits and record them in Workday using a Cash Sale or SPS Customer Payment, the source of the receipt (typically revenue) is recorded. Workday account balances, and the associated revenue, accounts receivable, etc., are misstated when no Cash Sale or SPS Customer Payment is recorded.
All University schools, colleges, campuses, units and affiliate institutions must comply with this policy. Exceptions to this policy are to be rare and must be approved in advance by the Office of Finance and Administration.
- Reviews and approves cash sales received from the business units within two business days from when the associated funds have been deposited at the bank;
- Follows up with business units when cash sale are submitted but no deposit is recorded by the bank.
Sponsored Programs Services (SPS):
- Reviews bank statement lines for items related to grants;
- Applies grant payments using the Customer Payment business process;
- Works with the University Accounting Banking Reconciliation Team to identify SPS funds.
University Accounting Banking Reconciliation Team:
- Makes reasonable efforts to determine the owner for undistributed funds received by the bank. This entails, in part:
- Using bank remittance data to try and determine to whom the funds belong.
- Contacting the entity sending the deposit to have them provide recipient information.
- Providing business area contacts with the Workday report listing the unrecorded bank statement lines being carried on the bank reconciliation and in the University Accounting Banking Reconciliation Team’s holding program.
- Each month, records unreconciled bank statement lines to Workday that have been carried on the bank reconciliation for longer than 60 days;
- On June 30 every year, upon approval by the Associate Vice President for Finance and Administration, transfers undistributed funds that are more than 12 months old out of the holding program for redistribution according to University priorities, as set by the executive leadership.
- Submit Cash Sale business processes in Workday for all deposits expected to be received into the bank account no later than five business days following the deposit posting to the bank account
- Monitor departmental accounting activity to confirm that each cash sale has been recorded in Workday.
- Monitor the list of unrecorded deposits which is published in Workday, looking for deposits that should be recorded, and submit the associated Cash Sale business process.
- For deposits moved to the University Accounting Banking Team holding program, apply for receipt of these funds by providing substantiating documentation. Substantiating documentation must provide evidence that clearly demonstrates that the funds were received for the benefit of the business unit making the application.
Unrecorded wire and ACH deposits are carried as reconciling items on the University bank reconciliation for no longer than 60 days. At year end, all unrecorded bank statement lines are transferred to the holding program in accordance with the year-end checklist.
At each month end, any unreconciled bank statement lines carried as reconciling items on the bank reconciliation for longer than 60 days are recorded to Workday by crediting a holding program managed by University Accounting Banking Reconciliation Team.
Departments may claim funds that have been moved to this holding program after providing clear documentation to University Accounting Banking Reconciliation Team that substantiates their claim to the funds.
At the end of each fiscal year (June 30), any undistributed amounts carried in the holding program for more than 12 months are redistributed according to University priorities, set by the executive leadership. Once this occurs, these funds can no longer be claimed, even after providing supporting documentation substantiating the claim.
Revisions: October 2023 – new policy (Rev. 617).