FN25 University Bank Accounts

CONTENTS:

• PURPOSE:
• SCOPE:
• DEFINITIONS:
• POLICY:
  • LIMITED DELEGATION OF AUTHORITY:
  • SIGNATURE AUTHORIZATION:
  • BANK STATEMENT RECONCILIATION:
  • COMPLIANCE:
  • RESPONSIBILITIES:
• SANCTIONS:
• FURTHER INFORMATION:
• CROSS REFERENCES:
• REVISION HISTORY:

PURPOSE:

This policy governs The Pennsylvania State University (“University” “Penn State” or “PSU”) University Bank Accounts and complies with the Office of Budget and Finance mission of providing effective fiscal leadership and stewardship of the University’s financial resources while partnering with the commonwealth campuses, campus schools/colleges and departments to manage funds, analyze and improve business processes and make strategic financial decisions that are compliant and timely.

SCOPE:

The University’s financial policies are applicable throughout the University, including all direct and indirect subsidiaries, and are required to be followed by all University employees who engage in financial, accounting, purchasing or other transactions, including University employees who in the course of their assigned duties engage in such transactions on behalf of third parties such as the Penn State Alumni Association or other related entities. The University’s financial policies are not applicable to Penn State Health or its subsidiaries, or Penn College of Technology, each of which has its own financial policies.

DEFINITIONS:

University Bank Accounts - For purposes of this policy, “university bank accounts” means all bank accounts (checking, savings, depository, money market, etc.) opened (1) for the University or any of its schools, departments, centers, institutes, programs, etc., (2) by or for any entity in which the University has an interest (such as an entity that may be established for overseas activities, or a subsidiary of the University); (3) by any entity with Pennsylvania State University tax identification number, and/or (4) in order to receive the deposits of or disburse University funds.

POLICY:

In accordance with the resolution passed by the Board of Trustees, the University Treasurer (or their delegate) is responsible for managing all banking operations on behalf of the University.

LIMITED DELEGATION OF AUTHORITY:

The University Treasurer has delegated banking operations, for the purpose of conducting University business, to the Treasury Office, a division of the Office of Budget and Finance.

University business areas or departments and their staff should not deal directly with any financial institution regarding the opening or closing of a bank account. Only the Treasury Office has the authority to enter into or modify banking agreements on behalf of the University.

All banking operations will be conducted and coordinated through the Treasury Office to achieve efficiency and avoid duplication of effort and bank accounts. The Treasury Office will review the requests to open a bank account to ensure that the bank account does not duplicate other university accounts and to ensure appropriate control procedures are in place, among other factors.

SIGNATURE AUTHORIZATION:

Requests for approval of signature authority shall be submitted to the Associate Vice President for Budget and Finance, through the Treasury Office for review and approval. The request shall stipulate the account title and number, the public depository, and the person(s) who are to have signature authority. Signature cards for all persons who will be authorized to sign on the account shall accompany the request.

Appointment of signature authority shall be for an indefinite period unless the request stipulates a specific period for approval of signature authority.

The Treasury Office shall maintain a file of individuals who currently have signature authority on University accounts held in public depositories.

BANK STATEMENT RECONCILIATION:

Frequent bank reconciliation is essential to prevent fraud and to ensure the University’s funds are managed with fiscal and fiduciary responsibility. Bank account reconciliation is a key component of good controls over cash and should be done in a timely manner. Reconciling the bank statement balance with the general ledger balance is necessary to ensure that (1) all receipts and disbursements are recorded (an essential process in ensuring complete and accurate monthly financial statements); (2) checks are clearing the bank in a reasonable time; (3) reconciling items are appropriate and are being recorded; and (4) the reconciled cash balance agrees to the general ledger cash balance.

Financial Reporting, a division of the Office of Budget and Finance, is responsible for developing and maintaining documented procedures for reconciling each bank account held by the University. A staff member who is not part of the cash receipt operation shall perform the reconciliation with manager oversight and review.

COMPLIANCE:

As part of the annual financial report preparation cycle, each institution must provide the Treasury Office with a list of all bank accounts, including the account name, number, and the name of all authorized signatories for that account.

RESPONSIBILITIES:

1. The Treasury Office is responsible for:
   
   1. Ensuring that the flow of funds throughout the university is performed in a secure and expeditious manner.
   2. Acting as the liaison between the university and the financial community
   3. Opening, closing, and monitoring the existence of all accounts holding university financial assets
   4. Counseling individuals managing university financial assets regarding the concept and importance of funds availability and fiscal accountability.
2. Financial Reporting is responsible for:
   
   1. Reconciling each University bank account
   2. Identifying and resolving items on a timely basis
   3. Maintaining records in accordance with Policy AD35 University Archives and Records Management

SANCTIONS:

Units that do not follow the guidelines set forth in this policy will at a minimum be held responsible for any fines or penalties.

FURTHER INFORMATION:

For questions or additional details, please contact the Treasury Office.

To request changes to this policy, please contact the Office of Systems & Procedures by submitting a GURU Technical Support Request form.

CROSS REFERENCES:

• The Pennsylvania State University Board of Trustee Bylaws
• Policy AD35 University Archives and Records Management

REVISION HISTORY:

• November 1, 2023 - original