FMPM 221 Bank Accounts

Scope

To set out the requirements for the establishment and maintenance of bank accounts, reconciliation requirements including management of unpresented cheques, unidentified receipts, returned payments and stop payment procedures.

Definitions

Bank Account

Suspense Account

Procedure

Establishment

The University has established banking facilities with the Commonwealth Bank of Australia. The banking arrangements meet the conditions as set out in FMPM 220: Policy - Bank Accounts.

New Bank Accounts

Requests to open new bank accounts should be discussed with the Manager, Treasury and Corporate Finance.

A written request should then be forwarded to the Chief Financial Officer.

Where appropriate, the Chief Financial Officer will:

• submit a recommendation, for approval by the Deputy Vice Chancellor, Services and Resources to open a new bank account other than with the primary transaction bank; and

• for bank accounts held in a foreign currency, make a submission for approval by Queensland Treasury.

Following approval to open a new bank account, the Manager, Finance and Taxation will:

• complete and lodge the appropriate authorised bank form with the bank; and

• update the register of bank accounts.

Where a new bank account is with a bank other than the Commonwealth Bank of Australia, the Chief Financial Officer must report details of the new bank account to Finance Committee as soon as possible after its establishment.

Closure of Bank Accounts

Where, after appropriate consultation, the Chief Financial Officer decides a bank account is no longer necessary, the Manager, Treasury and Corporate Finance must:

• ensure all transactions with respect to the account (including cheques drawn) have been completed;

• lodge with the bank a letter, signed by two authorised signatories advising of the closure of the account;

• meet the bank's requirements with respect to account closure; and

• update the register of bank accounts.

Register of Bank Accounts

A register of bank accounts must be maintained detailing:

• the name, address and branch of the bank;
• the name and number of the account;
• any overdraft limits that apply; and
• the terms, conditions and signatories to the account.

Banking Arrangements

All banking arrangements must provide for the following conditions with respect to all accounts:

• all correspondence regarding the accounts must be addressed to the Chief Financial Officer;
• account names must include the name “James Cook University” or an abbreviation as approved by the Chief Financial Officer;
• a cheque or other paper based form of withdrawal must not be accepted unless it carries the signature(s) of a person(s) authorised to sign;
• electronic withdrawals must be subject to segregation of duty, delegation and review controls;
• a certificate of balance and a bank statement or record of transactions must be available on request by an authorised person; and
• paid cheques must be available on request by an authorised person.

Variation to Terms and Conditions

Banking arrangements will be made or varied by the Manager, Treasury and Corporate Finance on instruction from the Chief Financial Officer.

The Manager, Treasury and Corporate Finance must update the register of bank accounts to include details of the variation.

Bank Reconciliations

A reconciliation between the Bank Statement Balance and the General Ledger Balance must be prepared weekly on the General Bank Account and at the end of each accounting period for all other bank accounts.

The following Officers:

• General Manager, JCU Halls of Residence - Residence Accounts

• Manager, Treasury and Corporate Finance, Financial and Business Services – All other bank accounts

are responsible for ensuring:

• each bank reconciliation is promptly and correctly prepared;

• the necessary action is taken in respect of all reconciling items disclosed by the reconciliation; and

• the reconciliation is signed and dated by the preparing officer to indicate the performance of this duty.

The reconciliation and supporting documentation must be forwarded to the preparer’s immediate supervisor for review and written approval.

Reconciling items

The Officers responsible for the preparation of the bank reconciliations are also responsible for the management of outstanding deposits, unidentified deposits, electronic returns and unpresented cheques.

Outstanding Deposits

Receipted funds which remain unbanked for 3 business days must be referred to the Manger, Treasury and Corporate Finance for immediate action.

Unidentified Deposits

Electronic deposits which are not identified within 3 months should be receipted to a suspense account for unidentified deposits. Investigation should be carried out to identify the origin of any unidentified deposits until all means are exhausted.

Unidentified deposits held in the Suspense Account for more than 6 months must be reported to Finance Committee.

Subject to the approval of the Chief Financial Officer, unidentified deposits held in the Suspense Account for more than 12 months are to be transferred into Consolidated Revenue. These amounts should also be included in the schedule of suspense items for the information of Finance Committee.

A record of all unidentified deposits will be maintained and must provide the following information:

• the receipt number;

• the date received;

• details that were available from the bank statement; and

• the value.

Electronic Returns

Electronic returns are electronic funds transfers that have been made by the University but could not be applied to the destination bank account, usually due to incorrect bank account details. The destination bank electronically returns the funds back into the University’s originating bank account.

The Banking Officer notifies:

• Salary and wage returns to the Human Resources Directorates. Human Resources Directorate will identify the correct bank details and liaise with the Procure to Pay Team to reissue the payment; and

• Accounts Payable returns to the Procure to Pay Team, who will correct the bank details and reissue the payment.

Unpresented Cheques

Cheques drawn more than twelve (12) months prior to the date of the bank reconciliation are considered to be long outstanding.

Long outstanding cheques (excluding salary and wages cheques):

• of value less than $500 will be written back to Operating Funds.

• of value equal to or greater than $500 will have a letter sent to the payee requesting the payee to:

  • present the cheque within 14 days to avoid cancellation; or

  • return a signed statement that the cheque is lost and request a replacement cheque.

• Where no reply is received or the cheque is not presented within 14 days the procedure relating to long outstanding cheques of less than $500 will apply.

Salary and wages cheques outstanding greater than 8 weeks will be referred to the Human Resources Directorate by the Banking Officer for action in accordance with University policy and Government Regulations.

Where a cheque that has been written off is subsequently presented, the cheque will be reinstated against Operating Funds.

Stop Payment of Cheques

Legislation permits banks to honour any cheque presented within 15 months from the date the cheque was issued that has not been subject to a stop payment request.  Stop payment requests remain in force for 15 months from the time of the request.

Where it is necessary to stop payment of cheques on any bank account, an Urgent Stop Payment Notice can be used.

The Manager, Strategic Procure to Pay is responsible for:

• ensuring that the cheque has not already been presented at the bank;

• obtaining authorisation to action the stop payment using an Urgent Stop Payment Notice;

• faxing the Urgent Stop Payment Notice to the bank to advise details of the stop payment;

• monitoring confirmation of action from the bank;

  • filing a copy of the Urgent Stop Payment Notice; and

  • attaching supporting documentation of the cheque which has been subject to the Urgent Stop Payment Notice to the Urgent Stop Payment Notice.

A record of stop payment cheques must be maintained and provide the following information:

• cheque number;

• date drawn;

• payee;

• value;

• date of stop payment action;

• reason for the stop payment action;

• replacement cheque number (if any); and

• batch number of the stop payment cheque entry.

Related documents and legislation

Statutory Bodies Financial Arrangements Act 1982, Sec 31

For enquiries in relation to this FMPM Procedure please contact [email protected].

Administration

Approval Details

Revision History