Department of the Interior Departmental Manual
Effective Date: 7/6/01
Series: Financial Management
Part 331: Cash Accountability
Chapter 2: Control Procedures
Originating Office: Office of Financial Management
331 DM 2
2.1 Collections.
A. Managing cash collections is an extremely costly and labor intensive process, and alternate collection mechanisms (e.g. electronic fund transfers and accepting charge cards for payments) are strongly encouraged. Bureaus and offices are responsible for maintaining records of cash collections in sufficient detail to readily identify all collections from the point-of-receipt to the time-of-deposit. Cash collections should be reconciled monthly including reconciling general ledger to subsidiary ledgers for cash accounts, and reconciling cash balances with Treasury. Also, cash must be properly classified and reported in the financial statements in accordance with the Statement of Federal Financial Accounting Standards No. 1 Accounting for Selected Assets and Liabilities. Control records must be maintained which will disclose:
(1) Collections received.
(2) Collections which have not been deposited.
(3) Deposits in transit which have not been acknowledged by the depositary.
(4) Deposits which have been acknowledged by the depositary.
B. Internal procedures of bureaus and offices must provide for such controls as prenumbered receipts, tickets and cash register receipts, separation of duties, and other devices to assure full accountability. Proper control and records will also be maintained for checks and money orders received as bid deposits. Any instructions issued by bureaus and offices must conform to Departmental procedures and Volume I, Part 5 - Deposit Regulations of the Treasury Financial Manual (TFM). The management controls established for collections must also be consistent with the General Accounting Office=s AStandards for Internal Control in the Federal Government@ as described in OMB Circular A-123, AManagement Accountability and Control.@ Bureau instructions and Internet addresses for pertinent regulations and guidelines should be provided to each collection officer or be readily accessible for his/her use on a daily basis. Additional information can be found on the Internet at www.financenet.gov; then go to AFMS@; click on ATFM@; and follow the instructions to locate the specific topic to review.
2.2 Safeguarding Public Funds.
A. Only employees designated in writing by proper authority are to receive, handle, or deposit public moneys.
B. Undeposited funds must be kept in a fireproof safe, or safe-type cabinet with a bar and combination lock. Under no circumstances will public moneys be held in desk drawers or other devices where they are readily susceptible to theft. In any situation where a fund custodian has to leave the physical location of funds, the funds must be secured in a fireproof safe, or safe-type cabinet with a bar and combination lock as that used by the custodian at the close of business.
C. Only those designated employees having direct responsibility for the funds shall have access to the funds storage facility or area.
D. Where there is change in a collection officer or alternate, the safe combination must be changed. The safe combination must be placed in a sealed, signed, and dated envelope and retained in a secure place. Collection officers are responsible for the security of any copy of the safe combination which has been documented for their personal use. No further copy or copies of the safe combination or any annotations of any kind will be maintained by the collection officer or be made known to anyone. Safe combinations should also be changed at least annually.
2.3 Deposits.
A. Deposits of all funds received for crediting to the U.S. Treasury must be made without delay. Unless otherwise authorized, depositors of public moneys will deposit funds at the nearest Federal Reserve Bank (FRB). When authorized by the U.S. Treasury, deposits may be made at a general depositary if one is located near the depositor. Depositors should limit their deposits to one each day. It may be necessary for depositors to set a Acutoff@ time in connection with the preparation of deposits, after which deposits received are processed the next business day. The cutoff hour should be established at the latest practicable time so that the maximum amount of funds will be deposited each day and allow deposits to reach depositaries prior to its cutoff time. Collections must be deposited in accordance with Departmental procedures and Part I - TFM Chapter 5.
B. Deposits should be mailed to a general depositary or FRB, unless over-the-counter deposits have been authorized by Treasury=s Financial Management Service (FMS). Where deposits are mailed to FRB for deposit, no expenses incurred in mailing deposits shall be deducted from the amount of the deposit. The fee for converting cash collections to postal money orders is payable from the government issued charge card, convenience check, imprest fund, or third party draft.
C. All deposits made with the FRBs are processed through the FMS=s cash concentration and reporting network, called CA$H-LINK.
D. Currency and coins must not be submitted to depositaries through the mail. Commercial banks can be authorized by Treasury to issue bank drafts in exchange for cash or coins received from the public.
E. When a justifiable need exists for a local bank to be designated as a Federal depositary or be authorized by Treasury to issue bank drafts, bureaus and offices will forward a request to the FMS to make the necessary arrangements. Such requests are to be submitted 45 days in advance of commencing deposit activities. This lead time is required for Treasury to complete the necessary arrangements associated with the designation of a bank as a Federal depositary. Requests for designation of a depositary must contain the following information:
(1) The name and location of the bureau/office=s current depositary.
(2) The time and manner in which deposits are made with the current depositary.
(3) The name and location of the proposed depositary (specifying the name and location of the branch bank, if applicable).
(4) The time and manner in which deposits will be made with the proposed depositary.
(5) The total dollar amount deposited monthly.
(6) The total number of checks (including Treasury checks) deposited monthly.
(7) The dollar amount and number of Treasury checks deposited monthly.
(8) The amount of cash deposited monthly.
(9) A brief statement outlining why a minority bank cannot be used if the proposed depositary is not a minority bank.
Such requests are to be submitted directly to Treasury with a copy to the Departmental Office of Financial Management (PFM). When the necessary arrangements have been completed, Treasury will notify PFM which will then notify the bureau or office.
2.4 Minority Bank Program. It is Government policy that deposit balances in minority banks be increased on a voluntary basis. To increase the deposit balances in minority banks, bureaus and offices should consider using a minority bank whenever it can serve as a depositary or provide other required banking services without an appreciable increase in administrative costs.
A. Treasury=s primary consideration in determining whether a minority bank will be used as a depositary will be the relative cost involved to the bureau or office in delivering the deposit to the minority bank. If, after considering the administrative and transportation costs, the Department recommends using the minority bank, Treasury will consider that request even if the Department=s current depositary is a FRB.
B. For additional information on the Minority Bank Deposit Program (MBDP), please go to the following Treasury web site: www.fms.treas.gov/mbdp/index.htm.
2.5 Administrative Examinations and Internal Reviews.
A. The basic authority for establishing and maintaining agency controls is vested in Section 113 of the Accounting and Auditing Act of 1950 (31 U.S.C. 3512), as amended by the Federal Managers= Financial Integrity Act (FMFIA) of 1982. Both acts require that appropriate accounting and internal controls over assets be established and maintained, and that ongoing evaluations and reports on the adequacy of the systems of accounting and internal controls be performed. In addition, OMB Circular A-123 Revised, AManagement Accountability and Control,@ provides the guidance for implementing the FMFIA.
Specifically, OMB Circular A-123 requires that Federal managers take systematic and proactive measures to (1) develop and implement appropriate, cost-effective management controls for results-oriented management (i.e., ensure programs and resources are protected from waste, fraud, and management, and that laws and regulations are followed); (2) assess the adequacy of management controls in programs and operations; (3) identify needed improvements; (4) take corresponding corrective action; (5) report annually on management controls.
B. In order to adequately discharge this responsibility and to ensure that the prescribed administrative procedures are being followed, bureaus or offices will conduct a management control review or similar internal study of all collection activities in accordance with the Department=s 340 DM on Management Accountability and Control.
(1) In planning the frequency and depth of an internal control review, due consideration should be given to identifying the relative risks and use statistical sampling techniques where possible to verify established controls are being performed and that they are adequate.
(2) Management control reviews or studies are to be conducted independently (i.e., they should not be conducted by the collection officers performing the function) to assure that the policies and procedures used provide effective controls over collections and balances for which collection officers are responsible; and that appropriate administrative actions are taken to correct identified deficiencies.
(3) These reviews should include an examination of the numbered receipts of collections to ensure that receipts are properly accounted for, recorded, and that they support the collections and deposits reported (SF 215 Deposit Ticket and SF 5515 Debit Voucher) through FMS=s cash concentration and reporting network, called CA$H-LINK.
(4) A verification of the cash amount recorded and entered into the accounting system and reported cash balance with Treasury in the financial statements with the source documents should also be included as a test of the cash accountability procedures.
(5) Bureaus and offices should periodically review their increased vulnerability or risks from check theft and check tampering because of advances in modern technology such as chemical washing of checks (changing dollar amount and payee), counterfeiting checks using desktop publishing equipment, and other techniques. In addition, the review or study should include an examination of the safeguarding facilities and procedures for conformance with 331 DM 2.2.
(6) Bureaus will prepare and submit a written summary report on the results of the management control review or study conducted to the bureau head by the office in charge of the collection activity. A copy of the report should be submitted to PFM. The report should also include any recommendations and corrective actions to address identified deficiencies.
7/6/01 #3370
Replaces 3/5/82 #2391