Revision of Part VIII by HC120730072434

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									                    Department of Human Services                               Index: PRO1211
                  Online Directives Information System                      Effective: 7/1/06
                                                                             Review: 7/1/10




SUBJECT: Decentralized Cash Procedure

PROCEDURE

1. Decentralized cash accounts are accounts for which detailed cash transactions are not recorded
primarily through the statewide accounting system or the offline expense/check writing systems.
Management of the cash accounts is the responsibility of the offices, divisions, institutions, and units
of the Department of Human Services that establish and maintain them. Cash accounts may be
established for two types of funds:

1.1 Appropriated funds, examples including but not limited to:
    a. petty cash accounts
    b. patient payroll accounts
    c. patient payments accounts
    d. revenue transfer holding accounts
    e. emergency relocation fund for adult protective services clients

1.2. Agency Funds (non-appropriated), examples including but not limited to:
     a. patients' or clients' personal funds
     b. patients' or clients' benefit funds
     c. canteen funds
     d. housing rental security deposits
     e. funds received for specific purposes
     f.  child support collections
     g. conference registration fees from clients and/or persons that are not employees of the
        Department of Human Services.
     h. donor-restricted contributions received in support of program activities.

2. Decentralized cash accounts are subject to the following general policies:

2.1 Creation and management of cash accounts must be specifically authorized in writing by the
    appropriate departmental manager (such as the institution superintendent, division or office
    director, or other chief executive officer). The source and purpose of funds must be identified
    for each account.

2.2 Cash accounts must be registered with, approved by, and are subject to the periodic reporting
    requirements of the Director, Office of Financial Services (OFS). The Director, OFS or


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     designee will maintain a complete and accurate listing of registered cash accounts. County
     DFCS operating accounts, foster care trust accounts, and child welfare trust accounts are
     exempt from this requirement, as are representative payee accounts for Adult protective
     Services clients.

2.3 Funds must be deposited in a bank or similar financial institution with FDIC insurance
    coverage. Funds must be deposited within five business days of receipt. Agency funds in
    excess of immediate working capital needs must be placed in interest bearing accounts that
    provide the highest possible return reasonable. The maximum account balance insured under
    FDIC regulations is $100,000. Where bank accounts in excess of this amount are maintained
    as depository or holding accounts for appropriated funds, collateral insurance must be
    negotiated with the depository institution for coverage up to the highest amount that may likely
    be on deposit at any time.

2.4 With express permission of the Director, OFS, a reasonable amount of cash may be kept on
    hand to make change, provide patient and client allowances, or for local transportation (bus
    fares). Such funds must be maintained and reported in accordance with all requirements of
    this procedure.

2.5 Income to and expenditures from cash accounts must be in accordance with state and federal
    law, provisions of the trust or other agreement that initiated creation of the fund, and applicable
    policies and procedures of the Department of Human Resources.

2.6 All cash accounts must be operated in accordance with generally accepted accounting
    procedures by employees covered under the departmental surety bond. Account operations,
    including transaction recording, account reconciliation and reporting, must include provision for
    adequate and appropriate internal controls. Accounts are subject to periodic financial and
    operational audits by one or more of the following entities, to which records of accounts shall be
    made available:

         Georgia Department of Audits
         DHR Office of Audits
         Auditors from awarding federal or other agencies

2.7 Exceptions to these policies and the following procedures may be expressly permitted by the
    Director, OFS, provided such exceptions do not conflict with the intent of this Policy, or with
    generally accepted accounting procedures. Requests for exception must be made in writing,
    and are not in effect unless or until authorized and approved.


3.   All decentralized cash accounts are subject to the following procedures.

3.1 A plan of operation is required for each cash account. The plan shall remain on file on site and
    be made available for inspection when the account is audited. The plan shall consist of
    descriptive information on the purpose of the account, the source and intended usage of funds,
    and specific written procedures for the following tasks:


     a. approval of transactions


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     b.   receipt and disbursement of funds
     c.   recording transactions
     d.   reconciliation of funds maintained in bank account(s) and cash on hand
     e.   separation of duties and other internal controls
     f.   training plan for personnel responsible for operation of account
     g.   any other tasks as appropriate for effective management of the specific fund


3.2 Administrative responsibility for each cash account shall be assigned by the appropriate
    manager to a bonded employee who shall be designated in writing as the account custodian.
    The custodian shall be responsible and personally liable for all funds (cash on hand and bank
    deposits) in his/her custody, and shall accept this responsibility in writing. The custodian must
    be knowledgeable of the plan of operation, of generally accepted accounting procedures, of all
    requirements of this procedure and of other requirements of the Department as applicable to
    cash account management. To assure adequate internal control, managers should not name
    one person to be custodian of more than one fund. If this is not practical or feasible,
    compensating controls should be installed. Whenever there is a change of custodians, a full
    reconciliation and account of funds shall be performed at the time of transition. Any
    discrepancies discovered should be promptly resolved and appropriate entries made to the
    records of the account. The former and newly appointed custodian and the manager must
    certify in writing that funds have been properly accounted.

3.3 To request establishment, and each time changes occur in an existing account, the manager or
    account custodian shall complete form 5135 - Request to Establish or Change a Bank Account.
    Upon completion, the form shall be submitted to the division or office director for review and
    authorization. Requests for establishment of new cash accounts must have attached a copy of
    the plan of operation. Upon appointment, the account custodian shall certify in writing that
    he/she has read and understands the plan of operation for the account. This certification must
    be attached to form 5135, and it must be signed by the custodian. The certification must also
    include the specific statement that the custodian accepts responsibility for all funds in his/her
    custody as described in section 3.2 above. Authorized requests for establishment of or
    changes to existing accounts, with any attachments, shall be forwarded to the Director, OFS for
    approval. Any changes to the plan of operation deemed appropriate by the Director, OFS prior
    to approval of the account will be sent to the originating unit for incorporation. New account
    requests must also be accompanied by a description of how the account will enhance the cash
    management of the Department of Human Services.

3.4 The account name as shown on form 5135 and as registered at the depository bank must be in
    the following format:

          First line           Georgia Department of Human Services
          Second line          Formal name of account
          Third line           Name of unit establishing account
          Fourth line          Type of account (patients' benefit fund, canteen fund, etc; not
                               required if included in the second line)

    Titles of bank accounts with multiple owners (such as patients/clients personal funds) shall
    clearly indicate the fiduciary nature of the account so that FDIC or FSLIC insurance coverage
    up to the legal maximum will be afforded each owner should liquidation become necessary.


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3.5 Depositories that have an agreement with the Office of Treasury and Fiscal Services may
    assess service charges. Charges for imprinted checks and deposit slips for all petty cash,
    revenue collections, child support collections, patients'/clients personal funds and
    patients'/clients' benefit funds are operating costs to be borne by the State from appropriated
    funds.

3.6 The Director, OFS or designee shall maintain files for each account, including all required
    submissions (plans of operation, forms, periodic reports, correspondence, etc.), and shall
    maintain an accurate listing of all accounts. This listing shall include the locations of accounts,
    subsidiary chart of account numbers (SCOA) assigned by OFS, names of custodians, approved
    ceiling (if applicable), names of depositories, account numbers, and other data as deemed
    necessary and appropriate for inclusion.

3.7 Records and reports of account activity shall be maintained and/or submitted by custodians for
    each decentralized cash account in accordance with the following.

    a.   At minimum, a single entry account record shall be maintained by the account custodian
         reflecting on a monthly basis receipts, disbursements, and current balances for each
         decentralized cash account. For the following types of accounts maintained by the
         institutions of the Division of Mental Health, Developmental Disabilities and Addictive
         Diseases, additional records are required as indicated below.

          i.    patients benefit funds, patients personal funds, canteen funds
                (a)      cash book
                (b)      general ledger
                (c)      detailed subsidiary ledgers for each owner as needed

          ii.   patients payments accounts
                (a)      cash book
                (b)      general ledger
                (c)      subsidiary ledger as needed
                (d)      log of major sources of income

         iii.   patient payroll accounts
                (a)      cash book
                (b)      individual pay records

    b.   Records of each account must be reconciled monthly to the bank statements and/or cash
         on hand by the custodian. It is required that the reconciliation be reviewed and approved
         by the custodian’s supervisor. Copies of all monthly account reconciliations must be
         retained in the account files with explanatory and supporting documents for possible audit
         reference. The following reports are required to be completed periodically. Instructions for
         each form cited below are included with the attachments.

         i.     Monthly:
                Form 5136, Cash Account Reconciliation Report to be retained by account custodian.

         ii.    Quarterly:


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                Form 5136, Cash Account Reconciliation Report to be submitted to Director, OFS
                within 30 days after the end of the first through third quarters (due by October 30,
                January 30, and April 30). Due to the time constraints of state fiscal year closing the
                report for the fourth quarter will be due July 20.

         iii.   Annually:
                Form 5108, Decentralized Cash Account Annual Summary Report to be submitted to
                the Director, OFS by July 20 for the fiscal year ended June 30.

    c.   In every case of loss or theft of funds, unit chief executive officers should implement
         procedures set forth in _________of this manual, Prompt Investigation and Reporting of
         Accidents and Incidents.

3.8 All correspondence, reports of activity for decentralized cash accounts and requests for
    assistance shall be sent to the following address.

         Office of Financial Services
         2 Peachtree Street NW #27.295
         Atlanta, Georgia 30334-1202



4   Decentralized accounts containing appropriated funds are subject to the following procedures.

4.1 Decentralized accounts shall be established for collection and transfer of funds generated by
    revenue-producing activities (such as cafeteria meals sales and patient account collections), for
    operation of patient/client work activities, for departmental operating expenses to be paid locally
    (petty cash accounts).

4.2. Petty cash accounts may be established to provide for miscellaneous purchases and services
     needed immediately and for which payment must be made immediately. The initial ceiling
     amount will be set at an amount that is 1.5 times the estimated need for monthly operations.
     Upon subsequent review of actual account expenses or upon auditor's recommendations the
     ceiling amount will be adjusted with the approval of the Director, OFS as needed to maintain
     the ceiling at 1.5 times the average monthly expenditure rate. Under normal circumstances,
     accounts will not be established for any unit that expects fund expenditures to average less
     than $100 per month, or where the division or office has an existing account in the same
     geographic location that is reasonably accessible to the unit.

4.3 Expenditures of appropriated funds from petty cash are subject to the same restrictions and
    conditions for all departmental purchases. Petty cash account funds may not be used for
    purposes expressly prohibited by state or federal statutes or regulations. DHR employees may
    make authorized purchases of supplies, services, post office box rental, postage, and other
    items for amounts not to exceed $250 provided such purchases:

    a.   are approved in writing by organizational unit director or designee
    b.   are needed immediately and cannot be requisitioned with advance planning through the
         regular purchasing process or are of small value of less than $250.



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    c.   are not under statewide contract (statewide contract items may be verified by contacting
         the Purchasing Unit of the Procurement/Contracts Administration Section, OFS)
    d.   are reimbursable from state and/or federal funds

    Employees will be reimbursed from the petty cash account for authorized purchases.
    Reimbursement requires completion by the employee and approval by the organizational unit
    director or designee of form 5142, Petty Cash Voucher. The voucher must bear an original
    approval signature; stamped or facsimile signatures or initials are not acceptable.

4.4 In addition to purchases which meet the criteria in the preceding paragraph, uses of petty cash
    funds for the following purposes are permitted:

    a.   approved expenses associated with patient/client field trips; signed receipts are
         required
    b.   approved travel payments to consultants or other persons who are not employees of the
          Department of Human Resources, who provide services to the Department and
         require immediate payment; completion of form BSR, Bill for Services Rendered is
         required; reimbursement of expenses will be in strict compliance with ______________ of
         this manual
    c.   freight bills in excess of $250, provided all other criteria for purchases from petty cash
         account are met.
    d.   license plates for vehicles to which DHR has title.

4.5 Custodians of petty cash accounts will be reimbursed by OFS for approved purchases. A
    summary amount and description including the month for which reimbursement is requested
    (such as "petty cash expenditures for the month of _________, 20__") should be entered in the
    description field of the form. A detailed listing of each transaction included in the request for
    reimbursement must be attached. The transaction listing must include the check number,
    vendor, and amount of each purchase. Additionally each request for reimbursement must be
    accompanied by original invoices and approved petty cash voucher. Accounts will be
    reimbursed for multiple purchases in amounts which may exceed $250 provided no single
    purchase exceeds $250 except as provided above for freight bills. All requests will be
    examined for compliance with budgetary provisions and provisions of this procedure.

4.6 If reconciliation of petty cash accounts reveal out of balance conditions (shortages or
    overages), this should be reflected on the quarterly report form 5136 submitted to the Director,
    OFS with written explanation attached. Account analysis should be performed to determine the
    source of the out of balance condition, and appropriate action should be taken to restore the
    account to a balanced condition. If local efforts to correct the imbalance are being effected, the
    written explanation is sufficient. In cases of unexplained shortages or overages, the
    custodian's personal check or money order for shortages, or the fund's check for overages will
    be attached to the quarterly report sent to the Director, OFS.

5   Decentralized accounts containing non-appropriated or agency funds are subject to the
    following procedures.

5.1 Decentralized cash accounts must be established for accounting and safekeeping of agency
    funds which are non-appropriated funds held for disbursements to or for designated trust
    recipients. Agency funds include but are not limited to patients' and clients' personal funds


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     (deposited by them at the time of admission to DHR institutions or earmarked funds sent in
     their behalf by families, friends, retirement, pension and disability funds, estate distributions,
     etc.), funds donated for the general benefit of all patients/clients of the institution, child support
     collections, and other funds entrusted to the department which are not budgeted for
     departmental operations. Transactions of the Agency Funds must be approved by the bonded
     employee designated by the unit chief executive officer to administer the fund.

5.2 Officials authorized to accept contributions shall not maintain direct control over the obligation,
    expenditure, or disposition of such funds. The funds shall be administered by a board of
    directors, advisory board, or other managing body established for the fund or otherwise
    appointed in writing by appropriate authority. Contributions of money or property shall be
    accepted in writing and shall be recorded and accounted for in the same manner as other
    property of a similar kind maintained by the division, office, or institution but shall be
    distinguished from state owned property. Cash proceeds from the sale of donated property
    shall be deposited to the credit of the appropriate fund and shall be available for expenditure
    pursuant to other provisions of this procedure.

5.3 For audit purposes, the sources of all funds credited to the accounts of individuals will be
    encoded in the records of the account. Interest earned on bank deposits for multiple
    patients/clients personal fund accounts shall be distributed pro rata to each owner based on
    account balances as of the last day of the month or quarter in which interest was earned.
    Interest earned on multiple owner accounts shall not be deposited to general benefit fund
    accounts, nor expended for the general benefit of all patients/clients.

5.4 The administration of patients'/clients' personal funds, patients'/clients' benefit funds and
    child support collections is a departmental responsibility, and normal operating costs (including
    staff time, supplies, and the purchase of imprinted checks and deposit slips) should be charged
    to appropriated funds. State and other budget funds must be periodically reimbursed for any
    direct costs incurred which are chargeable to the non-budgeted activity.

5.5 For all non-appropriated funds except patients'/clients' personal funds and patients'/clients'
    benefit funds, if a profit is made from the activities of the fund the custodian shall reimburse the
    budget fund for trust fund administrative costs supported by budget funds. The custodian
    shall forward to the Director, OFS with form 5136 quarterly a check for the lesser of:

     a.   the excess of receipts over disbursements, or
     b.   the direct costs supported by the budgeted funds (e.g. percent of institution
          bookkeeper's time and supplies utilized for fund administration and record keeping,
          budgeted employee costs of canteen operations)


     The methodology for calculating the reimbursement to the budget fund shall be included in the
     plan of operation for the trust fund.

5.6 Patients'/clients' personal funds shall be returned to them upon discharge from DHR
    institutions. Should patients or clients depart sites before receiving their personal funds, the
    custodian shall make reasonable effort to locate them or their legal guardians and shall forward
    checks payable to the patients/clients at the address on record. If checks are returned as
    undeliverable and reasonable efforts to locate the patients/clients or guardians are not


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     successful, the unclaimed funds shall be disposed in accordance with instructions from the
     Georgia Department of Revenue for the disposition of unclaimed property or property that is
     presumed to be abandoned.

5.7 Upon the death of patients or clients the custodian shall dispose of decedents’ personal funds in
    accordance with the decedents’ final instructions or wills, with trust agreements as executed by
    the decedents and their parents or guardians, or with instructions from the Georgia Department
    of Revenue for the disposition of unclaimed property or property that is presumed to be
    abandoned.

5.8 Conference registration fees in excess the actual costs of each planned conference shall be
    remitted to the Department of Human Resources and shall be recorded as miscellaneous
    income to the division or office that planned and executed the conference.



A.   History
         This procedure replaces the Department of Human Resources Administrative Policy and
     Procedures Manual, Part VIII.C.1, effective January 3, 2006.

B.   Proponency
         Office of Financial Services
         Funds Management Section
         Phone 404 656-9793

C.   Attachments Located at http://www.ofs.dhr.georgia.gov/portal/site/DHR-OFS/
         1. Form 5135, Request to Establish or to Change a Bank Account
         2. Form 5136, Cash Account Reconciliation Report
         3. Form 5108, Decentralized Cash Account Annual Summary Report
         4. Form 5142, Petty Cash Voucher
         5. Form BSR, Bill for Services Rendered
         6. Form 5165, Basic Expenditure Form
         7. Form 5173, Expense Transaction Continuation Sheet




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