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Unpresented Cheques and Unclaimed Monies Policy

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									                                                             Unpresented Cheques and Unclaimed Monies Policy



       This document is
   uncontrolled when printed.




                     Unpresented Cheques and
                     Unclaimed Monies Policy

RESPONSIBLE UNIT                      Financial Management Compliance Unit

DATE OF ISSUE                         February 2011

DATE OF OPERATION                     February 2011

DATE OF REVIEW                        October 2011

AUTHORISED BY                         Director, Finance and Investing

FURTHER INFORMATION                   Assistant Director, Financial Accounting and Compliance
                                      Telephone: 8226 2012




DOCUMENT CONTROL
Approved by:                                                                                         Date approved:
Chief Executive                                                                                      29 March 2011


                                        ……………………………………………………………..………….
                                                                    sign
Endorsed by:                                                                                         Date endorsed:
Deputy Chief Executive, Resources                                                                    17 March 2011


                                        ……………………………………………………………..………….
                                                                    sign
Recommended by:                                                                                      Date recommended:
Executive Director, Finance and                                                                      11 March 2011
Infrastructure

                                        ……………………………………………………………..………….
                                                                    sign
Contact person:
Anthony Creek, Assistant Director,
Financial Accounting and Compliance

Version:                                Status:                                                      File number:
Version 1.1                             Final                                                        10/3084-2

                                        Next review date:                                            Security classification:
                                        October 2011                                                 Unclassified Document




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                                                                            Unpresented Cheques and Unclaimed Monies Policy




                                         TABLE OF CONTENTS


1.      Purpose ........................................................................................................................ 3
2.      Scope............................................................................................................................ 3
3.      Definitions ..................................................................................................................... 3
4.      Policy Statement........................................................................................................... 3
5.      Policy Details to Policy Statement................................................................................ 4
  5.1 Resolving Unpresented Cheques and Uncliamed Monies........................................... 4
  5.2 General information on unpresented cheques ............................................................. 4
    5.2.1    Cheque Register .................................................................................................. 4
    5.2.2    Monitoring Unpresented Cheques ....................................................................... 4
    5.2.3    Re-Issuing Cheques ............................................................................................ 5
    5.2.4    Cancelling Cheques............................................................................................. 5
  5.3 General information on Rejected Electronic Funds Transfers ..................................... 5
  5.4 Register of Unclaimed Monies...................................................................................... 5
  5.5 Reconciliation of Unclaimed Monies ............................................................................ 6
  5.6 Amounts Older than 15 Months.................................................................................... 6
  5.7 Late Presentation of Cheques ...................................................................................... 6
Appendix 1 - Template reminder letter – 60 days ..................................................................... 7
Appendix 2 - Template reminder letter – 90 days ..................................................................... 8
Appendix 3 - ‘Certification of Unpresented Cheque’ form. ........................................................ 9
Appendix 4 - ‘Approval for the Cancellation of Unpresented Cheque’ form............................ 10




                                                       REVISION RECORD

           Date                    Version                                             Revision description
     29 March 2011                   V1.1
                                                     Final




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                                                     Unpresented Cheques and Unclaimed Monies Policy




         Unpresented Cheques and Unclaimed Monies Policy


1.       Purpose
The purpose of the ‘Unpresented Cheques and Unclaimed Monies Policy’ is to provide
guidance on the management of unpresented cheques and unclaimed monies.

2.       Scope
It is the responsibility of both the Department of Education and Children’s Services and
Shared Services SA to ensure that the management of unpresented cheques and unclaimed
monies is consistent with this policy.

3.       Definitions
The Department:
The Department refers to the SA Government administrative unit known as the ‘Department
of Education and Children’s Services’, established under the Public Sector Act 2009.

Shared Services SA:
The term ‘Shared Services SA’ is commonly intended to mean the Department of Education
and Children’s Services’ Procure to Pay Services and Payroll Services teams of Shared
Services SA, Department of Treasury and Finance.

Stale Cheque:
In accordance with the Cheques Act 1986 (Cwth), a cheque that has not been presented for
payment within 15 months of being written. The bank may not honour it, returning it marked
‘out of date’.

Unclaimed Monies:
Unclaimed money is a sum of money payable to a vendor which has remained unpaid
because DECS have not been able to locate and return the money to the rightful owner.
Examples of unclaimed money include rejected EFTs.

Unpresented Cheque:
An Unpresented Cheque is a cheque which has been created and dispatched, but has not
been presented to a financial institution for banking.

Void Cheque:
A Void Cheque is a cheque which is no longer accepted by the Financial Institution. Voiding
a check is the process of arranging with the financial institution to no longer accept a
particular cheque.

4.       Policy Statement
DECS officers will ensure that:
     •   all practical means will be undertaken to remind persons entitled to outstanding
         cheques to present the cheque or request a new cheque to be reissued;
     •   when the Department of Education and Children’s Services or Shared Services SA
         becomes aware that a cheque has been lost, stolen or destroyed, a stop-payment
         advice should be issued to the bank, from which the cheque was drawn as soon as
         possible;
     •   Recipients of cheques which remain unclaimed after 60 days and again after 90 days
         will receive a reminder letter and are requested to either bank the cheque or complete
         the ‘Certification of Unpresented Cheque’ form (refer to Appendix 3) and advising that




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                                                      Unpresented Cheques and Unclaimed Monies Policy



          failure to bank the cheque or return the form may result in a stop payment notice
          being lodged with the bank on the cheque;
      •   Cheques that remain outstanding after 15 months are to have a stop payment notice
          lodged with the department’s bank. Void Cheques cannot be banked by the recipient
          of the cheque;
      •   Valid cheques drawn by DECS that remained unpresented after a period of 15
          months, must be transferred to object code ‘39111 Unclaimed Monies’ in the general
          ledger and added to the relevant unclaimed monies register including disclosing at a
          minimum, the following information:
          •   the name of the claimee as per the Department’s records;
          •   the total amount due to the claimee;
          •   a description of the nature of the unclaimed money; and
          •   date of the last claim.

5.        Policy Details to Policy Statement
5.1       Resolving Unpresented Cheques and Unclaimed Monies

Where an unpresented Cheque or a rejected EFT has been identified the transaction is to be
investigated to identify the reason for the item. In some cases cheques are not presented
because they have been sent in error or EFTs are rejected because the bank details are
inaccurate. In such instances the reason for the error is to be investigated and resolved.

5.2       General information on unpresented cheques

‘Unpresented Cheques’ occur for the following reasons (not exhaustive):
          •   The original cheque had been misplaced and therefore the recipient is unable to
              present the cheque to a financial institution,
          •   The original cheque was never received by the recipient and therefore the
              recipient is unable to present the cheque to a financial institution,
          •   The original cheque had been badly damaged and was not accepted by the
              financial institution,
          •   The recipient has not banked the cheque because the cheque was raised in error
              and the recipient is not entitled to the payment, or
          •   The cheque is a duplicate of another cheque which has previously been banked.

Under the Cheques Act 1986 (Cwth), a cheque is deemed to be stale if it has not been
presented within 15 months of it being issued. However, in most cases, Westpac will still
honour cheques that have been issued for a period exceeding 15 months. Westpac will not
honour a cheque if the drawer has made a stop payment direction on the cheque.

5.2.1     Cheque Register

Shared Services SA will maintain a register of unpresented cheques. The register will contain
the following information (not exhaustive):
          •   Vendor Name and Number
          •   Cheque ID Number / Payment Reference
          •   Amount
          •   Cheque Date
          •   Comments

For reporting purposes, outstanding cheques will be classified in age bandwidths as follows:
          •   Greater than 60 days
          •   Greater than 90 days
          •   Greater than 12 months
          •   Greater than 15 months

5.2.2     Monitoring Unpresented Cheques



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                                                      Unpresented Cheques and Unclaimed Monies Policy




Shared Services SA is required to monitor and regularly review unpresented cheques,
including bank cheques, that have been outstanding for more than 60 days, 90 days, 12
months and 15 months to ascertain why the cheques may not have been presented and to
resolve any errors.

Shared Services SA will need to ensure that each of the unpresented cheques is not:
        •    A duplicate payment to the vendor, and if deemed a duplicate payment then the
             cheque needs to be cancelled;
        •    A payment to a staff member. These payments must be followed-up in all instances
             as they must not be transferred to ‘39111 Unclaimed Monies’.

Shared Services SA will be responsible for sending a reminder letter to all 60+ days and 90+
days unpresented cheque payees. Refer to Appendix 1 and Appendix 2 for a copy of the
template used to generate these letters. Attached to each of the letters will be the
‘Certification of Unpresented Cheque’ form (refer to Appendix 3).

Shared Services SA will maintain evidence that the reminder letters have been sent.

5.2.3       Re-Issuing Cheques

Upon the receipt of a completed ‘Certification of Unpresented Cheque’ from, which requires a
new cheque to be re-issued, Shared Services SA will cancel the related cheque prior to re-
issuing a new cheque.

Shared Services SA will ensure that the recipient has demonstrated their entitlement to the
payment by attaching appropriate supporting documentation (e.g. an invoice).

5.2.4       Cancelling Cheques

Upon the receipt of a completed ‘Certification of Unpresented Cheque’ from, which requires a
cheque to be cancelled, Shared Services SA is to seek approval from the Department prior to
contacting the Financial Institution.

Approval for the cancellation of all other cheques greater than 15 months will be sought from
the Department, using the ‘Approval for the Cancelation of Unpresented Cheque’ form in
Appendix 4, prior to contacting the Financial Institution.

The Department is required to approve the cancellation of cheques, using the ‘Approval for
the Cancellation of Unpresented Cheque’ form and return this to Shared Services SA for
documentary evidence.

The Department is required to approve all journals transferring credit balances from Cash at
Bank to ‘39111 Unclaimed Monies’.

Once appropriate approval is obtained from the Department, Shared Services SA will arrange
with the appropriate Financial Institution for the cheques to be cancelled/voided.

Once the Financial Institution has been advised of the cancellation, and confirmation has
been received, Shared Services SA will approve the necessary journals to transfer to the
amount from Cash at Bank to ‘39111 Unclaimed Monies’.

5.3         General information on Rejected Electronic Funds Transfers

Rejected Electronic Funds Transfers (EFTs) usually occur because of incorrect EFT details
(e.g. incorrect account number or BSB (Bank State Branch) number.

5.4         Register of Unclaimed Monies




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                                                     Unpresented Cheques and Unclaimed Monies Policy



Treasurer’s Instruction 2 ‘Financial Management’ requires that the Department maintains a
register showing all unclaimed money exceeding $10 which have not been claimed for 6
years or upwards.

This ‘Register of Unclaimed Monies’ is to be maintained by Shared Services SA. The register
will contain as a minimum the following information (not exhaustive):
        •   Vendor Name and Number;
        •   Vendor ID Number;
        •   Cheque Date;
        •   Cheque ID Number / Payment Reference;
        •   Amount; and
        •   Comments.

Once the journal reflecting the transfer of unclaimed monies is recognised, the unpresented
cheques register will be updated to record that the amount has been transferred to ‘Register
of Unclaimed Monies’.

5.5     Reconciliation of Unclaimed Monies

The ‘Register of Unclaimed Monies’ is to be reconciled to the General Ledger (account
number: ‘39111 Unclaimed Monies’) on a monthly basis by Shared Services SA. The
reconciliation is to be dated and signed by the preparer. The reconciliation is to be reviewed
and signed by an independent officer. Evidence of the reconciliation is to be maintained. An
electronic copy of the reconciliation (and supporting documentation) is to be provided to the
Department via e-mail each month (DECSFinancialCompliance@sa.gov.au).

The Department is required to monitor the reconciliation of unclaimed monies on an ad-hoc
basis.

5.6     Amounts Older than 15 Months

Amounts that remain unpresented after a period of 15 months after the cheque date are
journalled out from ‘39111 Unclaimed Monies’ into the associated expense line to reverse the
original expense. Such journals are still to be approved by the Department prior to processing.

5.7     Late Presentation of Cheques

If a Cheque that has been transferred to ‘39111 Unclaimed Monies’ is subsequently
presented and accepted at the bank, then Shared Services SA is required to raise a journal to
transfer the amount from ‘39111 Unclaimed Monies’ to Cash at Bank and remove the cheque
from the ‘Unpresented Cheques Register’ with a notation to the effect that it has been
presented and the date on which it was presented.




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                                                                     Unpresented Cheques and Unclaimed Monies Policy




Appendix 1 - Template reminder letter – 60 days




                   I:\CorpServ\Finance\Financial Management Improvement\Financial Mgmnt Compliance\Policies\Unpresented Cheques - 60 Days Letter.doc




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                                                                     Unpresented Cheques and Unclaimed Monies Policy




Appendix 2 - Template reminder letter – 90 days




                   I:\CorpServ\Finance\Financial Management Improvement\Financial Mgmnt Compliance\Policies\Unpresented Cheques - 90 Days Letter.doc




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                                                                                 Unpresented Cheques and Unclaimed Monies Policy




Appendix 3 - ‘Certification of Unpresented Cheque’ form.




          I:\CorpServ\Finance\Financial Management Improvement\Financial Mgmnt Compliance\Policies\Unpresented Cheques - Certification of Unpresented Cheque.doc




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                                                                                     Unpresented Cheques and Unclaimed Monies Policy




Appendix 4 - ‘Approval for the Cancellation of Unpresented Cheque’ form.




        I:\CorpServ\Finance\Financial Management Improvement\Financial Mgmnt Compliance\Policies\Unpresented Cheques - Approval for the Cancellation of Cheque(s).doc




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