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					                               Electronic Fund Transfer (EFT) Issues

There are several types of EFTs and related online transactions that Districts may be interested in:
   1. Payroll Direct Deposit
   2. Banks requesting us to pay our Federal withholdings by electronic fund transfer
   3. The option of paying various bills online
   4. Banks requesting that customers receive statements online

The specific problem Extension Districts have, which other government subdivisions do not have, is
that we do not have a full-time, on-site treasurer who can handle these transactions. Counties have an
elected, paid treasurer. Cities have an elected, paid clerk. School districts have a special provision in
the law to be able to hire a bookkeeper who can handle their finances.

Problems Extension District’s have in transferring money between accounts or to another account by
EFT is that the elected Treasurer is the only person who can legally transfer money by phone or
online or can have passwords to our accounts which are required online.

Not having an onsite treasurer will cause some difficulty, but we should be able to develop adequate
procedures that work for us. On phone transactions, we can probably create parameters by setting up
with the bank to only transfer between the District’s accounts by phone. Online transactions create
problems in the use of the password. These may be insurmountable. Direct Deposit payroll is more
manageable.

Direct Deposit process boils down to these steps in the process for payroll:
    Establish a policy.
    Sign an agreement for electronic payments with the bank.
    Expect to pay for this service.
    Gather information from employees to set it up
    Employee turn in time sheet for payroll
    Supervisor approve time sheet
    Bookkeeper prepares EFT payroll instruction
    Treasurer approves by signing instruction (similar to signing payroll check)
    Instruction delivered to the bank
    Bank follows instructions and transfers funds to employee’s account

Problems Districts need to be aware of when they do EFT’s:
   1. Staff signing for financial procedures is probably illegal within our law. The State Auditor’s
       position is that the only person who can sign financial transfers – checks or deposit transfers –
       is the elected treasurer and possibly another appointed Council member in emergency
       situations.
   2. Sloppy procedures allowing for potential misuse of funds.




Created on 11/4/2003 11:14 AM by Cal Johannes

				
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