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Appendix VI: Non-Appropriated Funds Policy

APS-IH / May 2011

The following document is policy provided by the DFPS Office of Finance Accounting Division.

Non-Appropriated Funds Policy

November 10, 2003           

Background

From time to time DFPS employees become involved with Non-Appropriated Funds. These are generally donations that will not be deposited to DFPS accounts and are distinct from funds that are forwarded to State Office Accounting for deposit into the State Treasury, or Children’s Funds that are currently deposited in various accounts for the benefit of children in our care. Non-Appropriated Funds generally result from fund raising activities or accepting donations in association with any entity that is collaborating with DFPS in fund raising activities. The issue for DFPS is the stewardship of those donations. Donations may be by check, cash, gift cards, and airline vouchers; our primary concern is with cash, gift cards and ticket vouchers. Internal Audit has reviewed Non-Appropriated Funds in the regions and has determined that controls need to be strengthened.

Policy

District directors need to assess the situation in their respective regions to determine DFPS ’s exposure and the possible need for designating staff who will be primarily responsible for receiving these donations. The designated staff should be trained and have access to written instructions on how to handle the donations. If the exposure is great enough, two staff members should be available, especially if cash is involved.

DFPS employees (except for the Community Partners Coordinators) should avoid situations that require being the temporary custodian of donated funds. In situations where it is known ahead of time that donations will be received, the fund raising entity should establish a bank account and should be encouraged to establish a Post Office Box to receive the donations. Donors should be asked to donate directly to the entity and checks should be made payable to the entity and mailed to the Post Office Box or the entity’s street address. Checks should not be made payable to DFPS or an individual.

When DFPS staff have been designated to receive donated funds certain basic procedures need to be followed. These procedures and examples are guidelines and may be adjusted to work efficiently in various situations. They may be modified but should adhere to the basic elements to ensure proper control and accountability.

Receipt Books (Form 4100 available from Accounting) should be maintained in offices where significant amounts of donations may be received. Separate Receipt Books should be maintained for Non Appropriated Funds and those (DFPS) funds sent to State Office Accounting for deposit.

A log should be maintained (sample below) that tracks the donation from receipt to final disposition. The log and the receipt book should be reconciled and/or reviewed by the district director or designee on a regular basis. The person doing the review should not be the person designated to receive the funds. Missing receipts have to be investigated.

  •   Compare the Receipt Book to the Non-Appropriated Receipts Log.  All receipt numbers unaccounted for in the log should be noted and investigated.

  •   For each review/reconciliation period, the total amount in the log should equal to the total amounts listed in the transmittal letters plus the amount of any items on hand (undistributed).

  •   The district director designee responsible for the reconciliation should notify the district director, in writing, that review/reconciliation has been completed. The results of the revision/reconciliation should state that everything is accounted for, or give a detail listing of what is missing, plus the outcome of the investigation.

There should be a secure location (lock box, lockable file cabinet, etc.) for the donations until they can be transmitted to the proper entity. The transmittal of the receipts should be made to someone officially designated to accept them on behalf of the entity and should be done frequently, at least weekly. Note: No more than $3,000 should be kept on hand at one time.

In any situation where an official receipt book is not available a DFPS employee, for their own protection, should document, in writing, the receipt and disposition of a donation.

Below is an example of the Non-Appropriated Funds Receipt Log. The designated representative for the entity will sign-off and date this log upon transmittal of the receipts.

Non-Appropriated Funds Receipt Log-Region XX

Date

Donor Name

Purpose

Type (cash, check, etc.)

Amount

Receipt Number

Initials

Transmit

To

Sign-off

Date

1-1-02

ABC Corp.

XYZ Entity

Check

100.00

12345

Jcb

JRWIII

2-2-02

1-2-02

Car wash proceeds

XYZ Entity

Cash

150.25

12346

Tc

JRWIII

2-2-02

2-9-02

HEB

Child Abuse Prevention

Gift card

50.00

12347

dt

 

 

 

 

Reconciled by:RD Designee 2-10-02

 

 

 

 

 

 

Attached are examples of a reconciliation of the log and the transmittals, plus a Memorandum to the District Director for the reconciliation process.

Overview for the Policy on the Handling of Non-Appropriated Funds

  •   Bank account in entity’s name, Not DFPS.

  •   DFPS should avoid being temporary custodian of donated funds.

  •   Checks should not be made payable to DFPS. 

  •   Donations to DFPS are deposited at the State Treasury as General Revenue.

If employee is put in the position of being a temporary custodian of donations:

  •   Separate receipt books should be kept for Non-Appropriated Funds.

  •   A tracking log must be maintained for donations.

  •   Only transmit receipts to officially designated personnel of entity.

  •   No DFPS employee should have authorization to the community group/entity’s bank account.

  •   Reconciliation of receipt book, receipt log, and transmittal letter/sign-off.

  •   Notification of reconciliation to district director.

  •   Secure location for donations (lock box, etc.).

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