A2513 DEPOSITORY BANK ACCOUNTS - RED LINE 7-8-19.DOCX

MARICOPA COUNTY INTERNAL POLICY
Maricopa County Title: Number:
Internal Policy Title: Depository A2513
Accounts Issue Date:
DEPOSITORY BANK ACCOUNTS
Policy Number: 6/20/12
Current Adoption
Date:
Current
Implementation Date:
Approved By:
Policy Category: Finance
Maricopa Revision
County Board of No: N/A
Initiating Department: Department of
Supervisors and
FinanceApproved by:
Special Revision
BOARD OF SUPERVISORS DistrictsBoard Date: N/A
Agenda Number:
Original Adoption
June 2012
Date:
A.I. PURPOSE
The purpose of the Maricopa County policy for Treasurer Depository Accounts is to To
establish procedures and provide guidelines to guidance for County Departments/Special
Districts, for on the appropriate usage and reconciliation of Treasurer’s Office (Treasurer)
established Depository Bank Accounts.
II. AUTHORITY
Arizona Revised Statutes (A.R.S.) § 11-491 authorizes the County Treasurer to keep all money
belonging to the County. A.R.S. § 11-492 directs all County Departments/ to submit public monies
to the County Treasurer.
III. APPLICATION
This Policy applies to all Maricopa County elected and appointed departments as well as the
Flood Control District of Maricopa County, the Maricopa County Library District, and the
Maricopa County Stadium District (Special Districts). The Board of Supervisors is authorized
to jointly adopt policies applying to the Special Districts will be guided in establishing internal
controls to help ensure adequate segregation of duties for cash handling, recording,
and reconciling Depository Account under the Intergovernmental Agreement, C-06-18-393-
6-00, approved on April 11, 2018.
Page 1 of 7

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
Accounts Policy Issue Date:
DEPOSITORY BANK ACCOUNTS
Number: 6/20/12
Policy Category: Finance Initiating
Revision
Department:
No: N/A
Department of
Revision
FinanceCurrent
Date: N/A
Adoption Date:
IV. DEFINITIONS
A. Accounting String: Specific accounting codes used by the County’s financial accounting
system to identify, process and post transactions to the proper fund, department, unit,
agency, activity, and revenue and/or expense object codes.
Department/Special District directors and administrators are responsible for ensuring
that personnel are aware of and comply with the requirements of this policy.
B. DEFINITIONS
B. Agency Web: County Treasurer’s portal which facilitates the revenue processing cycle
and allows users to view Fund account balances, activity and various month-end reports.
Departments upload CRTs directly to this website.
C. Bank Statement – a Depository Account: A statement produced by the County’s
servicing bank ofwhich lists all financial transactions occurring in the Depository Bank
Account over a period of time, generally aone calendar month.
D. Cash Receipt Transmittal (Cash Receipt - CR) – County’s – CRT): An internal
processCounty document utilized by Departments to record theand post Depository Bank
Account transactions indirectly to the accounting ledgers (Treasurer’s and County-wide
Financial Accounting systems).accounting system and simultaneously to the County’s
financial accounting system. The Treasurer posts Cash Receipts as Treasurer’s
Receipts (TR) inCRT is uploaded directly to the Treasurer’s ledgers. accounting system
while a nightly interface creates a draft of the identical transaction in the County’s financial
accounting system.
E. Department – An administrative subdivision of Maricopa County. Examples are
: For the purpose of this policy, “Department” refers to any division of Finance, Office of
the Legal Defender, etc. the County, including elected and judicial branch offices and
Special Districts.
Depository Bank Account (Depository Account) – a): A bank account established for the benefit of a
specific Department by the Treasurer atwith the County’s servicing bank which allows for deposits of
public monies by County Departments/Special Districts. An account is established for the
benefit of a specific Department/Special District. A Depository Account utilizes two
separate general ledger accounts on the Treasurer’s system. The account allows for
Page 72 of 712

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
Accounts Policy Issue Date:
DEPOSITORY BANK ACCOUNTS
Number: 6/20/12
Policy Category: Finance Initiating
Revision
Department:
No: N/A
Department of
Revision
FinanceCurrent
Date: N/A
Adoption Date:
depository transactions only, without the ability to disburse money or issue checks.
Deductions from a Depository Account, other than the Departments. While operational
transfers done(also known as “sweeps”) are performed periodically by the Treasurer, are considered
exceptions and are limited to returned dishonored checks, charges/fees generated by
the servicing bank, and preauthorized credit card fees/disputed chargeback
transactions.
Fund – a fiscal and accounting entity with a self-balancing set of accounts segregated
for the purpose of carrying out specific activities or obtaining certain objectives in
accordance with regulations, restrictions, or limitations.
F. Special District – an administrative and political subdivision of Maricopa County
that has a Board of Directors and an independent taxingDepartments have no
disbursement or withdrawal authority, i.e., Flood Control District of Maricopa County,
Maricopa County Library District and Maricopa County Stadium District. with this
type of account.
G. Treasurer’s Bank Ledger Account (Bank Ledger Account) – an account): One of
two accounts on the Treasurer’s general ledger (e.g., 10-X25-XXX115XXX-100-XXXX)
that records the Depository Account transactions directly from the bank. A summary of
transactions areis electronically remitted to the Treasurer by the servicing bank on a daily
which are immediatelybasis and recorded to the Bank Ledger Account with an offsetting
entry to the Clearing Account (defined below). TheAs this occurs via an electronic
interface, the Bank Ledger Account ismust always be in agreement with the servicing bank
balance.
H. Treasurer’s Clearing Account (Clearing Account) – a pass-through account): One
of two accounts on the Treasurer’s general ledger (e.g., 30-025-XXX210100-100-1000-
XXXX-XXXXX) that facilitates the recording of Depository Account depository account
transactions from the servicing bank to the County’s account ledgers (on both the
Treasurer’s and County-wide Financial Accountingthe County’s financial accounting
systems). Money isAmounts are transferred fromout of the Clearing Account ledger and
posted to the identified County Fund(s) using a Cash Receiptdepartment-created CRT
submitted to and processed by the Treasurer.
I. Treasurer’s GeneralAgency Fund Ledger Report (Treasurer GL Report) – a
monthDetail Reports: Month-end reportreports produced by the Treasurer reporting all
Page 73 of 712

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
Accounts Policy Issue Date:
DEPOSITORY BANK ACCOUNTS
Number: 6/20/12
Policy Category: Finance Initiating
Revision
Department:
No: N/A
Department of
Revision
FinanceCurrent
Date: N/A
Adoption Date:
posted transactions for all accounts onmaintained by their accounting system, including
the Bank Ledger Account and Clearing Account. The report isreports are available at
https://treasurer.maricopa.gov/agency/ for to authorized users. at
https://treasurer.maricopa.gov/AgencyWeb.
C. USAGE
V. POLICY
A. County Departments/Special Districts are able to conduct necessary deposit
transactions through the Treasurer’s cashiering collection window. Certain
Departments/Special Districts experiencing a financial or operational burden whenin
making deposits atdirectly with the Treasurer’s Office may be approved for a Depository
Account atrequest approval to open a depository account with the County’s servicing bank
in order to facilitate deposits. In general, Depository Accounts allow for convenience
and efficiencies to both the County and others (e.g., citizens, taxpayers,
governments).the deposit process.
B. Once approved, Depository Accounts are The County Treasurer is responsible for
establishing new depository accounts. Requests for new depository accounts must receive
prior approval from the Department of Finance and the Treasurer’s Office and must be
established bywith the TreasurerCounty’s servicing bank.
C. Departments are required to justify the need for a depository account both when requesting
a new account and on an ongoing basis, once the account is established. Additionally,
Departments must fulfill their fiduciary responsibility with the use of the account as the
account is to be used primarily for facilitation of various Department/Special District
accounting revenue processing.
D. The Director (or designee) of each Department is responsible for establishing and adhering
to internal controls that ensure adequate security and segregation of duties for cash
handling, recording, and reconciling the depository account transactions.
E. Departments are only allowed to make deposit transactions which. Departments are not
granted check issuance or other disbursement authority. The servicing bank is allowed to
make deductions from a depository account for returned/dishonored checks, deposit
corrections, credit card processor fees and chargeback transactions. Allowable
Department deposit transactions include, but are not limited to, deposits of: :
Page 74 of 712

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
Accounts Policy Issue Date:
DEPOSITORY BANK ACCOUNTS
Number: 6/20/12
Policy Category: Finance Initiating
Revision
Department:
No: N/A
Department of
Revision
FinanceCurrent
Date: N/A
Adoption Date:
1)1. Cash and checks received for payment of services, fines, fees, etc.,
2)2. Credit card settlements for payment of services, fines, fees, etc., and
3)3. Electronic payments received as reimbursements or advancementsadvances
from various governments (Federal, State, and Local Governments) for grants and for
payment of services, fines, fees, etc., provided by the County.
F. Deposit transactions to a Depository Account can only be made by the following methods:
1)1. In person at the Treasurer’s Office,
2)2. In person at the County’s servicing bank,
3)3. Via an armored car delivery to the County’s servicing bank,
4)4. Via an electronic Image Direct Deposit (IDD) check reader,
5)5. Via an electronic direct deposit made by Automated Clearing House (ACH) or
wire transfer, and
6)6. Via a lockbox service established at the servicing bank for mailed in payments.
G. The use ofDepartments are encouraged to request electronic payment methods and/or
automated equipment, such as ACH, wire transfers, credit cards, IDD check readers, ATMs
and kiosks, which allow for less check/cash handling by employees, stronger internal
controls, and timely receipting of deposits.
D. RECORDING TRANSACTIONS
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Maricopa County Title: Number:
Internal Policy Title: Depository A2513
Accounts Policy Issue Date:
DEPOSITORY BANK ACCOUNTS
Number: 6/20/12
Policy Category: Finance Initiating
Revision
Department:
No: N/A
Department of
Revision
FinanceCurrent
Date: N/A
Adoption Date:
H. Recording revenues or expenditures To effectively record revenue transactions in the
proper accounting period is only achieved with timely and accurate submission of
Cash Receipts. A Cash Receipt records the financial transaction in the County’s
accounting ledgers (Treasurer’s and County-wide Financial Accounting systems).
Departments/Special Districts must prepare a Cash Receipt for all Depository
Account transactions. , Departments must record their depository transactions in a timely
and accurate manner in both the Treasurer’s and County’s financial systems. Transactions
not processed within the same month of the deposit date at the bank will result in timing
differences on the month-end reconciliation.
I. Depository clearing accounts must be reconciled by an employee whose job duties are
independent of cash handling or recording functions within 30 days of month-end close. All
reconciliations and supporting documentation must be retained in accordance with record
retention policies.
J. Fiscal year-end reconciliations for June activity must be submitted to the County Treasurer
and the Department of Finance within 45 days of year-end close.
K. The depository account is subject to external auditor review and/or read only electronic
access at any time by the Department of Finance, Internal Audit, and the Budget Office.
L. Failure to comply with all requirements listed herein shall result in the closure of the
Department’s depository bank account.
VI. RECORDING TRANSACTIONS
A. Departments must upload a Cash Receipts Transmittal form (CRT) formatted as a .csv file
to the Treasurer’s accounting system (Agency Web) for all depository account transactions
in order to ensure revenues and/or expenditures are recorded in the proper accounting
period and to the proper fund.
B. Delays in submitting Cash Receipts result in a loss of earnings to the depositing Fund
as the monies remain in the Depository Account until a Cash Receipt is processed
by the Treasurer. Delays also addCRTs may result in difficulty toperforming account
reconciliations and research. as well as a loss of interest income to the depositing fund.
C. Departments collecting receipts directly should deposit amounts at the bank daily, and
should timely upload the corresponding CRTs. Documentation for all CRT uploads, at a
minimum, should include the following information depending on the type of transaction:
Page 76 of 712

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
DEPOSITORY BANK ACCOUNTS Accounts Policy Issue Date:
Number: 6/20/12
Policy Category: Finance Initiating Revision
Department: No: N/A
Department of Revision
FinanceCurrent Date: N/A
Adoption Date:
Deposits collected by Departments/Special Districts should be deposited and remitted
daily, if significant, or at least weekly to the : date, accounting template number, complete
Treasurer.
Cash Receipts should indicate the following:
1)1. Deposits – date, accounting string, such as applicable fund,
Department/Special District, agency, revenue object code, approved
Treasurer’s source code, and amount deposited., preparer and approver names
(required to be two different Department or County personnel).
2) Deposit adjustments or deductions (e.g., returned dishonored checks , bank charges, and/or
credit card chargebacks) –invoice fees): date, accounting template number, complete Treasurer
accounting string, such as applicable fund, Department/Special District, agency,
revenue object code, approved Treasurer’s source code, and adjustment amount
indicated in parenthesis “($X.XX)”.
3)2. Deductions (e.g., bank charges and/or fees and credit card fees only) –
date, accounting string, such as applicable fund, Department/Special District,
agency, expenditure object code, and deductedwith a minus sign in front of the
amount indicated in parenthesis “($X.XX)”.“-X.XX” and preparer and approver
names (required to be two different Department or County personnel).
D. Other adjustments and corrections, such as those for monies deposited to the wrong
Treasurer’s fund/account, should be communicated to the Treasurer (Accounting
Division) for necessary journal entries to the County’s accounting ledgers.
processed as a journal entry (JV) in the financial accounting system, which will
automatically update the Treasurer’s accounting system during the nightly interface
process.
reconciliations
Specifically, the Treasurer’s process to record Depository Account transactions is as
follows:
1) A bank account transaction summary is electronically transmitted by the servicing
bank to the Treasurer’s Office daily.
2) Summary information is then recorded on the Treasurer’s system to the Bank
Ledger Account (10-X25-XXX) with the offset to the Clearing Account (30-025-
XXX).
3) Treasurer’s Office personnel process Cash Receipts prepared by
Departments/Special Districts to clear transactions out of the Clearing Account into
Page 77 of 712

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
DEPOSITORY BANK ACCOUNTS Accounts Policy Issue Date:
Number: 6/20/12
Policy Category: Finance Initiating Revision
Department: No: N/A
Department of Revision
FinanceCurrent Date: N/A
Adoption Date:
the indicated Fund on the Treasurer’s system. A stamped copy of the processed
Cash Receipt is forwarded to the Department of Finance where the transaction is
entered into the County-wide Financial Accounting system.
4) For investment purposes determined by the Treasurer Investment Officer, cash
transfers (i.e., sweeps) are taken from the Bank Ledger Account and moved to the
Treasurer servicing account. No Department/Special District action is needed for
these transactions.
E. RECONCILIATIONS
VII. FOR REPORTING AND INTERNAL CONTROL PURPOSES, DEPOSITORY
ACCOUNTS MUST BE RECONCILED MONTHLY TO THE TREASURER’S
Departments must obtain the month-end general ledger reports for the Treasurer’s clearing account
corresponding to each depository account in order to reconcile the account balances within 30
days of month-end close by an employee whose job duties are independent of cash
handling and recording functions. Properly preparing and posting Cash Receipts will
result in the Treasurer’s Clearing Account maintaining a zero ($0.00) balance. Bank
statements and the Treasurer’s Bank Ledger Account activity must always agree.
A. A properly completed reconciliation on a monthly basis. The reconciling process will
identify missing or incorrect postingpostings of Cash Receiptsdeposits, unrecorded
charges/fees (i.e., deductions), bank errors, departmental input errors and deposits in
transit, and Department/Special District/bank errors. Immediate corrective steps
must be taken if needed. .
Daily cash receipts should be reconciled to total cash collections (IDD, cash register,
credit card, lockbox, etc.). The daily cashiering function and reconciliation between
cash received and cash register sales reports are not addressed in this policy.
The Depository Account reconciliation process requires examination of two accounts.
1) Bank Ledger Account (10-X25-XXX) - all transactions posting to the servicing bank
account will be netted and downloaded electronically to the Treasurer’s Bank
Ledger Account. The ending balances from the month-end bank statement and
balances on the Treasurer’s GL Report should agree. If the balances do not agree,
the situation must be immediately researched and reported to the Treasurer to
determine corrective action.
Page 78 of 712

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
DEPOSITORY BANK ACCOUNTS Accounts Policy Issue Date:
Number: 6/20/12
Policy Category: Finance Initiating Revision
Department: No: N/A
Department of Revision
FinanceCurrent Date: N/A
Adoption Date:
2) Clearing Account (30-025-XXX) – the Treasurer’s Clearing Account is critical to and
needs the most attention in the reconciliation process. The account is designed to
be a pass through account for all transactions to be cleared by a Cash Receipt
ultimately resulting in a zero ($0.00) balance. Cash Receipts must be processed for
any transactions remaining in this account (excluding timing differences) during the
reconciliation process.
The ending balance on the Treasurer’s GL Report, minus deposits without Cash
Receipts, plus deposit adjustments (e.g., dishonored checks) and deductions (e.g.,
charges/fees) without Cash Receipts, plus or minus bank/Department/Special
District errors should equal zero ($0.00). Identified differences must be investigated
and resolved as soon as possible, preferably by end of the month so as not to
impact another month but at minimum within 30 days. See Exhibit A for a
reconciliation example and recommended procedures.
F. GUIDELINES
Departments/Special Districts with Depository Accounts must adhere to the following:
1) Departments/Special Districts must justify the need to establish a Depository
Account through the Department of Finance.
2) The account can only be established by authorized account signers in the
Treasurer’s Office upon approval from the Treasurer’s Accounting Division
Manager. Designated Department/Special District appointees are users of the
account.
3) Only deposit transactions are allowed. Check issuance or disbursements are
prohibited.
4) The only deductions allowed are those made by the servicing bank for their fees
and returned/dishonored checks or by credit card processors for fees and
chargeback transactions.
5) Departments/Special Districts must prepare and submit Cash Receipts to properly
record all Depository Account transactions in the County’s accounting ledgers
(Treasurer’s and County-wide Financial Accounting systems) within 15 days from
month-end.
Page 79 of 712

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
Accounts Policy Issue Date:
DEPOSITORY BANK ACCOUNTS
Number: 6/20/12
Policy Category: Finance Initiating
Revision
Department:
No: N/A
Department of
Revision
FinanceCurrent
Date: N/A
Adoption Date:
6) Depository Accounts must be reconciled by an employee whose job duties are
independent of cash handling or recording functions within 30 days of month-end
close.
7) Fiscal year-end reconciliations for June activity must be submitted to the Treasurer
(Accounting Division) and Department of Finance within 60 days of year-end close.
8) All reconciliations, including back-up support must be retained in accordance with
record retention policies. Records are subject to review upon request by any
Department/Special District listed in bullet point (10) below.
9) Closure of the Treasurer’s Depository Account may occur if Departments/Special
Districts do not:
1. Properly perform Month-end general ledger reports are also known as “Agency Fund
Ledger Detail” reports and are located on Agency Web.
2. CRTs should be prepared and uploaded to Agency Web in a timely manner with
accurate information to ensure the Treasurer’s Clearing Account (210100-100-1000-
XXX-XXXX) maintains a zero ($0.00) balance.
3. Interest income is not earned on monies which remain in the clearing account until a
CRT is submitted to transfer the monies to the proper Fund.
B. Banking transactions are transmitted electronically by the servicing bank to the Treasurer
and recorded to two (2) separate ledger accounts in the Treasurer’s system. Therefore,
Departments must reconcile the following two accounts in the Treasurer’s general ledger:
1. Bank Ledger Account (115XXX-100-XXXX) – Under normal circumstances, the month-
end servicing bank statement balance and the ending balance on the Treasurer’s
Agency Fund Ledger Detail report should be in agreement. If there is a discrepancy,
the situation must be researched immediately and corrective action taken. In these
instances, Departments should notify the Treasurer’s office immediately.
2. Clearing Account (210100-100-1000-XXX-XXXX) – The Treasurer’s clearing account
is designed to be a pass-through account only. All transactions are cleared (i.e, zeroed
out) when the Department uploads a CRT in .csv format directly to Agency Web for
each depository account transaction occurring during the month.
a. A balance in the clearing account at month-end indicates that there are transactions
remaining for which no corresponding CRT has been uploaded or processed at
month-end. With the exception of timing differences, only a CRT upload will resolve
the discrepancy and bring the balance to zero. The most common reconciling items
consist of the following:
Page 710 of 712

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
DEPOSITORY BANK ACCOUNTS Accounts Policy Issue Date:
Number: 6/20/12
Policy Category: Finance Initiating Revision
Department: No: N/A
Department of Revision
FinanceCurrent Date: N/A
Adoption Date:
i. Deposits without a CRT (i.e., unprocessed by the Treasurer and therefore, not
posted in the Financial accounting system).
ii. Deposit adjustments (i.e., dishonored checks, errors etc.) without CRTs.
iii. Bank deductions (i.e., charges/fees) without CRTs.
iv. Bank/department errors (i.e. keying errors).
a. For further clarification on reconciliation procedures, see the Depository Account
Reconcilationreconciliations as required by this policy,
b. Prepare Cash Receipts for all transactions,
c. Record the financial transaction in the accounting ledgers,
d. Have a continuing need for the account, or
e. Fulfill their fiduciary responsibility with the use and financial activity of the
account.
Closure of Depository Accounts will result in Departments/Special Districts being
restricted to cash basis only operations, eliminating credit card acceptance. As
these limitations may significantly affect business operations of a
Department/Special District, the Treasurer in conjunction with the Department of
Finance, will work with the Department/Special District to address any issues. If
issues are not remedied within a prescribed period, actions will be taken to close
the account. The Department of Finance and Treasurer will notify the County
Manager of any action to close a Depository Account.
10) The account is subject to external auditor review and/or read-only electronic access
at any time by the Department of Finance, Internal Audit Department, and Office of
Management and Budget.
G. REFERENCE AND ADDITIONAL RESOURCES
Uniform Accounting Manual for Arizona Counties (UAMAC) – provides internal
controls for accounting and financial reporting by Arizona counties, in conformity with
statutory requirements and generally accepted accounting principles. The UAMAC is
published by the Auditor General. It can be found at http://www.azauditor.gov.
Department of Finance Recommended Procedures for Dishonored Checks –
provides guidance for handling dishonored checks. The procedure can be foundspecific
Page 711 of 712

Maricopa County Title: Number:
Internal Policy Title: Depository A2513
Accounts Policy Issue Date:
DEPOSITORY BANK ACCOUNTS
Number: 6/20/12
Policy Category: Finance Initiating
Revision
Department:
No: N/A
Department of
Revision
FinanceCurrent
Date: N/A
Adoption Date:
information, detailed procedures and document examples. The manual is located at
https://mymc.maricopa.gov/202/Procedures-and-Manuals.
Department of Finance Image Direct Deposit (IDD) Recommended Procedures –
provides guidance for processing checks electronically using IDD machines. The
procedure can be found at https://mymc.maricopa.gov/202/Procedures-and-Manuals.
C. https://mymc.maricopa.gov/205/Cash-Management. The Depository Account
Reconciliation Example –Manual is for reference only and not considered part of the
policy. The Reconciliation ExampleIt may be periodically updated without Board of
Supervisor approval. Refer to Exhibit A attached. , as deemed necessary, to
accommodate the effective administration of this policy.
Agenda Numbers: C-18-12-044-6-00; C-18-12-045-6-00; C18-12-046-6-00;
C-18-12-047-6-00
Revision History
Page 712 of 712
Version Revision Date Description of Revision
1 06-20-2012 Initial version. (C-18-12-044-6-00)
2 Minor edits to make terminology more consistent, updated references to the
County financial system, and updated policy template