Integrated CSU Administrative Manual

CSU POLICY

--DRAFT POLICY--

Section:  GENERAL ACCOUNTING

Section 3000 Policies

Policy Number:  3250.02

Policy Title: Disposition of Unclaimed Negotiable Instruments

Policy Effective Date: November 6, 2012

Last Revision Date: November 6, 2012
(see revision history)

POLICY OBJECTIVE

It is the policy of the CSU that unclaimed negotiable instruments remain the property of the payee. This document provides direction for the treatment of unclaimed negotiable instruments that cannot be returned to the rightful owner. Each campus must prepare written procedures to implement this policy.


POLICY STATEMENT

Title 5 Sections 42375 and 42376 of the California Code of Regulations, designates and authorizes each CSU President to provide for the care, restitution, sale, or destruction of unclaimed, lost, or abandoned property in the possession of the university. In the context of this policy, unclaimed property includes unclaimed negotiable instruments. Unclaimed negotiable instruments are defined as:

  • Checks that have been delivered but remain uncashed by the payee.
  • Checks that have been returned to the university and the payee cannot be located.

100     General

When unclaimed negotiable instruments, excluding payroll warrants, have expired and if reasonable efforts have been made to contact payees, thereafter, such unclaimed negotiable instruments will remain the property of the CSU and will be escheated. The escheated amounts will be recorded as liabilities. For instructions
on the escheatment process, see the Legal Manual at: www.calstate.edu/SFSR/Workshops/index.shtml.

After at least a three month period following escheatment, campuses must periodically identify amounts that will not be claimed by owners and reduce the amount of their liability accordingly. Amounts relieved from the liability will be
used for student scholarships or loans to students enrolled at the campus where
the unclaimed items are held.

200     Payroll Warrants

  • Undelivered payroll warrants, issued by the State Controller’s Office (SCO), should be returned to the campus main cashier. Prior to the lapse of the specified expiration period indicated on the check (usually 90 days), campuses should deposit the undelivered payroll warrants into the campus Wells Fargo bank account and record as an escheatment liability.
  • Delivered but uncashed payroll warrants, issued by the SCO, remain in the control of the SCO. The SCO will reflect these as outstanding items on the bank reconciliations. After the payroll warrant expires, the SCO will cancel the check and record it as an escheat liability. Campuses will be notified by the SCO of this action and should record the escheatment transactions accordingly.

Funds resulting from the escheated payroll warrants are not to be used for student scholarships or loans to students.

300     Externally Funded Checks

Unclaimed negotiable instruments originating as payments from all externally funded awards (i.e. Federal, State, Local or Privately Funded grants and contracts) should be returned to their funding source as required by the federal government or sponsor guidelines. If the sponsor guidelines do not provide direction, then refer to Section 100, General.

Payments originating from student aid funds are an exception to the escheatment process. Checks should be cancelled and the funds returned to the originating student grant or loan fund. For Federal Work Study (FWS) payroll disbursements,
the federal portion must be returned to the source. However, for the treatment of the nonfederal portion of the FWS payroll disbursement, refer to Section 200, Payroll Warrants.

Campuses must maintain records of unclaimed negotiable instruments and be prepared to reissue payment when a valid claim is presented.

 

Benjamin F. Quillian
Executive Vice-Chancellor/Chief Financial Officer

Approved:

APPLICABILITY AND AREAS OF RESPONSIBILITY

 

REVISION HISTORY

 

RESOURCES AND REFERENCE MATERIALS

Useful Guidelines:

Legal Manual Section 2.10.2 and 2.10.3 (http://www.calstate.edu/SFSR/Workshops/index.shtml)

Related Principles:

GASB Statements 27, 31

Sound Business Practices:

 

Laws, State Codes, Regulations and Mandates:

    • California Civil Code - Section 2080.8
    • California Education Code 89720-89725.1
    • Title 5 - Sections 42375 California Code of Regulations
    • Title 5 - Section 42376 California Code of Regulations
    • California Unclaimed Property Law and Regulations
    • Executive Order 1000

    COGNIZANT OFFICE(S)

    CO Manager:

    Ms. Lauri Reilly
    Accounts Payable Manager
    CSU Office of the Chancellor
    lreilly@calstate.edu


    Subject Expert:

    Mr. John Hayes
    University Controller
    Sonoma State University
    john.hayes@sonoma.edu

    Mr. Ben Hylton
    Manager Accounting
    Humboldt State University
    ben.hylton@humboldt.edu

    Ms. Laverne Simmons-Barnett
    Director of Accounting Services
    CSU Sacramento
    barnettlw@csus.edu


    Affinity Group:

    Financial Officers' Association http://foa.calstate.edu

    Feedback/Questions/Comments