--INACTIVE HISTORICAL POLICY--
Section: GENERAL ACCOUNTING
|Section 3000 Policies|
Policy Number: 3103.02
Policy Title: Outgoing Payments – Electronic and Paper
Policy Effective Date: January 1, 2012
Last Revision Date: June 5, 2012
(see revision history)
It is the policy of the CSU to use safe, efficient, and cost effective methods for the timely disbursement of university funds. Campuses must prepare written procedures that implement this policy.
Campuses must pay invoices so as to avoid penalties and interest charges but no earlier than is necessary. Payments should be scheduled so as to maximize available payment discounts, where practical.
Campuses may use a variety of methods for payment, including electronic disbursements, paper checks, procurement cards and virtual procurement card accounts. Where little or no value can be added by processing the transaction through standard procedures, direct payment can be authorized by the campus CFO or his/her delegate.
Regardless of the method of disbursement, effective internal controls, including separation of duties, must be implemented. Campuses must also comply with statutory or regulatory reporting requirements for all payments.
Electronic Disbursements – Automated Clearing House (ACH) Transactions
- Direct deposit is the electronic transfer of funds via ACH into a bank account at a United States financial institution, and is the preferred method of payment for the CSU.
- ACH payment procedures must include multiple safeguard parameters such as multi-level passwords and task separation, and provide for real-time monitoring of critical events such as service disruptions due to technical failure or natural disaster.
- All ACH payments must be processed in accordance with standard Accounts Receivable and Student Financial Aid Payment procedures, including dual control and be reasonably secured from erroneous or fraudulent manipulation.
- Approval steps must be defined to comply with CSU policy and appropriate banking rules and regulations such as the National Automated Clearinghouse Association (NACHA).
- For any ACH, including CSU employee payments and vendor remittances, an amount greater than or equal to $50,000 will require second level review and approval. Campuses may require second level reviews on ACH payments for smaller amounts as they deem necessary. (Campus procedures must indicate what job level/title satisfies the review requirement.)
- All Receivers requesting to enroll for receipt of payment by ACH must provide debit authorization along with credit authorization, where such debit authorization may only be used for collection of monies paid in error.
- A thorough effort to authenticate the Receiver and its/his/her banking data must be completed.
- As private and confidential data, ACH payment data is to be highly secure and rigorously protected from all unauthorized access in a manner consistent with the standards and policies established by the CSU Information Security Management Program.
- All returned or rejected ACH payments must be investigated and resolved within a time period sufficient to avert loss from fraud or negligence. The timeline may differ based on the particular situation.
- Wire transfers must always be released under dual control.
- Wires should be restricted to pre-approved templates, where practical. Templates should be reviewed and approved by someone other than the template creator.
- Wires for amounts greater than or equal to $100,000 require third level review and approval. Campuses may require third level reviews on smaller amounts as they deem necessary. (Campus procedures must indicate what job level/title satisfies the review requirement.)
- Controlled disbursement accounts and positive pay are to be used for paper disbursements. Any check drawn in an amount greater than or equal to $50,000 will require two authorized signatures.
- Procedures must be implemented to address exception checks presented for payment to the bank.
- Campuses must establish controls and procedures to safeguard the physical location of check stock.
- Campuses must establish effective controls over the check stock, such as numbered control logs, periodic inventory counts and account reconciliations.
- Campuses must establish controls and procedures to manage the handling of returned and stale dated checks.
- Campuses must establish controls and procedures to safeguard facsimile signatures and to ensure that their use is consistent with University policy and prudent commercial practices. Such procedures should include proper approvals to create a facsimile signature and measures to ensure the proper destruction of facsimile signatures when an authorized check signer leaves their position.
Benjamin F. Quillian
Executive Vice-Chancellor/Chief Financial Officer
Approved: June 5, 2012
APPLICABILITY AND AREAS OF RESPONSIBILITY
- October 6, 2011 (Initial Issuance Date)
RESOURCES AND REFERENCE MATERIALS
In the context of this policy, facsimile signature refers to a signature affixed by a special machine at the signature owner’s order. Facsimile signature is defined as the secure reproduction of any authorized signature, but does not authorize the use of a rubber stamp signature by the official or authorized employee.
- ICSUAM 8000.0 - 8095.0 - CSU Information Security Management
- ICSUAM 5227.0 – Direct Payments, Contracting and Procurement
- ICSUAM 3103.02 Outgoing Payments
Sound Business Practices:
Laws, State Codes, Regulations and Mandates:
NACHA rules, Gramm-Leach-Bliley Act, CSU Escheat Policy
COGNIZANT OFFICE(S)CO Manager:
Mr. Robert Eaton
Senior Director, Financing and Treasury
CSU Office of the Chancellor
Mr. Austin Davis
Assistant Cash Management Officer
Mr. Oliver Ravela
Banking Services Analyst
Ms. Cathleen Austin
Manager, Accounts Payable
Ms. Lorlie Leetham
Director, Fiscal Services
San Luis Obispo
Ms. Lauri Reilly
Manager, Accounts Payable
Ms. Monica Shackelton
Manager, Accounts Payables and Recievables
Ms. Cora Wong
Director, Student Financial Operations
FOA (Financial Officers Association), Student Administration, Accounts Payable Managers