This is a University of Arkansas Cooperative Extension Service bank account and all funds are recognized as the property of the University. Extension employees are prohibited from serving as officers with signatory authorization on bank accounts for associations, groups or foundations that are supportive of C.E.S. educational programs.

Examples of bank accounts that are NOT to be maintained and managed by C.E.S. personnel include:

3. Rules for County Checking Accounts

 

	1.	It is suggested that the account be named _________________County University of Arkansas Cooperative Extension Service Account.
	2.	The county checking account requires auditable records, including deposit slips for all income and receipts for all expenditures. Auditable records are those that describe the nature and condition of a transaction and provide support that the transaction occurred as stated.
	3.	Funds from the county checking accounts will NOT be used for travel or personal expenditures by any C.E.S. personnel.
	4.	Funds from county checking account will NOT be used by county personnel as an advance payment for expenses to be incurred in the future, including travel.
	5.	The County Extension Agent-Staff Chair will be the signer for all checks. The check signature authority will include the Staff Chair, District Director, Director of Financial Services and the Associate Director for Finance and Administration.
	6.	Checks cannot be signed by a non-Extension employee or by an Extension classified employee such as a secretary or a program assistant.
	7.	Signing blank checks and/or using a signature stamp is NOT permitted.
	8.	Checks may NOT be written to cash.
	9.	Extension employees may NOT receive payments of any nature from the bank account other than reimbursement of documented out-of-pocket expenses.
	10.	County financial records will be maintained by using Quicken ™ software.
	11.	Immediately after all applicable personnel changes, signature authority on the checking account should be updated and a review will be conducted.
	12.	For internal controls, two separate people should perform check writing and record keeping duties. For example, the County Extension Agent-Staff Chair will be responsible for writing checks and maintaining the checkbook. The office secretary will be responsible for reconciling the checkbook and Quicken™ software to the bank statement and maintaining appropriate records to support the reconcilement.

4. County Extension Agent - Staff Chair Responsibilities

The Staff Chair is personally responsible for the full amount of the funds deposited and entrusted to the county office accounts. In addition, the Staff Chair is responsible for ensuring that the Quicken™ data files will be submitted electronically to Financial Services by the 8th of every month and no later than the 15th of every month submit a signed reconciliation report and copy of the bank statement.

If the Quicken™ data files, reconciliation report or bank statement are not submitted to Financial Services within forty-five (45) days, or if disallowable expenses continue to occur after being notified by Financial Services that the transactions are not appropriate, the Associate Director for Finance and Administration may withdraw authorization for the fund. No further checks will be issued and any undocumented or non-reimbursable amounts will be invoiced to the Staff Chair. If necessary, payroll deduction from the Staff Chair will be used to reimburse Extension.

Fund shortages are the Staff Chair’s responsibility. All cash discrepancies should be immediately reported to the District Director and investigated. Significant shortages should be reported immediately to Financial Services. If it can be determined who caused the shortage, they will be held personally responsible and will be expected to reimburse Extension. Disciplinary actions may result and include termination.

To manage the checking account and sub-accounts, the Staff Chair should be:

	1.	Familiar with all appropriate University of Arkansas Cooperative Extension Service financial policies and procedures.
	2.	Provide records adequate to show the source, amount and restriction, if any, of all income/donations.
	3.	Provide records that show donated funds were expended in accordance with restrictions (i.e., that funds in the amount of the donation were expended for the restricted purpose.)
	4.	Provide records necessary to support all expenditures.
	5.	Provide up-to-date check registers and monthly bank reconciliations.

5. Deposits

An account will be maintained with a local bank and all deposits related to the County Checking Account will be made to this account (the Depository Account). No expenditures shall be made from the Depository Account.

	A.	Income
		1.	Income receipts must be used when collections are received. Each county Extension office will be provided an official University of Arkansas Cooperative Extension Service receipt book. This is the only receipt authorized to be issued.
			(a)	Receipts should be pre-numbered and include the date, name of the customer, amount received, whether cash or check was received, reason and the signature of the person collecting the funds.
			(b)	The receipt should be prepared in triplicate, and the original should be given to the customer. One copy must be maintained in sequence in the receipt book as the office copy. The final copy should be sent to the Financial Services office. When deposits are made to the Depository Account, a copy of each receipt included in the deposit should be attached to the deposit acknowledgement from the bank. The bank deposit forms with receipts should be sent to the Financial Services office on a monthly basis.
			(c)	If an Extension employee turns in money collected from several persons, one receipt may be written directly to that agent if documentation is attached to the receipt, listing (1) the individuals from whom the agent collected the money, (2) a description of each collection and restriction and (3) the amount collected from each individual.
			(d)	If a receipt is voided, the original receipt should be maintained with the office copy of that receipt.
			(e)	Copies of all receipts should be maintained for five years.
			(f)	All income and receipts should be identified by source and restriction, if any. While this information is recorded on the receipt, it is advisable to also record it on the check register beside the deposit entry. Any correspondence and check stubs should be placed in a file set up for that purpose.
		2.	All funds must be deposited into the University of Arkansas County Extension Office Depository Account. In no case should cash donations be expended directly or funds be placed in personal accounts.
		3.	Funds should be deposited on a regular basis; preferably on the day collected but no longer than three days. Under no circumstances should collections be retained in the office over weekends or holidays.
	B.	Reconciliations
		The Depository Account should be reconciled monthly and sent to Financial Services by the 8th of every month and no later than the 15th, along with the statement, copy of the Quicken™ data file and copies of the receipts. When the reconciliation is complete, it should be printed and attached to the bank statement. The person preparing the reconcilement should document responsibility by dating and initialing the report. The Staff Chair will review and document approval by dating and signing the reconcilement prior to filing. See Appendix I – County Depository Account Reconciliation Form.

6. Expenditures

A centralized Expenditures account will be maintained for each county office.

	A.	Record Keeping
		1.	All expenditures should be documented sufficiently to provide an adequate audit trail. Documentation should include one or more of the following: original invoice, billing statement, receipt, sales slip. Recorded on this documentation should be such information as date paid, check number and program. In addition, the employee making the purchase should initial the supporting document to verify that the cost is a legitimate Extension expenditure. This documentation should be filed in a manner allowing easy retrieval and should be maintained for the five years.
		2.	The Staff Chair should sign all checks. The office secretary should not have signature authority over any account. The Staff Chair should not sign any check until documentation has been received and the check completed. Blank checks should never be signed.
		3.	When a check is voided, the check should be attached to the check stub, and the signature section of the check should be removed.
	B.	Allowable and Unallowable Expenditures
		1.	The account may not be used to avoid any State of Arkansas or Extension purchasing restrictions, including those expenses that could be obtained by Extension’s online ordering systems or for those expenses normally paid by budgeted maintenance and operating funds or grant funds.
		2.	No checks may be cashed from these funds.
		3.	Only expenditures specifically authorized under these guidelines will be allowed.
		4.	No payroll, payroll advance or related transactions may be made from these funds.
		5.	Travel expenses for Extension employees – i.e., toll fees, gasoline or vehicle costs, tips, etc., may never be paid from these funds.
		6.	Disbursements made for entertainment or gifts may never be paid from these funds.
		7.	Each petty cash transaction must be documented with a receipt, invoice or similar item and subject to periodic audits. If the expenses are not allowable, Financial Services will contact the Staff Chair. In the case where the expenses are not allowable, reimbursement is expected.
	C.	Replenishing the Account
		Expenditures from the account will be replenished from the Depository Account on a monthly basis. A transfer will be made each month by Financial Services to replenish amounts spent by the county office in the previous month. The Depository Account balance must always be sufficient to reimburse the amount of outstanding expenses.
	D.	General
		1.	All checking account transactions should be recorded in the check register at the time the transaction occurs. Entries should be as detailed as possible showing income/source, person paid, program and purpose. Bank account balances should be recorded after each day’s transactions.
		2.	Signature authority over checking accounts should be updated immediately after personnel changes, and this should be communicated in writing to the appropriate District Director and forwarded onto Financial Services. Interim Staff Chairs can have check writing privileges but first must be approved by the District Director. At anytime, the District Director will have signature authority to sign checks.
	E.	Financial Records
		1.	County financial records will be maintained on the Quicken™ computer software program. Training and support will be provided by Extension’s Financial Services and Information Technology department.
		2.	The County Financial Reports will be sent to the Financial Services office on a monthly basis in an electronic format.
		3.	Quicken™ files should be saved regularly onto diskettes or CDs. Label them and maintain in a safe place in the county office.
	F.	Records Retention
		1.	The minimum retention period for county financial records is five years.
	G.	Audit Reviews
		1.	The Extension district and state office designee will annually conduct periodic reviews of county Extension offices accounts in order to monitor compliance.
		2.	Any shortages and/or cash losses must be reported immediately to the District office.

VII.   Grants and Agreements

The University of Arkansas Cooperative Extension Service encourages counties to seek grants and additional sources of revenue. In accordance with policy CESP 3-31 Grant Administration, all grants and agreements require administrative approval.

Grants and agreements that include deliverables with funds for research, testing, evaluation or performance reporting, or has salaries to be paid, must be awarded to the University of Arkansas Cooperative Extension Service.

VIII. Reporting of Cash and Non-Cash Charitable Contributions

A considerable amount of county financial transactions relate to the receipt and use of private contributions for the exclusive benefit of local programs and events. These contributions come in the form of actual cash, as well as gifts-in-kind of equipment, supplies, free use of facilities for which user fees are customarily charged, etc. This includes gifts directly to the county Cooperative Extension programs and C.E.S. specialists, as well as contributions made to local 4-H Foundations, Master Gardener projects and many others.

The Internal Revenue Service mandates that all contributions of $250 or more must be acknowledged with an official receipt from the organization receiving and benefiting from the gift. Because of this IRS requirement, all gifts of $250 or more that benefit Extension programs and activities should be acknowledged by letter. If the gift went to the County 4-H Foundation or 501(c)3 Master Gardener Association, a letter should be sent from the president of the County 4-H Foundation or 501(c)3 Master Gardener Association with a copy to Dr. Stephen Schafer, Director of Development, 2301 S. University Avenue, Little Rock, AR 72203. (See Appendix II for a sample gift acknowledgment letter.) If the gift went to any other Extension accounts, please report to the Division of Agriculture and Agricultural Development Council office in Fayetteville. This office has the sole responsibility for issuing official receipts, as well as the maintenance of the Division of Agriculture’s donor information base with the exception of the county or state 4-H Foundations and 501(c)3 Master Gardener Associations. The acknowledgment responsibilities for these groups rest with the president.

In addition to putting C.E.S. in compliance with I.R.S. regulations, reporting gifts has benefits to the donor and to county Extension programs. It is important to our Extension contributors – individuals, businesses, organizations and others – that their charitable gifts are reported, and the benefits to our contributors include:

	1.	Proper reporting ensures their gifts are bona fide, tax-deductible contributions as required by the I.R.S. and the state of Arkansas (to the fullest extent of the law.)
	2.	It provides the donors with broader public recognition of their gifts through donor annual reports to be produced by Cooperative Extension, as well as separate donor publications of the University of Arkansas.
	3.	It provides donors of significant amounts the benefits of Division of Agriculture and University of Arkansas donor recognition groups, including special events, recognition gifts, etc.
	4.	As appropriate, it supports the development of additional “thank you” letters, etc., from district and state-level administrators. It can also automate the acknowledgment letters sent from local county personnel or Extension specialists.

The benefits of properly reporting gifts made to Cooperative Extension’s county and other fundraising programs include:

	1.	Extension’s use of gifts-in-kind of equipment, materials, supplies, etc., may have legal ramifications for our organization, employees and others who are end-users of such gifts. It is mandatory, therefore, that all non-cash, gifts-in-kind be reported to the Agricultural Development Council, regardless of their value. This required reporting provides a level of liability protection that is very important to Cooperative Extension, as well as the employee(s) who accept, use and/or redistribute the in-kind gifts. It should be noted that failure of Extension employees to report gifts-in-kind may result in the employee personally assuming liability for the use of the materials, equipment, etc. C.E.S. does not want any employee to assume personally any risk in the performance of their job-related services, programs or actions.
	2.	The ability to build a more comprehensive database of donors, including important demographic information, historic giving records and the documentation of pivotal contacts with major donors, etc. This is increasingly important for Extension’s county offices because of staff turnover, particularly changes in county staff chairs. It often takes new county chairs six months, a year and sometimes even two years to learn who supports the programs financially and who the “go to” people are when extra financial support is needed. A more comprehensive database will allow new staff chairs and agents to have immediate access to past donor lists, significantly shortening one important part of their learning curves.
	3.	The ability to “protect” special county donors from what otherwise may be inappropriate funding appeals from state-office personnel, specialists, as well as professionals on the University of Arkansas fundraising staff.
	4.	The ability to run contributor reports, to complete merge-mail appeal letters, to distribute more conveniently informational mailings about activities and special programs. While the reporting of gifts of $250 or more and all gifts-in-kind are required, county offices and specialists may also report cash and non-cash gifts of less than $250. Reporting all gifts will allow each county to begin an even more complete donor database, the benefits of which are that much more important.

IX.    Fundraising Reporting Procedures

Documentation of cash gifts of $250 or more, and all non-cash, gifts-in-kind should be reported to the Division of Agriculture Office and Agricultural Development Council in Fayetteville. This includes local 4-H Foundations, Master Gardeners and county accounts. In turn, this office will coordinate its support services in the counties and Extension’s Office of Development, headquartered in the state office in Little Rock.

This reporting process has been developed to make it as easy as possible for faculty, county staff members and specialists. A series of computerized “templates” have been developed so that reporting is electronic and not time consuming.

All Division of Agriculture gifts as outlined above should be reported on template DIVAGR-01. This form can be found by linking to  http://intranet.uaex.edu/policy/templates/mswordtemplates/DIVOFAG/DIVAGR-01.dot.

All Agricultural Development Council gifts outlined above should be disclosed on template ADC-01. This form can be found by linking to http://division.uaex.edu/ADC_Guidelines/forms/PDF/ADC-01.pdf.

n addition to the information requested on the appropriate forms, copies of any letters or other forms of communication that accompanied the gift should be forwarded to the Fayetteville office.

When non-cash or “gifts-in-kind” are received, county offices should not assign a dollar value to these types of donations. This is the sole responsibility of the donor. A donor-provided value should be reported, however, and that amount of gift credit will be documented in the donors’ records. If no gift-in-kind value is known, then please recommend a $1.00 value and forward the required information. This, in turn, will provide the important legal protection described earlier in this gift section.

Please forward information to:

Mrs. Merritt J. Royal, Associate for Administration
AFLS 202, University of Arkansas
Fayetteville, AR 72701
 479-575-4546, FAX: 479-575-7066, mjroyal@uark.edu

Specific questions about Extension fundraising may be directed to:

Dr. Stephen Schafer, Director of Development
2301 S. University Ave., P.O. Box 391
Little Rock, AR 72203
501-671-2079, sschafer@uaex.edu

Appendix

I. County Depository Account Reconciliation Form

II. Sample Gift Acknowledgment Letter

Return to Financial Guidelines Index

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