Fiscal Policies and Procedures for County…

         Fiscal Policies and Procedures for
                  County Councils
Fiscal management policies established for county outreach and extension councils are
based on the Missouri Revised Statutes, University of Missouri policies and procedures,
and other accepted accounting and management policies for public entities. Councils may
have additional policies and procedures to ensure efficient management of financial
operations. These policies and procedures provide for uniform financial record keeping
and facilitate reporting between the cooperating partners, University of Missouri
Extension, county councils and county commissions, in furtherance of the delivery of
outreach and extension programs.


                                                 Responsibilities
University of Missouri Extension
   · Receive and expend allocations from the University of Missouri, USDA and other
      sources in accordance with pertinent statutes, agreements, policies and procedures
      in support of outreach and extension programs.

     ·    Participate with the council to establish a budget to support facility and program
          costs necessary to deliver programs within the county.

     ·    Provide management assistance to county councils for furtherance of extension
          work.


County Extension Council: Missouri Revised Statutes, Sections 262.550 to 262.620,
adopted in 1961 by the General Assembly, provide the establishment of a University of
Missouri Extension Council in each county. Specifically, the council has the
responsibility to:

     ·    Arrange for and administer the county share of the cost of extension services and
          receive by way of gift, purchase or otherwise acquire, in its own name, real or
          personal property required for the administration of the extension program.

     ·    Provide for the collection of fees for specific services that require special
          equipment or personnel. Councils may not collect dues for or pay dues to state or
          national organizations or associations. Supplies or services deemed necessary by
          the University and the council to the conduct of any education program are not
          considered private enterprise or commercial activity within the meaning of the
          statutes.

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     ·    Accept financial contributions from private sources to be used for extension
          purposes. The IRS has ruled gifts and contributions to the council to be tax-
          deductible.

     ·    In cooperation with the county commission and the University, prepare an annual
          financial budget covering the county's share of the cost of carrying out the
          extension programs.

     ·    Prepare a monthly requisition and certified statement of expenses to the county
          commission as the basis for issuance of a warrant covering the requisition drawn
          in favor of the treasurer of the council.

     ·    Direct the treasurer to account for all fiscal activities of the council by keeping a
          record of all monies received and disbursed, specifying the person from whom
          received and to whom paid, and the purpose for which they were paid out.

     ·    Make an annual report through its secretary to the county commission, covering
          all receipts and expenditures, a summary of work undertaken and results
          accomplished. The report is to be filed with the commission no later than Feb. 1,
          following the completed year.

     ·    Establish procedures for providing a satisfactory audit and management review of
          funds administered by the council.


Regional Director: As University of Missouri employees, regional directors are
responsible for direct-line administration of outreach and extension programs and
supervision of off-campus faculty and staff in a designated geographic region.
Specifically, the regional directors have the responsibility to:

     ·    Assure that county program directors represent University of Missouri Extension
          with county councils, county commissions and other funding agencies in
          planning, securing and managing funds to carry out county programs.

     ·    Assure that CPDs arrange for maintaining the approved accounting system and
          for annual audits of county monies, and make appropriate financial reports to
          regional and state offices.

     ·    Plan for and manage resources available for multicounty programs.


County Program Director: As a University employee, the county program director is
responsible for:

     ·    Providing management support for council operations


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     ·    Supervising council-paid support staff

     ·    Reviewing receipts and disbursements per the council budget, policies and
          procedures

     ·    Implementing county-level administrative support systems, policies and
          procedures

     ·    Keeping the council and regional director informed of administrative matters.


Council Treasurer: The council treasurer is responsible for:

     ·    Executing a corporate surety bond of not less than 125 percent of the council
          funds for which the officer will be accountable at any one time, with the cost of
          the bond being paid by the council

     ·    Assuring that all money received is deposited in a bank or trust company
          designated by the council

     ·    Assuring that fiscal records are audited annually

     ·    Assuring the development of a detailed written report, covering the past year's
          receipts and disbursements, to be filed with the county commission no later than
          Feb. 1

     ·    Turning over all receipts, records and council funds to the next treasurer when the
          term of office is ended

     ·    Signs checks with another council officer

     ·    Reviews monthly bank reconciliations

     ·    Assures that the council is provided with regular financial reports.


                                             Accounting System
County Extension Council Fiscal Record Keeping: The county extension council will
maintain the University of Missouri approved accounting system to fulfill its statutory
responsibilities for financial record keeping and reporting. The extension council
accounting system is a cash, fund accounting system that recognizes receipts and
disbursements on cash basis and recognizes selected receivables, payables and liabilities.
Receipts and disbursements, receivables, payables, assets and liabilities are maintained



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by fund as defined in the chart of accounts. The financial records include receivables,
payables, revenue, expenses, assets and liabilities.

Chart of Accounts: The chart of accounts for council operations must be maintained for
all accounts in the accounting system, including account code, account name,
purpose/description. The county program director (CPD) is authorized to approve the
establishment and termination of all accounts.


                                                     Budgeting
Budget Development: Preparation of an annual operating budget is necessary for the
effective management of council resources. As the University of Missouri liaison with
the council, the CPD assists the council in preparing the annual operating budget and
keeping the budget current during the year.

University of Missouri Extension maintains and provides guidelines for preparation of
the annual operating budget. The budget is to be inclusive of all council operations,
including all sources and uses of funds. The budget, and any subsequent revisions, is
reviewed and approved by the council. The annual budget is submitted to University of
Missouri Extension for use in meeting state and national level reporting needs.

"In-kind" contributions, e.g., space value, utilities, services, etc., are noted for the council
financial plan but not documented in the accounting system.

Per state statutes, a budget for county commission funding is prepared and submitted
annually. This budget will be in a format as prescribed by the commission.

Endowments: If the council has a locally held endowment with specified uses, the
budget should reflect a fund for the endowment. Unrestricted use endowment revenue use
may be budgeted in the Unrestricted General Operations.

Fee-Based Activities: A budget for each fee-based educational activity should be
prepared by the staff responsible for the activity and approved by the CPD and/or
regional director per University of Missouri Extension and council policy and procedure.

Grants and Contracts: A budget for each grant or contract is prepared per the terms and
conditions of the grant or contract.
                                                     Purchasing
Bid Procedures: Office furniture, equipment and other materials that are available from
more than one vendor must be purchased only after being satisfied the best value in terms
of price, quality and service will be received. Dollar amount may be specified, lower or
higher, than the $500 noted below by action of the council.



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          Purchases under $500: Compare materials and prices from local vendors and
          select the best value in terms of price, quality, and service.

          Purchases over $500: Distribute to vendors that are known to be able to supply
          the material or service, written specifications and a bid closing date. If the
          accepted bid is not the lowest bid, a statement of the reason the low bid was not
          accepted should be made a matter of council record.

Purchase Orders: All councils should use a purchase order procedure to assist the CPD
in managing the authorized budget. A purchase order system:
       1) Establishes an approval procedure
       2) Provides a payables record for expense planning
       3) Ensures that vendors will supply and bill the council with an official form
           with signature approval.
Purchase order forms must be printed with the name and address of the council and
sequentially numbered.

Contracts: All documents that constitute a legal commitment of council resources (i.e.,
leases, service contracts) should be executed only by the council chair upon direction of
the council as indicated in council meeting minutes.


                                                     Receipts
Segregation of Duties: Council office procedures should provide for the segregation of
duties for the receipt and deposit of monies. These procedures are established for the
protection of the individuals involved and security of funds. Individuals responsible for
receiving funds should account for those funds to another individual who prepares the
deposits.

Pre-numbered Receipts: All money received, cash or checks, is recorded on a pre-
numbered council receipt, which includes the name of council. A receipt is issued for all
transactions in which money is received in the extension center or by staff at locations
other than the extension center. A copy of the receipt is maintained as an official part of
the accounting record. Any voided receipts are retained in the receipt book for permanent
reference. A log may be prepared for mail-in payments received, with one receipt written
for the total. Similarly, if registration fees are collected on site, attendance sheets may be
prepared and the total placed on a numbered receipt when turned over to office personnel
for deposit. Copies of mail logs and attendance sheets are retained as part of the
accounting records. If an office has a significant number of walk-in clients, a cash
register produced receipt may be used. The cash register tape must be coded as to revenue
type and retained as part of accounting records.

Restrictive Endorsement: The individual responsible for receiving funds should
restrictively endorse each check received by stamping "For Deposit Only, (name) County



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Extension Council" before placing it into a cash box or cash register. A council restrictive
endorsement stamp should be located with each receipt book in use.

Bank Deposit: Cash and checks in the cash box at any one time should equal the sum of
applicable receipts. Each bank deposit will include a record of each receipt number
represented in the deposit. Deposit slips are maintained as an official accounting record
of the council. In offices with limited personnel, the county program director should
periodically reconcile receipts to deposits. All current receipts, cash or checks should be
deposited at least each week and more often during periods of income-generating
activities. Some offices will need to make daily deposits, and a staff member will be
designated as responsible for deposits during regular office hours. Council procedures
should stipulate a maximum amount of cash and/or checks to be allowed to be on hand at
any one time.

Accounts Receivables: When a client incurs a financial obligation to the extension
council, a pre-numbered statement or invoice is issued. The original is given or mailed to
the client and copies are filed for reporting and follow up.


                                              Cash Management
Office Procedures: The council will maintain appropriate office procedures for the
proper accounting for cash and checks, security of monies, division of duties of
employees, making regular deposits and other procedures necessary to ensure the proper
control of monies. The council authorizes the treasurer to keep cash balances invested in
interest-bearing accounts to the extent practical.

Handling Cash: the responsibility for cash is to be delegated to only one person at a
time. When relief personnel is required, separate cash boxes should be maintained or the
amount transferred should be verified each time personnel changes. A locked cash box,
drawer or cabinet must be available to personnel when the office is open and a safe or
locked cabinet when the office is closed. Council procedures should stipulate the
maximum amount of cash, other than a minimal change fund, that can be left in the office
over the weekend or holidays.

Change Fund: Depending on the office location and level of cash activity, a change fund
may be needed when an exact change policy is not practical. A one-time check is written
to cash for the purpose of a change fund. Keep separate from cash receipts and follow the
same security procedures as with other cash on hand.

Petty Cash: A petty cash fund should only be established in office locations where
required small purchases cannot be charged for subsequent payment by check. The petty
cash fund must be kept in a separate, secured location accessible only to the individual
authorized to make such purchases. When a cash purchase is made, the employee should
complete and sign a petty cash requisition describing what was purchased and the cost.
The requisition is placed in the cash box. At any given time, the cash and petty cash

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requisitions must total the authorized amount. Monthly petty cash requisitions are
submitted for approval, and a check is written to reimburse the petty cash fund for the
amount of purchases made. Petty cash requisitions are entered in the accounting system
per the appropriate account number and expense subcode.

Postage Meters: Postage meters require the same security procedures as cash within the
office. During office hours, the meter is to remain locked, and one person is to be
responsible for the key. When the office is unattended, the meter is to be locked in a
secured safe or cabinet.


                                                     Disbursements
Pre-Numbered Checks: All financial obligations are to be paid by pre-numbered check,
complete with the date, signature, payee, dollar amount and reason for payment, and any
invoice, voucher or other reference number. Any voided checks should be retained for
permanent reference. All checks written will reference documentation on file.
Recognizing only original statement/invoices will prevent the possibility of duplicate
payments. When checks are written, the check number is recorded on the reference
document. Documents may include vendor invoices or statements, payroll and travel
vouchers, written letters of agreement and contracts. Per state statute, checks require an
authorized signature and second, or counter, signature, both on file with the bank. Only
council members may be authorized to sign checks.

Payroll Disbursements: Employee time records/payroll vouchers must show the dates
and/or hours for which payment is made and be signed/dated by the employee and
immediate supervisor. The immediate supervisor should verify vacation and sick leave
records at least quarterly.

Non-Payroll Disbursements: All disbursements must have original source documents to
support the transaction. Documentation may include vendor invoices, written letters of
agreements, contracts, leases, etc.

Travel Expenses: Reimbursements to staff and council members for travel expenses are
to be made by approved voucher. The approved University-provided format may be used,
or a locally developed format that provides the necessary information: a description of
each trip with the date, purpose, miles driven and any other travel expenses listed. Staff
travel vouchers must be signed/dated by the staff member requesting reimbursement and
the immediate supervisor. Council travel vouchers must be signed/dated by the council
member requesting reimbursement and signed by the CPD.

Refunds: The council should establish guidelines for authorizing refunds of fees or
service charges.




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                                           Financial Operations
Annual Financial Audits: An annual audit of the council's accounting records is
required. Auditing options include engaging a CPA firm, using an auditor available to
other county government offices or appointing an audit committee. See the Audit
Guidelines for County Councils for additional information.

Agency Accounts: An agency account may be established when the council agrees to act
as fiscal agent for a related organization, such as 4-H council, camping association, etc.

Bad Debts: All receivables determined to be uncollectible are to be written off after all
appropriate collection efforts have been pursued. A returned check for insufficient funds
that was deposited is entered as a bad check, and the reduction in revenue is noted in the
appropriate account. The council must approve the write off of uncollectible receivables
as recommended by the treasurer at a regular meeting.

Banking: Council banking should be done at one bank and all disbursements through one
checking account. Councils may determine for reasons of prudent fiscal management that
funds not needed for immediate operations be maintained in accounts than the regular
checking account and/or with other recognized financial institutions that offer improved
returns while maintaining appropriate security for public funds.

Reconciliation of Bank Statements: The bookkeeper will reconcile the council's
accounts with the bank statement each month. The reconciliation will follow the
procedures for verifying receipts and disbursements in the accounting system. The
reconciled bank statement should be initialed and dated by the bookkeeper and the CPD.
The treasurer should review reconciliations regularly. In an office having only one
secretary/bookkeeper, the CPD periodically should receive the bank statement
(unopened), review cancelled checks and trace recorded receipts to deposit.

Bonding: The council must follow state statutes requiring a corporate surety bond of at
least 125 percent of the estimated amount that will be in the treasurer's custody at any one
time. In addition, a position corporate surety bond of at least 125 percent of cash on hand
is recommended for the council bookkeeper and other council employees. University-
employed staff is covered by a University-provided bond.

Corrections: The council may authorize the CPD to approve corrections to accounting
transactions containing errors. Corrections are made using the procedure specified in the
accounting system, appropriately documented and periodically reported to the treasurer.

Grants and Contracts: The council is authorized per state statutes to administer grants
and contracts. Grant or contract proposals require prior approval of the council, CPD,
regional director and director of cooperative extension before the proposal is submitted.
Copies of all proposals shall be maintained as part of the council and regional director
records. Upon grantor approval, the council and regional director will review and approve



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the acceptance of the terms and conditions of the grant or contract. Grant and contract
funds are administered in a separate accounting fund for each grant or contract.

Records Retention and Documentation: All source documentation to accounting
transactions are to be retained for five years and then may be destroyed, except for
specific documents which have reference value, such as major purchases, long term lease
agreements, etc. Annual budget and financial reports should be made a part of the council
minutes and retained permanently. Printed copies of the detailed list of transactions and
the detailed ledger reports should be run at the same time as monthly status reports and
retained in file for reference for a period of no more than two years. Annual audits should
be maintained as a permanent record.

Transfers Between Accounts: All transfers of income and/or expense items between
accounts should be made in a timely manner. Transfers must be approved by the CPD on
the Request for Transfer form. The purpose of the transfers is to adjust account balances
when the activity is completed or to reflect the proper recording of the revenue or
expense in the correct account.

Tax Forms: IRS Form 941 once completed should be signed by a "duly authorized
member or officer" of the council.

Void Check: The council may authorize the CPD to approve the voiding of a check
when a check writing error has been made. A voided check must be maintained as part of
the accounting records.

Year-End Closing: Official accounting records are to be closed at the end of each
council fiscal year. To the extent possible, all receipts and disbursements within that
fiscal year. Account balances will be either carried forward as beginning balances in the
next fiscal year, when an activity represented by the account is to be continued, or
transferred to another account, per council policy and procedure, if purpose for the
account has ended.

Use of Public Funds: All funds in the custody of the council are, by definition, public
funds. All funds must be handled using recognized, best management practices. Payments
generally should not be made before receiving materials and/or services. Except where
unavoidable, payments for supplies and services should be made directly to vendors and
not as reimbursements to staff. Purchases that could be interpreted as benefiting
individuals, firms or organizations with which council members or staff are associated
should be avoided, including personal use of long distance telephone. Purchases of
supplies or materials by staff or councils members from council inventory should be
avoided as this inappropriately extends a council's state sales tax exemption to the
purchaser. It is recommended that councils establish a written policy regarding the use of
long-distance telephone services for personal use. If councils have no such policy, there
is no recourse if phone services are abused.




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                                        Cost Recovery and Fees
Policy: State statute authorizes councils to set and collect fees for services and
educational programs. UO/E provides management advice in establishing fees and
determining what costs may be recovered.

Recoverable Costs: Recoverable costs may include, but are not limited to:

   1) Non-staff instructor's pay, honorarium, travel, meals, lodging, etc.
   2) Facility Rental
   3) Communications
   4) Copy service
   5) Supplies
   6) Food/refreshments
   7) Clerical, labor or technical services
   8) Involved specialist(s) travel, meals, lodging, etc.
Regional and state specialist staff salaries are paid by UO/E and are not recoverable by
councils. Recovery of such costs in a council-sponsored program must be approved in
advance by the regional director and subsequent reimbursement made to UO/E.

Source of Funds: Cost may be recovered from one or any combination of:
   1) Participant fees
   2) Co-sponsoring organizations
   3) Sponsoring departments or divisions of the University
   4) Grants, gifts or contracts.


                                                     Insurance
Liability: Councils should review their liability risk and take steps to provide adequate
insurance coverage. Where councils own office and meeting room space, comprehensive
public liability insurance should be considered. Discussions with local county officials
should provide assistance in determining risk experience and coverage under existing
policies. Where the council does not own space, consideration should be given to
purchase of renter's insurance.

Property: Furniture and equipment owned by the council should be insured against loss
from theft, fire and other perils. UO/E provides coverage for all University-owned and -
inventoried business personal property.

Worker's Compensation: The University provides worker's compensation coverage for
all staff supervised by University-paid employees. This coverage includes council-paid
secretaries and any other staff paid by the council but supervised by University-paid staff.




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                                                     Assets
Assets: Assets are classified as current, long-term investments and fixed. If the council
wishes to establish an owner's equity or net worth, then asset balances are required
throughout the accounting cycle.

Current Assets: Current assets are those properties that are either cash or can be
converted to cash within one year, and are designated for current operations:
   1) Cash on hand
   2) Cash in banks, checking accounts, savings or money market accounts
   3) Certificates of deposit with terms of one year or less
   4) Receivables.

Fixed Assets: Fixed assets are tangible or physical properties owned by the extension
council and used in the normal operations of the extension office. It is recommended that
the "straight-line" method of amortizing fixed-asset costs be used. To use the straight-line
method, divide the purchase cost by the estimated life of the item to calculate the monthly
depreciation expense. During the life of the fixed asset, an accumulated depreciation
expense and the current book value are calculated and reported on the balance sheet.
Examples of fixed-asset categories:
    1) Office furniture
    2) Office equipment
    3) Buildings
    4) Land.

Long-Term Investments: Long-term investments are financial instruments or securities
with a term of one year or more that can be converted into cash without interfering with
the normal operations of the extension council:
    1) Certificates of deposits and other such financial instruments with terms of more
        than 1 year
    2) Endowments, restricted or designated
    3) Restricted funds for special purposes
    4) Other investments such as stocks and bonds held for a term of more than one year.

Inventories of Equipment and Furniture: A complete listing of all council-owned non-
expendable furniture and equipment as defined by council policy should be maintained
and reviewed annually. Information, such as date of purchase, where purchased, purchase
cost, serial and inventory numbers, and current location, is used for valuing assets,
insurance documentation, damage or loss reports and budgeting for replacement.

Multicounty Accounts: Multicounty accounts may be established when two or more
counties are engaged in collaborative programmatic efforts and/or funding staff travel
throughout a region and the pooling of funds presents the most effective management and
accounting method. 8000-8999 agency accounts are used to account for funds
administered by the custodial county.



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                                              Financial Reports
As a public body, the council has a responsibility to be informed and to keep its
constituencies informed of its financial operations and condition.

Monthly reports: The CPD is responsible for assuring that a monthly financial status
report is prepared for the council. State statutes require the submission of a monthly
funds requisition be submitted to the county commission.

Quarterly reports: A quarterly report of revenue and expenditures is submitted to
University of Missouri Extension to assist in fulfilling reporting requirements at the state
and national level.

Annual Financial Report: State statutes require an annual financial report to the county
commission. Section 262.617 states: "At the close of each calendar year the council,
through the secretary, shall make an annual detailed report to the county court, covering
all receipts and expenditures, together with a summary of work undertaken and results
accomplished. The report shall be filed with the county court not later than February first,
following the close of the year or portion of year covered by the report."




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