707 Accounts Payable Policies
 
Accounts Payable policies and procedures have been developed to assure authorization and documentation of all expenditure checks. They are responsible for paying all invoices for the Troy University system. These items include (but not limited to): 1) Invoices attached to approved purchase orders for materials or services received; 2) Student refunds; 3) Utility bills; 4) Invoices attached to approved check requests; 5) Approved travel reimbursement reports; 6) Memos requesting payment with proper documentation; 7) Payments to individuals through consulting agreements for services rendered; 8) Payments to contractors and other vendors for construction projects paid through plant and reserve funds.

The approval levels for various payments can be found in the Financial Adminstration Policy section (701). Note: This information can also be found on the Controller website in the Financial Policies section.

To expedite the processing of check requests, the Accounts Payable Check Request form has been developed for use when requesting checks not related to travel reimbursements or purchase order payments. Payment procedures for purchase orders issued to vendors are described in the Purchasing Policy Section . Payments for other check requests include travel reimbursements, consultant professional service agreements, petty cash replenishments, refunds, etc., must be approved by the department chair, dean, vice chancellor, and/or Senior Vice Chancellor for Finance and Business Affairs prior to processing.

The check requests are only to be used for purchases less than $500.00, all other purchases should be on a purchase order or an approved credit card. The accounts payable check request is to be limited in use. Therefore, vendor payments over $500.00 should have prior approval which will expedite the payment process and eliminate invoices from being held for approval.

All checks will be mailed from the Accounts Payable area unless extenuating circumstances occur. The need to decrease lag time for paying vendors requires checks not to be returned to the department requesting payment. The only exception to this requirement is the payment of employee travel.

The purchase order needs to be approved prior to vendor payment. The departments will create their own requisition on line, however accounts payable needs a copy of the approved purchase order to attach to the invoice.

708 Sales and Use Tax
 
Sales and use tax compliance at Troy University is governed by the following policies/procedures:
  1. All departments and branches must request approval from the appropriate senior administrator prior to initiating new sales activities.
     
  2. The Tax Director shall be notified of all new sales activities.
     
  3. If sales are delivered outside the State of Alabama or if sales activities are conducted outside the State of Alabama, it is the responsibility of the department or branch personnel to complete all registration and license procedures in that state, acquire guidelines and report forms for sales and use taxes in the state, and ensure that all sales activities comply with sales and use tax regulations in the state. These activities should be coordinated with the Troy System Director of Tax Services.
     
  4. Deposits: departments should reconcile taxable sales collections daily and submit deposits with appropriate reports to the campus Cashier.
709 Asset Management
 
Asset management functions are vital to safeguard current Troy assets and to assure future growth. The following policies and procedures have been developed to enhance the University's asset management.

709.1 Investment Policy (Board Resolution #24, approved 3/17/89)

Because of the diverse nature of the funds coming under the management and Control of the Board and the corresponding operational needs of the University, the policies and practices hereinafter set forth necessarily separate funds into two investment categories. Category one is Operational Fund Investments,consisting of relatively short-term investments, while the other is Permanent Fund Investments, which consist of relatively longer-term investments.Operational Fund Investments are applicable to the following fund groups:

-Current funds

-Loan funds

-Agency funds

-Plant funds

The Board's objective for Operational Fund Investments is to maximize current investment returns consistent with the liquidity
needs of the University and to protect principal.

The Chancellor or his designee shall be responsible for the direct investment and administration of Operational Fund Investment; however, such investments shall be limited to the following marketable securities:

-Direct obligations of the United States of American or obligations unconditionally guaranteed as to the principal and interest by the United States of America

-Obligations of any agency or instrumentality of the United State of America

-Repurchase agreements secured by the U.S. Government and Agency obligations

-Shares in externally managed money-market funds, specifically approved by the Board

-Certificates of deposit with commercial banks secured as required and approved as depositories by the Board

The maturity range of Operational Fund Investments shall be consistent with liquidity requirements of the funds in this category. However, funds established under certain debt instruments may be invested in accordance with the applicable criteria.

Permanent Fund investments are applicable to the following fund groups.

-Endowment (including funds functioning as endowment)

-Life income and annuity funds

The Board's objective for Permanent Fund Investment is to emphasize income growth (with safety and consistency) and principal growth at a rate at least equal to inflation. Risk tolerance of Permanent Fund Investments must be considered in order to conserve principal properly.

The Chancellor or his designee shall be responsible for the direct investment and administration of the several categories of Permanent Fund Investments; however, unless otherwise restricted by the donor, such investments shall be limited to the same marketable securities allowable for Operational Fund investments.

All funds are to be invested in accordance with the above criteria unless there are specific restrictions placed on individual investments by external donors. In such cases, these funds shall be separately invested in accordance with the restrictions set forth by the donor.

709.2 Depositories of University funds

Depositories of University funds must be approved by the Troy University Board of Trustees. With the Board's approval of a depository, the Senior Vice Chancellor for Finance and Business Affairs may authorize the establishment of accounts as needed to support the operations of the Troy University accounting system. The Senior Vice Chancellor for Finance and Business Affairs will ensure that all University funds on deposit are adequately collateralized.

When establishing checking accounts, the Senior Vice Chancellor for Finance and Business Affairs will select the type of account which will assure maximum interest income on the funds being maintained in the accounts. Because of the nature of funds and/or activity, it may be necessary to establish regular checking accounts which do not accrue interest; however, the funds maintained in these accounts will be minimal.

710 Internal Controls
 
Internal control is imperative to safeguard assets, to ensure the accuracy and reliability of accounting data, to promote operational efficiency, to protect personnel, and to help ensure adherence to prescribed policies and institutional regulations. It is the responsibility each administrators and department chair to utilize these basic policies and procedures to establish guidelines which apply specifically to the functions and activities within their departments and /or units and which ensure effective internal control within the individual departments. Each administrator and departmental chair should monitor activities to assess effectiveness of operations, adequacy of controls, and compliance with established laws, regulations, policies, and procedures.

The following general procedures are recommended for departments maintaining petty cash funds and/or collecting for sales, rentals, and/or services:

Petty Cash: Cash on hand and paid invoices must at all times equal the amount of the authorized Petty Cash Fund. In the event an authorized Petty Cash Fund has been divided and is located in more than one office, there must be a memorandum available authorizing and reflecting the distribution of petty cash in the two locations. The department must request receipts for all petty cash disbursements, and may initiate the replenishment of petty cash funds by submitting a Check Request Memorandum, with original receipts attached, to the Controller.

The department should always maintain copies of all check requests and receipts. At least one a year, audits are performed on all petty cash funds by the Controller’s Department.

Resale Activities: The cash register tape of all daily sales must be retained as a permanent file. Resale activities will submit daily deposits Student Financial Services/Cashier. The deposit reports will reflect the date of collections, the amounts of cash, checks, credit cards, and petty cash and Funds Held slips included, and appropriate account number(s) to be credited. Two calculator tapes must accompany all checks; a tape should be run on each of the two check amounts shown. The departments/units should maintain a copy of all deposit reports and Student Financial Services/Cashier cash receipts.

Service/Rental Fees: All departments that collect fees for a service or for rental must utilize a numbered receipt book with duplicate copies to document all collections. The original receipt should be given to the customer and the copy should remain in the book. All deposit reports should reflect the date(s) of collections, appropriate account number(s) to be credited, the amounts of cash, checks, credit cards, and petty cash slips included, and the beginning and ending receipt numbers for collections being deposited. Two calculator tapes must accompany all checks; a tape should be run on each of the two check amounts shown.

The last receipt copy of each deposit should be identified by the notation of "Deposit and Date" on the front of the copy. The departments should maintain a copy of all deposit reports and Student Accounts Receivable cash receipts on file.

Bank Deposits: All departmental/unit funds will be deposited intact; all collections for a specified period will be deposited at the same time. No funds will be carried forward to a later deposit. A collections report, showing the date(s), inclusive receipt numbers, summary of collections by account number and the amounts of cash, checks, credit cards, and petty cash slips included, should be supported by a bank deposit.

The reports should be consecutively numbered and filed in numerical order with the deposit slip attached as a permanent record. All cash and checks received by a department should be deposited in the campus Student Financial Services/Cashier office no later than the next business day. If a department's operations do not conform to any of the activities described above, the Controller will advise the department chair in establishing appropriate procedures for these operations.

710.1 Internal Audits

Internal audits will be performed at random and/or upon request. The Senior Vice Chancellor for Finance and Business Affairs may select the departments and/or activities to be audited, and will determine whether a financial, operational, or compliance audit will be conducted. Administrators, and department chairs may request internal audits by submitting a memorandum to the Senior Vice Chancellor for Finance and Business Affairs explaining the purpose of the requested audit.

With authorization and instructions from the Senior Vice Chancellor for Finance and Business Affairs, these audits will be conducted by the Controller’s staff. The departments/units will not be given prior notice of the audits; however, consideration will be given to departmental activities when scheduling the audits. Internal audits will begin with an interview with the administrator or department chair(s). Everyone will be expected to cooperate fully with the internal auditors in supplying the requested records and information.

Upon completion of the audit, the Senior Vice Chancellor for Finance and Business Affairs will conduct an exit conference to advise the appropriate administrator or Dean of audit findings and recommendations. These administrators will also receive a copy of the formal audit report submitted by the Senior Vice Chancellor for Finance and Business Affairs.

If internal audits should disclose findings of misuse or abuse of University resources, a complete description of the findings will be documented in the audit report, including the names of any individuals involved. The Chancellor, Senior Vice Chancellor for Finance and Business Affairs, and senior administrators will review the nature and severity of the findings and determine the appropriate corrective actions. In addition to adjusting internal controls, policies, and procedures, Troy University officials may respond with any of the following actions:

-Submit written notice of audit findings and reprimand to individual(s) involved, with permanent copy to be placed in Personnel Files.

-Reassign employee(s) to another position and/or department.

-Request immediate restitution of Troy funds.

-Request immediate resignation of employee(s).

-Initiate immediate dismissal of employee(s).

-Report findings to University Police for possible criminal prosecution.

710.2 External Audits

All external audit functions are coordinated by the Senior Vice Chancellor for Finance and Business Affairs. Annual audit reports are submitted to the Chancellor, who subsequently reports this information to the Troy University Board of Trustees. External audits at Troy University are annually conducted by the State of Alabama Department of Examiners of Public Accounts. These audits are conducted in accordance with generally accepted auditing standard and Government Auditing Standards, issued by the Comptroller General of the United States. These standards require that all audits be planned and performed to obtain reasonable assurance about whether the financial statements are free of material misstatement.

The audits include examination, on a test basis, of evidence supporting the amounts and disclosures in the financial statements. Assessment of the accounting principles used and significant estimates made by management, and evaluation of the overall financial statement presentation are also included in external audits.

In addition to the Examiners of Public Accounts, external audits may also be conducted by federal agency auditors, the U.S. General Accounting Office, the U.S. Internal Revenue Service, and state and local government agencies. External auditors should begin the audit with a conference with the Senior Vice Chancellor for Finance and Business Affairs and/or University administrators subject to audit. All Troy department chairs are expected to cooperate fully with these external auditors in supplying the requested records and information.

Upon completion of audits, an exit conference must be held with the same Troy administrators to discuss findings and recommendations of the external audits. Copies of the formal audit report must be provided to the Senior Vice Chancellor for Finance and Business Affairs and the Chancellor. The University must then take action on the audit recommendations, and if requested, follow with the appropriate audit response.