FIACCT 19-02_01 Bank Accounts – Trust Bank Accounts – Reconciliation

Effective: April 1, 2002
Revised: March 1, 2008

Purpose

This policy explains the procedures for the reconciliation of trust bank accounts.

Definitions

Bank Statement

The document sent by the financial institution that shows the transactions that have taken place for a specific account during a given period, usually one month.

Trust Bank Account
Reconciliation Form

Finance form FI 57T, used to summarize the bank reconciliation
information.

Background

A monthly reconciliation should be performed comparing the agency’s books and the bank entries. Corresponding entries should be made in FINET to record all activity for the month. This reconciliation is designed to ensure that all entries recorded by the bank are recorded on the agency’s books and in FINET, or are corrected by the bank if in error, thereby ensuring that all cash is properly accounted for and safeguarded.

Policy

It is the responsibility of each state agency with a trust bank account to complete the Trust Bank Account Reconciliation, form FI 57T, each month (a similar worksheet containing the same information is acceptable if approved by the Division of Finance). The completed form(s) should be sent to the Trust and Agency Accountant, Division of Finance (801-538-3171), on a quarterly basis no later than the last business day of the month following the end of each quarter. Attached to the form should be copies of the related bank statements and any supplemental schedules with supporting documentation.

It is the responsibility of each agency to process any necessary transactions in FINET to correct errors found in the reconciliation process and to record trust bank account activity on FINET on a monthly basis. Each agency is required to work with the applicable financial institution to resolve bank errors. All reconciling items are to be appropriately resolved within 90 days or the yearend closing date, whichever is earlier.

Procedures

Responsibility

Action

Agency

Compare detail (both credits and debits) between the current bank statement, the agency’s books, and the previous month’s bank reconciliation to determine which items match.
List on the Trust Bank Account Reconciliation form any deposits that do not have a corresponding entry on the books, including current or previous ones that have not cleared. Deposits on the bank statement not having a corresponding deposit on the books should be listed in Section 1 on the reconciliation form. Deposits on the books that do not have a corresponding deposit on the bank statement are listed in Section 5 of the form.
If there were any returned checks on the bank statement that have not been recorded on the books, including current or previous ones that have not cleared, list them in Section 2 on the reconciliation form.
List any withdrawals that do not have a corresponding entry, including current or previous ones that have not cleared. Withdrawals on the bank statement not on the books should be listed in Section 3 on the reconciliation form, and withdrawals on the books not on the bank statement should be listed in Section 6 of the form.
If there are previous or current differences or errors, record them under Section 4 or Section 7 on the reconciliation form. If the bank is in error, contact the financial institution to clear it up. Check the next month’s statement and ensure that the error is corrected.
Resolve any reconciling items within 90 days or by the closing date on the yearend closing calendar. It is critical that all activity on the bank statement is accounted for in FINET in the same fiscal year.
After the reconciliation is complete, make appropriate entries in FINET to record the deposits and withdrawals. Entries to FINET should be done on a monthly basis. Check to ensure that the FINET balance equals the balance showing on the agency’s books.
Submit the reconciliations on a quarterly basis to the Division of Finance, along with copies of the bank statement and any other supplemental schedules.

Division of Finance

Review the quarterly reconciliations. If there are errors in the
reconciliation process, follow up with the agency to ensure that they are corrected. If there are outstanding items over 90 days that need to be corrected, follow up with the agency to make sure the corrections are made.