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5580 - Electronic Banking

Policy: Electronic Banking Policy Number: 5580
Date of Original Policy: 10/21/2015 Date Revision Adopted: 11/07/2018
Reviewed by Policy Committee: 10/17/2018 Date of Next Review: 10/21/2021
Replacement of Policy Number:  

The Board of Education recognizes the use of various electronic banking transactions as a faster, easier, and more efficient substitute for paper transactions.  Electronic banking uses computer and electronic technology to streamline the processing and recording of receipts and disbursements, while reducing the cost of processing these transactions.  Receipts, disbursements and transfer in proper circumstances can be processed via electronic funds transfer (EFT) services, whether transferring funds from a savings to a checking account at the same bank or making a payment to a vendor’s bank across the country. Internal controls, such as written policies and procedures, authorizations, segregation of duties and monitoring, however, are still important in the new technological world.

The Board of Education shall authorize the use of electronic banking in accordance with all applicable laws and regulations, including General Municipal Law Section 5-a authorizing the use of electronic or wire transfers and in conformity with the guidelines established by this policy.

The Board of Education also recognizes that most banking institutions no longer provide cancelled paper checks to the customers, but instead offer an electronic image obtained online.  As such, the Board of Education authorizes the acceptance of these electronic images in lieu of cancelled checks as required by statute.

Scope

Electronic banking activities will be used for, but not limited, to the following:

1.    Online banking services (reviewing bank accounts, retrieving bank statement, downloading copies of cancelled checks, making stop payment orders, etc.)
2.    Check fraud prevention services (Positive Pay- Payable Web Services)
3.    Electronic depositing of checks received
4.    ACH Vendor payments (payroll and/or accounts payable)
5.    EFT or wire transfers
6.    Electronic Federal Tax Payment System (EFTPS)
7.    Electronic State Tax Payment System (prompt Tax)

Online Banking Services are recognized as standard practice and procedure for maintaining an effective case management program.  Access to any of the Districts’ online bank accounts will be managed by the Superintendent and Treasurer to allow other users restricted access as necessary for banking functions as needed. (Examples of various online banking functions include monitoring account balances, Issuing stop payment orders, retrieving copies of cancelled checks, ordering deposit slips, etc. )

Check Fraud Prevention Services- to help protect against the threat of check fraud, a file of all cash disbursements payments made by paper checks will be uploaded to the bank’s web payables check fraud prevention system. This process provides details about checks the District has written and compares that information to checks being processed to the bank for payment. The benefits include reducing the risk of check fraud by providing the District with the ability to monitor and control checks presented against any District account so only authorized items are paid.

Electronic Funds Transfers (EFT’s) and wire payments can only be initiated by the Treasurer or Deputy Treasurer.  All bank transfers and wire payments must be reviewed by the Account Clerk.  The recording of such transactions will be captured manually by the Treasurer through the use of journal entries which are approved in the financial software by the Superintendent.  Bank call back features will be utilized when available.  

Payroll ACH Payments are restricted to Payroll related deduction payments to authorized third party administration of the District and are authorized by the Superintendent after standard processing of payroll.  Such transfers are completed by the Treasurer, with payments taken from the Trust and Agency Fund bank account. Recording of such transaction will captured manually by the Treasurer through the use of journal entries .

Accounts Payable ACH Payments are authorized by the Treasurer after standard processing and recording through the accounts payable transaction cycle and claims auditing process. Recording of ACH vendor payments will be the responsibility of the Treasurer through the standard posting of the monthly cash disbursements journal. All payments made through this process are subject to the same claims audit process as exists currently with paper drawn checks.  Release of payments is made by the Treasurer only after the completion of the approval and claims audit process.

Revenue Collection
 
1. Electronic deposits of check means of utilizing a secure banking check scanning device for checks received are authorized as delegated by the Superintendent. The use of an electronic scanning device helps improve security, efficiency and cost effectiveness of making deposits recording of such deposits will be the responsibility of the Treasurer through the standard posting of the cash receipts monthly journal.

2. Electronic payments received from customers are acceptable and may be recorded via manual journal entries or through the regular cash receipts transaction journal and the discretion of the Superintendent/Treasurer.  

Monitoring
The Superintendent is responsible for implementing adequate internal controls for each of the electronic banking methods utilized.  An effective internal control system includes, but is not limited to, segregation of duties, proper authorization, an adequate documentation for all electronic transactions.

 
 
Superintendent: James R. Froio
Phone: 315.689.8500
Address: 9 N. Chappell St., PO Box 902 | Jordan, NY 13080