ALL AGENCIES, DEPARTMENTS, AND DISTRICTS GOVERNED
BY THE BOARD OF SUPERVISORS
EFFECTIVE: October 1, 1979
REVISED: 4/83, 2/2000
_________________________________
David E. Sundstrom, Auditor-Controller
1.
POLICY
The Board of Supervisors may establish a cash
difference fund for an officer of the County pursuant
to Government Code Sections 29370 through 29390.1.
The accountability for the use of cash difference
funds is to the Board of Supervisors.
Applications to establish, increase, reduce, discontinue,
or replenish cash difference funds are made to the
County Auditor-Controller, who is authorized to
perform the functions of the Board under Government
Code Section 29370.1 and Board Resolution Number
99-135 dated April 6, 1999.
1.1
Purpose
The purpose of this procedure is to assist
officers of the County to establish, increase,
reduce, replenish, and discontinue cash difference
funds in conformance with requirements set
forth in Government Code Sections 29370 through
29390.1.
1.2
Authority
Authority
Subject
California
Government Code Sections 29370 through
29390.1
Establishment and replenishment
of county cash difference funds.
Board of
Supervisors’ Resolution No. 83-354
dated March 8, 1983
Authorizes Auditor-Controller
to perform the functions of the Board
to replenish cash difference funds.
Board of
Supervisors’ Resolution No. 99-135
dated April 6, 1999
Authorizes Auditor-Controller
to perform the functions of the Board
to establish, increase, reduce and discontinue
cash difference funds.
1.3
Definitions
1.3.1
Officer
"Officer of the County",
includes any elective or appointed officer
of the County, and any person in charge
of any office, department, service,
or institution of the County, or a division
or branch thereof, and as enumerated
in Section 24000 of the Government Code.
1.3.2
Cash Shortage
Deficits occurring from employee mishandling
of cash receipts or disbursements. These
deficits occur during daily operations
such as accepting money and making change
in over-the-counter transactions.
1.3.3
Cash Loss
Loss or deficit occurring due to a
theft or mysterious disappearance.
2.
PROCEDURE
2.1
Establishing or Increasing Fund
2.1.1
Written Request
An officer wishing to establish or
increase a cash difference fund shall
send a written request to the Auditor-Controller
General Ledger Unit, stating the need
for the fund or the reason for the increase,
and the amount requested.
2.1.2
Auditor-Controller Review
The Auditor-Controller reviews the
request for County procedural and operating
rules compliance. If the request is
approved, the Auditor-Controller authorizes
the issuance of a check establishing
or increasing the fund. The Auditor-Controller
assesses the size of requests for increases
based on prior activity for cash difference
fund replenishments.
2.1.3
Internal Control Weaknesses
The Auditor-Controller may elect not
to increase the fund of a department
or agency with material cash difference
fund internal control weaknesses until
such weaknesses are corrected. Frequent
replenishments for employees with chronic
shortage problems may constitute evidence
of internal control weaknesses.
2.2
Use of Fund
2.2.1
Increase Amount Tendered
The cash difference fund may be used
to increase an amount tendered to any
officer on an account when an underpayment
of $10.00 or less exists.
NOTE: Each County officer should analyze
each situation and determine if use
of cash difference funds for this purpose
is both cost-effective and beneficial
to the County. A County officer has
the prerogative of not using the fund
for this purpose or for setting a limit
less than the $10.00 maximum.
2.2.2
Reimburse Cash Shortage
The cash difference fund may be used
to reimburse a cash shortage of County
funds. The reimbursement shall not exceed
the amount in the cash difference fund.
NOTE: If the shortage exceeds the cash
on hand in the cash difference fund,
a written application to the Auditor-Controller
can be made to have the fund replenished.
(See Section 2.3 following.)
2.2.3
Not Used to Replenish Cash Losses
Cash difference funds cannot be used
to replenish cash losses. Any evidence
of burglary, theft or mysterious disappearance
of County funds should be immediately
reported to the Sheriff-Coroner or appropriate
police agency. For additional requirements,
refer to County Accounting
Procedure (CAP) No. C.3., "Cash
Losses."
2.2.4
Report to Officer
In accordance with Government Code
Section 29373 in a department or agency
with a cash difference fund, the director
or department head shall be provided
with a written report setting forth
the exact sum of any cash deficit or
overage by the close of each business
day. The report shall be prepared by
the person who receives and disburses
money placed in his or her custody as
directed by law or by official authority.
2.3
Replenishment of Fund
2.3.1
Application for Replenishment
Application for replenishment shall
be in writing to the Auditor-Controller.
Each application must include the following:
Itemization of each cash shortage
and/or underpayment.
Dates of occurrences.
Names of employees whose accounts
were reimbursed from the fund.
2.3.2
Statements Included in Replenishment
Application
Individual cash shortages of $10.00
or more must reference the following
applicable statements:
Circumstances of the deficit have
been reviewed by management and
there is no evidence of fraud or
gross negligence.
Where necessary, specific steps
have been taken to modify procedures
and increase control to preclude
similar instances from occurring.
(Briefly describe new or revised
procedures.)
Individuals accountable for cash
shortages have not had a history
of cash shortages, or if they have
had a history, they have received
additional counseling and training.
2.3.3
Authorized Signature
Application for replenishment must
be signed by the department/agency head,
or, in case of his/her absence, by the
Chief Deputy or an Assistant Director.
2.3.4
Auditor-Controller Review
The Auditor-Controller reviews the
application for replenishment for compliance
with procedures and determines the amount
of replenishment. If the Auditor-Controller
does not concur with the application,
it is returned to the department/agency
for correction or completion.
2.3.5
Issuance of Check
After concurrence, the Auditor-Controller
issues a check to the officer who requested
replenishment. The replenishment is
charged to expenditure Object Code 1701,
"Cash Difference," in the
fund/agency of the department/agency
in which the shortages were incurred.
2.3.6
Amount of Replenishment
An application for replenishment should
not exceed the total amount of the cash
difference fund. Applications should
be prepared considering the time required
for review and check preparation.
2.3.7
Recovery of Shortage
If a shortage for which the cash difference
fund has already been replenished is
recovered, the department or agency
shall restore this amount into the cash
difference fund and reduce the subsequent
request for replenishment. Each such
recovery should be noted as a separate
item on the request for replenishment.
2.4
Discontinuance of Fund
2.4.1
Written Request
The officer may send a written request
to the Auditor-Controller General Ledger
Unit to discontinue the cash difference
fund. Upon receipt of the request, the
Auditor-Controller directs the officer
or designee to deposit any unused balance
of the cash difference fund into the
County treasury and to submit an accounting
for the portion of the fund that was
used, in accordance with Government
Code Section 29379.
2.4.2
Deposit of Unused Balance
The deposit of the unused balance
of the cash difference fund is recorded
in Balance Sheet Account Code 8030,
"Cash Difference Funds," on
a deposit order. The deposit order shall
be prepared in accordance with CAP
No. C.4., "Deposits."
2.4.3
Final Accounting
The officer submits a final accounting
report with the information required
for replenishments as described in Sections
2.3.1 through 2.3.3 of this Procedure.
The report must account for any remaining
balance of the cash difference fund
that is not deposited according to Section
2.4.2 of this procedure.
Upon receipt of the final accounting
from the officer, the Auditor-Controller
prepares a journal voucher to record
the used portion of the fund as expenditures
in Object Code 1701, "Cash Difference,"
with an offsetting entry reducing Balance
Sheet Account Code 8030, "Cash
Difference Funds."
2.5
Transfer of Fund
The cash difference fund will be transferred
whenever a change in County officers occurs
and the outgoing and incoming officers are
both available and willing to sign the transfer
request.
2.5.1
Statement of Assets Transferred
The outgoing and incoming officers
submit a Statement of Assets Transferred
to the Auditor-Controller General Ledger
Unit to transfer the cash difference
fund and other assets from the outgoing
to the incoming officer. Both officers
must sign the Statement. See CAP
No. M.4., "Requirements of Elected
Officials Assuming or Leaving Office."
2.5.2
Auditor-Controller Approval of Transfer
Upon receipt of the Statement of Assets
Transferred, the Auditor-Controller
notes the transfer in the cash difference
fund records. A written confirmation
of the transfer is sent to each of the
affected officers.
2.6
Termination of Officer
The cash difference fund must be discontinued
whenever an outgoing officer’s employment
is terminated or the outgoing officer is unavailable
or unwilling to sign a Statement of Assets
Transferred Form as described in CAP
No. M.4.. In such circumstances, the final
deposit and the final accounting are submitted
by the incoming or interim officer.
2.7
Safeguarding the Fund
Funds granted to an officer must be retained
in safekeeping equipment within the department/agency
or in a bank checking account, or both. The
County Treasurer will normally assist in establishing
a checking account to avoid bank charges.
2.8
Annual Report
The Auditor-Controller shall render a written
report and give an account to the Board of
Supervisors of cash difference funds used
at the end of each fiscal year and at such
other times as the Board directs or the Auditor-Controller
determines is necessary. The Annual Report
will contain a summary of cash difference
fund establishments, replenishments, increases,
reductions, transfers, and discontinuances
requested and received by each department/agency.
Legal