ALL AGENCIES, DEPARTMENTS, AND DISTRICTS
GOVERNED BY THE BOARD OF SUPERVISORS
EFFECTIVE: 1/00
_________________________________
David E. Sundstrom, Auditor-Controller
1.
POLICY
Many accounting transactions are recorded on Journal
Vouchers. Journal Vouchers are prepared by Auditor-Controller
accounting staff and by authorized individuals in
various departments and agencies. Collectively,
the Journal Vouchers serve as the General Journal
for the County of Orange.
To ensure that transactions are recorded according
to accounting principles, legal requirements, County
policy, and the coding restrictions of the computerized
financial information system, Journal Vouchers are
reviewed by the General Ledger Unit of the County
Auditor-Controller.
1.1
Purpose
The purpose of this procedure is to establish
preparation and review guidelines and criteria
for approving transactions recorded on Journal
Vouchers.
1.2
Authority
Authority
Subject
Government
Code Section 26881, and Board of Supervisors’
Resolution No. 82-162 dated February
2, 1982
Auditor-Controller prescription
of and supervision over accounting forms
and methods
Accounting
Standards and Procedures for Counties,
Sections 3.04, 3.05, and 3.12
Journals, General Ledgers,
and Journal Entries
1.3
Definitions
1.3.1
Journal Voucher
Journal Vouchers are documents used
to record accounting adjustments, accruals,
transfers, and other transactions not
automatically recorded through the processing
of source documents in the County accounting
system. The controls described in this
Procedure do not apply to automated
interface transactions as described
in detail in Section
2.8.
Other documents may also be used to
record accounting transactions; for
example, Deposit Orders are used to
record cash receipts. See Exhibit
I for an example of the Journal
Voucher form. All PC-generated Journal
Voucher forms must be in this basic
format.
A transaction is an event that causes
a change in the assets, liabilities,
fund balance, or retained earnings of
a fund. Transactions are recorded as
journal entries on Journal Vouchers.
1.3.4
Debit
A debit is an increase to assets or
expenditures, or a decrease to liabilities,
fund balance, retained earnings, or
revenues. Debits are recorded in the
left columns of Journal Vouchers.
1.3.5
Credit
A credit is an increase to liabilities,
fund balance, retained earnings, or
revenues, or a decrease to assets or
expenditures. Credits are recorded in
the right columns of Journal Vouchers.
1.3.6
Fund
A fund is a fiscal and accounting
entity with a self-balancing set of
accounts established for the purpose
of carrying on specific activities,
or attaining certain objectives, in
accordance with specific regulations,
restrictions, or limitations.
1.3.7
Agency
In the County accounting system, an
agency is a designated subset of a fund.
Most County departments or agencies
use an assigned agency number within
the County General Fund.
1.3.8
Operating Transfers Out
Legally authorized transfers of funds
from a fund receiving revenue to another
fund through which the resources will
be expended. Operating transfers out
are recorded in the 4800 through 4809
object codes, depending on the number
of the fund to which the transfer is
being made. Operating transfers out
must be appropriated in the Board-approved
budget, or a separate Board action is
required to provide the necessary appropriations.
1.3.9
Residual Equity Transfers Out
Nonrecurring or nonroutine transfers
of equity between funds. Residual equity
transfers out are recorded in the 5000
through 5009 object codes, depending
on the number of the fund to which the
transfer is being made. Residual equity
transfers out must be appropriated in
the Board-approved budget or a separate
Board action is required to provide
the necessary appropriations.
2.
PROCEDURES
2.1
Use of Journal Voucher Form
The Journal Voucher form is used to record
charges from one fund or agency to other funds
or agencies, to allocate revenues and expenditures
from one fund or agency to other funds and
agencies, to record operating and residual
equity transfers from one fund to another
fund, to allocate expenditures and revenues
to different organizations and/or activities
within a fund or agency, and to make corrections
to other transactions.
2.2
Preparation of Journal Voucher Form
The Journal Voucher form must be filled
out completely and conform to the following
minimum requirements:
Description field is limited to 25 characters.
Agency No. of the preparing agency must
be filled in.
Journal Voucher No. should be left blank
and will be completed by the Auditor-Controller
General Ledger Unit. (See Section
2.4 of this Procedure.)
All required account coding information
must be filled in.
Cash entries must be posted to the columns
labeled "For Cash (8010) Entries
Only."
The total of debit amounts must equal
the total of credit amounts.
A detailed description of the purpose
of the Journal Voucher must be included
in the "Explanation" section
of the form.
The preparer must sign in the "Prepared
By" section, date the Journal Voucher,
and include his/her telephone number.
Indicate under the "CC:" section
who should receive copies of the Journal
Voucher.
Back-up documentation must be attached
to the Journal Voucher to support the
amounts included on the form. If the documentation
is too voluminous, a reference must be
included in the "Explanation"
section indicating that back-up for the
Journal Voucher is available at the preparing
department and referencing the files containing
the documentation.
The "Approved By" section
must be signed by an authorized signer
for the department or agency. (See Section
2.3 of this Procedure.)
It is the responsibility of the department/agency
staff preparing and authorizing the Journal
Voucher to insure that the transaction being
recorded is:
Legal
Budgeted
Adequately supported by auditable documentation
2.3
Signature Authority
2.3.1
Authorized Signer
Each Journal Voucher must be signed
in the "Approved By" section
by a person included on the department’s/agency’s
Authorized Signature List on file with
the Auditor-Controller. The signature
must appear on the Authorized Signature
List for the Funds or Agencies with
expenditure or cash reduction transactions
on the Journal Voucher, with the exception
of Journal Vouchers to record cost applied
and interfund transactions. The signer
must have specific authority to sign
Journal Vouchers, be listed on the Authorized
Signature List with authorization to
sign in the absence of the Department
Head, or be the Department Head. Journal
Vouchers prepared for departments or
agencies with agency accounting support
from the Auditor-Controller must be
signed by an authorized person from
the accounting staff.
2.3.2
Cost Applieds/Interfund Billings
Some Journal Vouchers record cost
applied transactions or interfund billings
between agencies or funds. Funds or
agencies that are billed on a journal
voucher may be controlled by departments
or agencies other than the department
or agency preparing the Journal Voucher.
A person authorized to sign for the
billing department or agency recording
the reimbursement must sign such Journal
Vouchers. The General Ledger Manager
shall review such transactions to determine
whether they appear to be reasonable
before approving the Journal Vouchers
and submitting them for processing.
2.3.3
Form of Authorization
An authorized signature may appear
in handwritten form or as initials adjacent
to typed or machine-printed names. Only
original documents will be processed.
Photocopies will not be accepted. Journal
Vouchers that lack authorized signatures
in the correct form will be returned
to the submitting department or agency.
2.4
Assignment of Journal Voucher Numbers
The Auditor-Controller General Ledger Unit
assigns a Journal Voucher transaction number
to each Journal Voucher received. The transaction
number identifies the month of processing,
the department or agency submitting the Journal
Voucher, and the sequential position of the
transaction in the month. For example, the
fifth Journal Voucher submitted by the Auditor-Controller
in October would bear the number JV 003 10-00005.
2.5
Auditor-Controller Review of Journal Vouchers
2.5.1
General Ledger Unit Responsibility
The Auditor-Controller General Ledger
Unit Manager or other designated Deputy
reviews and signs Journal Vouchers before
the documents are submitted for processing.
2.5.2
Journal Voucher Requirements
Certain types of transactions or transactions
in certain funds are subject to legal
or policy restrictions. The Auditor-Controller
shall withhold Journal Vouchers from
processing if they violate the following
guidelines:
Transactions must be logical and
correct in form.
Debits and credits must be equal
for the Journal Voucher as a whole
and for each fund.
Transactions must be recorded
with proper account coding. The
account coding must be appropriate
for the type of transaction being
recorded.
The Journal Voucher form must
be prepared in the proper form.
For example, balance sheet accounts
must be in the correct column.
Cash entries (8010) must be properly
recorded, without Agency account
coding, and in the appropriate columns.
Adequate descriptions of transactions
including a detailed description
of the purpose of the Journal Voucher
must appear on all Journal Vouchers.
It is the responsibility of the department/agency
staff preparing and authorizing the
Journal Voucher to insure that the transaction
being recorded is:
Legal
Budgeted
Adequately supported by auditable
documentation
2.5.3
Large Dollar Amount Transactions
The Auditor-Controller reviews transactions
of large dollar amounts to determine
whether they create appropriations or
cash deficits. Journal Vouchers that
would create deficits are withheld until
the preparing department or agency can
make appropriate adjustments.
2.5.4
Department/Agency Account Monitoring
Auditor-Controller review of Journal
Vouchers is not a substitute for departmental/agency
monitoring of accounts. All departments
and agencies are responsible for frequent
inspection of ledgers to verify that
no inappropriate transactions are recorded.
2.5.5
Interfund Billings
The Auditor-Controller reviews interfund
billings for reasonableness. If a transaction
appears to be unreasonable, the department
being billed will be called for verification
before the Journal Voucher is submitted
for processing.
Interfund billings must be approved
as part of the budget process, and agreed
upon by both the department/agency being
charged and the billing department/agency.
Journal voucher charges in excess of
arranged amounts should be submitted
by the billing department/agency to
the department/ agency being charged
for review prior to transmittal to the
Auditor-Controller for processing. Refer
to CAP No. J.1., Cost
Applied and Interfund Transactions.
2.5.6
Interfund Loans
The Auditor-Controller verifies that
any Journal Vouchers recording interfund
loans have been approved by the Board
of Supervisors. Journal Vouchers to
record loans without Board approval
or in excess of approved amounts will
be withheld from processing until Board
approval is obtained.
2.5.7
Land and Structures and Improvements
Journal Vouchers to record expenditures
for land or structures and improvements
will not be processed without correct
project identification.
2.5.7.1
Land Expenditures, Object 4100
Transactions with expenditures
in Object 4100 must include an
organization code (ORG) to identify
the specific land project or parcel.
Land ORGs begin with the letter
"L." See CAP
No. FA.2., Fixed Asset Expenditure
Coding.
2.5.7.2
Buildings and Improvements,
Object 4200
Transactions with expenditures
in Object 4200 must include an
ORG to identify the specific structure
being built or purchased. Object
4200 ORGs for most departments
or agencies begin with the letter
"P." Entries to cost
apply 4200 charges using the 4209
account, Buildings and Improvements
Reimbursements, must charge the
expenditure to Object 4200 in
the fund or agency being billed.
See CAP No.
FA.2., Fixed Asset Expenditure
Coding.
2.5.8
Fund Balance Unreserved Account 9990
Transactions involving the Fund Balance
Unreserved Account 9990, are not permitted.
The only exceptions are Board-approved
changes to reserves and transactions
in the 101 Overage Fund and 650 School
Control Fund.
2.5.9
Operating Transfers and Residual Equity
Transfers
The Auditor-Controller verifies that
Board-approved appropriations are available
for all transactions involving operating
transfers out or residual equity transfers
out.
2.5.10
Job Charge Correction Journal Vouchers
Special Journal Vouchers for job charge
corrections cannot contain any cash
transactions. Corrections involving
multiple funds must be corrected on
conventional Journal Voucher forms.
See Exhibit
II.
2.6
Auditor-Controller Approval of Journal
Vouchers Over $5,000,000
2.6.1
Journal Vouchers Under $5,000,000
If the total of any debit or credit
column of a manually prepared Journal
Voucher is less than $5,000,000, the
General Ledger Manager or other designated
Deputy may sign the Journal Voucher
after proper review and submit it for
processing.
2.6.2
$5,000,000 to $25,000,000
If the total of any debit or credit
column is $5,000,000 or above, up to
a total of $24,999,999, the Journal
Voucher must be
reviewed and initialed by the
General Ledger Manager or other
designated Deputy, and
signed by an Accountant/Auditor
Manager I or above.
2.6.3
$25,000,000 or Above
If the total of any debit or credit
column is $25,000,000 or above, the
Journal Voucher must be
reviewed and initialed by the
General Ledger Manager or other
designated Deputy,
reviewed and initialed by an Accountant/Auditor
Manager or above, and
reviewed and signed by a Division
Chief, the Chief Deputy or the Auditor-Controller.
2.7
Deposit Order Corrections
Except for H&CD Accounting, corrections
to Deposit Orders must be corrected by Journal
Vouchers prepared by the Auditor-Controller/Accounts
Receivable Unit. A department or agency that
desires a Deposit Order correction sends a
memo to the Supervisor of the Auditor-Controller/Accounts
Receivable Unit referencing the date and number
of the Deposit Order to be corrected and explaining
the reason for the correction.
2.8
Automated Journal Voucher Interface Transactions
Some transactions are transmitted to the
accounting system, and ultimately to the accounting
ledgers, as automated interface transactions.
The transaction data is entered into departmental
computer systems by the preparers. This data
is transferred into the central accounting
system via computer tape input or other electronic
transfers. No paper document is sent to General
Ledger for review prior to entry into the
system. A hard copy of the transactions is
sent to General Ledger for filing after the
transactions have been processed.
There are certain system controls to prevent
fundamental errors in the automated transactions.
However, transactions are not reviewed for
available appropriations, cash, or other restrictions
until after they are processed. Departments
and agencies that process automated Journal
Voucher transactions are responsible for insuring
that the transactions are legal, budgeted,
and adequately supported by auditable documentation.
2.9
Deadline for Submitting Journal Vouchers
The daily deadline for submitting Journal
Vouchers is 12:00 noon. Journal Vouchers submitted
to the Auditor-Controller/General Ledger Unit
after 12:00 PM may not be submitted for processing
until the following day.
2.10
Restrictions on Transactions Recorded in
Certain Funds or Agencies
2.10.1
Professional Consultants Recovery
Agency 018
Billings to 018 require approval by
CEO/Public Finance.
2.10.2
Employees Retirement Fund 157
Transactions other than payroll transactions
are not permitted. The Orange County
Employees’ Retirement System (OCERS)
is separate from the County accounting
system for non-payroll transactions.
Bills for services are processed by
sending invoices to OCERS.
2.10.3
Local Transportation Funds 184 and
187
Charges are not normally recorded
against these funds. Journal Vouchers
with such billings are reviewed by the
Orange County Transportation Authority
(OCTA), Auditor-Controller/Claims and
Disbursing, and the Auditor-Controller
before they are processed.
2.10.4
Victim/Witness Fund 266
Billings to the Victim/Witness Fund
266 should be sent to Superior Court
for approval.
2.10.5
Agencies in the Trust Fund 300 Series
Withdrawals from the Trust Fund 300
series agencies can only be recorded
by the authorized personnel from the
controlling department or agency.
2.10.6
School Control Fund 650
Transactions affecting Fund 650, except
for the monthly JV prepared from the
Department of Education reconciliation,
should be withheld until the Treasurer-Tax
Collector has been notified. Only the
Auditor-Controller and Treasurer-Tax
Collector record transactions for Fund
650.
2.11
Disbursements of Cash
Generally, disbursements of cash from County
funds to external entities or individuals
must be recorded on checks, electronic funds
transfers (EFTs) or wire transfers for which
approval is subject to control and review
by the Auditor-Controller Claims and Disbursing
Section. Cash credit entries on Journal Vouchers
are usually only recorded for interfund transfers,
with the following exceptions:
Corrections of check issuances prepared
by the General Ledger Unit cash reconciliation
staff.
ZBA (zero balance account) distributions
for self-insured programs. Board approval
for such agreements is required by law.
A copy of Board approval for each agreement
is maintained in the General Ledger Manager’s
files.
School Control Fund 650 disbursements:
Checks issued by the Department of Education
are not processed through the County accounting
system. The following Journal Voucher
entries are recorded to adjust the cash
balance in the County accounting system:
Monthly disbursements and receipts not
posted in the County accounting system:
The General Ledger Unit prepares this
transaction based on the cash reconciliation
report submitted by the Department of
Education.
NMUSD "sweep" transactions:
The Newport-Mesa Unified School District
(NMUSD) disburses money from the Department
of Education bank account. The Treasurer-Tax
Collector prepares Journal Vouchers to
record these disbursements, based on information
provided by the bank.
Disbursements to school districts (wire
transfers): The Treasurer-Tax Collector
records Journal Vouchers for disbursements
from the Department of Education bank
account to various school districts. A
signed copy of the school district authorization
must be attached to the Journal Voucher.
2.12
Treasurer-Tax Collector Investment Transactions
Journal Vouchers from the Treasurer-Tax
Collector involving account 8070, Specific
Investments, must include attached "Income
Summary" schedules showing the sale of
investments or "Daily Investments"
schedules showing the purchase of investments.
The attached schedules should show the funds
and dollar amounts for the sale or purchases
of investments.
Journal Vouchers with 8070 transactions must
display a statement that the transfers do
not include any inter-fund sales. This statement
must be signed or initialed on the face of
the Journal Voucher.
2.13
Corrections of Journal Vouchers or Checks
If a Journal Voucher records a significant
correction to a previous Journal Voucher or
to a check, the person who signs as Deputy
must add a cc to the General Ledger Accounting
Supervisor. To provide an audit trail, the
General Ledger Accounting Supervisor marks
the original document with the corrected entries
and the correcting Journal Voucher number.
Significant corrections include changes to
dollar amounts, funds, agencies, objects,
revenue sources, and/or balance sheet accounts.
2.14
Auditor-Controller Only Transactions
Some Journal Vouchers contain transactions
that are not entered into the Treasurer-Tax
Collector system because they have already
been recorded in the Treasurer-Tax Collector’s
system. Excluded transactions include:
Clearing fund entries for outstanding
checks (e.g., special P, AP and WE Journal
Vouchers)
Transactions to cancel "trust"
checks from the Trust Fund 300 series
agencies
School Control Fund 650 entries prepared
from the monthly Department of Education
reconciliation.
Legal