SOP No: FS-CS07

SOP Library

SOP NO: FS-CS07 (List of Exhibits/Attachments)

Mission: Finance and Administration

Area: Financial Services (FS)

Activity: Cashiering (FS-CS)

Title:

Revised SOP on Cash Collections and Deposits

Date Approved/Issued: 07/30/1996

Date Effective: 08/01/1996

Digest:

I. TERMS OF REFERENCE

A. Rationale

B. Objective

C. Scope

D. Basis

II. IMPLEMENTING GUIDELINES

Collection

Sources of Cash Collections

Cash collections refer to cash and other cash items received by the NFA from various sources through its Collecting Officers.

Sources of NFA's cash collections are categorized into two, namely :

1.1 Sales - includes proceeds from sales of local and imported grains.

1.2 Others - includes collections from business registrants such as registration and licensing fees, surcharges, income derived by NFA from services offered as a service corporation, refunds of NFA personnel and outside parties, refundable deposits like bidder's bonds, collections, representing the NFA's trust liabilities to other parties, collections arising from previous obligations to the NFA and other miscellaneous collections.

Before the acceptance of these collections, the Collecting Officer shall consider the documents authorizing such payments like Authority to Accept Payment, processed business application forms, and other letters/advises issued to this effect.

Scheme of Cash Collections

2.1 Collections by Regular Collecting Officers of the Central Office and Field Offices

2.2 Collections by Bonded Special Collecting Officers

Acceptable Forms of Cash Collections

The following are the forms of cash collections which can be honored by the Collecting Officers.

3.1 Cash

3.2 Treasury Checks

3.3 Treasury Warrants

3.4 Manager's Checks

3.5 Cashier's Checks

3.6 Postal Money Orders

3.7 Bank Drafts

For check collections, the corresponding official receipt number and date shall be indicated at the back of the check for reference purposes. The check should be payable to the National Food Authority and should not be post-dated or stale. For NFA purposes, stale checks are those that have been outstanding for more than six (6) months except treasury warrants and checks which become stale only if they remain outstanding after 2 years from date of issuance.

Other Acceptable Forms Subject to Conditions

Generally, only the aforementioned forms can be accepted by the NFA as collections. However, the NFA opt to accept other forms mainly for the benefit of its clientele but subject to certain conditions are designed to safeguard the NFA's interest, and therefore, the payors should agree to these conditions if they want to avail of this particular policy. This policy is applicable only for NFA office with Regular Collecting Officers.

4.1

Personal or Company checks

In addition to the regular conditions covering check collections, the following should also be complied with :

a) They should be paid by NFA regular clientele like retailers, hog and poultry raisers, flourmillers, feedmillers, business registrants and other NFA registered/licensed clients or NFA personnel (regular, casual, contractual employees and employees of other government agencies who are officially assigned/detailed at the NFA like NFA based COA personnel.

b) Out-of-town checks maybe accepted provided that the collection shall be charged with a standard bank charge rate of 1/4 of 1% of the amount of

check but not lower than P50.00.

c) They are subject to bank clearing before the release of the original of the official receipt issued thereof. Pending release of the original official receipt,

temporary receipt

(Exhibit 1) shall be issued to the payor to acknowledge the receipt of check.

In case of payments for cash sales transactions, no actual stock withdrawal shall be authorized until clearance of the check/release of original O.R.

4.2

Indorsed Checks and Warrants

A Collecting Officer may accept payments in the form of checks and warrants issued in payment of government obligations upon proper indorsement and identification of the payee subject to the conditions set herein :

a) The payee of the check/warrant should be the same person who has to pay NFA.

b) The payee is limited to NFA registered/licensed clients, NFA personnel (regular, casual or contractual employees), and employees of other government agencies who are officially assigned/detailed at the NFA

like NFA based COA personnel upon recommendation of the head of office to which they are assigned.

c) In case the checks/warrants shall be dishonored, the NFA payor shall still be liable for the sum due to NFA.

Accommodation of Government Checks/Warrants

As an additional benefit to the NFA employees the Regular Collecting Officer may accommodate government checks and warrants drawn in favor of the NFA employees upon approval of the Chief of the Cash Division, Department of Treasury, Budget and Fund Management (DTBFM) for Central Office or Regional Manager/Provincial Manager for field offices subject to certain conditions.

The policies to cover check accomodation are the following :

a) Only government checks/warrants as herein defined shall be honored for accommodation.

b) The accommodation should be approved by the designated official, Chief, Cash Division, DTBFM (C.O.) or Regional Manager/Provincial Manager (F.O.).

c) Only cash collections of Regular Collecting Officers shall be used for authorized accomodation. Therefore accomodation out of cash advances of Disbursing Officers and collections of Special Collecting Officers is strictly prohibited.

d) Those checks encashable from banks within the vicinity of the NFA office shall only be accomodated in cases wherein it is no longer possible for the payee to encash it from the bank within the day since it was made available for release to the employee only after 3:00 p.m., the closing time of the bank. This shall be considered by the approving official in authorizing the accomodation.

e) In case the accomodated check is dishonored by the bank, the payee shall be liable to the NFA for the sum due. Furthermore, if fraud was committed in the encashment, officials or employees who are directly responsible for such illegal transactions are personally liable.

logbook of accomodated checks

(Exhibit II) shall be maintained.

Deposit of Collections

Daily collections from various sources shall be deposited intact not later than the following working day using the proper depository accounts as identified below :

Nature of Collection

Bank Accounts

Local Rice LCC (Local Rice Collection)

Imported Rice Collection IRC

Collection from Registration MSC - Miscellaneous Collection

& Licensing Activities

Penalties, Performance Bonds,

Staff House, Shuttle Bus, Insurance

Proceeds, NFA Collections and

others Income derived by NFA from

services offered as a service

corporation (Warehouse rentals,

trucking fees, drying fees, Milling

threshing and other Post harvest

facilities)

Sale of Imported Yellow Corn ICC - Imported Corn Collection

Collections from PSMS PSMS

Receivable

Collections from JICA 1 & 2 JICA 1 & 2

Government release and GF

availment of loans

In places where there are no authorized depository banks located in the vicinity, the provincial management (PM/Accountant III) shall be responsible for setting-up the frequency of deposits of collections with the nearest bank or remittance to the Cashier III with the concurrence of the COA field auditor.

Remittance of Deposits Out of Collections

1. Per bank agreement, deposits made out of NFA collections shall be remitted by the banks provincial offices to the banks' NFA branch. The bank branch shall credit the usual remittance from provinces to the new accounts based on the aforementioned grouping.

2. Remittances by the banks provincial offices shall be thru telegraphic transfers/bank draft/automatic on-line remittance/transfer.

3. The accumulated balances of deposits for accounts maintained at the provincial office shall be equivalent to the banks minimum balance requirement. Therefore, the balance in excess of P1,000.00 shall be remitted to the banks NFA branch office once a week or preferably every Thursday or as often as necessary. In the event that unremitted collections during any day of the week be more than P500,000.00, said amount shall be immediately remitted without waiting for Thursday of the week.

4. For deposits made to other authorized commercial banks (allowed only in those areas where there are no government banks located), remittance of the provincial offices of said commercial banks are made to the head office of the said bank. Subsequently, such funds shall be transferred from the head office of the commercial bank to the NFA Central Office through the issuance of the Managers' check in favor of NFA.

Collecting Officer

1. Designation of Collecting Officers

The Administrator, as head of the NFA, may designate such number of collecting officers as may be deemed necessary.

The Collecting Officers may or may not be directly designated by the Administrator. Those that are directly designated are those by virtue of their appointments as Cashiers and Special Orders. Others may be designated thru Office Orders signed by the head of office.

No official or employee shall accept NFA collections unless designated. The NFA shall not be responsible for any losses due to payments given to unauthorized NFA official or employee.

Therefore, such shall be a personal transaction between the NFA official or employee and the paying party.

2. Classification of Collecting Officers

Collecting officers are classified into two: the Regular Collecting Officers (RCOs) and the Special Collecting Officers (SCOs).

A Regular Collecting Officer is one whose appointment or designation as collecting officer is permanent.

A Special Collecting Officer is one whose designation as collecting officer is temporary. Designation is short-term or co-terminus with the duration of the project or activity for

which purpose he/she is designated as a special collecting officer.

3. Accountability and Liability of Collecting Officers

Collecting officers are accountable officers and therefore are mandated to render an account of the funds entrusted to them in a manner and within the time prescribed by the NFA. They are responsible for the funds in their possession or custody and are liable for all losses resulting from the unlawful deposit, use, or application of these funds and also for those attributable to negligence in the keeping of funds.

No accountable collecting officer shall be relieved from liability by reason of his having acted under the direction of a superior officer in applying or disposing of the funds with which he/she is chargeable, unless prior to that act, he/she notified the superior officer in writing of the illegality of the application or disposition. The officer directing any illegal payment or disposition of the funds shall primarily be liable for the loss, while the collecting officer who fails to serve the required notice shall be secondarily liable.

4. Bonding of Collecting Officers

Every accountable collecting officer shall be properly bonded in accordance with law (bonded with the Fidelity Fund of the government) before assumption to duty.

5, Safekeeping of Funds by Collecting Officers

All cash accountabilities shall be kept in safe custody by the Collecting Officers. Cash on hand shall be kept in safe boxes and the safe combination shall only be known to the Cashier and Corporate Treasurer. Cash kept in banks shall be in a bank account under the name of the NFA and shall be subjected to withdrawal by duly authorized NFA personnel only. This safekeeping policy necessitates the enclosure of the Cashier's Office and prohibition of entry to unauthorized personnel.

Documentation and Reporting

1. Acknowledgement Receipts

No payment of any nature shall be received by a Collecting Officer without immediately issuing an acknowledgement receipt thereof. The forms issued by the NFA Collecting Officer to acknowledge receipt of collections are the following :

1.1 OFFICIAL RECEIPT

The Official Receipt (OR) is an accountable form printed and pre-numbered sequentially. This shall be issued in numerical sequence and accomplished in ink or ballpen. Existing guide for filling-up the official receipt shall apply. This is issued in four (4) copies : Copy 1 - Payor ; Copy 2 - COA ; Copy 3 - Accounting and 4 - Collecting Officer. This is issued by the RCO and SCO for various types of transactions. One OR booklet shall be maintained for each of the following nature of collections :

a.1 Sales - represents proceeds from sales of local and imported grains and by-products including handling and delivery charges and collections of accounts arising from such transactions.

a.2 Others - representing all other types of collections not covered by sales.

The OR shall be summarized in chronological order in the RCD and Official Cashbook of the Collecting Officer.

Cancelled OR shall be marked as such (all 4 copies) and shall be attached to RCD. The original cancelled OR shall be submitted to the COA together with the duplicate attached to the

Report of Collections and Deposits

(RCD). The Collecting Officer shall secure the Accountant's notation on cancelled ORs. Erasures in the OR should be initialed by the Collecting Officer.

1.2

TEMPORARY RECEIPT

- Exhibit I)

This is a pre-numbered form which shall be issued in two (2) copies : copy 1 - Payor; Copy 2 -

Collecting Officer. This shall be used to acknowledge receipt of personal/company checks and postdated checks. This shall only be a mimeographed form. The standard size of the temporary receipt shall be one-fourth of a long bond paper. The Chief, Cash Division, DTBFM (Central Office) or Regional Accountant (Field Office) shall be responsible for the control of the issuance of Temporary Receipt (TR). He/she may designate another employee to take charge of numbering the mimeographed forms. The serial numbers of the TR shall be logged and subsequently noted by the official concerned. One batch of TR (25 sets/batch) at a time shall be released to the Collecting Officer who shall acknowledge its receipt on the same logbook.

(Exhibit III)

Subsequent releases shall depend upon

the frequency of issuance as determined by the official. Before another batch shall be released, the designated employee shall verify previous issuances.

The verification shall cover :

a.1 The issuance of a corresponding OR (which should be indicated on the duplicate TR) for company/personal checks. The TR number shall likewise be indicated in the corresponding OR issued.

a.2 The recording of the post-dated checks in the logbook of post-dated checks.

a.3 Proper issuance of TR is sequence including determination of missing/unaccounted TRS. Spot verification, even if no new batch shall be released, can be done or authorized by the official concerned as an internal control measure. Any adverse findings of the designated employee shall be reported immediately to the concerned official for appropriate action.

The TR shall not be included in the Monthly Report of Accountable Forms prepared by the Collecting Officer.

2. Deposit Slips

Daily collections shall be deposited intact not later than the following banking day and the evidence or receipt for such deposit is the deposit slip (DS).

This form is provided by the depository bank and filled-up by the Collecting Officer making the deposit. This is usually accomplished in four (4) copies with the same copy distribution as the OR.

The usual informations contained in the DS are the NFA as the depositor, account number, date of deposit, and amount of deposit with breakdown of total cash and total check deposits. For check deposits, the name of the drawee bank, check number, and amount of check are also indicated in the DS. At the back of the

checks for deposit is stamped "FOR DEPOSIT TO NFA ACCOUNT NO. ________

ONLY".

All copies shall be validated by the bank teller retaining the original for PNB file and returning the other copies to the Collecting Officer. This shall be attached to and summarized in the RCD and Cashbook based on the sequence of dates when the deposits were made.

3. Collecting Officer's

Official Cashbook

This is in journal book form (Exhibit IV) maintained by the RCO or SCO to record the collections and deposits made. Recording of entries in the

Cash Book

(CB

) shall be made daily.

The usual supporting documents for the CB are OR for collections and DS for deposits.

The CB shall be written in ink. The cash on hand shall be balanced with the Cashbook at the end of each day. At the end of each month, the entries shall be ruled and closed. The ending balance shall be carried forward as balance of the cash on hand at the beginning of the succeeding month.

A Monthly Reconciliation Statement of the Cashbook balance and subsidiary ledger balance shall be prepared by the Accountant.

The Collecting Officer shall maintain one cashbook for each of the following : (as in the case of one OR booklet and one RCD for each type of collections).

a. Sales

b. Others

The Cashbook is also one of the documents verified when COA/IAS conducts cash examination of the Collecting Officer. The cash on hand balance as of the date of cash examination shall be certified by the Collecting Officer on the CB, and subsequently (after the cash examination) this shall also be certified by the Auditors as to their audit findings.

4. Report of Collections and Deposits

This is a supplementary record prepared by the Field Office (F.O.) Collecting Officers in 4 copies (Copy 1 - Journalkeeper ; Copy 2 - Subsidiarykeeper ; Copy 3 - Auditor ; Copy 4- Collecting Officer) covering transactions handled for the week

(1 - 7, 8 - 15, 16 - 22 and 23 to end of the month). In the Central Office (C.O.) RCD is prepared in 3 copies (Copy 1 - COA ; Copy 2 - C.O. - Cash Division and Copy 3 - Accounting).

One RCD shall be prepared for sales collections (

Exhibit V

) and another for other types of collections

(Exhibit VI

Entries in the RCD shall be in chronological order based on ORs and DSs. The RCD shall be recorded directly to the Journal of Collections and Deposits (JCD).

A report for the week shall also be prepared even if there are no transactions handled for control purposes. The usual numbering and manner of preparing the report shall apply, however, the Collecting Officer shall certify that no transactions were handled for the period covered in the report.

Each type of report (RCD-Sales and RCD-Others) shall be numbered in continuing series for the calendar year coded as follows :

RCD No. : Type of Report - Year - Month - nth report for the year - Page No.

Sales (S)

Others (0)

Illustration : A one-page RCD - Sales for the 1st week of February 1984

RCD No. : S - 96 -02 -5 (f) *

*(f) - this shall always be indicated in the last page of the report.

Daily Cash Position Report

This is accomplished by the Regular Collecting Officer at the end of the day to account for the total cash on hand and to be submitted to concerned official (Chief, Cash Division, DTBFM for the C.O. or Regional Manager/Provincial Manager/Accountant for F.O.).

Control of Accountable Forms

Accountable forms should be safeguarded and controlled as to ordering, storing, and issuing. Adequate records thereof should be kept.

A Monthly Report of accountable forms (used and unused) shall be prepared by each Collecting Officer for submission to COA, Accounting and Supply Officer.

Counting of unused booklets shall be done periodically/during cash examination. In case of lost unused booklets, the same shall be reported immediately to the General Services Department (GSD) for appropriate actions. Notice of Loss of such booklets shall be posted/disseminated for information and control purposes.

Other Internal Control Measures

1. Disbursement and Collection Funds especially in field offices shall be counted

and segregated as to denomination and should not be comingled with personal

and other funds.

2. Responsibility for control of cash shall be vested in one person.

3. No part of the cash shall be transferred to any accountable officer without the prior approval of duly authorized officer.

4. No disbursement shall be made from collections.

5. Once every six months or at the end of June and December of each year or more often, a complete liquidation of all cash accountabilities in the hands of cashiers shall be made.

6. No accountable officer shall be transferred or permitted to resign/retire unless he/she has cleared himself/herself of his/her present accountabilities.

7. File copies of existing rules and regulations affecting the Collecting Officer's work should be maintained by the Collecting Officer, or at least the officer who has supervision over the collecting officer.

8. Collecting Officers should have no access to or responsibility over accounting records related to cash.

9. Accounting records should be up-to-date and Subsidiary Ledger should be maintained for each accountable officer.

10. Conduct surprise cash examinations frequently either by the COA/IAS/Provincial Accountant/C.O. (Chief, Cash Division).

11. Collecting Officers are prohibited from acting as Cashiers or Treasurers of savings and loan associations and other organizations in his/her incumbency. (GAO General Circular No. 25 dated April 20, 1953.

12. Verification of the deposits from the Monthly Bank Statement sent by the bank and preparation of the Monthly Bank Reconciliation Statement including prompt clearance of reconciling items should be done by the Accountant. Confirmation of deposits may also be sent to the bank as another control measures.

13. Items of deposit subsequently dishonored by the bank should be promptly adjusted in the Collecting Officer's and Accounting's records. The Collecting Officer shall inform Accounting of the dishonor of the check deposit based on the banks' advice.

Overages or Shortages of Funds

Cash coverages which cannot be satisfactorily explained by the Collecting Officer shall accrue to the NFA as Miscellaneous Income and a corresponding official receipt shall be issued thereof.

Cash shortages shall be set up for collections from the Collecting Officer either thru immediate restitution or salary deductions depending upon the decision of the authorized officials.

Accounting Treatment

Receipt of cash by the Collecting Officer is always a debit to his/her account and the credit shall be the appropriate receipt account depending on the nature of collections which can be recognized as income, capital revenue, grants, extraordinary receipts, liabilities (trust,

depository, etc.), capital account/Field Office Account (FOA) chargeable to C.O. account or asset account (Cash with Disbursing Officers or other officers, receivables, etc.).

Deposit of the collection is a debit to Cash in Bank account, and a credit/deduction to the Collecting Officer's account.

All collections and deposits are recorded in the Journal of Collections and Deposits.

The pro-forma entries to record the cash transactions are as follows

1. To record receipt of collections by the Collecting Officer ;

DR : Cash with Collecting Officer

(Regular or Special) xxx

CR: Appropriate Account xxx

(Indicate Nature)

2. To record deposit of collections in the bank:

DR: Cash in Bank (Identify Fund Balance xxx

CR: Cash with Collecting Officer xxx

(Regular or Special)

3. To record remittances for F.O. (base on Bank Tickets):

Provincial/Regional Office:

DR: HOA - Cash xxx

Cr: Cash In Bank (Bank & Fund

Account xxx

Central Office:

Dr: Cash in Bank xxx

Cr: FOA - Cash xxx

The usual advice to inform the other office that its account had been debited/credited shall be prepared and sent by the sending office.

Policies and procedures on the Inter-branch Accounting System (SOP No. FS-GP10 issued on February 9, 1995) regarding the preparation of the advice form shall be strictly followed to provide for easier monthly monitoring and reconciliation.

The foregoing SOP shall supersede SOP No. FS-CS01 issued on May 6, 1984.

All rulings and/or issuances inconsistent herewith are hereby superseded.

III. RESPONSIBILITIES

IV. FLOW CHART
Top Page

EXHIBITS

Logbook of Accomodated Checks

Logbook of Temporary Receipt

Official Cash Book

Report of Collections and Deposits - Sales

Report of Collections and Deposits - Others

Temporary Receipt

Logbook of Accomodated Checks
Logbook of Temporary Receipt
Official Cash Book
Report of Collections and Deposits - Sales
Report of Collections and Deposits - Others
Temporary Receipt