OKLAHOMA STATE UNIVERSITY

ACCOUNTING POLICY & PROCEDURES FOR
OKLAHOMA COOPERATIVE EXTENSION SERVICE
EXTENSION CENTER’S AGENCY FUNDS
REVISED APRIL, 1999

1.01 The following procedures have been established by the Director, Oklahoma Cooperative Extension Service. Utilization of these procedures will insure accounting in a systematic manner for all income and all disbursements of funds made by the Oklahoma Cooperative Extension Service Centers.

2.01 All funds received and/or disbursed by Extension staff, both professional and clerical, due to their employment status with the Oklahoma Cooperative Extension Service Center.

2.02 All funds received and/or disbursed by Extension staff, both professional and clerical, and identified with or made because of a program conducted by or through an Oklahoma Cooperative Extension Service Center.

Authority

3.01 These procedures are established pursuant to the authority contained in Article VI, Section 31 and 31a of the Oklahoma Constitution and the court cases in implementation thereof, as well as the authority in Title 70, Oklahoma Statutes.

5.01 Maintenance Category: The Agency Funds will have a maintenance category for the purpose of handling the income and expenditures for maintenance and any ‘in and out’ activity as authorized in the approved budget. This category will be entitled "Maintenance Category " and may be subdivided into program areas, if desired. The County/District Extension Director is authorized to expend any available amount in the maintenance category(s) in accordance with the approved budget, subject to the limit of cash which is available in the account.

5.04 4-H Programs: The County/District Extension Director is authorized to establish one or more restricted categories to record the financial activity of the 4-H clubs. Such accounts will be restricted to receiving and disbursing funds derived from donations to and/or incomes earned by 4-H activities. These funds may only be disbursed for any approved 4-H activity.

6.01 Bank Account: The County Extension Director or the District Director will select a local bank to handle the Agency Funds. The County/District Director will establish one bank account, for which he/she is the only authorized signer, which will be used for all income and disbursements by the Oklahoma Cooperative Extension Service Center. The account will be carried as follows: OSU Extension Center, _________ County/District Agency Fund.

6.02 Recordkeeping: Quickenâ computer software is used to record, on a daily basis, every transaction involving the receipt and disbursement of funds. A separate category shall be established for each specific program. The category will reflect the current balance in the agency fund for the specific program at all times.

6.03 Change Fund: In order to have funds available to make change to clients, the County Extension Director may request a nominal change fund. Written requests are sent to the District Extension Director. See Exhibit C for the ‘Request for Change Fund’ form. Upon receipt of the ‘Request for Change Fund’ signed by the County Extension Director and approved by the District Director a check payable to the ___________ County Extension Center will be issued. This check must be cashed and the change fund will be on-hand in the County Extension office at all times for the purpose of making change to clients. The fund is not to be used to make purchases for the County Extension Center. The change fund and all receipts until they are deposited must be kept in a secured place in the County Extension Center. The County Extension Director is personally responsible for the change fund which will be subject to routine audit.

6.04 Receipt of Funds: Upon receipt of funds by the Oklahoma Cooperative Extension Service Center, the following procedure must be observed. An official OSU receipt, which is prepared in duplicate, must be issued for all funds at the time of their receipt except for publications costing less than $1.00. Each receipt will show the date, the name of the person or organization tendering payment, the amount received, the identification of the program or purpose for which the funds were received, and must be signed by the person receiving payment. The receipt must be issued to the person remitting the funds. A memo may be made on the receipt if the funds were paid on behalf of someone else. The receipt should list if the funds received were cash or check. If a check was received, list the check number. The original receipt is given to the individual remitting the funds. The carbon copies of the receipts remain in the receipt book and must not be detached. The original and the copy of voided receipts must remain in the receipt book. Funds received for publications costing less than $1.00 must be receipted in total on a daily basis. The receipt will read "Received from Various Individuals". The original copy of this receipt may be discarded.

6.05 Deposits of Funds: All funds received must be deposited within 5 days of their receipt or whenever $100 is collected, whichever comes first, by the County Extension Director to the bank account identified in Procedure 6.01. The County Extension Director may designate another person to make the deposit. If possible, this should be someone other than the person receiving the funds and preparing the deposit. Deposits must be posted in Quickenâ daily. The deposit register must list the name and receipt number and category.

6.06 Disbursements: All disbursements will be made using an official Oklahoma State University Extension Center prenumbered check which has been signed by the County Extension Director after he/she has reviewed the supporting documentation. Documentation must be an itemized invoice or itemized receipt showing date of purchase and item purchased. Statements are not adequate documentation. The appropriate support for expenditures when an invoice is not received is the document which gives the County Extension Director the authorization and directions to make the payments. For examples, fair premium payments would be documented with the premium list which was prepared by the fair board.

1. Refunds: Payment for refunds must be supported with a written request for the refund or written explanation as to the reason for the refund and must also reference the deposit on which the original funds were received. Additional documentation is a copy of the payment receipt.
2. Reimbursements: Individuals may be reimbursed for expenses incurred on behalf of the agency account provided that 1) there is a reason to make the purchase in this manner 2) the County/District Extension Director has given prior approval for the individual to make such purchases and 3) the itemized vendor receipts are submitted by the individual requesting reimbursement.
3. Payments to Individuals—Wages and Payments (honorarium) to Independent Contractors: The forms ‘Determination of Independent Contractor Status’ (versus Employee status) and ‘The Twenty Factor Test’ must be completed prior to making a payment to an individual. See Exhibit D. These forms were designed by Oklahoma State University in accordances with the Internal Revenue Service guidelines to differentiate between an independent contractor and an employee. To qualify as an independent contractor, the responses to all questions on page 1 must be ‘No’ and majority of the responses to the ’20 Factor Test’ must be (B). If the individual isn’t an independent contractor, then he/she is an employee.

1. Wages: In the cases where it is determined that the individual does not meet the requirements for independent contractor status, then wages must be paid. Wages may not be paid directly to the individual from the agency account. However, the funds to pay the wages plus 10% for the associated benefits (matching social security, medicare, workers compensation, unemployment) may be paid to OSU who will in turn pay the individual. Submit payroll sign-up forms to the DASNR Personnel Office. A check from the agency account, for the wages plus 10%, payable to Oklahoma State University, must accompany the payroll sign-up forms.

2. Honorarium Payments: In cases where it is determined that independent contractor status exists, payment(s) may be made from the agency account to the individual for amounts up to $400 during a calendar year. Whenever more that $400 is due to an individual independent contractor or it is expected that more than $400 will be owed, in total, to an individual during a calendar year, the funds must be paid to OSU along with the following: 1) a completed ‘Determination of Independent Contractor Status’ and ‘The Twenty Factor Test’ and 2) purchase request to pay the individual and 3) an agency check, for the amount of the honorarium, made payable to Oklahoma State University.

4. Services Provided by Businesses: Invoices from businesses may be paid from the agency account. The independent contractor guidelines would apply to the payment of invoices from sole proprietors.
5. Travel Reimbursements: Disbursements to volunteers and other non-state employees for travel may be made in accordance with state regulations or a written policy, that does not exceed state regulations, established by the appropriate group, i.e. 4-H Leaders. The documentation for travel must include 1) travel points, from and to, 2) map mileage and vicinity mileage 3) mileage rate and amount due and 4) amount paid. Disbursements from the agency account to Extension personnel for travel are not authorized. To pay travel to an OSU or other state employee, the funds from the agency account must be paid to OSU and the individual must file an State of Oklahoma Travel Voucher.
6. Disbursement File: A file will be established to support all disbursements from Agency Funds. Canceled checks, if returned by the bank, will be attached to supporting documentation. Documentation will be filed in check number order. The following must be written on the documentation: 1) Check number, 2) Date Paid, 3) Category 4) Memo or description regarding payment and 5) Educational purpose. All disbursements must be recorded daily in the Quickenâ computer file.

6.07 Monthly Reconciliation of Account: Upon receipt of the monthly bank statement, the County/District Extension Director will be responsible for effecting a reconciliation between the bank statement, and the checkbook. This reconciliation should be done by someone other than the person who maintains the checkbook. A Quickenâ bank reconciliation report will be printed, showing the previous and ending bank balance, cleared balance, uncleared checks and deposits, and register ending balance. At the same time, a category summary report, which categorizes the register ending balance, must be printed. These reports must be filed with the Extension Finance Office, before the tenth working day after the bank statement date. One copy of this report must be sent to the District Director, and one copy must be retained by the County Extension Director.

6.08 Outstanding Checks: Checks which remain outstanding for more then one (1) year are considered unclaimed property. After one year, unclaimed checks for less than $50.00 should be VOIDED. Unclaimed checks for more than $50.00 should be remitted to the Oklahoma Tax Commission, Unclaimed Property Section. Contact the Oklahoma Tax Commission for the necessary forms before submitting payment.

6.09 Periodic Audit and Review: District Directors are responsible for conducting a periodic review of accounts with the County Extension Director. The Extension Finance Office will conduct periodic audits and reviews of all financial activities in the Oklahoma Cooperative Extension Service Centers and submit a report to the Director, Oklahoma Cooperative Extension Service and the Internal Audit Office of Oklahoma State University. The County/District Extension Director must respond in writing regarding all recommendations in the audit report.

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