University of Arkansas at Little Rock
Policy Name: Check Signing
Policy Number: LR 303.6
Effective Date: July 1, 2017
Policy
The University of Arkansas at Little Rock maintains that its internal controls are sufficient to allow for a digitized/electronic signature on all checks. In addition to the requirement that all pay requests require two levels of approvals prior to being processed, the university has a sophisticated positive pay process with a clear separation of duties between those that can generate a check (Accounts Payable, Payroll, and the Financial Systems Administrator) and those that maintain the script that submits the positive file to the bank (Information Technology Services).
In order for a check to be honored by the university’s primary bank, both the physical check and the information in the electronically submitted positive pay file (check amount, check number, and payee) must all match. Daily automated emails are submitted by the university’s designated bank to the associate vice chancellor for finance and select individuals in Financial Services which informs, positive or negative, of any positive pay exceptions. In the rare event of a positive pay issue, there is a two level process to manually insert the correct information. This process requires one person to go on-line and address the exception and request its approval for processing, and then one of the senior financial managers in Financial Services must approve this exception. Checks presented to the bank that have not been included in a positive pay file or that are stale dated are not honored by the bank.
Blank check stock and the check writing printer is physically restricted and kept in a locked storage area. Check logs are produced and maintained in Intellicheck and Banner, which are the check printing software and the university’s accounting software. The only paper checks manually signed regardless of denomination are those (yellow checks) used to replace lost checks or to correct when a small portion of an employee’s pay was electronically submitted to an incorrect financial institution. Instead of recalling the entire pay file for the employee and possibly putting them into an overdraft situation, the university only pulls back the incorrect amount and then issues this on a paper check, which is produced in Financial Services, signed by the vice chancellor for finance and administration or the associate vice chancellor for finance, and disbursed by a cashier in the Bursar’s Office.
If necessary, payments for goods and services can be processed via Fedwire. Accounts Payable and General Account are responsible for initiating wire transfers on behalf of the university for the movement of funds from the university’s operating bank account. Procurement related wires are initiated by Accounts Payable, while non-procurement related items such as bond payments and employee benefit payments are initiated by General Accounting. All wires are controlled through the university’s online banking system and dually approved.
Source:
Revised: June 26, 2011; July 1, 2017
Approved by: Dr. Joel E. Anderson, Chancellor
Custodian: Office of Finance and Administration