CHAPTER: 300 BUSINESS/BUDGET

AS

BANK ACCOUNTS/PETTY CASH SYSTEM

EFFECTIVE DATE: SEPTEMBER 5, 2000

TABLE OF CONTENTS

PURPOSE

This Department Order outlines procedures for the administration and accountability of all bank accounts established and controlled by the Department.

APPLICABILITY

This Department Order applies to all staff whose duties involve the accountability of bank accounts established and controlled by the Department. Sections 303.01, 1.2, and 303.04, 1.3, and 1.6, are applicable to private prisons.

PROCEDURES

303.01 ESTABLISHING BANK ACCOUNTS

1.1 Procedures for Obtaining Approval to Open a Bank Account

1.1.1 The Business and Finance Bureau Administrator shall approve or disapprove each request prior to a bank account being opened.

1.1.2 Approved bank accounts shall be established with the State Servicing Bank. Exceptions shall be approved by the Business and Finance Bureau Administrator and the State Treasurer.

1.1.3 Interest earned on an account that contains appropriated funds shall be deposited in the General Fund, unless other arrangements are made with the State Treasurer.

1.1.4 Deputy Directors, Assistant Directors, Wardens or their designee shall submit a memorandum of request to the Business and Finance Bureau Administrator to obtain approval to open a Bank Account. The request shall explain the purpose of the bank account.

1.2 Private Prison facilities contracted by the Department shall maintain an internal system of cash controls to assure the accountability of cash.

303.02 ACCOUNT INFORMATION

303.03 ESTABLISHMENT OF A REVOLVING FUND -

303.04 SPECIAL SERVICES FUND -

Established in accordance with A.R.S. 41-1604.03, the Special Services Fund consists of Central Office Activities and Recreation Funds, the Institution Inmate Activities and Recreation Funds and the Private Prison Welfare and Benefits Fund.

1.1 Central Offices Activities and Recreation Fund (CO A&R)

1.1.1 The following shall be deposited into the CO A&R account:

1.1.1.1 Commissions on revenues generated from the contracted inmate telephone system.

1.1.1.2 Interest received from the Inmate Trust Control Account, the Abandoned Funds Account, and interest accrued from the A&R account.

1.1.2 Expenditures are dependent upon the current availability of revenue. Such expenditures are limited to the:

1.1.2.1 Purchase of initial equipment for recreation, libraries and education.

1.1.2.2 Assistance in the establishment of an A&R account and purchasing initial inventory and equipment for inmate stores and/or canteens.

1.1.2.3 Funding of the public performance license each year.

1.1.2.4 Funding of the victim notification system.

1.1.2.5 Payment of medical costs associated with personal injuries caused by inmates to other inmates or themselves.

1.1.2.6 Funding of other expenditures approved by the Director or Division Director for Program Services.

1.1.3 The Division Director for Program Services or designee shall approve or deny all expenditures.

1.1.4 By August 1, of each year, the Department shall submit to the President of the Senate and the Speaker of the House of Representatives a report that contains a complete account of:

1.1.4.1 The transactions relating to the inmate telephone system.

1.1.4.2 The telephonic victim notification system for the preceding fiscal year.

1.2 Institutional Inmate Activities and Recreation Fund (A&R)

1.2.1 The following shall be deposited into the A&R account:

1.2.1.1 Revenues from the following sources:

1.2.1.1.1 All profits received from the operation of inmate stores, vending machines in visitation, yard areas and snack bars.

1.2.1.1.2 Contributions when made specifically to the Institution A&R Fund.

1.2.1.1.3 Proceeds from approved fund raising activities.

1.2.1.1.4 Inmate earnings that are forfeited as outlined in Department Order #905, Inmate Banking/Money System.

1.2.1.2 Interest received from investing Institution A&R Funds shall be deposited in the appropriate institutional A&R account.

1.2.2 Allowable Expenditures - Expenditures from the A&R Fund are dependent upon the current availability of revenue.

1.2.2.1 Such expenditures may include, but are not limited to:

1.2.2.1.1 Payment for the repair or replacement of any state property that is damaged through intentional activities or neglect on the part of inmates.

1.2.2.1.2 Payment of medical costs associated with personal injuries caused by inmates to other inmates.

1.2.2.1.3 Funding for legal material at the institutions, including those law books and legal supplies the Department is required to provide. Expenditures for legal material and paralegal services shall be made in accordance with Department Order 902, Inmate Legal Access To The Courts.

1.2.2.1.4 Educational and resource material. Example: films, VCR tapes, educational movie fees and library books and supplies.

1.2.2.1.5 Purchase and maintenance of recreational supplies and equipment, sporting goods and passive games.

1.2.2.1.6 Purchase and maintenance of inmate cable TV systems, public performance licenses, films, videos, monitors and satellite contracts.

1.2.2.1.7 Minor construction projects. Example: visitation ramadas and basketball courts, that have been approved in accordance with this section.

1.2.2.1.8 Items to start up and replenish store inventories and/or store supplies. Example: cash register tape, store forms and the purchase and repair of store equipment: freezers, refrigerators and cash registers.

1.2.2.1.9 Other expenditures used for the recreational benefit, education and welfare of the inmate population.

1.2.2.1.10 The payment of salaries of the inmates working for inmate stores or libraries.

1.2.3 Proposals for Expenditures - Proposals for expenditures of Unit or Institution A&R Funds shall be submitted, in writing, to the Chair of the appropriate A&R Committee for inclusion on the agenda of the next committee meeting. Proposals that are passed by a majority vote shall be submitted for final approval or disapproval to:

1.2.3.1 The Warden for the Institution A&R Committee.

1.2.3.2 The Warden for the Unit A&R Committee. The Deputy Warden reviews the Unit A&R Committee's recommendations and recommends approval or disapproval to the Warden.

1.2.4 Authorization for Expenditures and Reporting Requirements.

1.2.4.1 All checks written from an A&R account shall require:

1.2.4.1.1 One staff signature for amounts less than $250.

1.2.4.1.2 Two staff signatures for amounts of $250 or greater. The cosigners shall be responsible for the appropriateness of fund expenditures.

1.2.4.2 Each institution Business Administrator shall submit a monthly report on the A&R accounts and expenditures to the Warden, Deputy Warden, Business and Finance Bureau Administrator and each A&R Committee Chair using financial statements as specified in the Financial Services Technical Manual.

1.3 Private Prison Welfare and Benefits Account - Each private prison shall establish a Welfare and Benefits (W&B) account. The Deputy Director for Prison Operations shall have sole discretionary authority over the W&B account and may as needed, utilize or have access to monies from the W&B account to satisfy legislative mandates or Department needs.

1.3.1 The following shall be deposited into the W&B account:

1.3.1.1 All profits received from the operations of inmate stores, vending machines in visitation, yard areas and snack bars.

1.3.1.2 Commission on revenues generated from the contracted inmate telephone system.

1.3.2 Expenditures are dependent upon the current availability of revenue. Such expenditures are limited to:

1.3.2.1 Payment of medical costs associated with personal injuries caused by inmates to other inmates.

1.3.2.2 Funding for legal material at the institutions, including those law books and legal supplies the Department is required to provide. Expenditures for legal material and paralegal services shall be made in accordance with Department Order 902, Inmate Legal Access To The Courts.

1.3.2.3 Educational and resource material. Example: films, VCR tapes, educational movie fees and library books and supplies.

1.3.2.4 Purchase and maintenance of recreational supplies and equipment, sporting goods and passive games.

1.3.2.5 Purchase and maintenance of inmate cable TV systems, public performance licenses, films, videos, monitors and satellite contracts.

1.3.2.6 Minor construction projects. Example: visitation ramadas and basketball courts, that have been approved in accordance with this section.

1.3.2.7 Items to start up and replenish store inventories and/or store supplies. Example: cash register tape, store forms and the purchase and repair of store equipment: freezers, refrigerators and cash registers.

1.3.2.8 Other expenditures used for the recreational benefit, education and welfare of the inmate population.

1.3.2.9 The payment of salaries of the inmates working for inmate stores or libraries.

1.3.2.10 Payment for the repair or replacement of any state property that is damaged through intentional activities or neglect on the part of inmates.

1.3.2.11 Private prison store keepers salaries.

1.4 The Business and Finance Bureau Administrator shall prepare a quarterly consolidated A&R report and submit the report to the Director, the Deputy Director for Prison Operations and the Region Operations Directors.

1.5 Audits - All A&R accounts are subject to audit by the Inspections Bureau on a yearly basis or as deemed necessary.

1.6 Financial Reports and Budgets

1.6.1 Institutions and Private Prisons shall submit monthly financial statements in the format identified in the Fiscal Management Technical Manual, 301.3.

1.6.1.1 Statements are due to the Business and Finance Administrator by the 20^th calendar day of the month.

1.6.1.2 Private Prisons shall include a copy of the W&B account bank reconciliation and a copy of the first page of the bank statement.

1.6.2 Institutions shall submit an annual A&R budget in the format identified in the Fiscal Management Technical Manual, 301.3.

303.05 EMPLOYEE FUNDS-

A Department wide Employee Fund shall be established in the Uniform Statewide Accounting System (USAS). The Director or designee shall have approval and signatory authority for events and expenditures.

1.1 Institutions and divisions may establish an Employee Fund. A separate checking account shall be established for each institution or division with the approval and signatory authority being delegated to the appropriate Division Director or Warden.

1.2 Each division, institution and budget unit Business Offices Department wide shall maintain records for their Employee Fund in accordance with the Generally Accepted Accounting Principles (GAAP), Arizona Manual and all applicable Department written instructions.

1.3 All requests shall be submitted to the Director, Deputy Director, Division Director, Warden or Administrator in writing and approved, prior to implementing revenue generating activities or expenditures from the Employee Fund account.

1.3.1 Allowable expenditures and revenue generating activities are:

1.3.1.1 Employee events (holiday parties, picnics, etc.).

1.3.1.2 Sponsorship of employee teams or local athletic teams.

1.3.1.3 Other activities beneficial to employees as deemed appropriate by the signatory authority (employee recognition, flowers and cards for employee bereavement, illness, etc.).

1.3.1.4 Approved charitable organizations.

1.3.1.5 Employee assistance.

1.3.2 Allowable Revenues:

1.3.2.1 Vending machine commissions in administrative areas. (Where Arizona Industries for the Blind does not elect to provide services).

1.3.2.2 Food sales. Example: baked goods, burritos, etc. No alcoholic beverages.

1.3.2.3 Yard sales.

1.3.2.4 Raffles.

1.3.2.5 Car washes.

1.3.2.6 Other revenue generating activities as deemed appropriate by the Director or designee taken from the Department's approved activity list.

1.4  Event/activity Coordinator(s) and/or Committees shall provide participating employees with a receipt.

1.5  The appropriate Division Directors, Wardens and Administrators shall ensure that adequate separation of duties is considered in the counting, handling and depositing of cash into the Employee Fund.

1.6 All Employee Funds shall be subject to annual inspections.

1.7 Each Business Administrator for the institution or division shall submit a monthly reconciliation of the Employee Fund checking account to the Chief Financial Officer.

IMPLEMENTATION

The Assistant Director for Administrative Services shall maintain and update the Uniform Statewide Accounting System (USAS) Training Technical Manual and a Business and Finance Technical Manual, addressing at a minimum:

• Financial procedures.

• A standard method for accountability and control in the following areas:

• Accounting

• Payroll

• Purchasing

• Contracts

DEFINITIONS

INMATE ACTIVITIES AND RECREATION FUND (A&R) - Is a special services account, which contains monies held in trust by the Department for the benefit, education and welfare of inmates. The fund is administered by the Department.

INSTITUTION A&R COMMITTEE - A designated group of Department employees who review and recommend the use of A&R Funds.

INSTITUTION A&R FUND - A special services account established at each institution for the benefit, education and welfare of inmates.

INMATE TRUST ACCOUNT - An account in which the Department acts as a bank via the Inmate Banking System (IBS) for all funds received for the inmates.

PETTY CASH - A sum of money set aside, from the Revolving Fund, to be used on a loan basis for the purpose of making change or paying small obligations for which the issuance of a formal voucher and check would be too expensive and time consuming.

PETTY CASH VOUCHER - A written document used to record individual disbursements of petty cash.

REVOLVING FUND - An account to be used for the purpose of making cash outlays for postage, travel expenses and such other disbursements which are proper as ultimate claims for payment from state funds. This section is not applicable to Private Prisons contracted by the Department.

UNIFORM STATEWIDE ACCOUNTING SYSTEM (USAS) - A state wide accounting system.

UNIT A&R ALLOCATION - An allocation of institution funds reserved for each unit.

WELFARE AND BENEFIT (W&B) FUND - Is a special services account, which contains monies held in trust by the private prison for the benefit, education and welfare of inmates.

___________________

Dora Schriro

Director

FORMS LIST

303-1P, Estimated Revenue and Expenditure

303-2P, Funding Justification

AUTHORITY

A.R.S 44-312 (A)

A.R.S. 44-313

A.R.S. 47-4404

A.R.S. 35-193 Revolving Funds

Arizona Accounting Manual Sections V, L1-3