TABLE OF CONTENTS

PURPOSE

The purpose of this Department Order is to establish a fiscal management system for the maintenance and accountability of all Department appropriated and non-appropriated monies and funds. The fiscal management system shall be operated within the framework of statutory requirements, fiscal rules and generally accepted accounting principles. The Department shall comply with the State of Arizona Accounting Manual in all accounting functions.

RESPONSIBILITY

The Business and Finance Bureau Administrator is responsible for providing changes to the State of Arizona Accounting Manual to all manual holders, as they are received from the Department of Administration. Manual holders are responsible for updating the manual accordingly. Any questions pertaining to accounting methods or practices shall be referred to the Business and Finance Bureau Administrator.

The Assistant Director for Administrative Services is responsible for ensuring that Department Orders related to fiscal issues and the Technical Manuals for this Department Order are reviewed annually, after the Arizona State Legislature has adjourned, to incorporate relevant changes in law concerning fiscal management.

The Business and Finance Bureau Administrator is responsible for ensuring that copies of the Technical Manuals specified in the Implementation section of this Department Order are maintained by the Business Office of each division, bureau, facility and other areas specified by the Assistant Director for Administrative Services.

APPLICABILITY

This Department Order applies to all staff whose duties involve the maintenance and accountability of appropriated and non-appropriated monies and funds for the Department. Only sections 301.01 through 301.05 of this Department Order are applicable to private prisons.

PROCEDURES

301.01 RECEIVING NEGOTIABLE INSTRUMENTS AND CASH

1.1 Receiving Points - Administrative Services Accounting and each institutional Business Office shall designate in writing a specific receiving point for receiving negotiable instruments including the specific area and position(s). There shall be only one receiving point, unless an extreme operational difficulty exists.

1.2 Two employees with no responsibility for maintaining account records shall be present when mail is opened.

1.3 Endorsement - A negotiable instrument shall be endorsed immediately upon receipt with a restrictive endorsement, which shall read:

ARIZONA DEPARTMENT OF CORRECTIONS

(Area/Institution)

pay to the order of any bank

for deposit only

ARIZONA STATE TREASURER

301.02 INTERNAL CASH CONTROLS

1.1 All areas receiving cash, checks or money orders shall prepare a written system of internal cash controls. The system shall include the following:

1.1.1 Cash handling, record keeping and reconciliation duties shall be segregated. An individual employee shall have no more than one of these duties.

1.1.2 Adequate physical facilities to safeguard cash prior to deposit.

1.1.3 Negotiable instruments receipt summaries and mail receipt listings shall be prepared and reconciled to deposits daily at all locations where cash is received.

1.1.4 Deposit slips for receipts shall be prepared intact daily. Cash received shall equal cash deposited. Checks received shall equal checks deposited.

1.1.5 The deposit and deposit slip shall be verified and initialed by a person other than the preparer. A validated deposit slip shall be received for each bank deposit and retained in the files.

1.1.6 Pre-numbered cash receipts shall be used, issued sequentially and "voided" issues retained.

1.1.7 Access to petty cash and check books shall be restricted to the custodian.

1.1.8 Monthly reconciliations shall be reviewed and approved by the appropriate Business Administrator.

1.1.9 Procedures for handling non-sufficient funds and deposit corrections shall be included in the written system of internal cash controls.

1.1.10 Deposits with the State Treasurer shall be "direct deposited" to the bank. Send the yellow copy of the validated deposit ticket and the deposit with the State Treasurer form (GAO-605) to Central Office Accounting. Cash or checks shall not be sent by interagency mail.

1.2 Within 30 days of it's effective date, each institution shall submit their written system of internal cash controls to the Business and Finance Bureau Administrator for review and approval.

1.3 The Inspections Bureau shall review for compliance with the written system of internal cash controls.

301.03 DEPOSITS

1.1 All cash and negotiable instruments shall be deposited as soon as possible after receipt. A designated secured file, safe or other storage device shall be used to store received funds.

1.2 When cash or negotiable instruments are received for deposit to local accounts, staff shall prepare a bank deposit slip for the appropriate bank account.

1.3 Institutional staff may deposit cash or negotiable instruments with the State Treasurer at any branch of the state servicing bank, using the three-part deposit slips provided by the State Treasurer.

1.4 Private Prisons shall follow deposit instructions as outlined in Department Order 905, Inmate Banking/Money Systems, Attachment I.

1.5 Deposits by institutions shall be transported to the bank by the contracted armored car services.

301.04 TAX ON OUT-OF-STATE PURCHASES

1.1 Paid to Out-of State Vendors - When an out-of-state vendor bills the Department for use- tax on supplies, materials or equipment, authorized staff shall pay the tax directly to the vendor.

1.2 Paid to the Arizona Department of Revenue - When out-of-state vendors do not charge a use-tax, authorized staff shall submit tax payments to the Arizona Department of Revenue.

1.3 Business Office staff shall:

1.3.1 Record the purchase of supplies, materials and equipment on the Monthly Use Tax Report, Form 301-2P, or in a similar format.

1.3.2 Complete and process an ADOR 64-1040 (TPT-1) Transaction Privilege, Use and Severance Tax Return.

1.3.3 Accumulate these purchases monthly, as specified in the Business and Finance Technical Manual instructions.

301.05 COUNTY REIMBURSEMENT OF TRIAL EXPENSES

1.1 The Department is responsible for charges incurred in the prosecution of inmates who commit crimes while under jurisdiction of the Department, including while on escape status.

1.2 After an inmate's trial occurs, the clerk of the court in which the trial is held prepares an itemized invoice against the state for the court costs and any other costs or fees incurred by the county for the prosecution and defense of the trial.

1.3 The court judge certifies the invoice. The court then sends the invoice to the Department's Legal Services Unit.

1.3.1 The Legal Services Unit shall forward the invoice to the Criminal Investigations Bureau Administrator or designee to verify the validity of the case(s). Upon approval of the case(s), the Administrator shall return the invoice to Legal Services.

1.3.2 Upon receipt, the General Counsel or designee shall review the invoice for reasonableness, and upon approval to pay, forward the invoice to the Administrative Services, Business Administrator. The Business Administrator shall designate the source of funds to be used for reimbursement and forward the invoice to Central Office Accounting for payment.

1.4 The Business and Finance Bureau Administrator shall ensure that approved invoices are paid promptly and that a report of payments made are provided to the Director quarterly.

1.5 Private prisons, who are under contract with the Department, are responsible for charges incurred in the prosecution of inmates who commit crimes while under their jurisdiction in accordance with A.R.S. 41-1609.04.

301.06 DONATIONS

1.1 Offer of Donation - A person or entity wanting to donate to the Department of Corrections shall:

1.1.1 Complete the Offer of Donation, Form 301-1P.

1.1.2 For tangible item(s), specify if the item(s) may or may not be sold.

1.1.3 Specify any restriction(s) on the donation by checking the applicable choice(s) on the Offer of Donation form. Donations shall not be designated to an individual institution and/or unit as beneficiary.

1.1.4 Determine the estimated value of the donation(s).

1.1.5 Identify (describe) the item(s) being donated.

1.1.6 Provide monetary donations made in the form of legal currency, check, money order, traveler cheque or other forms of negotiable instrument. Any remaining monies from monetary donations, once the purpose of donation has been accomplished, shall be deposited in the Department's general fund.

1.2 Cash Donations

1.2.1 The Deputy Director or an appropriate Division Director shall approve all cash donations.

1.2.2 In accordance with accepted accounting principles, restricted monetary donations approved by the Director, Deputy Director or Division Directors shall be specifically identified and tracked within the Donations Fund.

1.3    Donations for Specific Purposes

1.3.1    The Deputy Director or Division Directors shall approve restricted donations prior to acceptance.

1.3.2    Restricted tangible donations shall be accepted and documented in accordance with section 301.06,1.4 and Department Order #304, Equipment and Inventory.

1.4 Accepting a Donation.

1.4.1 The staff member receiving the donation shall ensure that the donor has completely filled out the Offer of Donations Form.

1.4.2     If the donation is not accepted, the Accepting Authority shall ensure that the donation is returned to the donor.

1.5 Procedures After Acceptance - The Accepting Authority shall ensure that:

1.5.1 Donated tangible items are not converted for personal use by any individual.

1.5.2 Donated tangible items that are considered capital or inventorial equipment is processed in accordance with Department Order #304, Equipment and Inventory.

1.5.2.1 A photocopy of the Offer of Donations form is given to the Property Manager.

1.5.2.2 The Property Manager shall complete the State Property Receipt Return, Form 304-2, and forward it to the Accepting Authority.

1.5.3 The original copy of the Offer of Donations Form, State Property Receipt Return, (for equipment and inventorial property) and the money (for monetary donations or proceeds from sale of donated items) are forwarded to the Administrative Services Bureau Administrator.

1.5.4 Accounts for individual institutions shall not be established within the Donations Fund. Accounts for specific purpose (without specifying the institution) may be established with the approval of the Division Director for Support Services.

1.6 The Administrative Services Bureau Administrator or designee shall ensure that:

1.6.1 The Offer of Donations form is properly completed and that the appropriate authority accepted the donation.

1.6.2 All monetary donations or proceeds from the sale of donated items are deposited with the Arizona State Treasurer in the Department Donations Fund.

1.6.3 Equipment and Inventory items are added to the USAS Fixed Assets system.

1.6.4 Accounts for individual institutions are not established within the Donations Fund. Accounts for a specific purpose may be established with the Director's approval.

1.6.5 "Status of Donations Fund" report is submitted monthly to the Director and to the Administrative Services Bureau Administrator.

1.7 Expenditures

1.7.1 Wardens, Deputy Wardens and Bureau Administrators shall annually submit to the Director a list of projects or equipment to be purchased from the Donations Fund for unrestricted donations.

1.7.2 The Director shall approve all requests for purchase and expenditures involving the Donations Fund.

1.7.3 The Administrative Services Bureau shall process all approved requests for purchase and expenditures.

301.07 EMPLOYEE RECOGNITION DONATIONS OR FUND RAISING ACTIVITIES - The Business and Finance Bureau Administrator shall establish an Employee Recognition Fund with the Arizona Department of Administration, General Accounting Office (GAO).

1.1 The staff member receiving a donation for the fund shall ensure that the donor has completely filled out the Offer of Donations, Form 301-1P.

1.2 The goods, merchandise or cash received shall be handled in accordance with sections 301.02 and 301.06 of this Department Order.

1.3 An Employee Recognition Program Donated Materials Inventory Log shall be maintained by each budget unit Business Administrator or designee.

1.4 Storage and safeguarding of goods, merchandise or cash that have been contributed for the benefit of an Employee Recognition Program shall be maintained by each budget unit Business Administrator or designee in accordance with sections 301.02 and 301.06 of this Department Order.

1.5 Fund raising activities shall be conducted in the manner prescribed by the State Accounting Manual.

301.08 PROFESSIONAL SOCIETY DUES

1.1 Membership in professional societies or professional license fees may be obtained in the name of the Department, institution or an individual if the following apply:

1.1.1The Department derives a benefit from the employee participating in the organization.

1.1.2 The professional license fee pertains to the job being performed by the employee.

1.4.1 The appropriateness of the membership and/or license.

1.4.2 The benefit the Department shall derive from participating in the organization.

1.4.3 Costs involved.

1.4.4 Period of time of the membership and/or license.

1.5 Approved requests shall be returned to the Budget Unit Manager for funding at the Budget Unit level. Denied requests shall be returned to the Budget Unit Manager citing the rationale for disapproval.

1.8 Approval and payment of Departmental memberships and/or licenses shall be subject to availability of funds.

Terry L. Stewart,
Director