Contents

1. Advance Payment for Registration Fees/Travel
2. Credit/Credit Card
   1. Credit Card Check-out Form
   2. Credit Card Standards for Counties
   3. Credit Card Voucher/Request for Payment
3. Guidelines for Audits for Extension District Funds and County Extension Councils
4. Check Sheet for Audits in Counties 
5. Guidelines for Managing Grants
6. Guidelines for Receiving and Expending Extension Funds
7. Handling Program Council Funds
8. Petty Cash Guidelines
9. Professional Improvement Funds
10. Program Enhancement/Support Funds
11. Reimbursement Guidelines for Inservice Offerings with Academic Credit Option
12. Request for Reimbursement/Payment Form

Money Handling Procedures

(Top of page)

Advance Payment for Registration Fees/Travel–County Funds

Advanced payment for registration fees and travel on county funds applies to registration fees for in-service training, workshops, conferences, seminars, etc., and airfare for official travel.

• Prior approval by the District Director must be granted in order for advanced payment to be received.
• Staff should use the “comments” section of the CATPAWS travel authorization system to request pre-payment, and include the purpose for the travel, and the itemized amount of the funds requested.
• The approved travel request must be attached to the monthly expenses for the month in which the travel takes place, as well as the month it was disbursed.
• Advanced-payment assumes the staff members’ intent to attend the meeting. The employee must seek a refund or credit if illness or personal emergency requires cancellation after fees have been paid. Excessive cancellations may result in the suspension of the privilege.

(Top of page)

Credit/Credit Card Standards for Counties

The following standards have been developed for County Extension District Board decision making on County Extension Office credit/credit card expenditures:

• Debit cards are not allowed! This is the same as writing a check and signing it.
• Any action taken to establish a credit/credit card account by the Extension District Board should be reflected in the minutes before any credit/credit card accounts are established.
• The Extension District Board has the option to not have credit/credit card accounts and may impose spending limits and/or approval for expenditure guidelines.
• If a credit card account is established, the District Board may choose to have one major credit card or individual store credit cards and maintain the card(s) in the office for usage. (It may be necessary to have cards assigned individually because of vendor policies).
• The credit card(s) should be issued in the name of the Extension District Board. Utilize the tax exemption form for any purchases to ensure that no tax is charged on purchases. Refer to the Office Management and Operations Manual for instructions on how to obtain a tax exempt number. County District Boards must have their own number and can not use the UK number.
• The Extension District Board should make a list of allowable and non-allowable charges for county purchasing.
• The credit card(s) should be kept in a locked location in the office and checked out by the Extension agent for purchases. After the purchase, the card is returned and a receipt is attached to a payment voucher which designates the account to be debited. (See samples for credit card check-out and request for reimbursement or payment.)
• If purchases are made at the same time for two different accounts, the charges should be made as if making two separate purchases and obtain two separate receipts. This simplifies the accounting for the funds (i.e. equipment account or supplies and services account, etc.).
• Absolutely no personal purchases! To do so is misappropriation of public funds and a basis for termination of employment.
• Absolutely no co-mingling of purchases, i.e. a situation where the agent expects to reimburse part of the receipt for personal purchases. Refer to the sentence above in regards to the consequences of misappropriation of public funds.

*Refer to other sections in this manual for information on receipts and expenditures.

(Top of page)

Guidelines for Audits for Extension District Funds and County Extension Councils

We are required by KRS 65.065, which was amended by House Bill 127, to have an annual audit of Extension District Boards that “receive funds from all sources or expends for all purposes $750,000 or more.” If receipts or expenditures are less than $750,000, a district must annually prepare a financial statement, and once every four years provide for the performance of an audit using “generally accepted governmental auditing standards and requirements by the Auditor of Public Accounts.”

The audit program must cover all applicable audit objectives and meet all applicable professional standards as set forth by the American Institute of Certified Public Accountants (AICPA) and Government Accounting Office (GAO). This includes but is not limited to the AICPA’s Codification of Statements on Auditing Standards and GAO’s Government Auditing Standards commonly known as the “Yellow Book”.

Following the audit the district board is required to file a copy of the audit with the judge executive of the county. KRS 65.070(b).

Also following the audit the district board should:

• Review the results of the audit and put into practice ( and document in the district board minutes) accounting practices identified by the auditor.
• Provide the District Director with a copy of the audit.
• Review the audit with the County Extension Council.
• It is recommended that a different firm handle the District Board audit, if already handling the bookkeeping.

It is a good business practice to have District Board and County Extension Council funds audited when there is a change in treasurers.

Check Sheet for Audits in Counties

(Top of page)

Guidelines for Managing Grants

• Regional Program and Development Coordinators can be a valuable resource in the grant development process.  The appropriate Regional Program and Development Coordinator should be contacted before the grant proposal is developed to discuss the grant process, purpose, justifications, and budgets for the grant.  
• Grant proposals should be for a program that is consistent with the purposes and goals of the Cooperative Extension Service.
  • Grants should be used to extend and expand existing or new Extension programs.
  • Grants should be written with a purpose and not for the reason of just getting more money.
• If the amount of the grant is $5,000 or more, approval of the District Director is required.
• Grants which result in the hiring of a UK employee must be approved by the Dean and Director of Cooperative Extension Service PRIOR to submission and will be handled through the College’s normal grant process, which includes development of a contract between UK’s Office of Sponsored Project Administration (OSPA) and the granting agency. 
  • Agents are not authorized to sign as the fiscal agent for the University for grants submitted through the UK Office of Sponsored Project Administration.
• The Regional Program and Development Coordinator MUST be involved in the grant proposal process if the grant is to be routed through the University of Kentucky and can assist in the grant submission.
• If the grant requires an agency match, the District Director must be involved.
  • Agents do not have the authority to commit the value of their own time or other agency resources as match. Furthermore, a person’s time may be committed for match on another grant.
• Inform and secure the support of the other staff in the office.
  • Be specific about the commitments that need to be made by the local office and at the University level.  Including the following:
    • New personnel to be hired to implement the program.
    • Amount of office space, operating costs, and materials, etc. needed.
• Secure approval and support of the County Extension Council, Program Council and District Board.
• Develop a budget based on realistic costs.
  •  Include personnel costs, office operating expenses, program materials, etc.
  • Many times the budget does not include the total costs of operating a program. Only identified extra out-of-pocket expenses are considered. As a result, Extension pays most of the cost of conducting the program, but the grantor receives most of the credit.
• A separate fund or account should be established in order to track the grant funds.
  • Grant funds may be handled by the District Board, County Extension Council or Program Council.
• Implementation of the grant must stay within the approved budget.
• The District Board Treasurer or Program Council Treasurer pays all bills.
  • An accounting of the grant funds is prepared on a regular basis (monthly, quarterly, annually) according to the agreement with the grantor.
• Funds to pay personnel costs are to be transferred to UK.
• Any equipment that is allowed to be purchased under the grant will be inventoried and maintained by the county Extension office according to the agreement with the grantor.
• An agreement on how to give credit to Extension and the grantor needs to be made in advance. 
• At the end of the grant period, a final report of program accomplishments and a financial accounting is prepared and submitted to the grantor.  

(Top of page)

Guidelines for Receiving and Expending Extension Funds

County Extension District Boards or Extension Councils who are fiscally responsible for receiving and disbursing funds should adopt operating policies adhering to sound accounting principles. Neither agents, secretaries nor other Extension employees or immediate relatives should become custodians of any Extension funds.

Options for general bookkeeping and/or accounting of funds could include:

• Outsourcing of accounting and check writing to bonded professionals. (i.e. Accountants, bonded bank personnel, county treasurer)
• The office secretary may do the bookkeeping for the County Extension Council or District Board. The secretary would work under the supervision of the County Fiscal Coordinator. If the secretary does the bookeeping, the treasurer should reconcile the books.  (See Reconcilitian of Books Below.)

Financial Guidelines

Receiving funds

• All funds are to be deposited by the appropriate treasurer. Direct deposit provisions may be made by sheriff, fiscal court or other approved agency.
• Receipts for all monies (checks and cash) received should be provided.
• All accounts, funds within accounts and/or budgeted items should be clearly identified for bookkeeping purposes.
• Accounts may have more than one fund and each of those funds must be clearly identified. Funds within accounts may require separate budgets.
• Procedures must be developed and adopted for depositing money into accounts on a timely manner. Any money left over night in a county Extension office must be in a locked safe.

Expenditures

• Bills should not be paid by Treasurer without a bill or receipt in possession. Employees should use Request for Reimbursement/Payment form with receipts attached.
• No blank signed checks should be on hand in the Extension office.
• Agents, assistants, office secretaries or other Extension employees should not sign checks or be authorized to sign checks. This is very serious and could result in termination of employment.

Accountability Procedures

• Establish procedures whereby funds are collected and disbursed by the bonded treasurer of the County Extension District Board or County Extension Council.
• Establish means to report checks written and account fund balances periodically throughout year to agents, District Board and/or County Extension Council.
• Reconciliation of books – options are:
  • Outsourcing of bookkeeping responsibilities to an accounting professional who is bonded according to KRS.
  • Bookkeeping may be done by the County Extension Secretary and the checks signed by the district treasurer (bonded according to KRS).
  • Cancelled checks should be mailed directly from the bank to a 3rd party (non-Extension employee) and that party reconciles the checkbook.
  • It is often recommended that each check have 2 signatures. However, some accountants would question this procedure on the basis that if 2 people sign the check it is easy for each to assume that the other has adequately determined the validity of the expenditure. If only one person signs the check he or she bears all the responsibility and, therefore, will usually exercise more caution.
• An auditable bookkeeping system should be adopted. Many good computerized software options are on the market which may be adopted.
• Receipts and/or documentation in the form of Memorandums of Agreement, Vouchers, and District Board minutes must be on file to justify all receipts and expenditures.
• Accurate and detailed minutes of District Board meetings are essential for complete audits. For example: if, in the budget, money is set aside in an emergency fund and it becomes necessary to use a part of this money, the board minutes should indicate a vote and for what purpose this change in expenditure was authorized.
• Audits should be performed following KRS 65.065 statues. Copies of audits must be sent to the District Director. If deficiencies were noted in the audit, they must be taken care of immediately and so noted in District Board minutes.

(Top of page)

Handling Program Council Funds

Even though agents, secretaries and assistants should not be handling funds, it is necessary for the Extension Office to receive funds from a variety of sources. These funds may be from soil tests, sales of 4-H plants, Extension Homemaker fund raisers or cookbooks, Petty Cash, etc. There must be a "paper trail" for all funds received and spent. The purpose of this paper trail is to insure accountability, honesty, and perceived honesty.

Two basic steps that should be taken by all Extension staff are: 1). having receipts for money changing hands and 2). witnesses to all transactions.

1. Receiving funds at the office, i.e. soil tests, 4-H camp, registration fees, etc.
   
   1. Receipt and carbon all funds received. One copy is for the office and one copy for the person delivering the funds.
   2. Keep a dated log or transmittal sheet for each category of funds, i.e.: 4-H camp, registration. Receipts and log should match .
   3. When funds are picked up the program council treasurer for deposit there are two essential steps:
      1. The Extension staff and the treasurer jointly count the money.
      2. Signed receipts are signed by both parties. The receipts must equal the log or transmittal sheet.
2. Funds received outside the Extension Office: i.e. concession stands, plant sales, meals at field days, cook book sales, etc.
   
   1. When possible these funds need to be counted and deposited by the appropriate program council treasurer. There are occasions when the treasurer is not present at the end of the day and other arrangements must be made.
   2. Counting the money at the end of the day should be done by two people and both sign a receipt and a carbon of that receipt put with the money.
   3. There are occasions when the money must be kept at the Extension Office before the program council treasurer picks it up. Before money leaves the office the Extension employees and the treasurer should jointly count the money and both sign a receipt. This transaction should be entered in the log and dated.
3. In summary:
   
   1. All checks should be made payable to the appropriate fund. It should never be made
      payable to an Extension staff.
   2. Extension staff should never be authorized to sign checks for any Extension program council or tax funds.
   3. Periodically cash and checks are kept in the Extension Office overnight. Be sure to have the funds in a locked area such as a safe or locked file cabinet.
   4. No blank, signed checks should be kept in an Extension Office.

(Top of page)

Petty Cash Guidelines

Following are guidelines for counties that have a Petty Cash Fund.

• The amount is established by either the County Extension Council or the Extension District Board. The amount is usually no more than $100.
• One person in the office should be assigned the responsibility for Petty Cash.
• Receipts and cash must always equal the amount established for the fund.
• Do not mix personal and business expenses from Petty Cash. Extension staff should not put IOU's in Petty Cash.
• Checks written to replenish the Petty Cash fund must equal the amount of the receipts of expenditures.
• Record receipts in a log maintained by the office secretary.

(Top of page)

Professional Improvement Funds

Professional improvement funds can be used for expenses for professional association meetings on local, area, state, and national levels. The funds may also be used for travel and expenses incurred for workshops, meetings and other non credit training opportunities which enhance the employee’s job skills

• All items must be paid by the employee and reimbursed by the dispersing party (county or state). An exception would be airline tickets and meeting registrations, which can be paid in advance by County Extension District Boards or County Extension Councils with the approval of the District Director.
• Professional improvement funds can not exceed $2,500 per agent per year. A recommended amount for secretaries and assistants is $1,250 per year. This amount will be periodically reviewed by administration every two years.
• The District Director must approve all prepayments for travel and professional improvement, which is paid directly by the board. The payments must fall within the Board’s approved budget.
• Funding of one trip on professional improvement funds can be prorated over two fiscal years as long as the amount does not exceed $2,000 per year. Prepayment of registration and airfare may be made one fiscal year, with other expenses occurring in another fiscal year.
• Unused professional improvement funds can not be carried over from one year to the next. Any transfer of funds to another account in the county budget during the same fiscal year must have Extension District Board approval.
• Employees can not be reimbursed with out an actual receipt. Employees are responsible for keeping track of the balance of their funds and not over spending. In the case of overpayment the employee will reimburse the District Board or County Extension Council.
• Claims for using professional improvement funds for travel and expenses must be approved by the District Director and follow University Travel Regulations.
• Dues to professional organizations cannot be paid using Professional Development funds.  These are the responsibility of the agent and are viewed as personal benefits.  Chamber of Commerce dues for an office/business membership may be paid from District Board funds.
• Professional improvement funds can not be used for fees, books, travel, or other expenses incurred while seeking a degree without permission from the District Director.

(Top of page)

Program Enhancement/Support Funds

• Program support funds should be equally appropriated for each agent.
• Program support funds may be appropriated for program assistants.
• Agents should develop a budget for use of program support funds and present it to the County Extension Council during the formation of the county budget and to the District Director.
• Itemized expenditure of funds must be submitted to the Extension District Board or County Extension Council, whichever is the funding body, with receipts for all expenses kept on file.
• Program support funds may be used for program expansion such as supplies for demonstrations and equipment used to expand a program. Examples might include purchase of “packaged” programs for use in the county, visuals, digital cameras, videos, reference books, etc.
• Program support funds should not be used to replace funds needed by program councils (i.e. 4-H, Extension Homemakers, Agriculture Advancement Council). Program Councils should have an annual budget and internal audit of funds.
• Program support funds should not be used for expenses which benefit an individual such as a camp scholarship, but can be used for leader training materials and leader workshop expenses. If an individual leader receives funds for training, it would be expected that the leader repay with volunteer time spent in the county program, or refund any expenses received.
• Program support funds should not be used for salaries, payments, bonuses, or gifts to individuals, whether an employee, volunteer, or client.

(Top of page)

Reimbursement Guidelines for In-Service Offerings with Academic Credit Option

Reimbursement on regular county travel funds will be allowed for academic credit classes which are also offered as in-service training opportunities. Costs associated with an academic credit class will be treated in the same manner as reimbursement for expenses for the in-service training.