Timely reconciling all bank accounts is a key component of good controls over cash. A procedure is in place to maintain a good cash control by ensuring that all receipts and disbursements are recorded completely and accurately, by ensuring a timely clearing of checks, and by comparing cash balances to the general ledger cash balances.
- Unopened bank statements are received by the mayor. The statements are reviewed for any unusual deposits and disbursement activity.
After review, statements are assigned to the town clerk who has the responsibility for ensuring that all bank accounts are reconciled within twenty (20) business days after the bank statements are received.
- The monthly bank reconciliations are to be properly completed, dated, and signed by both the preparer and reviewer/approver and be maintained on file for subsequent review and audit.
- Bank account balances are periodically reviewed to ensure that they are fully secured and that the types of securities pledged by the financial institution are in accordance with state law. (See R.S. 39:1221 for kinds of security and R.S. 39:1225 for amount of security.)
- The preparer of the reconciliations prepares a summary spreadsheet detailing the comparisons of bank reconciliation cash balances with the general ledger cash balances.