Bank Reconciliation


Purpose

The purpose of the bank reconciliation is to reconcile any differences between the Bank
Account balance and the General Ledger cash account balance.

Definitions

Deposits in Transit – A cash deposit that has been made and has been recorded to the General Ledger but due to bank processing is reflected in the bank statement of a subsequent month to the period of reconciliation.

Outstanding Checks – Checks that have been recorded on the General Ledger are not listed as cleared checks on the bank statement for the month of reconciliation.

Procedure

  1. The JP Morgan Corporate Bank Statement is received in the AUI Corporate Office as well as the NRAO Green Bank Fiscal Office.  The bank statement received in NRAO Green Bank Fiscal Office is received and reviewed by the NRAO Chief Accountant.  The AUI/NRAO Chief Accountant is also located at the Green Bank Fiscal Office, but does not receive the AUI JP Morgan Corporate Bank Statement.  The NRAO Chief Accountant provides a copy of the approved bank reconciliation to the AUI/NRAO Chief Accountant, who then files a copy of the bank statement and bank reconciliation.
  2. The AUI/NRAO Chief Accountant posts the sweep interest and the dividend activity.
  3. The AUI/NRAO Chief Accountant forwards the statements to the NRAO Chief Accountant who prepares the monthly bank reconciliation and also reviews the posted wire transfers.
  4. Any transactions from the bank statement that have not been recorded in the General Ledger are recorded and any variance indicated on the bank reconciliation is researched and any required corrections to the general ledger are documented.
  5. A copy of cancelled checks, bank statements, and bank reconciliations is maintained by the NRAO Chief Accountant and a copy of bank statements is maintained by the AUI Treasurer and AUI/NRAO Chief Accountant.
  6. The NRAO Chief Accountant generates a report of “stale dated checks” defined as checks that have been outstanding for greater than 60 days, and the AUI/NRAO Chief Accountant will track the check.  If the check cannot be found and cashed, the AUI Controller or AUI Treasurer will request the Bank to stop payment on the stale dated check.