7. Electronic Payments, Cheques and Credit Cards
This Chapter contains instructions on implementing electronic banking facilities, making payments by direct credit, cheque, credit card and cash, including from a Working Cash Advance.
Electronic banking is the process of using electronic methods to pay (eg by direct credit to a vendor's bank account) and receive money (eg revenue collection using by EFTPOS). Electronic banking provides an opportunity for management cost and resource efficiencies and the use of these facilities is encouraged.
The government policy is for payment by direct credit. In Australia, cheque payments should only occur where the payee does not allow direct credit payments to their bank account. Small payments may be more efficiently handled using a DFAT credit card.
Posts should use direct credit payments where reliable and secure electronic banking facilities are available and it is cost effective.
Credit cards (including petrol cards and taxi cards) offer advantages in terms of convenience and prompt payment to vendors. Normal departmental procurement procedures apply when making credit card purchases (see Chapter 8).
Finance Managers should only approve the payment of vendors by cash as a last resort (eg the sole supplier only accepts payment by cash).
7.2 Implementing Electronic Banking Facilities
- Prior to the introduction of electronic banking facilities (eg direct credit payment, EFTPOS revenue collection, etc) the Finance Manager should prepare a business case, including a cost/benefit analysis and risk assessment, to identify the overall costs of the service (including set-up costs and ongoing fees) and to determine if the proposal is cost effective. Transaction fees should be funded from the work area’s budget and not passed onto the other party. This may require local legal advice on any risk of loss/liability that may arise from the use of the facilities.
- The CFO must approve the implementation of an electronic banking system. The business case should be provided to support the request.
- Finance Managers must ensure that electronic payment facilities adequately protect the Commonwealth from fraud and that key internal controls are not jeopardised.
- Refer to Chapter 5.6 for instructions on electronic receipting facilities and to Chapter 7.3 for instructions on electronic payment facilities.
- Chief Finance Officer
- As required
- Prepare a business case for a proposal to introduce electronic banking facilities.
- Seek prior approval from the CFO. The request should include:
- Security arrangements for transmission of data to the bank (eg two signatories are required to log onto the system and to process and authorise payments)
- How the data will be transferred between the post and the bank (eg standalone internet)
- Compatibility of the bank’s system with post unit systems
- What language the data will be entered to the bank’s system
- Internal controls to be implemented at the post
- An assessment of the risk to the Commonwealth of using the system.
7.3 Electronic Payments
A direct credit payment is made to the payee’s bank account. A direct debit payment is where the department authorises the supplier to debit a DFAT bank account.
- The Finance Manager must seek approval from the CFO to implement electronic payments at post.
- inance Managers should ensure that two electronic signatures are required to effect direct credit payments and a reliable and secure electronic banking system is available.
- All requests for the withdrawal of money from an official account require the signatures (written or via electronic means) of two employees who have been appointed as ‘cheque signatories’/’electronic signatories’. At least one of the signatories must be an A-based employee. Refer to the FMM Forms folder for a sample Instruction for a Cheque Signatory / Electronic Signatory form.
- A proposal for payment by direct debit to a DFAT bank account must be approved by the CFO in Australia or the Finance Manager.
- The Finance Manager must ensure direct debits are promptly and accurately brought to account in SAP, including any GST.
- Chief Finance Officer
- Finance Manager
- As required
- Seek prior approval from the CFO.
- Approve proposals for direct debit payment by CFO (in Australia) and Finance Managers (overseas) subject to the following:
- Only the most reputable vendors should be offered the facility (eg government authorities)
- The approver is satisfied the arrangement provides adequate safeguards (eg incorrect debits will be promptly adjusted) for the department
- The supplier to send the original invoice to the work unit
- The bank agrees to notify the Finance Manager prior to a direct debit being made that exceeds an overdraft limit or places the account in overdraft
- Any penalties incurred for a late payment where the bank is at fault will be paid by the bank
7.4 Custody and Supply of Cheques
- Blank cheques are accountable documents and must be protected and accounted for in accordance with the requirements of Chapter 12 of this Manual. Chapter 12 outlines further procedures relating to the custody and issue of cheques.
- Bulk stocks of cheques are to be held in the sole custody of the custodian of accountable documents and in a secure receptacle to which they sole access.
- The custodian of bulk stocks of cheques must be appointed in writing by the Finance Manager (see Chapter 2).
- The Cashier or another authorised employee is responsible for the security and custody of cheque stocks once they have been issued by the custodian.
- Local procedures apply when obtaining cheques.
- Finance Managers
- Official appointed as custodian of cheques
- As required
When ordering cheques ensure that the account number and the name of the bank account are clearly printed on the cheque.
Cheques should be printed with a “not negotiable” crossing or its equivalent unless this contravenes local banking practice.
Stocks of cheques are to be stored and maintained in accordance with FMM Chapter 12.
7.5 Preparation of Cheques
- Where possible, cheque printing should be automated. Where cheques are written by hand, rule through unused spaces after the payee name, the amounts in the amount fields and the words "or bearer" to prevent alterations. Care needs to be taken that the payee details and the amount are in accord with what the SAP payment proposal and the FMA001.
- The Finance Manager must approve the opening of a cheque to “pay cash”. In most circumstances cheques should not be opened to “pay cash”. Where cash payments are the preferred method of payment, posts are encouraged to make cash payments from the Cashier's or petty cash advances. The only cheques that may be endorsed "pay cash" as a matter of routine are those issued to reimburse cash advance holders.
- Where an error occurs in preparing a cheque, the cheque must be cancelled by stamping the word "CANCELLED" across the face of the cheque and following the procedures at Chapter 7.9.
- Cancelled cheques should be retained on a file held specifically for that purpose.
- Where approval by the CFO has been given for the Certifying Official and the Cashier to be the same person (see Chapter 2), one of the officials appointed as a cheque signing official should ensure that expenditure has been approved in writing by an Approver or Approver's agent.
- In the case of global banker transmissions from overseas posts, DFAT Canberra may request supporting documentation from the post prior to releasing the payment.
- Funds Controller
- Official appointed for the purpose of signing cheques
- As required
- Prepare cheques for approved and certified payments as per instructions for SAP, or prepare cheques manually in accordance with local banking requirements;
- Where facilities are available, encourage vendors to accept payments electronically in preference to cheque payments.
- Cash payments, where necessary, should be made from an established advance such as the Cashier's or the petty cash advance.
- Cancel cheques in the following situations:
- payee or amount incorrect;
- cheque damaged; or
- printing out of alignment;
- Cancel a cheque by marking a line diagonally from corner to corner across the face of the cheque, marking the word "CANCELLED" on the face of the cheque and following the instructions at Chapter 7.9.
- Retain cancelled cheques on file and note against each cheque the reason for cancellation.
7.6 Stale Cheques
- Identify stale cheques when preparing the bank reconciliation report (see Section 6.10).
- In Australia a cheque is stale if it not been presented within fifteen months of the date of issue (unless the CFO has approved a longer period). Stale cheques should be cancelled and the procedures for unclaimed cheques at Chapter 7.9 should be applied. The statutory period laid down by the bank/law varies from country to country.
- Overseas, issue a Stop Payment Request once a cheque becomes stale (this period varies from country to country but is usually between six months and one year).
- Finance Managers overseas may implement a time period prior to a cheque becoming legally stale provided this does not contravene local laws.
- Finance Manager
- Funds Controller
- As required
- Identify stale cheques.
- Lodge a Stop Payment Request (if necessary to ensure the cheque will not be presented) signed by the Finance Manager with the bank.
- Obtain written acknowledgment from the bank that a Stop Payment Request has been actioned.
- Cancel and replace (if necessary) the cheque in accordance with SAP Instructions and Help Cards relating to Accounts Payable, Voiding Cheques and Cheque Management.
- If the stale cheque was funded from a previous financial year administered appropriation (see Chapter 3) the funds must be returned to the Finance Official Public Account.
7.7 Issuing Duplicate or Replacement Cheques
- If a payee claims a cheque is damaged it should be returned, cancelled and replaced. If a payee claims they have lost the cheque it must be stopped and a duplicate issued after the bank has confirmed the stop payment request is effective.
- The Finance Manager may approve the issue of a replacement cheque where the payee has claimed that a cheque has been damaged or lost and the bank has confirmed that a Stop Payment has been placed on the cheque.
- Where the original cheque is presented after a duplicate cheque is issued and the payee claims they didn’t negotiate both cheques the post should raise the matter directly with the bank concerned.
- Finance Manager
- Funds Controller
- A replacement cheque can only be issued once the bank has confirmed in writing that a Stop Payment has been placed on the original cheque.
- To issue a replacement cheque:
- Examine the list of outstanding cheques to confirm that the cheque has not been presented
- Contact the bank to confirm that the cheque has not been presented since the last bank statement
- Lodge a Stop Payment Request with the Bank for the Finance Manager’s signature
- Obtain written acknowledgment from the bank that the Stop Payment Request has been actioned
- Obtain the payee’s agreement for the return of the original cheque should it be located
- Obtain approval from the Finance Manager, or Approver or Approver's agent to issue a replacement cheque
- Cancel and replace the cheque in SAP in accordance with the SAP Instructions and Help Cards.
7.8 Fraudulent Presentation of a Cheque
- Report all cases of fraudulent presentation of DFAT cheques to the Conduct and Ethics Unit.
- Determine whether the cheque was received by the payee prior to the fraud being committed to establish whether the loss rests with DFAT or the payee.
- Examine the post’s or office’s procedures to identify if the fraud was a result of internal control deficiencies and advise the Conduct and Ethics Unit.
- Finance Manager
- Funds Controller
- As required
- Report the case to the Conduct and Ethics Unit.
- Issue a replacement cheque to the payee if the Finance Manager is satisfied on the basis of documentation and any formal request from the payee that the payee (or their agent) did not receive value for the original cheque.
- Take recovery action for the amount of the original cheque against the bank that credited the cheque to the incorrect client’s account.
- Where this is not possible, approach the bank that negotiated the cheque and attempt to obtain the name and address of their customer who presented the cheque. The post or office should seek reimbursement from the customer.
- If the bank’s client refuses to refund the money, legal action should be considered to recover the amount but only after consultation with the Conduct and Ethics Unit.
7.9 Unclaimed Cheques
- Cancel cheques that are unclaimed or returned.
- Funds Controller
- Finance Manager
- As required
- Stamp the word "CANCELLED" across the face of the cheque.
- Cancel the cheque in accordance with SAP Instructions and Help Cards relating to Accounts Payable, Voiding Cheques and Cheque Management.
- Note on the original FMA001 that the cheque has been cancelled and the reason for doing so.
- Retain cancelled cheques on a file held specifically for this purpose.
7.10 Credit card arrangements
The FMA Act defines a Commonwealth credit card as “a credit card issued to the Commonwealth to enable it to obtain cash, goods or services on credit”. Credit cards include taxi and fuel cards.
Entering into credit arrangements with providers
- The CFO and overseas Finance Managers can enter into credit arrangements with banks or credit card / voucher providers. These arrangements must provide for the department to repay any money within 60 days of being notified by the provider in accordance with the FMA Act.
- The AS FSB and overseas Finance Managers are Card Managers. Card managers are responsible for the administration of credit card arrangements, including:
- Verifying the identity of a cardholder on behalf of the provider (if required).
- Lodging card applications with the provider.
- Updating cardholder information, including transaction and credit limits.
- Cancelling / suspending cards.
- Undertaking ad hoc reviews of cardholder reconciliations to ensure expenditure was in accordance with department policy, supporting documentation was provided and card statements have been processed within the specified timeframe.
- Undertake an annual review of card use with a view to cancelling cards that aren’t needed.
- Maintaining a register of issued credit cards.
- Maintaining a register of disputed credit card transactions.
- Managing the agreement with the provider.
7.11 Issue of credit cards
- A DFAT credit card may be issued to:
- DFAT officers in Australia and at post to pay for business travel expenses in accordance with the DFAT Travel Policy and to purchase goods and services.
- Attached agency officials at post after all other options have been exhausted.
Eligible DFAT officials
- To be issued with a credit card an official must be:
- A DFAT employee (including LES). A credit card cannot be issued to contractors engaged by the department.
- Willing to accept and abide by the conditions of use set out in the DFAT credit cardholder agreement and comply with the relevant departmental policies and procedures.
- An Approver or Approver’s Agent to approve spending proposals (if necessary) and to enter into arrangements.
- Credit card applications must be made in writing by completing the cardholder application form.
- The issue of credit cards to SES officers do not require approval.
- The issue of all other credit cards must be approved by the applicant’s supervisor on the following terms:
- Travel credit cards are issued in accordance with the DFAT Travel Policy.
- Purchasing cards are approved on the basis that the applicant occupies a position that has a regular and demonstrated need to purchase goods and services using a credit card.
- Completed applications must be forwarded to the Card Manager for lodgement with the card provider.
Eligible attached agency officials
- Overseas Finance Managers may agree to issue a credit card to an attached agency official if the Finance Manager is satisfied the agency has exhausted all other options, including:
- Providing the official with an Australian credit card; or
- Making arrangements with a local bank at post to provide a credit card to the official.
- Before agreeing to issue a DFAT credit card an agency delegate must provide a written assurance that:
- They support the issue of a card to the official;
- The card holder has been issued with appropriate instructions on the use of the card and any necessary delegations/authorisations to use the card; and
- The agency takes responsibility for the official’s use of the credit card and DFAT will be fully reimbursed for all transactions processed on the card.
7.12 Use of the credit card
Fraud or misuse of credit cards
- Penalties apply for fraud or misuse of the DFAT credit card (including charging private expenditure without a sound reason for doing so) under the FMA Act, Public Service Act and Crimes Act. Cardholders may be liable for any losses to the Commonwealth.
- An official who becomes aware of an apparent misuse of a DFAT credit card must report the matter immediately to the AS FSB and the Conduct and Ethics Unit.
- The cardholder must complete and sign the DFAT Credit Card Application and Agreement form.
- The cardholder must ensure they have the necessary delegations / authorisations before using the card.
- A cardholder who is not an Approver / Approver’s Agent must ensure Regulation 9 and Regulation 10 (if required) approval has been provided before they use the card to order and / or pay for goods and services.
- The cardholder must comply with any financial limits or conditions relating to their delegation / authorisation.
- The cardholder must comply with the DFAT travel policy and procurement guidelines (where applicable).
- The cardholder must not withdraw cash from their card except where an SES officer has elected to use the card to pay for meals and incidentals in accordance with the DFAT Travel Policy.
- A cardholder must not charge business expenses to their personal credit card unless there are exceptional circumstances
Credit card purchases
- A DFAT credit card can be used to make purchases over the counter, telephone, fax and the internet where the site is secure.
- Officers with a mobile phone or other electronic device provided by DFAT have two options to manage official and private purchases through an iTunes (or similar) account:
- Link their personal credit card to the iTunes account and seek reimbursement for any official purchases they make on their account.
- Establish separate official and private iTunes accounts so that only official purchases are made from the account linked to their DFAT credit card. Officers using this option should take care to ensure no private activities are conducted using their 'official' iTunes account noting that a DFAT card must not be used for private purchases, regardless of the cardholder's intention to repay
Supporting evidence documents
- Cardholders must retain supporting evidence documents (eg receipt, tax invoice, statutory declarations, etc) for all expenses charged to the credit card except for cash withdrawals by SES officers in accordance with the DFAT Travel Policy.
“Receipt” or “invoice” refers to the bill issued by the merchant and the cardholder’s written acknowledgement that the cash, goods or services has been received.
- The cardholder should provide a valid tax invoice for transactions over $82.50 (including GST) so the department can claim back Australian GST.
- In the event that a cardholder loses or misplaces a receipt the cardholder must provide a statutory declaration (when the purchase exceeds the threshold of $20) which shows that the purchase was a bona fide business expense and was made in accordance with the DFAT Travel Policy or purchasing guidelines.
- Supporting evidence documents should be attached to the credit card statement
- Cardholders must check and sign-off the monthly credit card statement. In addition, a cardholder who has used the card to pay for meals and incidentals on a trip must complete the Trip Reconciliation Ready Reckoner.
- While it is preferable for the cardholder to undertake the acquittals, the cardholder may authorise another official to undertake these processes for and on their behalf, however, the cardholder remains accountable and responsible for the acquittals.
Credit card statement
- The cardholder must ensure the card statement is reviewed and signed-off within 7 days of receipt of the statement.
- The cardholder must ensure:
- Each transaction has supporting evidence documents. Refer to “Supporting evidence documents” above.
- The transaction amount is correct (ie the amount on the statement equals the receipt or invoice).
- Any coincidental private expenditure is clearly identified.
- Unauthorised transactions are raised with the merchant and card provider promptly. Refer to Disputed Transactions below.
- The cardholder (or authorised official) must sign-off the credit card statement. By signing the statement the cardholder is declaring that all purchases included in the statement were for official purposes, unless otherwise noted, and the values match the supporting evidence documentation.
Reconciliation of meals and incidental expenses (SES officers only)
- Where an SES officer used the credit card to pay for meals and incidentals on a trip the cardholder (or authorised official) must reconcile these expenses to the Trip using the Trip Reconciliation Ready Reckoner.
- The completed Trip Reconciliation Ready Reckoner must be attached to the credit card statement.
- The cardholder must repay any amount owing, including coincidental private expenditure and expenditure (including any associated GST) in excess of the meal and incidental thresholds, within 30 days.
- An officer is not entitled to be paid any unspent meal allowance or incidentals.
- Claims for reimbursement of travel expenses must be submitted for approval to the official who approved the travel before a reimbursement can be processed.
- An independent reviewer (for non-SES cardholders this must be the cardholder’s supervisor) must:
- Review card expenditure to ensure consistency with DFAT’s travel and procurement policies.
- Review the Trip Reconciliation Ready Reckoner to ensure expenditure on meals and incidentals is within the limits on the Trip Statement.
- Review transactions where the cardholder received a benefit to ensure the expenditure is reasonable.
- Review any private expenditure to ensure it was coincidental.
- Ensure a debt has been raised in SAP for amounts owing by the cardholder, including any private expenditure.
- Check the accuracy and completeness of the card statement acquittal.
- Where errors are identified the reviewer must return the acquittal to the cardholder for correction. Once the reviewer is satisfied the acquittal is correct they must sign-off the statement. Instances where the cardholder disagrees with reviewer’s findings should be referred to the Card Manager for further review.
Disputed transactions can arise in the following cases:
- The amount on the statement is different from the amount agreed at the time of sale
- The goods / services are defective or not provided
- The merchant processed the transaction twice
- The merchant processed a credit to correct an error but it hasn’t appeared on the card
- The merchant is not recognised (ie the trading name of a company differs from the business or company name)
- The transaction is fraudulent.
- Unless the credit card agreement states otherwise disputed transactions are paid upfront pending investigation.
- Cardholders must dispute a transaction within 90 days after the transaction occurred otherwise the department will lose its right to make a claim. The cardholder should take the following action:
- If the cardholder recognises the supplier, the cardholder should query the transaction directly with the supplier as this is how most disputes are resolved. Where the supplier has not resolved issue within 14 days the cardholder must notify the card provider and advise the Card Manager.
- If the supplier is not recognised the cardholder must notify the card provider and advise the Card Manager.
- If the card provider has not replied within 30 days the cardholder should seek assistance from the Card Manager.
- Where a dispute is upheld the provider will credit the cardholders account. The credit should be credited to the same GL code and cost object as the original transaction.
- The card provider should provide written advice if a dispute is not successful. Any fee charged by the provider (eg document evidence search fee) should be debited to the work area’s cost centre. The provider’s advice should be attached to credit card statement, as supporting documentation for the provider’s fee. A copy of the advice should be provided to the Card Manager.
Fraudulent transactions or loss / theft of a card
- The cardholder must notify the Card Manager and card provider immediately they suspect their card has been used fraudulently or realise their card has been lost or stolen.
(NAB contact is 1800 033 103 or 61 3 8641 9083 if calling from overseas.)
- Replacement credit cards will be arranged by the Card Manager.
Changes to cardholder information
- Requests to amend cardholder information (eg purpose of the card, card financial limits, work unit, statement mailing address, etc) should be emailed to the Card Manager.
- Requests to amend the cardholder’s work unit should be sent by the receiving work unit.
Cancellation of a card
- A credit card should be cancelled when:
- The cardholder ceases employment with the department.
- The position occupied by the cardholder no longer requires a card.
- Misuse of the card by the cardholder.
7.13 Using the credit card for travel
- Cardholders can charge the following business expenses to their card:
- Departure taxes / fees
- Excess baggage costs that have been pre-approved
- Bank fees for foreign exchange conversion and ATM use
- Accommodation (including taxes)
- Business centre expenses, including use of business centre at hotel and printing costs for business purposes
- Business telephone calls
- Taxi, bus and train fares, including airport transfers
- Other business expenses (eg representation) that have been pre-approved where possible
- Emergency medical treatment
Meal allowance and incidental expenses (SES officers only)
- An SES officer can elect to use the card to pay for meals and incidentals in accordance with the DFAT Travel Policy.
- An SES officer who chooses to use the card to pay for meals and incidentals:
- Must be issued with a Trip Statement that sets out the maximum amounts in the credit card billing currency (ie Australian dollars for NAB credit cards) that can be charged to the credit card for meals and incidentals.
- Can pay for expenses by charging the expense to the card and / or withdrawing cash up to limit of allowable travel allowance.
- Is not entitled to be paid any unspent meal allowance or incidentals.
- The following incidental expenses can be charged to the credit card:
- Tips and gratuities
- Private transport costs
- Dry cleaning
- Newspapers and magazines
- Personal telephone costs in accordance with the DFAT Travel Policy
- Hotel movies
- Batteries, electrical adapters, locks for bags
- Expenses relating to privately owned assets such as laptops, mobile phones (excluding costs of calls) and baggage
Reimbursement of additional expenses
- Cardholders must use good judgement to ensure additional expenditure can be justified, such as additional expenses were incurred due to changes to the itinerary.
- The reimbursement claim, including supporting evidence receipts, must be submitted to the original travel approver. The approver must not approve the expenditure unless they are satisfied the additional expense is reasonable.
- Where the approver does not approve additional expenses charged to the card the cardholder must promptly reimburse the department.
- Private expenditure must not be charged to the DFAT credit card unless the cardholder uses the card to pay an invoice that includes both official and coincidental private expenditure. The cardholder must repay any private expenditure (including any associated GST) promptly.
- When a trip has been completed the Trip Statement should be amended to reflect any changes to the itinerary. Refer to FMM 7.12 for more information.
7.14 Credit card administration
Delivery of new cards and PINs
- Where possible the provider should deliver new cards and associated PINs to the Card Manager for distribution to the cardholder.
- The Card Manager should ensure the cardholder’s details are entered to the appropriate systems (eg SAP / PTWS / travel provider).
Credit card register
- The Card Manager must record the following information in a Credit Card Register:
- The card number
- Name of cardholder
- SAP cardholder vendor (where applicable)
- Cardholder’s work unit
- Purpose of the card
- Cash withdrawals allowed
- Monthly card limit
- Transaction limit
- Issue date
- Expiry date
- Cancellation date
- Date application lodged
- Date card delivered to cardholder
Disputed transaction register
- The Card Manager must maintain a register of disputed transactions and review unresolved transactions each month.
- To ensure compliance with the department’s travel and procurement guidelines the Card Manager should undertake a risk based sampling of credit card statements. The sample could comprise new cardholders, cardholders with a history of errors and a random sample of the remaining cardholders.
- The checks undertaken should include:
- Cardholder and independent reviewer had signed the statement reconciliation
- Supporting evidence documents have been provided for each transaction
- Meal and incidental expenses had been reconciled and signed-off (where applicable)
- Transactions were within limits (eg transactions were not split)
- Card statements were entered into SAP correctly (eg complete statement was entered)
- Card statements were entered within required timeframe
Annual review of cards
- The Card Manager should undertake an annual review of purchasing credit card usage with a view to cancelling cards that aren’t needed.
7.15 Use of taxi cards within Australia
Issuers of taxi cards
- Division Heads and Branch Heads in Canberra and STO Directors may authorise the issue of taxi cards to their employees who use taxis frequently (eg when a taxi is required more than once a week).
- Finance Managers may authorise the issue of taxi cards to Regional Directors at their offices.
- SES officers may authorise the issue of taxi cards to themselves.
Holders of taxi cards
- A cardholder must complete a taxi card agreement and acknowledgement form agreeing to the conditions applying to usage of the card (refer to the FMM Forms folder).
- An official, who becomes aware of an apparent misuse of a departmental taxi card, must report the matter immediately to the AS FSB and the Conduct and Ethics Unit.
- Taxi card holders must not provide details of their card to other employees or share their card with others.
Approve Issue of Cards
- Divisional Heads and Branch Heads in Canberra and STO Directors
- Finance Managers should approve taxi cards issued for their Division and Branch Heads and STO Directors
- A taxi cardholder must be a FMA Regulation 9 Approver or Approver’s Agent
Use of cards
- Holders of taxi cards
- As required
Issuers of taxi cards
- Only approve the issue of a taxi card to an employee where there is a demonstrated need for the card;
- Ensure the taxi card holder is appointed as approver/approver's agent prior to the issue of the card;
- Issue a taxi card agreement and acknowledgement form to the cardholder detailing the conditions applying to using the card;
- Ensure Cardholder complies with the conditions applying to usage of the card as set out in the taxi card agreement and acknowledgement form;
Upon receipt of individual monthly statements, promptly reconcile the statements; and
- Store cards in a secure place and report lost, stolen or destroyed cards immediately to the card provider and the departmental issuing official.
7.16 Cash payments to vendors
Suppliers should only be paid in cash as a last resort (eg the sole supplier only accepts payment by cash). Invoices must be entered to the supplier’s SAP vendor record. A SAP cash payment run is then processed to extract cash payments. A separate cash advance is issued and acquitted for each SAP cash payment run.
- Finance Manager must put arrangements in place to ensure the security of public money and the safety of officials making cash payments. Suppliers should be paid on departmental premises.
Approval of suppliers
- The Finance Manager must approve proposals to pay suppliers in cash taking account of factors, including local business practice and any risks associated with handling cash.
- The supplier’s SAP vendor master record should be updated to include the cash payment method.
Cash payment processing
- To make cash payments a SAP cash payment run is processed and the payment proposal report is printed. The report is used as the cash payment schedule for suppliers to acknowledge receipt of the payment and to acquit the cash advance.
- The usual payment checks (eg the spending proposal has been approved, goods / services have been delivered, etc) must be undertaken before a payment can be made (refer to Chapter 8.11).
- The Finance Manager must approve the withdrawal of cash (for the total amount of the SAP payment proposal) from the bank account and issue a cash advance to an advance holder (eg Cashier).
- The advance holder is responsible for paying the suppliers and for custody of the cash advance.
- The cash payment is made to a supplier (or an agent appointed in writing by the supplier). The advance holder must verify the identity of the person collecting the payment. The payee must write their name and sign the SAP payment proposal to acknowledge receipt of the payment. A second departmental officer must witness the payment. For each payment the advance holder and witness must write their names and sign the payment proposal next to payee’s signature.
Repayment of unpaid cash
- The advance holder should repay cash that remains unpaid for 14 days to the bank account. The SAP vendor payment document should be reversed to reflect the amount was not paid.
Acquittal of cash advance
- The Cashier must acquit the advance by signing-off the completed SAP payment proposal and attaching the deposit slip (where applicable) for amounts repaid.
- The completed acquittal is submitted to the Finance Manager for checking.
7.17 Working Cash Advance
This section provides the policy and procedures for establishing, operating and reconciling a Working Cash Advance (WCA). The 'Working Cash Advance User Guide' should be used as guidance where appropriate, however, if there is an inconsistency between the FMM and User Guide the FMM will apply.
Use of the WCA
- The WCA should be used where a post does not have a local bank account or a post operates in a cash economy where most payments and receipts are made in cash.
- Posts making ad hoc cash payments to suppliers should refer to FMM 7.16 'Cash Payments to Vendors'.
Approval of WCA
- Proposals to establish a WCA must be approved by the CFO.
- The Finance Manager's request should include the reason why a WCA is required, the proposed cash limit and justification (eg estimated transaction volume and value) for the proposed limit.
Operation of the WCA
- The Finance Manager should avoid establishing other cash advances (eg petty cash) for the payment of public money where possible.
- The following DFAT officials should be involved in the operation of the WCA:
- Cashier: is responsible for the security and operation of the WCA.
- Witnessing official(s): witness the enveloping of cash payments and cash payments to payees.
- Finance Manager: signs-off the WCA reconciliation and posts the parked document to SAP.
- Appointment letters are available at FMM Forms and Template.
- The Finance Manager must appoint officials to undertake the other roles. The Finance Manager must not undertake the role of WCA Cashier.
- The Finance Manager must implement procedures to manage the risks associated with the WCA and ensure key internal controls are maintained.
- All WCA payments and receipts must be recorded separately on the WCA Ledger (refer to the WCA User Guide).
- The Cashier must issue a receipt to the payer and record the information in the WCA Ledger. The receipt must include the date, amount, payer's name and reason for the payment.
- The duplicate copy of the receipt and any supporting documentation (eg invoice) should be retained with the WCA records.
- Payment requests should be submitted on the Proposal to Spend Public Money Form FMA 001.
- The Cashier must ensure:
- DFAT payments have been approved under FMA Regulation 9
- Attached agency payments have been signed-off by an authorised agency official in accordance with the SLA.
- Before issuing the payment the Cashier must verify the identity of the person receiving the payment.
- Payments must be witnessed by a Witnessing official.
- The payee must acknowledge receipt of the payment on the FMA001. The receipt should include the date, payment amount and the reason for the payment. The payee must also write their name and sign the payment receipt.
- The Cashier and Witnessing official must write their names and sign next to the payee's signature.
- The FMA001 and supporting documentation (eg invoice) must be retained with the WCA records.
Cash payments prepared in advance of collection
- Where a cash payment is prepared in advance of collection the payment should be placed in a sealed envelope and kept in the WCA cash box. Details of the payment, including the payee's name , payment amount and the reason for payment, should be written on the envelope and initialled by the Cashier and Witnessing official.
- Payments that are unclaimed for more than 14 days must be repaid to the WCA and recorded in the WCA Ledger.
- The Finance Manager should determine the frequency of the WCA reconciliation after taking account of the WCA level and other risks.
- Notwithstanding the above, the WCA must be reconciled at least once a week and whenever the occupant of the Cashier position changes.
- At least once a week; and
- Prior to EOM processes; and
- Whenever the occupant of the Cashier position changes.
- The WCA Reconciliation sheet (refer to the WCA User Guide) must be used for the reconciliation.