Overview
The Interactive Teller Machine (ITM) Account Balancing and Control Standards Policy ensures the integrity of the financial statements of the company. The goal of this policy is to provide a governance and framework for a standard and consistent account reconciliation process across the company.
All balance sheet General Ledger accounts and internal use Demand Deposit Accounts (DDA) are subject to these standards. Balancing is the process of supporting the validity of the balances in these accounts. The reconciliation routine, which is necessary to complete the balancing process, recognizes reconciling items identified as follows:
Unposted debits/credits
- Reconciling items recorded on subsidiary but not on the general ledger or internal use DDA
Outstanding debits/credits
- Reconciling items recorded in the general ledger or internal use DDA but not on the subsidiary records
This policy statement applies to all associates responsible for the initiation and execution of accounting entries, account reconcilers and approvers, and account owners whom certify reconciliations. This policy serves as the single governing authority for all account reconciliation activities.
Through the adoption of this policy, supporting written procedures (Account Balancing Procedures) should be developed and implemented to guide associates in the correct procedures of balancing and also control risk exposure for the company. Further, it will assure external and internal auditors that checks and balances are in good working order and account balance discrepancies are quickly noted and resolved.
Account Balancing and Control Standards Policy Elements
- Interactive Teller Machine (ITM) account reconciliations should be performed using the Frontier (FISERV) software system.
- All account reconciliations are required to be completed in a timely manner in accordance with established timeframes.
- All account reconciliations are required to be signed-off on by an appropriate preparer and approver within the Financial Accounting Department.
- The preparer and approver cannot be the same person.
- An additional level of certification should be completed by the account owner.
- All reconciling items are required to be identified and have supporting documentation.
- Supporting documentation is required to be maintained with all reconciliations and should be in electronic format when possible.
- All reconciling items begin aging from their recordation date and should be categorized for review into the following groups by the number of days:
- 0-30
- 31-60
- 61-90
- >90
- Unidentified outages should be separately identified and be aged from the first occurrence in the outage.
- All reconciling items and unidentified outages, regardless of amount, and aged greater than 30 days must be reviewed by the Financial Account Manager and a plan for resolution will be required.
- All reconciling items > or = $5,000 (single item) and aged > than 60 days, as well as unidentified outages aged > 60 days must have a documented plan (in writing) for resolution provided to the Financial Accounting Manager.
- The Bank Controller should be made aware of all reconciling items > $10,000, and all unidentified outages >60 days.
- Any aged items or unidentified outages > 90 days must be formally approved in writing by the Bank Controller. A reporting process should be developed by Financial Accounting to ensure that aged and material items received the proper level of review, scrutiny, and research prior to each month and quarter-end close.
- Reconciling items and unidentified outages must receive the proper level of review and approval prior to writing off as a loss as set forth in this policy statement.
- Any exceptions to the aforementioned policy elements must be approved by the Bank Controller.
Internal Controls
Accountability for the accuracy of account balances involves many associates and therefore, a certification process has been developed to involve the appropriate associates that will certify the completeness of their role.
To further ensure proper separation of duties, in no case will an associate be both a Reconciler and an Owner, and in no instance will a Reconciler be the same associate that approves a reconcilement.
Write-Offs
Timeframes for resolving reconciling items and unidentified outages will vary depending on the nature, volume, and complexity of the account. More emphasis should always be given to researching the larger items and differences that could have a more significant impact on bank earnings and require timely allocation of resources to resolve.
Reconciling items should be resolved only with certainty and documentary support. Items should not be aggregated or transformed in any manner that misrepresents the reconciling difference. The original date of the reconciling item should be maintained in the description, since the item may be transferred to another account or reopened after an incorrect disposition. Reconciling items should not be cleared by merely matching like amounts or by netting a group of unrelated items. Reconciling items and unidentified outages should generally be resolved within 90 days of their occurrence. This timeframe is a guideline and any exceptions outside of the 90 day period should be approved by the Bank Controller.
When it has been determined and documented that unresolved reconciling items or unidentified outages are not recoverable, these items/balances should be written off after the following approvals have been obtained. Approval documentation should be maintained in the Accounting Manager’s file containing the write-off entries greater than $2,000.
| Amount | Approval Required |
|---|---|
| $500 or Less | Account Owner |
| $501 to $2,000 | Account Owner and Reconciliation Administrator |
| $2,001 to $5,000 | Account Owner and Accounting Manager |
| $5,001 to $50,000 | Account Owner and Controller (CCB and CCBG) |
| Greater than $50,000 | Account Owner/CCB & CCBG Controller/CFO |
Express/Virtual Bankers (ITMs), smart ATMs, and coin machine outages > $50 must be approved by the Reconciliation Administrator.
Key Definitions
Account Reconciliation
Account reconciliation is the comparison of an account’s control balance to a sub-ledger balance, bank or other third party statement, or additional documentation that appropriately supports the account’s balance. Reconciliations may be performed daily, weekly, or monthly based on the related risk to the company which is assessed and approved by the Bank Controller.
ITM Acceptor/Dispenser Tracking Report
The ITM Acceptor/Dispenser Tracking Report is prepared and maintained by Express with the aid of Retail Support. The information contained within the report will aid in the accurate reconciliation of each of the ITMs on a daily basis. It should help to spot errors early, so they can be addressed and remedied quickly. The following information is contained within the report.
- ITMs
- Dates of Service
- Acceptor/dispenser loads and unloads
- Expected residual cash if missing
- Comments will also be included for items Express considers irregular or needing attention
Supporting Documentation
Supporting documentation provides details for and substantiates the control balance being reconciled. It should be detailed enough so that a person with no extensive knowledge of the account can review the reconciliation and understand the nature of the balance.
Reconciling Item
A reconciling item is a transaction or item that represents a difference between the control account and the subsidiary ledger or other supporting schedule balance. All reconciling items must be explained and have supporting documentation.
Unidentified Outage
An unidentified outage is a reconciliation difference between the control account and subsidiary system that cannot be identified and itemized because it is not yet known. These amounts should be accurately identified as either a DR or CR amount in order to properly assess the risk with the outage. These amounts should not be treated lightly and should be resolved with all possible speed and priority.
Frontier Reconciliation Software
Frontier is a highly configurable transaction management and reconciliation solution provided by FISERV. The software solution provides end-to-end functionality that automates and streamlines the gathering of account reconciliation data and the related reconciliation process. CCBG uses this software for performing a majority of its account reconciliations.
Financial Accounting
The following is a list of duties specific for the Financial Accounting Department as a part of the ITM Reconciliation and Controls Process.
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An Accounting Reconciliation Specialist prepares the FISERV ITM Reconciliation on a daily basis for each ITM.
- The Specialist will use the ITM Acceptor/Dispenser Tracking report to assist in the daily reconciliation.
- Once ready the reconciliation is e-mailed to _ITMGroup, including read receipts, for review. This is to be completed daily.
- The Account Reconciliation Specialist will follow up on outstanding items until they are resolved. If timeliness becomes an issue (for example: items are not resolved or lack of communication within 1 week), the issues will be address by the management included in the e-mail train.
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A second Accounting Reconciliation Specialist will prepare the Truist Reconciliation on a weekly basis.
- Once ready the reconciliation is e-mailed to _ESSettlement, the Financial Accounting Manager, the Virtual Banking Manager, Retail Support Manager, Financial Account Analyst, Funds Settlement Specialist – Team Lead, Internal Control Manager, Accounting Supervisor/System Administrator, Accounting Reconciliation Team Lead, Manager/Electronic Banking Services, Retail Support Coordinator CC: _ESRecon Group
- The Account Reconciliation Specialist will follow up on reconciling items or unidentified outages timely. The specialist is to immediately escalate any issues with aged, reconciling, or unidentified outages
Journal Entries
- Financial Accounting will review the memo posted journal entries before the end of the day.
Express Banking
The following is a list of duties specific to the Express Banking Department as a part of the ITM Reconciliation and Controls Process.
The Express Banking Manager has been made the Account Owner, the individual who initiates the majority of transactions to an account and/or clears the majority of reconciling items, and who maintains the best working knowledge of the account. The following is a list of the duties for the Account Owner:
- Maintains and has ready access to the supporting documentation for transactions
- Certifies that reconciling items included in the reconciliation report can be properly resolved and cleared in the next accounting cycle (within the next month).
- Attests that account activity appears reasonable and within expected parameters and that balances are substantiated by supporting documentation.
- The Express Banking Manager can delegate these tasks, however the manager will ultimately remain accountable for completeness.
ITM Reconciliation
- Express Banking is responsible for certifying the reconciliation on a monthly basis, with an open item to have a second reviewer certify the account on a quarterly basis
- Express Banking prepares and maintains the ITM Acceptor/Dispenser Tracking Report.
- Express and Retail Support will review the report on a periodic basis for completeness, quality control, and accuracy
- The report is to be emailed to _ITM Group weekly by the end of day Friday.
- For the complete daily ITM Reconciliation procedures completed by Express, see ITM Reconciliation Procedures - Daily.
Journal Entries
- End of the Month procedure documentation is currently in process.
As new ITMs are loaded Express and Retail Support will work together to ensure that they each have a unique load amount. Going forward, this will assist in a cleaner tracking and reconciliation process.
Retail Support
The following is a list of duties specific to Retail Support as a part of the ITM Reconciliation and Controls Process.
- Responsible for opening claims and research requests with Brinks and Truist based on the ITM Tracking Report on a weekly basis.
- This ensures we are complying with the 30 day loss claim clause within the Brinks and Capital City Bank contract.
- Opening the claims and research requests is the responsibility of the Retail Support manager.
- Responsible for monitoring any new ITMs to ensure the acceptor and dispenser loads and unloads are processing completely and accurately.
- As new ITMs are loaded Express and Retail Support will work together to ensure that they each have a unique load amount. Going forward, this will assist in a cleaner tracking and reconciliation process.