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Checks outstanding more than two years

The Indiana Code, Title 4, Article 10, Chapter 10 (IC 4-10-10), requires state agencies, such as state supported universities, to declare canceled all checks that remain outstanding and unpaid for a period of two (2) or more years. No later than March 2 of every year, the disbursing officer of the state agency must prepare four copies of a list of all checks which have been outstanding for two or more years and distribute them as follows:

1. The original list is to be filed with the responsible head of such agency. The appropriate office at USI would be that of the Vice President of Business Affairs and Treasurer.

2. One copy is to be retained by the disbursing officer or person preparing the list. That would be the Payroll Office for payroll checks and the Business Office for student refunds and accounts payable checks.

3. One copy shall be transmitted to the Auditor of State, 200 W. Washington St., State House, Rm 240, Indianapolis, IN 46204.

4. One copy submitted to the State Board of Accounts, 302 W. Washington, Room E418, Indianapolis, IN 46204

The lists must provide the check date, check number, the fund from which the check was paid, the payee name, and amount. The fund would be either current (which includes unrestricted, designated, auxiliary, and restricted), loan, or plant.

The outstanding check lists are to be routed to the Internal Audit Office for the annual filing with the appropriate state offices.

The university must establish liability accounts and honor any valid claims against the outstanding checks for a period of seven (7) years from date of original check. The claimant must file a voucher certifying that he is the owner of the check, that the money is justly due him, and relate the circumstances that prevented the check from being presented for payment within a reasonable time. After seven years, the payee cannot recover and the funds belong to the university.

A regular reconciliation of the liability accounts is required to keep an accurate accounting of who the outstanding payees are and the amount of each check. The unclaimed wage reconciliation will be performed by Human Resources personnel and a report forwarded to the Business Office and to Internal Audit. The student refunds and accounts payable reconciliations will be performed by Business Office personnel and a report forwarded to Internal Audit.

Reconciliation reports should be retained as long as the information contained within is pertinent.

University of Southern Indiana
Payroll Procedures for Voiding and Reporting Unclaimed Wages

In February of each year, identify the outstanding payroll checks that are two years old or older. Pick up any of these checks that are still on file with the cashier's office and mark them void. Make a copy of the checks for the Unclaimed Wages file, and forward the original checks to the Business Affairs office for filing in the canceled check files located in the vault. Prepare a Missing Check Memo form for each check that is not in house.

Call the Reconciliation Dept. at Old National Bank to discuss the need to receive a cashier's check equal to the amount of the outstanding payroll checks. Submit a letter with a list of the outstanding check numbers and payee names to the appropriate person1, requesting the check and instructing him/her to record unclaimed wages on the bank tape. The next recon file run will show that these checks were paid on the date of the cashiers check. Make a notation that these are unclaimed wages and make a copy of that portion of the recon report for the Unclaimed Wages file.

Upon receipt of the cashier check, give the check and a list of payees and amounts to the cashier. Instruct the cashier to receipt the amount into 0-10000-2773, Unclaimed Payroll Checks, and to include each payee's name and amount in the description on the receipt.

Send the list of all outstanding check numbers, check dates, payees, and amounts to the Internal Audit office for filing with the Auditor of State, the State Board of Accounts, and the Vice President for Business Affairs and Treasurer before March 2. A final copy as submitted to the various state offices will be returned to Payroll for the Unclaimed Wages file.

Send a letter to each individual whose check has been voided informing him/her that he/she may still receive the unclaimed wages if a written request is made within seven (7) years of the issue date. His/her request must include a current mailing address, a social security number, and certification that the requestor is the owner of the check. The state Code also requires that the individual relate "the circumstances that prevented the check from being presented for payment within a reasonable time" (IC 4-10-10-8). A form requesting this information should be sent with the letter.

If a request for reissue is received from a payee, prepare a check voucher listing all information on the voucher necessary for a clear audit trail. Charge the Unclaimed Payroll Checks account, 0-10000-2773, and forward it to Accounts Payable. Attach a form letter to the check voucher and request this be sent with the check. The form letter should instruct the individual to cash the check at his/her earliest convenience.

Human Resources will be charged with (1) performing regular reconciliations of the liability account established to pay out future claims and (2) forwarding a report to the Business Office and the Internal Audit Office. The Payroll Office will be charged with the responsibility of notifying the Business Office to move funds out of the liability account into a miscellaneous income account once the seven year period has passed.

Our current contact person at Old National Bank is Kathy Crowe at 464-1480.

updated 5/4/2006 3:44:48 PM

8600 University Boulevard - Evansville, IN 47712-3596 - 812/464-8600

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