Velega outlines new and current
Treasury policies for ASG

ASG Treasurer Velega Savali has written a four-page letter to all ASG department and agency heads, addressing matters in internal controls and other procedures which he says involves outstanding audit issues that they wish to clear.

According to Velega, checking accounts outside of Treasury require legal authority and purpose. “There should be no checking accounts held by departments other than Treasury,” he wrote. “Where a legal purpose and authority exists, the accounts must still be reconciled and statements sent to Treasury on a monthly basis.”

With regards to revenue operations, Velega said that regular cash deposits should be made to the Revenue Office on a daily basis and credited to the proper revenue account.

Each department is responsible for ensuring that all invoices reach the Accounts Payable Office, as this is not the function of the vendor. Original supporting documentation must accompany each request for payment, meaning no faxed copies would be accepted.

For payments to be valid, the vendor must hold a copy of the purchase order. Without such, vendors risk the chance or not being paid for transactions. “Only genuine documented invoices will be paid; this office will not pay from statements,” Velega wrote.

Each invoice must include full documentation of the items purchased, procured, or services rendered.

Effective immediately, all original source documentation for payroll must accompany each biweekly submission of payroll to the Payroll Office. This means that original timecards or timesheets must be maintained for each employee and sent with payroll. Scantron sheets are not considered source documentation for purposes of payment.

Timecards or timesheets for each employee must be signed by the employee certifying that the record is true and correct, and each such document must also be signed by a timekeeper or supervisor also certifying that the record is true and correct, and that the hours worked actually occurred.

The Payroll Office may request at any time, documents to support things like authorized payroll deductions, verification of social security numbers, and eligibility to receive longevity pay, hazardous duty pay, bonuses, and special types compensation such as clothing and housing allowances, and lump sum payments.

“We realize this will require a significant transition to attain full compliance, however we ask that each department work to meet these standards in the following month,” Velega wrote. “Treasury will make available, sample Excel spreadsheets for timesheets beginning the first week of October 2007.”

Velega said that journal entries to the financial system have become far too frequent in occurrence. “Transferring expenses from one program or grant to another will no longer be allowed, including payroll transactions,” Velega explained. “It is the obligation of each department to assure that payment of expenses, including payroll, be originally made out of the proper program, fund or grant.”

Lastly, Velega addressed the issue of federal awards and grants, saying that for costs to be allowed under federal awards, they must meet certain general criteria:

• Be necessary and reasonable
• Be allocable to federal awards
• Be authorized or not prohibited under local laws or regulations
• Conform to any limitations or exclusions as to types or amounts of cost items as set forth in OMB Circular A-87
• Be consistent with policies, regulations, and procedures that apply uniformly to both federal awards and other activities
• Be accorded consistent treatment and are in accordance with generally accepted accounting principles
• Not be included or used to meet cost sharing or matching requirements of other federal grants or awards; and
• Be adequately documented

Direct charges to federal awards and grants are those that can be identified specifically with a particular final cost objective.

Typical direct costs chargeable to federal awards are:

• Compensation of employees for the time devoted and identified specifically to the performance of those awards
• Cost of materials acquired, consumed, or expended specifically for the purpose of those awards
• Equipment and other approved capital expenditures
• Travel expenses incurred specifically to carry out the award.

“Please bear in mind that direct charges for foreign travel are allowable only when the travel has received prior approval of the awarding agency,” Velega said. “Each separate foreign trip must receive approval.”

Velega concluded, “Departments operating with federal programs should have a sound understanding of OMB Circular A-87 which can easily be located on the internet.”