Policy and Procedures for Disbursements



Policy and Procedures for DisbursementsBACKGROUND INFORMATIONThe method of disbursement used for the payment of the purchase of goods and services include: 1) payment by check; 2) electronic fund transfer; 3) automated clearing house; and 4) credit card. When making disbursements for goods or services received it is important to verify that accurate payments for eligible costs are made to vendors in a timely manner. In addition, disbursements can be subject to fraud and embezzlement and therefore proper controls are required to assure that the expenditures of PHA funds are necessary, reasonable, and directly related to the goals and objectives of the PHA.This policy applies to all disbursements of the PHA.This document provides a sample of a PHA disbursements policy and procedures.Sample 1 – All PHAs. This sample provides an example disbursement policy for all PHAs, regardless of size or complexity.PHAs can simply cut and paste the sample into their policy and procedures document and modify as needed.OTHER ITEMS FOR CONSIDERATIONIn the review of the sample, the PHA will need to take their specific situation into consideration when modifying the disbursement policy and procedures to suit their PHA.The following provides the major assumptions that were used to develop the sample policy and procedures.Assumption – If the PHA has a credit card, the PHA will have a credit card policy that they will follow.Assumption – If the PHA has petty cash, the PHA will have a petty cash policy that they will follow.SAMPLE 1 – ALL PHAsISBURSEMENT POLICYThis policy applies to all disbursements of the PHA.It is the policy of the PHA to ensure payments for the purchase of goods or services are made in a timely manner in the amount as required under the terms of the contract, agreement, purchase order, etc. The method of disbursement includes payment by check, electronic fund transfer, automated clearing house, and credit card. Proper documentation and approval should be obtained prior to payment of payables to ensure effective controls over disbursement of PHA funds. DISBURSEMENT PROCEDURESAuthorized Payment TypesAll payments shall be made by check, electronic fund transfer (EFT), automated clearing house (ACH) or credit cards.Where possible, the PHA’s first choice is to make payments by check.All checks must follow the check writing policy (refer to check writing policy).EFT and ACH payments must be accompanied by an EFT/ACH payment request form.Credit card payment is permitted only for those authorized goods and services allowed to be purchased under the PHA’s credit card policy (refer to credit card policy).No cash withdrawals from the bank or ATM for payments are allowed. Payments and procedures around the use of petty cash are covered in the PHA’s petty cash policy (refer to petty cash policy).Supporting Documentation and Payment ProcessingPayments should only be processed if supported by sufficient documentation.The supporting documentation at a minimum includes sufficient information to substantiate the amount as well as the business purpose, the payee's name, address, and the date and nature of the transaction, including:Verification that the expense is properly supported by the vendor's original invoice, a receiving document and a purchase order, if applicable;Verification that the purchase requisition and purchase, if used, were properly approved prior to ordering the goods or services;Determination that goods and services were received; andDetermination that allowable discounts are taken.PHA staff assigned to authorize the payment must approve payment request with the supporting documentation by signing and dating the supporting documentation prior to the printing of checks.Payments shall be made timely to avoid any late payment fees, interest, or other payment related charges.It is the policy of the PHA that any charge failing to have the required documentation may be the direct financial responsibility of the individual who caused the PHA to incur an inappropriate cost, interest or late fee.MiscellaneousDocumentation for payments, other than payroll, to an authorized check signer must be approved by a different authorized check signer (i.e. cannot write a check to yourself).Facsimile signatures will not be allowed for EFT/ACH payment approvals.In the case of credit cards, the use of auto drafting of payments before items are approved is not allowed. ................
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