Fees and User Charges Report

State payments to the vendor. In order to discontinue BUWH, the General Accounting Division must receive an IRS W9 form (for the first occurrence) or forms SSA-7028 or IRS letter 147C (for second occurrence within a three-year period) from the vendor.

4.3 Corporate Purchasing Card Program

The General Accounting Division (GAD) is responsible for the Statewide Corporate Purchasing Card (CPC) Program.

The Purchasing Card is issued to State employees normally authorized to buy goods and services for the agency. The cardholder's name and agency are embossed on the card. The individual is responsible for the proper use of the card. Both the cardholder and the agency’s Purchasing Card Program Administrator (PCPA) are required to keep accurate records. Only a PCPA may request changes to information in an agency cardholder’s account. The CPC is used mainly to purchase small dollar items ($5,000 or less). An R*STARS accounting code is part of the information stored for each account holder in the bank's system. GAD will use this accounting data to record the entry in R*STARS. Merchants doing business with the State are paid through their card-issuing bank, in accordance with the card regulations. GAD will record the agencies portion of the summarized total using the R*STARS transaction adjustment process.

The State of Maryland’s CPC Program Policy and Procedures Manual contains details concerning the CPC program. Copies of this manual are available from the agency’s PCPA, the Comptroller’s web site:

http://compnet.comp.state.md.us/General_Accounting_Division/ or from the CPC Program Coordinator at GAD.

4.4 Fees and User Charges Report

The Fees and User Charges Report of the State of Maryland is required to be submitted to the Governor and the General Assembly under Section 2-107, of the State Finance and Procurement Article of the Annotated Code of Maryland. The Comptroller of the Treasury, General Accounting Division, adopted regulations under COMAR 03.09.01 to comply with this requirement. The regulations define the required fees and user charges data to be submitted to the State Comptroller by units of State government and reported by the Comptroller to the Governor and General Assembly in a biennial report on or before December 1 of the even years.

Each unit of State government that imposes fees or user charges shall accumulate and report up-to-date data to the Comptroller as specified by this regulation. The data accumulated will be reported in the format prescribed by the Comptroller and sent to the

Comptroller’s General Accounting Division.

The format prescribed to report the current year’s data will be contained in the biennial reporting instructions distributed to each unit of State government by the General

Accounting Division. These instructions will be distributed in February, for preliminary completion, and June, for final completion, of each even calendar year to report the current fees and user charges information for the fiscal year ending June 30.

State agencies are required to comply with the Comptroller’s directives as promulgated in the manual and directed by correspondence from the General Accounting Division. Each unit of State government is responsible for providing current data no later than

September 15, of each even calendar year for the final report.

The Fees and User Charges Report will contain for each fee and user charge, a

description of the service or function and a comparison of actual revenue generated with the total cost of providing the service or function.

Appendix D of the manual is a complete Fees and User Charges Report instruction packet, which includes an introduction, instructions, forms, and definitions in detail. 5 Internal Controls

State agencies are responsible for establishing an effective system of internal control. The Internal Control Manual for Use by State Departments and Independent Agencies was developed by the Comptroller’s Office to provide the necessary guidance for the development, implementation and maintenance of a sound system of internal control. This manual may be found on GAD’s website. The following is an overview of the internal controls agencies should implement.

Internal control is the overall plan of organization and all the coordinate methods used to safeguard assets; ensure the reliability of accounting data; promote efficient operations and ensure compliance with established governmental policies, laws, regulations and contracts. To accomplish these objectives, certain basic standards must be present in any effective system of internal control. The general standards concern reasonable assurance of achieving control objectives, supportive attitude, competent personnel, and control objectives and techniques. Specific standards which are central to the standard of control objectives and techniques involve documentation, recording of transactions and events, execution of transactions and events, separation of duties, adequacy of supervision, access to and accountability for resources, and efficient and effective use of resources. The specific internal control procedures needed by an agency will vary with each situation encountered. In determining which controls should be in place, estimates and judgments are required to assess the expected benefits and related costs or risks of

implementing or not implementing control procedures. For example, it is recognized that certain agencies may not have sufficient personnel to fully or adequately segregate duties. Under these circumstances, it is the responsibility of management to exercise prudent judgment to ensure that the best internal control procedures are in place.

Basic internal control procedures include, but are not limited to, the following: 5.1 Cash

 Centralization of the cash receipts collection function to the maximum extent possible.

 Immediate recording of cash receipts for accounting control purposes (e.g., utilization of mail receipts listings, cash registers, pre-numbered receipt forms).

 Restrictive endorsement of checks “for deposit only” immediately upon receipt.  Provision of separate cash drawers (or similar control devices) for each employee

responsible for collections to affix individual responsibility and accountability for collections until deposited.

 Segregation of the cash receipts handling duties from the cash receipts and accounts receivable record keeping, billing and reconciliation functions.

 Reconciliation of cash receipts recorded on cash register tapes, pre-numbered receipt forms and/or mail listings with the cash receipts ledger and amounts deposited (e.g., per validated deposit tickets, R*STARS records) by an employee independent of the cash receipts functions.

 Independent verification of the continuity of cash register tapes by comparing the ending transaction number from one tape to the beginning transaction number of the next tape.

 Accounting for the numerical sequence of pre-numbered receipt forms as to issued, voided and on hand.

 Supervisory review and approval of voided transactions and adjustments to cash receipts and accounts receivable records.

 Existence of adequate facilities to store and safeguard cash receipts until deposit.  Prompt and intact deposit of cash receipts.

 Substantiation of the use of petty cash with vouchers that are signed and dated.  Surprise cash counts performed by someone other than the Petty Cash Fund

custodian.