402.506 Disbursement Records Requirements - PowerPoint PPT Presentation

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402.506 Disbursement Records Requirements

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  1. 402.506Disbursement Records Requirements Revised Rule

  2. Acceptable Records to Substantiate Bingo Expenses • Language was added to provide for imaged bank statements • The industry requested to add the language “to extent available from the financial institution,” to clarify these may not be available. Actual or imaged bank statements, deposit slips and cancelled checks or cancelled check images, to the extent available from the financial institution.

  3. Acceptable Records to Substantiate Bingo Expenses • New language was added to reflect that each electronic transfer from the bingo account should have a record that indicates the purpose, amount and payee. The purpose, amount and payee for each electronic transfer from the organization’s bingo checking account.

  4. Acceptable Records to Substantiate Bingo Expenses • New language was added to require records to be maintained for any expense. • The rule requires expense records to be maintained for promotions, door prizes, advertisments, flyers, games schedules and documents reflecting special pricing. A licensed authorized organization or unit shall maintain records to document any expenses, including incidental expenses, for promotions or door prizes, including any advertisements, flyers, game schedules, or documents reflecting any special pricing structures.

  5. Allocation of Expenses • Language was added that clarified that records that document the allocation method that expenses related to the non-bingo operations of the organizations and expenses related to bingo must be maintained. The licensed authorized organization or unit shall maintain records to document the allocation method for expenses that are divided between bingo and non-bingo operations of the organization and the allocation of the expenditure between bingo expense and charitable distribution.


  6. Cash Disbursements Journal The rule now requiresthat a Cash Disbursement Journal or equivalent be maintained that shows: • The information for each check written • Electronic funds transfers • Bank fees • Cash shortages or overages

  7. Cash Disbursements Journal If any licensed authorized organized organization maintains its records on a commercially available accounting software package (e.g. Quicken), use of the standard accounting features of the package shall meet the requirements of maintaining a Cash Disbursements Journal.

  8. Cash Disbursements Journal • The Cash Disbursements Journal must be maintained on a cash basis. • The Cash Disbursements Journal must include information for checks written, electronic funds transfers, bank fees and cash shortages and overages that are dated during the calendar quarter.

  9. Cash Disbursements Journal Required Information: • Organization Name or Unit Name • Taxpayer or Unit Taxpayer Number • Calendar Quarter • Date of Check, Withdrawal or Electronic Fund Transfer Transaction.

  10. Cash Disbursements Journal Required Information: • Check Number, Transaction Number or Confirmation Number • Name of Payee • Amount of Expense • Expense Category which corresponds with the category on the Quarterly Report

  11. Cash Disbursements Journal The Rule Specifies: The Rule Specifies: Any changes made on the Texas Bingo Quarterly Report shall be documented on the Cash Disbursements Journal. • Each expense category shall be totaled quarterly and match the information reported to the Commission on the Texas Bingo Quarterly Report.

  12. Bingo Checking Account • Under the revised rule……A licensed authorized organization or unit must maintain sufficient funds in the bingo checking account to cover all checks written and electronic fund transfers.

  13. Bingo Checking Account Bank fees incurred because the organization fails to maintain sufficient funds in its account to cover expenditures from the bingo account may NOTbe considered a reasonable or necessary expense.

  14. Disbursement Records Under the revised rule all disbursement records must be: • Complete • Accurate • Legible • Maintained for 4 Years

  15. 402.514 Electronic Fund Transfers New Rule

  16. What is an EFT? “Electronic fund transfers (EFT)” refers to the transfer of funds using a computer system, electronic terminal, telephone, mobile phone, or other non-paper based method that may be used for both credit transfers, such as deposits into an account, and debit transfers, such as payments from an account.

  17. EFT Controls Organizations and units must use the same financial policies, procedures and controls that govern disbursement by check and receipt of funds into the bingo bank account for EFT transactions. (2001.452 BEA, 402.505 – Permissible Expense and 402.506 – Disbursement Records Requirements)

  18. EFT Controls • Only authorized persons are allowed to execute an EFT transaction on behalf of the organization or unit.

  19. EFT Controls Organization and units must maintain documentation of board approval of changes in persons authorized to execute EFT.

  20. EFT Controls Examples of board approval documentation include but are not limited to: • Meeting minutes • Bank account signature cards • Copies of applications to the financial institution to authorize individuals access to perform on-line banking in association with the bingo account.

  21. EFT Controls Under the New Rule: Under the New Rule: Each EFT must be accounted for when completing monthly bank reconciliations • The Bingo Chairperson and bookkeeper shall review accounting records and bank statements to ensure that ONLY AUTHORIZED EFTs are executed.

  22. Recordkeeping for EFTs Under the new rule, at a minimum the organization or unit must record this information regarding EFT receipts: • Payer Name • Amount Paid • Date Paid • Purpose of the Funds Received; and • EFT Confirmation Receipt, if provided.

  23. Recordkeeping for EFTs Under the New Rule: Under the New Rule: The following information must be maintained to support the EFT payment: Payee Name Amount Paid Date Paid Account Number from which the Transfer is Made Nature of the Payment Name of the Person Executing the EFT EFT Confirmation Receipt, if Provided • The organization or unit must maintain a copy of each EFT payment transactionTOGETHER with the invoice or billing statement.

  24. Recordkeeping for EFTs Records related to EFTs into or out of the bingo account must be maintained for: 4 Years

  25. Discrepancies or Misapplication of EFTs • The bingo chairperson or other person authorized to sign on the bingo bank account must notify the organization’s financial institution IMMEDIATELYto report problems or if it is suspected that someone has access to the bingo bank account without authorization.

  26. 402.101 Advisory Opinions Revised Rule

  27. What Changed? • Subsection (e)(5) has been changed so that only the REQUESTOR may rely upon an advisory opinion. • Previously, other persons whose conduct is substantially consistent with the opinion and facts stated in the request could also rely on the advisory opinion.

  28. 402.600 Bingo Reports Revised Rule

  29. When is the Report Mailed? • The rule was revised to reflect our current practice of mailing the quarterly report to the licensees on the 25th of the month prior to the end of the calendar quarter.

  30. When are Electronically Submitted Reports Considered Filed? • For quarterly reports submitted electronically, the report is considered filed as of the date and time sent from the specified e-mail address.

  31. Signature Requirements • The rule added language that for the valid filing of paper quarterly reports, an officer, director, or bookkeeper must sign the report. By signing a report, the officer, director, or bookkeeper declares that the information in the report is true and correct to the best of their knowledge and belief.

  32. Lessor Quarterly Report • The rule was amended to specify that the lessor report will also include information regarding taxes, insurance premiums, and utility expenses, that are paid by the lessor, and reimbursed by an authorized organization or unit to the lessor.

  33. SSP Quarterly Report • The requirement for a System Service Provider to file a quarterly report was removed from the rule. (g) Quarterly report for information relating to a system service provider license. (1) A system service provider shall file a report on a form prescribed by the Commission or in an electronic format prescribed by the Commission, reflecting each sale or lease of an automated bingo system to a person or organization in this state or for use in this state. (2) The report shall be filed with regard to each calendar quarter and is due on or before the last day of the month following the end of the quarter. The report is due to the Commission regardless of whether a sale or lease of an automated bingo system occurred during the quarter. (3) The report must be filed under oath attesting to the information being true and correct.

  34. Non-Filers • The language in the rule was revised to clarify that ‘failure to file a required report by the due date may result in an administrative penalty.’

  35. 402.451 Operating Capital New Rule

  36. Definitions • The ‘Bingo Account’ is defined as the bingo checking account, bingo savings account and petty cash if bingo funds of a licensed authorized organization or unit.

  37. Definitions • Retained ‘Operating Capital Limit’ is defined as the maximum amount of funds that may be retained in the bingo account which is equal to the organization’s or unit’s actual quarterly average bingo expenses, excluding prizes paid, for the preceding license period but does not exceed $50,000 per organization.

  38. Bingo Account Balance Question: The bingo account balance of a licensed authorized organization, reconciled to include outstanding checks and deposits in transit, on the last day of each calendar quarter may not exceed the total of: (1) the organization’s or unit’s retained operating capital limit; (2) prize fees held in the bingo account to be paid to the Commission; and (3) net proceeds from the conduct of bingo for the current quarter. When must the bingo account balance be in compliance with the organization’s operating capital limit? Answer: On the LAST DAY OF THE QUARTER.

  39. Transferring Funds Since the Bingo Bank Account is considered the bingo checking account, bingo savings account and petty cash if from bingo funds, funds MAY be transferred between these accounts, where applicable.

  40. Calculating Operating Capital for Conductors • Expenses reported on the quarterly reports for the 4 calendar quarters immediately preceding the license start date are used in the calculation. • If a two year license, each 12 month period will be calculated. • If an original licensee renewing for the first time, the calculation will be based on the quarterly reports for the 3 calendar quarters immediately preceding the license start date.

  41. Calculating Operating Capital for Original Conductors $50,000. When conducting bingo apart from an accounting unit.

  42. Operating Capital Effective Period for Conductors • The operating capital limit is effective for the four (4) calendar quarters beginning on the first day of the calendar quarter immediately following the license start date. • If the license start date is May 6, the effective period would begin July 1 (Third Quarter).

  43. Calculating Operating Capital for Units • Expenses reported on the quarterly reports for the 4 calendar quarters beginning October 1 (Fourth Quarter) through September 30 (third Quarter)are used in the calculation. • The operating capital limit is effective from January 1 through December 31 of each year.

  44. Calculating Operating Capital for New Units • The operating capital limit for new units is equal to the SUM of the unit member’s operating capital limit who are joining the unit.

  45. Unit Membership Changes The unit’s operating capital limit will be increased or decreased by the average unit member operating capital whenever the number of unit members changes. • Unit operating capital limit: $200,000 • 4 members – per member amount $50,000 • If an additional member joins the unit, the new operating capital limit will be $250,000

  46. Leaving an Accounting Unit “If a licensed authorized organization withdraws from a unit and will no longer utilize unit accounting, its retained operating capital limit will be equal to the average unit member operating capital of the unit prior to withdrawal, not to exceed a total of $50,000.”

  47. Failure to Receive Notice Our office will notify the organizations and units of their operating capital limit however, if they fail to receive notice by the effective date they must still comply with their new operating capital limit.

  48. Excess Bingo Account Balance If the bingo account balance on October 1, 2009 was in excess of the operating capital limit as of January 1, 2010, then the funds must be disbursed within the following time frame: Excess Funds as a PercentageLast Day to Disburse Excess Funds of the Operating Capital Limit Less than 200% September 30, 2010 200% - 299% September 30, 2011 Greater than or equal to 300% September 30, 2012

  49. Requests to Recalculate Operating Capital • If the organization amends a return or was a non-filer at the time the operating capital limit was calculated, then bingo chairperson or designated agent, as applicable, can submit a written request to re-calculate their operating capital limit.

  50. 402.453 Request for Operating Capital Increase New Rule