Rotary Fund
This chapter describes how to establish a revolving expense account using a rotary fund. This revolving expense account includes:
See the Statewide Fiscal Policy Advisory Committee (FPAC) Rotary Account and the Petty Cash and Change Fund Policies for additional information.The rotary fund is a revolving expense account created within your agency's fund structure to expedite disbursements. Disbursements are then recorded against an operating fund (as you would have done if you had created a warrant) and replenish your rotary fund. Rotary funds allow you to issue sight drafts immediately. An agency establishes a rotary fund to issue sight drafts (checks) for cash disbursements within an authorized limit. Disbursements include:
To use the rotary for any unique purpose, you must have prior written approval from the State Controller’s Office. Send requests in writing to the State Controller, Division of Statewide Accounting, 700 W. State St., P.O. Box 83720, Boise, ID 83720-0011.
Idaho Code charges the State Board of Examiners with the responsibility to authorize rotary accounts and to approve the amount of the rotary fund.
To establish the account, submit a written request to the State Board of Examiners, 700 W. State St., P.O. Box 83720, Boise, ID 83720-0011. The letter must specify the amount of cash to be transferred to the rotary fund and the fund from which it is to be transferred.
Upon approval from the Board, the State Controller will assign a rotary fund number in the STARS fund series 0800-0899 and process a transfer of the requested amount of cash from the source fund of the rotary.
The SCO will process a transaction code 728 to record the establishment of a rotary fund and a transaction 729 to record the advance to the rotary fund from the source fund. See the Rotary Fund Transaction Codes section later in the chapter for more information. The SCO will send notification of the fund number and the transfer to the requesting agency and to the State Treasurer.
After the SCO assigns the rotary fund number, you may order sight drafts (checks) through the State Treasurer. If you choose not to use the State Treasurer’s sight draft contract, you must contact the STO in order to ensure that the format, etc., of the drafts are acceptable and compatible with the Treasurer’s redemption system.
To increase or decrease the authorized amount of the rotary fund, submit a written request to the State Board of Examiners, 700 W. State St., P.O. Box 83720, Boise, ID 83720-0011. Include a reason for the transfer. The request must specify the amount of cash you want transferred to or from the rotary fund and the fund it should be it transferred to or from.
Upon approval of the Board, the SCO will process a transfer of the requested amount of cash using the 728 and 729 transaction codes. The SCO will send notification to the requesting agency and the State Treasurer.
To close the account, send a written request to the State Controller’s Office. The request should include the rotary fund number, the source fund, and the dollar amount of the rotary fund.
Before closing the rotary fund, all issued sight drafts must be redeemed, voided, or cancelled. The cash balance in the rotary fund must equal the total amount of cash originally transferred from the source fund. Unused sight drafts should be shredded.
Idaho Code 67-2020 describes the allowable types of expenses from the rotary fund. Normally a rotary fund is established to expedite cash disbursements such as travel advance, prepayment of registration fees for classes or seminars, petty cash, or small emergency purchases.
Idaho Code does not limit the amount for a travel advance; however, some agencies set a maximum limit, such as 95% of the expected travel costs, to reduce the number of possible overpayments requiring a refund from the employee.
According to Idaho Code 67-2021, the disbursing officer is responsible for and must account for all monies in the rotary fund. There may be more than one disbursing officer for signing sight drafts. Idaho Code says that the account may be drawn upon by a sight draft signed by the officer and attached to an itemized voucher for the expenditure.
Each disbursing officer is required to complete signature authorization cards for the State Treasurer’s Office (STO). Blank signature cards can be obtained from the STO (208-334-3200). Signature authority is specific to each rotary fund, so only persons who have a card signed for that particular fund should sign as disbursing officer on the rotary fund sight drafts or transactions.
Persons authorized to sign a sight draft using the disbursing officer’s name must sign and initial in their own handwriting. Facsimile signatures are not allowed. A signature authorization card must be on file in the STO.
If you revoke signing authority for a disbursing officer, you must notify the STO in writing.
According to Idaho Code 67-2022, each officer having a revolving expense account shall present a complete itemized account of all expenditures at stated intervals to be fixed by the board. A rotary fund statement must be prepared and reconciled after the close of each month. See the reconciliation section for more information. Idaho Code also states that the (disbursing) officer shall replace any amounts disallowed.
All voided sight drafts must be marked “VOID” on the original, and the signature space must be torn off. Send the original voided draft to the State Controller’s Office with the corresponding monthly reconciliation statement (rotary fund statement form). The voided copy is to be retained by your agency.
List the voided sight drafts on the rotary fund statement form under Sight Drafts Drawn section as a “0” amount. If a sight draft is voided in the following month instead of the month in which it was written, it must appear as a credit amount to the current month’s listing of Sight Drafts Drawn.
Cancellations and stop payments of sight drafts are processed the same as stop payments and warrant cancellations. Please refer to the Warrants and Cancellations documentation for details.
Rotary funds allow you to issue sight drafts without having to enter transactions in STARS and wait for warrants. However, you must record the rotary expenses and the reimbursement of the rotary cash in STARS.
To process a reimbursement, use a transaction code 730 to reimburse the cash in the rotary fund and a transaction code 735 to record each expense.
With rotary reimbursement batches, the 730 transaction code must always equal the sum of the 735 transaction codes in the same batch. All reimbursements to the fund must be supported with receipts. If a receipt is not available, you may use a copy of the sight draft as supporting documentation. Do not reimburse a sight draft until you have verified expenditures with receipts. Also, be sure to reference the rotary fund number and sight draft number in any reimbursement transaction.
STARS allows you to see a list of your agency’s sight drafts that have been redeemed through the State Treasurer’s Office. This is useful if you need to know if a rotary fund sight draft has been redeemed before issuing a cancellation or a stop payment on the sight draft.
You can view the redeemed Rotary/Sight draft file by selecting ‘W’ (Warrants) from the STARS Main Menu, and then ROTARY/SIGHT DRAFT INQUIRY Screen (S056). Screen S056 is a list of redeemed sight drafts, the dates they were redeemed, and their amounts. The list is sorted by your agency, by rotary fund, and by sight draft. Only your agency records will show - STARS security prevents agencies from viewing records of other agencies.
You can page through the sight drafts or you may recall (R=recall) a specific sight draft number under a specific rotary fund.
S056 STARS Rotary/Sight Draft Inquiry for Redeemed Sight Drafts
VERSION 1.3 STARS ROTARY/SIGHT DRAFT INQUIRY S056
FUNCTION: R (N=NEXT, P=PRIOR, R=RECALL)
AGY: 230 SIGHT DRAFT NO: 000043590 FUND: 0875
SIGHT DRAFT EFFECT DTE AMOUNT SIGHT DRAFT EFFECT DTE AMOUNT
000043590 09/21/2000 75.00 000043647 05/15/2001 77.00
500027487 05/08/2000 12.00 500027504 06/29/2000 5.00
500027613 05/17/2000 7.00 500027630 05/15/2000 7.00
500027632 05/04/2000 2.00 500027638 05/01/2000 32.00
500027647 05/03/2000 121.50 500027648 05/01/2000 3.00
500027649 05/09/2000 3.00 500027850 05/09/2000 20.00
500027851 05/09/2000 150.75 500027852 05/05/2000 43.00
500027853 05/08/2000 43.00 500027854 05/08/2000 130.00
500027855 05/23/2000 12.00 500027856 05/05/2000 292.80
500027857 05/09/2000 68.80 500027858 05/08/2000 103.00
500027859 05/24/2000 103.00 500027861 05/09/2000 12.00
500027862 05/30/2000 43.00 500027863 05/10/2000 32.00
500027864 05/10/2000 32.00 500027865 05/18/2000 23.00
500027866 06/05/2000 79.75 500027867 05/18/2000 80.00
500027868 05/23/2000 83.00 500027869 05/23/2000 83.00
500027870 05/23/2000 83.00 500027871 05/18/2000 83.00
You must enter a batch header before you can enter any rotary reimbursement transactions in STARS. The typical batch types to enter a rotary reimbursement transaction are batch type 4 or 5. Use a batch type J for cash deposits.
NOTE: The 107, 730, and 732 transaction codes require a rotary fund number (08xx) to process.
Transaction Code
Description
107
Cash Receipt For Unused Rotary Advance – level 3 Requires a rotary fund number to make a deposit to the rotary fund.
730
Reimbursement of Rotary Fund for Sight Draft – level 3 Requires a rotary fund number to replenish the rotary fund.
732
Reimbursement of Trust Account Rotary for Sight Draft – level 3 (requires a rotary fund number to process).
735
Expenditures For Sight Drafts Reimbursed – level 3 (see TC 27C to post to an encumbrance). Charges sight drafts as an expenditure to the designated fund.
736
Trust Acct Payment by Sight Draft (Rotary Acct) – level 3 Used by H&W & Vet Svcs to post trust payment sight drafts against their deposits using GL 2407. Requires a subsidiary number.
738
H&W Expenditures For Sight Drafts Reimbursed – level 3 (same as TC 735).
27C
Encumbrance Expenditure Adj Post Pmt (VP Post) – Charge – level 3 Use for 735 postings that need to post to an encumbrance - it offsets TC 730.
For posting payments that are not 1099 reportable, use a generic vendor number such as ROTARYxxx-00 (where xxx indicates your agency number).
The vendor number/suffix ROTARYXXX-00 should be used for non-1099 reportable payments for small rotary items and for instances when you cannot locate a vendor number.
Posts to general ledger accounts 1005 (DR – rotary cash) and 1151 (CR- Deferred Expense) and requires an approval level 3.
You must enter the following elements for a TC 107. NOTE: STARS will have already filled in the BFY and effective date.
Data Element
CUR-DOC/SFX
Enter an eight-character current document number and two-digit suffix. NOTE: We recommend you use all eight characters.
TRANS-CODE
Enter transaction code 107.
AMOUNT
Enter the amount of the deposit to the rotary fund.
FUND
Enter the four-digit rotary fund number. This will be a fund number in the 0800 series.
Important tips for entering TC 107:
1. The TC 107 does not require a PCA or Index.
2. The TC 107 requires a rotary fund number.
3. You may process deposits to the rotary fund for items such as a refund for a travel advance made from the rotary fund, closing petty cash, etc.
You must enter the following elements to enter a TC 730.
NOTE: The system will have already filled in the BFY and effective date.
Enter transaction code 730 (record reimbursement of sight drafts).
Enter the amount of the reimbursement to the rotary fund. The 730s should equal the expenditures (735 or 27C). This amount can be entered as an accumulative total instead of having to match each 735/27C amount.
Important tips for entering TC 730:
Posts to general ledger accounts 4200 (DR – expenditures) and 1003 (CR- cash in treasury) and requires an approval level 3.
You must enter the following elements to enter a TC 735. NOTE: The system will have already filled in the BFY and effective date. We recommend that you leave RDOC (reference document numbers) blank when you enter TC 735.
Enter an eight-character current document number and a two-digit suffix. Use any document number you wish.
STARS uses this number on the Vendor Payment File, listing the payments to a vendor in alphabetical order using this CUR-DOC/SFX number. To keep the numbers in date order, you may want this number to be consecutive from the first of the year to the end. (EXAMPLE: ROT00001, ROT00002, etc.)
Enter transaction code 735 (record an expenditure for sight drafts reimbursed).
INDEX or PCA
Enter a four-digit Index if you are Index-driven or a five-digit PCA if you are PCA-driven. Your Index or PCA usually looks up a fund and budget unit, which are also required elements. If the PCA does not look up the Index, you must manually enter the Index.
EXP-SUB-OBJ/DET
Enter a four-digit expenditure subobject (you can also use a agency-specific two-digit detail). The expenditure subobject you use will be a factor in whether a 1099MISC tax form will be sent to a vendor.
Enter the amount of the transaction.
BU
Four-digit Budget Unit. May be looked up by the PCA or Index.
FUND/DET
Four-digit Fund (2-digit Detail is optional). May be looked up by the PCA or Index.
VEND-NO
Enter the nine-character vendor number and two-character suffix of the vendor that was paid with the sight draft. STARS will post the payment to this vendor number on the Vendor Payment File. This is the number used for tax reporting to the IRS. You can use a generic vendor number if the transaction is not 1099 reportable.
Optional:
WARR-NO - Not required, but recommended in order to associate a 735 posting to a sight draft for reconciliation. Enter up to a nine-character sight draft number to show on the Vendor Payment File. Recommend using RF00##### as a format.
INV-NO - Not required, but recommended. Enter up to a fourteen-character invoice number, if you have one. STARS posts this information to the Vendor Payment File for future reference. This invoice number shows on daily and expenditure reports.
INV-DESC- Not required, but recommended. Enter up to a thirty-character invoice description. Be sure to include enough information so you can identify the payment. This is additional information such as the month or on whose behalf you are making the payment. This information will post to the STARS Vendor Payment File for future reference. The invoice description shows on daily and expenditure reports.
Redeemed sight drafts post as a disbursement and reimbursements post as a receipt to a rotary fund. If you write sight drafts and do not reimburse them in a timely manner, you could have a negative cash balance in your fund. The State Treasurer assesses a fine for each day the fund is in the negative.You can view a rotary fund balance in STARS by starting at the main menu and selecting I (Online File Inquiry) then selecting 63 or 73, Cash Control File option.
(Also used to record encumbrance expenditures for sight draft reimbursement.)
Posts to general ledger accounts 4200 (CR-expenditures) and 1003 (DR-cash in treasury) as well as encumbrance general ledger accounts. It requires an approval level 3.
Important tips for entering a TC 27C:
NOTE: STARS uses this number on the Vendor Payment File, listing the payments to a vendor in alphabetical order using this CUR-DOC/SFX number. To keep the numbers in date order, you may want this number to be consecutive from the first of the year to the end. (EXAMPLE: ROT00001, ROT00002, etc.)
REF-DOC/SFX
Enter an eight-character reference document number and two-digit suffix to post information to the encumbrance on the Document File. This tells the system which existing encumbrance document to update.
BFY
Enter a two-digit budget fiscal year if the encumbrance is for a prior year encumbrance.
Enter transaction code 27C. This transaction will post the sight draft payment to the correct information, which includes posting to an encumbrance. This transaction offsets a TC 730.
Do not enter. The Ref-Doc/Sfx will lookup information from the encumbrance record on the document file.
WARR-NO
The TC 27C does not allow an entry. We recommend using the invoice number to show your sight draft number.
INV-NO
Not required, but recommended to help associate a 735 posting to a sight draft for reconciliation. Enter up to a nine-character sight draft number to show on the Vendor Payment File. We recommend using RF00##### as a format for your number.
INV-DESC
Not required, but recommended. Enter up to a thirty-character invoice description that will post to the Vendor Payment File for reference. Be sure to include enough information so your agency can identify the reason for the sight draft. The invoice description shows on daily, expenditure, and general journal transaction reports.
Enter the vendor number/suffix of the vendor paid with the sight draft. STARS will post the TC 27C to this vendor number on the Vendor Payment File. This is the number STARS uses for tax reporting to the IRS. You can use a generic vendor number if the transaction is not 1099 reportable.
Important tips for entering TC 27C:
Petty cash is an amount of cash withdrawn from either your agency’s rotary fund or from your agency’s operating fund to meet the minor cash needs of your agency. The petty cash is an amount established within an authorized limit for an agency to provide immediate disbursement.
Change fund is an amount of cash withdrawn from either your agency’s rotary fund or from your agency’s operating fund to be used for making appropriate change for the agency’s customers. A change fund may be established for an agency from either an authorized rotary account or an agency operating fund.
Your agency is required to reconcile your rotary fund and submit a rotary fund statement form to the State Controller’s Office by the end of the week following receipt of the SCO month end financial reports. Monthly reconciliation is required for every rotary fund, even if there are no sight drafts issued or credits to the fund processed during the month.
After their review, the SCO will return all required attachments such as voids, affidavits, and sight drafts redeemed during the report month, to your agency.
The Rotary Fund Statement Form (RF) is avaialble on the SCO web site. The interactive PDF form contains formulas that help you calculate certain amounts.
Outstanding sight drafts that are issued before July 1 of the current fiscal year are required to be sent to unclaimed property at the State Treasurer’s Office or the agency. You will receive a list before this action is taken.
Due to procedures that take place as part of the year-end closing process, the following are the special reporting requirements for the June Rotary Fund Statement Form statement:
Show any transfers of funds from the agency (TC 350) to unclaimed property for the cancellation of outdated sight drafts as a decrease in the CREDITS TO THE FUND section. This is because they are all issued in a prior period and the cash balance in the rotary fund must be reinstated. SCO will process transactions to send the cash to the State Treasurer’s Office (TC 353).
To record the transfer of cancelled prior year sight drafts from a rotary fund to unclaimed property, use TC 350. This TC is used only at year-end, June 30, when you cancel prior year sight drafts. The transaction is entered on form EXPDISB and sent to the State Controller’s Office. The Rotary Fund number is required for processing
Show any sight draft that has been reimbursed (TC 730/735) but is being cancelled at year-end as a decrease in the CREDITS TO THE FUND and as a credit in the SIGHT DRAFTS DRAWN.
If a sight draft has not been reimbursed (TC 730/735), no transfer will be made. However, the sight draft must be shown as a credit in the SIGHT DRAFTS DRAWN.
If a sight draft has a stop payment and has been reimbursed (TC 730/735), the reimbursement must be reversed before June 30, no transfer will be made, but the draft must be shown as a credit in the SIGHT DRAFTS DRAWN section of the statement.
If a stop payment has been issued on a draft and has not been reimbursed, no transfer will be made. The draft must be shown as a credit in the SIGHT DRAFTS DRAWN and must not be shown in the CLAIMS NOT FILED section of the statement.
Report
DAFR0163
Rotary Redemption and Reconciliation Report
Lists the sight drafts redeemed during the month. Includes the sight draft number, redeemed date, and amount. For reconciliation purposes it lists the month’s activity that posts to the cash control file. This report breaks by fund. It sorts by sight draft number.
DAFR0124
Transmitted Rotary File Edit Report
Lists rotary fund sight drafts being transmitted by the State Treasurer’s Office. Shows the statewide transmitted rotary file data after edits. Includes error messages on edits such as duplicate sight draft records, etc.
The rotary fund transaction detail is found on the same transaction detail reports as expenditures and receipts (e.g., DAFR8200, DAFR6850, or DAFR6860).
Types of Reports
TC 107, 730, 732, 353
Post to the receipt transaction detail reports. Register 5 – Revenue and Receipts transaction register.
TC 735, 736, 738, 350
Post to the expenditure and disbursement transaction detail reports. Register 4 – Expenditure transaction register.
TC 27C
Posts to the expenditure and disbursement transaction detail reports. Register 6 – General Journal transaction register.