Systems and Procedures
A Division of The Office of Budget and Finance
A Division of The Office of Budget and Finance
Periodically, it becomes necessary to stop payment on and/or void a Pennsylvania State University (“University” or “Penn State”) check that has already been issued to a Supplier/Business Partner.
Typically, stop payments are processed when a Supplier/Business Partner advises the University that their check has not been received. If it has been less than 10 business days since the check was written and mailed, the department should advise the Supplier/Business Partner to allow a few extra days for delivery.
This procedure is utilized when an Accounts Payable or Payroll check has been lost, stolen, or rendered non-negotiable due to damage. If a check has been lost or stolen (i.e., no physical check available) a stop-payment request is processed by Accounting Operations to the University’s financial institution requesting the bank prohibit payment of that check. The stop-payment request also requires the check be voided within the System for Integrated Management, Budget, and Accounting (SIMBA). If a check is no longer needed or has been rendered non-negotiable (i.e., mutilated) and the check (or pieces of the check) is returned to Accounting Operations, the check is voided in the SIMBA, but a stop-payment is not needed because the University is in possession of the check.
A stop-payment request always results in a check being voided; however, voiding a check does not always require a stop-payment.
Requests for stop-payments on Accounts Payable checks (no paper check available) are made to Accounting Operations by completing a Stop-Payment Request Form. The requester completes the top portion of the form and emails the form to the Accounting Operations Accounting Manager, with “stop payment” in the subject line of the email. The form may be mailed to Accounting Operations, Attention: Accounting Manager. The mailing address is as follows:
The Pennsylvania State University
Accounting Operations
202 James M. Elliott Building
120 S. Burrowes Street,
State College, PA 16801
Accounting Operations verifies the Accounts Payable check is still outstanding by researching the check information in SIMBA (real-time banking activity). Next, the Bank of New York NEXEN System will be accessed via the Internet, and a check history obtained. Once verified that the check in question is indeed outstanding, Accounting Operations enters the stop payment information (check number, date, amount, payee name) into the NEXEN System to prevent the check from being negotiated. Once this information is provided, the NEXEN System replies with a confirmation number acknowledging the successful transmitting of the stop payment information. Accounting Operations writes this confirmation number on the corresponding Stop Payment Request Form. Accounting Operations also voids the check in SIMBA, in preparation for the issuance of a new check (see Replacement Processing).
Requests for stop-payments on University payroll checks (no paper check available) are processed only when authorized by the University Payroll Office. In the event you receive a paper check that is subsequently lost or damaged, University Payroll will request the issue of a replacement check.
After notification is received that the stop payment order has been completed, the original check will be canceled, and a replacement check will be issued by Accounting Operations. If the original check is found after notification to payroll, it will be invalid and should be returned to University Payroll.
Please contact the Payroll Office directly regarding stop payments on Payroll Checks.
When a previously issued check is no longer required and is in the possession of departmental personnel without having been presented to a bank for payment, the department is to mark the check as “VOID” on the face of the check in large letters through the signature block. The voided check should then be attached to a completed Check Cancellation Form explaining the reason why the check was voided and whether it is to be reissued. The Check Cancellation Form and voided check should be forwarded to the Accounting Operations Accounting Manager for processing. Accounting Operations voids the check in SIMBA, in preparation for the issuance of a new check (if appropriate) (see Replacement Check Processing). When the check is voided in SIMBA, the expense is NOT removed from the fund/organization/account to which it was originally expended.
For email requests, the email needs to be directed to the Accounting Operations Accounting Manager, include “void check” in the subject line of the email, and attach the Check Cancellation Form.
With a damaged check, the completed Check Cancellation form and damaged check are mailed to Accounting Operations, Attention: Accounting Manager. The mailing address is as follows:
The Pennsylvania State University
Accounting Operations
202 James M. Elliott Building
120 S. Burrowes Street,
State College, PA 16801
A document reversal is processed by Accounting Operations per SIMBA instructions in those cases where a new check is not to be issued. This would occur in those situations where funds are to be returned to the originating department.
Requests to void University payroll checks are processed only when authorized by the University Payroll Office.
Please contact the Payroll Office directly regarding voiding payroll checks.
Once the stop payment or check cancellation transaction has been completed and/or voided in SIMBA, the Accounting Operations Accounting Manager prepares a Create Incoming Invoices per SIMBA instructions to initiate the issuance of a replacement check. Copies of the Stop-Payment Request will be forwarded to the Accounting Operations central desk as paper backup supporting the transaction. Once generated, the replacement check is returned to Accounting Operations. Accounting Operations notifies Payroll that the request(s) has been completed and document information is provided. The replacement check is then mailed to the appropriate Payee/Payee Department, or held for pick-up, per the instructions specified by Payee/Payee Department.
Stop payment and canceled check transactions are retained by Accounting Operations, filed by Payee name. This documentation is retained from the end of the fiscal year +3 years in compliance with bank statement record retention requirements. In addition, a copy of the request and backup documentation is scanned and attached to all relevant documents in SIMBA for tracking purposes.
Financial Reporting will be responsible for monitoring/detecting any exceptions which may arise (e.g., a lost check being cashed, forgeries, etc.), and notifying Accounting Operations if such exceptions occur.
Violations of a financial policy and/or procedure should be reported to your supervisor, unit manager, your Human Resources representative, and/or office responsible for the policy and/or procedure. Where those resources are inadequate, you may choose to make an anonymous report through the Penn State University hotline by calling 1-800-560-1637.
The Business Area Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for collaborating with Internal Audit when audits are being performed in the administrative area. Audits relating to sponsored activities or other audits performed by external auditors may also be performed. The Financial Officer would also be responsible for collaborating with the external auditor and/or a central university officer related to these procedures.
University Records must be retained and managed in accordance with Policy AD35 University Archives and Records Management and the University’s Records Retention Schedules that have been approved by the Records Management Advisory Committee (RMAC), the Office of General Counsel, and Senior Vice President and Chief of Staff. These Records Retention Schedules are derived from - or based upon - federal, state, and local statutes or regulations (i.e.; Federal Acquisition Regulations, the OMB Uniform Guidance, Internal Revenue Service, and other regulations governing the auditability and retention of financial records), University Policy, industry standards, and business needs. All University Records must be maintained in such a manner to provide ease of access, establish a suitable audit trail for all transactions, and to be reviewed prior to disposition.
University Records and Transitory/Disposable Records are defined below:
Upon completion of the retention period, University Records must be disposed of via secure destruction or transfer to University Archives, unless an exception to the disposition process set forth below applies. In many cases, retention periods and disposition methods may be generally determined by comparing the type of record (i.e., reports, correspondence, etc.) to similar records series with known retention periods listed on the Records Retention Schedule. If the disposition method for University Records states "Review by Archives" on the Records Retention Schedule, the Unit responsible for those records should consult the University Archivist for a final determination of disposition. For University Records that must be securely destroyed, units may arrange for shredding services by either contacting the Blue/White Shredding Program or the Inactive Records Center (IRC).
Exceptions to the disposition process are as follows:
To safeguard the privacy of individuals, records that contain Personally Identifiable Information (PII), as defined in University Policy AD53 Privacy Policy, or student records, as defined in University Policy AD11 Confidentiality of Student Records, must be securely destroyed beyond recovery. For additional information regarding privacy and the protection of an individual's personal information, see Policy AD53 Privacy Policy.
Additional question should be directed to the Office of Records Management.
There are no exhibits associated with this procedure.
For questions or additional details for checks issued by Accounting Operations, please contact the Accounting Operation Accounting Manager.
For questions or additional details for payments issued by Payroll, please email Payroll.
To request changes to this procedure, please contact the Office of Systems & Procedures by submitting a GURU Technical Support Request form.
December 11, 2024