The department’s maintenance of accounts and
records shall be in accordance with applicable
laws, policies, procedures, and generally
accepted accounting principles. It shall be
maintained in sufficient detail to permit an
independent annual audit.

DEFINITIONS

Cash funds: Monies which include petty
cash funds, cash received by any division,
discretionary funds, investigative funds,
and all other instances in which cash or
checks are received, maintained, and/or disbursed.

Custodian: A person designated by the
division-level commander to have control
and responsibility for a cash fund.

Division-level commander: Refer to Policy 2.01,
DEPARTMENTAL ORGANIZATION AND CHAIN OF COMMAND.

Encumbrance: A commitment in the form of a
purchase order, contract, salary accrual, or
similar item that will become payable when
goods are delivered or services rendered.

Fiscal year: A financial period of twelve
months during which revenues, appropriations,
and expenditures are referenced for accounting
purposes. The fiscal year for the Honolulu
Police Department begins on July 1 and ends
on June 30 of the following calendar year.

Special account funds: Monies used only for
investigative purposes (see Policy 2.35, SPECIAL ACCOUNTS).

Unencumbered balance: An appropriation or
allotment that has not been committed and is
available for expenditure.
ACCOUNTING RESPONSIBILITIES

A. The Finance Division shall establish
and maintain an accounting system that includes
provisions for monthly financial status reports
indicating the following:

1. The initial appropriation for each account;

2. Balances at the commencement of the monthly period;

3. Expenditures and encumbrances made during the period; and

4. The unencumbered balance.

B. The Finance Division shall maintain a
file containing the monthly financial status
reports. Finance Division personnel shall
prepare internal reports as needed and external
reports as requested and approved by the Chief of Police.
APPROPRIATIONS AND EXPENDITURES

Each appropriation and expenditure shall be
classified according to function, organizational
component, activity, object, and account.
Expenses occurring in the fiscal year shall
be vouchered and charged to the budget for that year.

GRANTS

A. All financial reports for grants shall
be prepared and submitted by the accountant in
ccordance with the grant provisions.

B. The Finance Division shall maintain
fiscal records for the financial management of
the grant’s funds.

MAINTENANCE OF CASH FUNDS

All personnel authorized to receive, maintain,
or disburse cash shall observe the following procedures:

A. Division-level commanders authorized to
control cash funds shall establish procedures
necessary for the safekeeping, maintenance, and
investigation of discrepancies of all cash funds.

B. The division-level commander shall
designate a custodian to have control and
responsibility for the cash funds.

C. The custodian shall maintain control
over the cash fund. At least one alternate
custodian shall be designated to maintain
control over the cash fund during the temporary
absence of the custodian.

1. The custodian shall be responsible
for the amount of the cash fund.

2. Access to the cash fund shall be
restricted to the custodian and alternate custodians.

3. Upon a change in custodianship
(i.e., transfer of funds between a
custodian and alternate custodian or
from the previous custodian to a new
custodian), the cash must be counted
by the employees directly concerned.
The new custodian shall prepare a
receipt in triplicate. The original
receipt shall be given to the custodian
being relieved, one copy shall be
retained by the element, and another
copy shall be forwarded to the Finance Division.

D. Cash Purchase Limitations

1. Payments from the cash fund
shall be made only for approved purchases
in amounts not to exceed the maximum of $50.

2. Cash disbursements for expenses exceeding the
preapproved amount shall require the authorization of
the commander.

3. Any cash disbursement of $100,000 or
more shall require the authorization of the Chief of Police.

E. All cash fund transactions shall be
recorded in a ledger that identifies the
initial balance, credits, debits, and balance on hand.

The ledger shall document:

1. The date of each transaction;

2. The purpose of the transaction; and

3. The amount of cash received or disbursed.

F. All cash or checks received shall require
receipts and/or documentation.

G. The cash fund shall not be used to
cash personal checks, provide change for money,
or make unauthorized cash advances to any employee or person.
INSPECTION AND REVIEW OF CASH FUNDS

A. Each cash fund shall be inspected
monthly by the division-level commander and
that division’s second in command.

B. Inspections shall be scheduled
regularly to review the ledger and receipts
to ensure their proper use, documentation
of expenditures, and correct balance on hand.
AUDIT OF ACCOUNTS

A. The Honolulu City Council provides for
an independent, annual financial audit of all
city operations and may at any time request a
performance audit of any or all city agencies
and operations (Revised Charter of the City
and County of Honolulu, Section 3-114,
Financial Performance Audits).

B. The Finance Division shall perform
internal audits and financial analyses as
directed by the Chief of Police. The audits
shall include the department’s special account funds.