UNIVERSITY OF PITTSBURGH PROCEDURE 05-06-04

CATEGORY:               FINANCIAL AFFAIRS

SECTION:                   Funds Management

SUBJECT:                  Processing and Endorsement of Checks

EFFECTIVE DATE:    August 25, 1989

PAGE(S):                    3

I.    PURPOSE

      To establish the procedure for standardization of the endorsement of checks made

      payable to the University of Pittsburgh, or others as authorized by the Comptroller, for

      payment of goods and/or services. This procedure implements the Expedited Funds

      Availability Act, for which the Federal Reserve System has established regulations that

      restrict the placement of the endorsement of checks.

II.   SCOPE

      This procedure is applicable for the following:

      -     Checks made payable to the University of Pittsburgh, or others as authorized by the

            Comptroller, in payment for goods and/or services

      -     To all University units that accept such checks for payment and endorse them for

            deposit in the Cashier's Office or directly in the bank

III.  DEFINITIONS

      Restrictive Endorsement:  The method of affixing an endorsement to a check or money

      order using a rubber stamp to limit its use to deposit in a University bank account.  The

      endorsement must include the words FOR DEPOSIT ONLY, and the name of the

      University unit.

IV.  PROCEDURE

      Check Payment - Pay To The Order of

      All checks accepted in payment for goods and/or services must be made payable to the

      University of Pittsburgh, or other payees as approved and authorized by the Comptroller.

      The University of Pittsburgh must be the principal payee.

      Example 1:         Make checks payable to:

                                 University of Pittsburgh

                                 Western Psychiatric Institute and Clinic; or

                                 University of Pittsburgh WPIC

      Example 2:         Make checks payable to:

                                 University of Pittsburgh

                                 Pittsburgh Cancer Institute; or

                                 University of Pittsburgh PCI

      Federal Reserve System Endorsement

      The Expedited Funds Availability Act requires the standardization of endorsement of

      checks received by the University in payment for goods and/or services.  Failure to

      follow the requirements of the regulations that the Federal Reserve System has

      established for check endorsement may result in the bank refusing to accept for

      deposit checks that do not meet the Federal Reserve System standards.

      University Auditor's Endorsement Requirements

      University Auditors require that the University unit Restrictive Endorsement stamp be

      put as soon as possible on any checks received for payment of goods and/or services.

      Third Party Checks

      All checks received by any University unit must be made payable to: University of

      Pittsburgh.  Checks made to any other payee must be approved and authorized by the

      Comptroller.  Third party checks should be avoided, and may be accepted only if they

      are made payable to the University, or other authorized payee.

      University Endorsements

      The total field allowance for placement of endorsements permitted by the Expedited

      Funds Availability Act is 1-1/2 inches.  Refer to Exhibit A, Figure B, for illustration of the

      endorsement field.

      Endorsements by Units Authorized for Direct Deposit

      University units that are authorized by the Comptroller to deposit receipts directly in the

      bank may use the entire endorsement field of 1-1/2 inches for the restrictive

      endorsement.  Refer to Exhibit A, Figure B.

      Endorsements by Units Processing Deposit of Receipts Through the Cashier's Office

      The University Cashier's Office endorsement requires 1-1/4 inches of the 1-1/2 inch

      endorsement field, leaving a balance of 1/4 inch for the unit endorsement stamp.  The

      unit restrictive endorsement stamp is limited to a maximum of 1/4 inch.  For the proper

      placement of the unit restrictive endorsement stamp refer to Exhibit A, Figure B.  The

      unit campus address and any other identifying information such as account numbers

      should be placed on the front of the check in the suggested locations as indicated in

      Exhibit A, Figure A.

      Refusal By The Bank To Accept Checks

      Checks sent to the bank for deposit that do not meet the requirements established by

      the Federal Reserve System for endorsement of checks, may result in the bank's

      refusal to accept such checks for deposit, or that the University assume any liability for

      which the bank may become liable because of its inability to process checks that do not

      comply with the endorsement requirements.

V.   EXHIBIT

      Exhibit A - Endorsement and Information Fields

VI.  REFERENCE

      Policy 05-06-04, Processing and Endorsement of Checks