This page is the main index of the full text of the 1991 Local Government Code of the Philippines. Featured on the World Wide Web by The Law Firm of Chan Robles. Accounting Policies and Procedures Manual. This replaces the previous version of Guideline 4: Implementation of a Compliance Regime issued in June 2015.The changes made are indicated by a side bar to the right. A financial transaction control is a procedure. Fraud: Falsifying accounting records. FDIC: Trust Examination Manual. While general accounting principles apply to trust. Aside from personal. The specialization required by this. The fundamental principle behind general accounting. This principle does not apply to trust accounting, since. STATEWIDE ACCOUNTING MANUAL. F&A Costs. See “Facilities and Administration” “Facilities” and “Administration” Two broad categories of indirect costs used by educational institutions. As such, the fundamental principle behind trust accounting is expressed. In this equation, assets such as securities, deposits. Expressed differently, the assets of trust accounts are also. Normally, the only accounts holding cash or. Therefore, examiners need some basic knowledge of the. Trusts, in some form, are. A trust occurs when the ownership of property is. A set of financial statements is a structured representation of the financial performance and financial position of a business and how its financial position changed. A trustee retains title to trust property. A trust cannot exist when the legal owner, or party holding title. Nevertheless, a. fiduciary does not necessarily have to hold title to property, such as in a. Beneficiaries are divided into two classes: those holding a. Since the first class of beneficiaries is entitled to the. In an agency capacity, ownership and, in general, title. While serving both classes of beneficiaries can often prove. While account agreements may outline permissible. The following list summarizes allocations for various issues: D. Carrying Values. Unlike commercial bank accounting, where assets and liabilities are. The examiner. may find that the assignment of carrying values will vary not only from. This makes a meaningful analysis of trust department. One or several of the. Book or cost of the asset; Tax cost or date of death valuation when acquired from a decedent's. Par value, the face value of property; or Nominal value, assigning a nominal value to each item or interest of. Accounting Records. As mentioned earlier, the level of sophistication of trust. Records will also vary. However. the reporting requirements imposed on fiduciaries and the concepts involved. Therefore, the overall framework of each accounting system. E. 1. General Ledger. The general ledger will comprise all control accounts of the. It includes both customer and internal accounts used by the. Many automated systems have subsidiary. The examiner. must exercise judgment in determining the sufficiency of the records. E. 2. Asset Control Accounts. These accounts should reflect the total holdings of the major asset. E. 3. Subsidiary Asset Controls. These accounts will reflect the total investments in specific issues. E. 4. Subsidiary Liability Controls. These records will reflect the total of cash and investment holdings. This category should be further. The. cash ledger should detail income and principal cash, and reflect transactions. The investment ledger should reflect each asset held. Purchases, sales, stock dividends and splits should be. The examiner must bear in mind that some. In these situations, it. Trust Records. In addition to maintaining a reliable system of accounting, a trust. The design and control of these support records can mean. Moreover, departments with detailed and accurate records are less likely. While some smaller, noncomplex trust departments may continue to. Two important records are. Administrative File and the Tickler System. F. 1. Administrative File. The administrative file consists of interrelated records, which. The records of the. These records consist of: F. Legal File. Contains copies of all legal documents relevant to the account. F. 1. b. Digest or Synopsis. Synoptic records provide a concise summary of the principal duties. Synoptic records are. Correspondence File. Contains all correspondence related to the account. F. 1. d. Investment Review File. Contains asset reviews, which enable management to evaluate. F. 1. e. Securities Transaction File. Contains broker confirmations and other data related to changes in. F. 1. f. Tax File. Contains tax- related documents and copies of tax returns filed for. F. 2. Tickler System A tickler system is a chronologically arranged system of. Other Records. Other records which affect the operation of a department to a. F. 3. a. Securities Transaction Register. This record should list in chronological order all the securities. This record will most likely be in. Vault Control Log. This log is used to record the dates and identities of individuals. Records should also be maintained indicating. F. 3. c. Broker Statements. The statements reflect all transactions effected for the department. These statements should be reviewed carefully by the staff and. Securities Transaction Register. G. Account Documentation. Documentation is as important as the administration itself, as. Challenges to account. The failure to maintain documentation that. Evidence of Appointment. In general, a fiduciary should refrain from taking any action until. Valid evidences of appointment. In the most basic appointment, such as a. The same is true for a living trust. In accounts operating under. In estates where the. Letters. Testamentary. In estates where named executors cannot or do not accept the. Letters. of Administration. Letters of Administration are also used to appoint an. Trustees named in a will serve under Letters of Trusteeship. In. accepting appointments to serve as successor to a prior trustee or executor. Copies of the original court appointments (if applicable), An authenticated copy of the instrument it will serve under, An accounting of the estate, trust, or agency from inception to its. Any other documents substantiating its appointment, or indemnifying. Supporting Documentation. During the term of an appointment, numerous actions may be taken to. At times these actions. Others may involve actions having serious consequences for the. A. fiduciary must be able to support its actions by demonstrating it had the. The fiduciary's. legal authority will be found in common law, statutory law, and the underlying. The rationale for its actions may be more difficult to demonstrate. The types of documentation the fiduciary. G. 2. a. Trust Committee Minutes. Deliberation and action over matters affecting the account. G. 2. b. Approvals. Written approvals of discretionary actions are sometimes required by. Written approvals should. When extraordinary actions affect. Indemnification. Certain discretionary actions may involve controversial matters, such. These actions require more formalized written approvals in the. G. 2. d. Accountings and Customers' Statements. These are required for court- appointed accounts, but may be prepared. Essentially, the listing or statements reflect all. Either the. court having jurisdiction, all interested parties, or both should approve. Account Reviews. Periodic reviews performed by the trust committee. G. 2. f. Receipt and Release. This is a formal document acknowledging the receipt of cash or. It is given by the recipient to the fiduciary, and releases the. Other Documents. There are numerous documents a fiduciary will obtain during the. These might include property appraisals, lease. Each has its own significance, and depending on the nature of the. H. Internal Controls. H. 1. Segregation of Duties. One of the most fundamental methods of internal control is the. One individual should not be capable of initiating. In a trust department, this concept begins by segregating. Many. FDIC- supervised trust departments are relatively small in size and. In. these cases, an institution should develop compensating controls. This can be implemented by having a second individual. But it is effective only if the. Management. is responsible for assessing the specific requirements of the. Examiners should evaluate the adequacy of these policies. Vacation Policy. Supervisory. During such an absence, the possibility of. The FDIC has. encouraged an uninterrupted absence of at least two weeks. However. compensating controls, such as the rotation of personnel among. Reconcilements. The. Other Elements of. Control. The. organizational structure of a trust department is another component. Management must define functional lines of. Work should flow in a logical manner. Control systems should be reviewed regularly and updated as. Examiners. should consider the extent to which the Board and management have. Adequate staffing to provide for efficient. Compensating controls where limited staff. Clearly. defined responsibilities, duties, and lines of authority; Prompt. Adoption of a comprehensive operations. Examiners. should assess the effectiveness of the department's internal control. Many trust departments are. Examiners need to. One. or more basic points may have deficiencies, but the system may be. Often this is accomplished by. H. 5. Fraudulent Acts While the. In such cases, the. Unauthorized and. The. absence of effective dual control makes such actions easy for the. One method is to transfer assets to an account under. Once the assets are in this account, the. Diversion of stale. A combination of. Conversion of. payments received on securities believed to be worthless. A trust department's policy guidelines. Requirements that all assets. This also supports a continuous. Diversion of. income on assets received in either irregular amounts or at. Such income is usually derived from. Income from all investments. In this connection, several defalcations have occurred by. Falsification of. The adopted policy should require that expenses be. The trust administrator. Similarly. adequate internal safeguards should exist to assure the crediting. The administration of these trust. Unless. strong internal controls are in effect, defalcations through. Improper use of. suspense accounts. Frequently, trust department suspense. Misuse of. corporate bonds, notes, and stock certificates in the bank's. Securities. remitted for payment or transfer not properly controlled could be. Nominees. Most trust departments register securities in. Nominee registration simplifies the. When a securities issuer pays interest. The department subsequently credits the accounts. Most governing trust instruments also authorize. The bank's board of directors should approve the execution. Examiners should determine that the bank's nominee partnership. J. Use of Broker- Dealers. For Securities Safekeeping/Securities Investor Protection. Corporation (SIPC)Financial.
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