Question: Uncashed check

I received a call from a mom who found 2 uncashed checks from 5 years ago. She would like me to write her new checks. The amount is a few hundred dollars. I see a record in our books that we wrote her the checks, but the person who entered it reconciled it by deleting out (zeroing) the amount. She has the signed checks and can photocopy them for me, but I can't find receipts in our records. Any advice??? I'm brand new to this position.

Asked by Anonymous

Answers:

Community Advice

Parttimeparli writes:
Your org. cannot issue her a check because there is no line item for that in the budget. If I were in your shoes I'd tell her to bring it up at a membership meeting. Then the membership can decide whether they want their money spent on something for which they have no receipts. It takes the responsibility out of your hands( or the board's hands) and let's the membership decide.

Advice from PTO Today

Craig writes:
The first question is whether the lost checks were replaced at the time. I'm guessing the mom who found the check doesn't remember, since it was five years ago. Your group seems to have kept good records, which is very helpful. There are a few things you can do. You can check to see if there is any record after the checks were zeroed out indicating that new checks were written. If your group did annual audits, you can see whether there are any audit notes about that entry. And you can check with the bank to see if a stop payment order was placed on those checks. (If so, it's likely that replacements were issued.) Stop payment orders expire after a couple of years, so the bank will need to do a little research. If you can't find any additional information, I'd recommend asking the executive board to make a decision on whether to write a new check or not. One possible compromise would be to write a check for a lesser amount (say half), thus sharing the burden. You're fulfilling an "obligation" for your group, and the woman is taking responsibility for not depositing the checks in a timely manner. By the way, the note below from Parttimeparli (who is very knowledgeable about parliamentary procedure) that you can't issue a new check has a couple of caveats. Your budget should include some discretionary money (although maybe not enough to cover this amount), and your bylaws might allow checks to be written for a certain amount without a vote of the membership. I'd love to hear what you decide and how it works out, if you wouldn't mind posting again.

Community Advice

domspern writes:
I think the above responses are helpful if the organization is not subject to escheat (unclaimed property) laws. I would suggest checking with your state to see if your organization is required to be the holder of that uncashed check amount until it is remitted to the state.

I would offer that if the check still shows as outstanding in your reconciliations, there would be no budgetary impact to cancel the old check and reissue a check for the same amount, as the new expense would be offset by the credit creating from reversing the old check.