General Guidelines
- The term “cash” includes currency, coin, checks, money orders, and credit card receipts.
- Individual accountability for all cash (including cash receipts, change funds, and petty cash funds) should be maintained at all times.
- An accounting record for cash should be established immediately upon receipt.
- Access to cash should be restricted at all times to the person accountable for the funds. The person should be provided a locked, secure storage facility to which only he/she has access. This could be a lockable cash drawer, safe, safe compartment, or filing cabinet. The degree of security provided by the storage facility should be commensurate with the amounts being stored.
- All transfers of cash accountability should be documented. Documentation should include amount transferred, date, and signatures of both persons involved in the transfer. The documentation should be kept in a location separate from the cash funds.
Training
Departments should ensure that employees assigned cash handling responsibilities receive appropriate training and are familiar with campus policy guidelines and departmental procedures.
Documentation of Procedures
Written procedures for receiving, recording, reconciling, safeguarding, and depositing cash should be prepared and provided to employees with cash handling responsibilities. Also, responsibilities for handling cash should be documented in employee job descriptions.
Cash Receipt Guidelines
All cash should be recorded immediately recorded upon receipt. The recordings may be made on a cash register, a computer system data entry terminal, by means of pre-numbered receipt forms, or on a handwritten log. Each individual cash receipt should be identified and controlled by a unique, sequential transaction number such as a cash register ring number or cash receipt number. The cash receipt records should provide the following:
- Name of department receiving cash
- Name of person or organization cash was received from
- Amount received and cash or check indicator
- Check amount and check number
- Date
- Identification of person receiving cash
- When receipt forms are used, they should include signature of the person receiving cash
- An equivalent identification should be provided for when receipts are recorded on a cash register, computer terminal or handwritten log
- Transaction number, cash register ring number, or receipt form number Checks should be made payable to the Board of Regents and should be restrictively endorsed immediately upon receipt. An endorsement stamp may be obtained from the bursar’s office for this purpose.
Refunds and Voids
All refunds and voided cash transactions should be supported by documentation stating the reason for the refund or void. The documentation should also include the signature or initials of the person recording the refund or void and the signature or initials of a supervisor responsible for reviewing refunds and voids. Refunds should also be supported by the name and signature of the person receiving the refund.
Safeguarding Cash
Funds held overnight should be minimized. Cash should be kept in a locked safe or other secure area. The degree of security provided should be commensurate with the amounts stored.
Combinations or keys to safes and other storage facilities should be restricted to the custodian of the cash and a designated backup. Combinations or locks should be changed as necessary, and whenever a person with the combination or key is separated. Persons responsible for cash should be instructed to maintain confidentiality of safe combinations.
Appropriate precautions should be taken when transporting cash from the department to the bursar’s office. Cash should not be sent through campus mail. When large amounts are involved, or when cash must be transported after dark, it is recommended to obtain an escort from the Office of Public Safety.
Cash Deposits
Cash receipts should be deposited with the bursar’s office on a timely basis. 51ԹϺ policy requires a deposit at least weekly, or whenever accumulated receipts on hand exceed $250.
Cash receipts should be deposited intact. The funds deposited should reflect amounts on hand, less the amount of any assigned change funds. The deposit and supporting records should reflect any cash overages or shortages.
Cash receipts should not be used for petty cash disbursements, check cashing, or other purposes.
Reconciliation
The following reconciliation procedures should be performed or reviewed by a supervisor not directly involved in receiving and recording cash:
- Cash receipts should be counted and balanced to the cash recordings at the end of the business day.
- A receipt for each cash deposit should be obtained from the Bursar’s Office and compared with the department’s record of the deposit amount.
- The cash deposits listed in monthly general ledger reports should be reconciled to the department’s records of cash receipts. Any differences should be investigated and explained.
- A dated and signed record of the reconciliations should be prepared and retained.
Segregation of Duties
Adequate segregation of duties reduces the likelihood that errors (intentional or unintentional) will remain undetected by providing for separate processing by different individuals at various stages of a transaction and for independent reviews of the work performed. The basic idea underlying segregation of duties is that no one employee or group of employees should be in a position both to perpetrate and conceal errors or irregularities in the normal course of their duties.
In general, the principal incompatible duties to be segregated are authorization, custody of assets, and recording or reporting of transactions. In addition, a control over the processing of a transaction generally should not be performed by the same individual responsible for recording or reporting the transaction.
Potential problem areas are only an indication of where segregation of duty controls are breaking down or are lacking. If overlaps in the performance of these duties are identified, it may be an indication to management that structural changes would enhance the protection of assets. In smaller departments, it may not be possible or reasonable to have complete segregation of controls. In these cases, additional management review and supervision is necessary to ensure that proper internal controls are maintained.
The following chart can be used to determine the levels of internal controls available in your department. For each of the functions listed, enter the name of the individual(s) responsible for maintaining that function. Review the chart for individuals whose names are listed in more than one column and then make a determination whether that represents a potential lack of segregation of duties.
| Function | Authorization | Custody | Recording | Reconciliation |
|---|---|---|---|---|
| Opening of mail and listing of checks | ||||
| Handling of cash receipts | ||||
| Preparation of deposits | ||||
| Comparison of list of checks to bank deposits | ||||
| Entering deposit information into Advantage | ||||
| Maintaining accounts receivable | ||||
| Reconciliation of Advantage with deposit information | ||||
| Authorization to write off bad debts | ||||
| Overall control of the accuracy, completeness of, and access to data files |