CONTROLLING CASH ITEMS

• 1.0 Purpose
• 2.0 Policy
  • 2.1 General
  • 2.2 Basic Controls for the Receipt of Cash Items
  • 2.3 Cash Register Controls
  • 2.4 Credit Controls
• 3.0 Definitions
• 4.0 References
• 5.0 Approvals and Revisions

1.0 Purpose

This policy describes the general guidelines for controlling cash items (checks, cuurency, and coin) at the University.

2.0 Policy [Top]

2.1 General

It is University policy to minimize the number of departments collecting cash items. Each collection point may have different requirements for cash item collection, may use different numbers of employees, and may deposit at different locations. However, there are several basic rules of control that must be followed. All University employees involved with cash item collection should both be aware of, and comply with, these rules.

The basic rules governing receipt of cash items are:

• All cash items received must be recorded immediately and deposited as follows:
  • Deposit within 24 hours is required for total receipts exceeding $200.
  • Weekly deposit is required for total receipts of $200 or less. Items must be properly secured--preferably in a departmental safe or in a locked file cabinet, desk, or cash box.
• Cash items on hand and in the departmental account must be accurately stated and controlled by appropriate safeguards.
• Departmental systems and procedures must provide adequate and appropriate controls over the receipt, storage, and deposit of cash items.
• Departmental systems and procedures must conform to the guidelines and requirements detailed in University Policy II.C.1 "Records Retention and Disposition".

Note: All cash operations are subject to review by the University's internal and external auditors. Therefore, ensure that all receipts can be related to a deposit, and that all deposits can be directly traced to an entry in the Integrated System General Ledger.

The University Financial Administration surveys University departments every year to identify all cash collection points. If the controls are inadequate for the volume of cash collected, corrective action is requested and monitored.

2.2 Basic Controls for the Receipt of Cash Items

• All new cash collection locations must be approved by the Associate Comptroller for Revenue & Collections
• For new cash collection locations, a new Revenue Project must be established in the Integrated System General Ledger for recording the deposit of cash items
• Ensure all rates used for pricing are approved in advance by the appropriate office
• Ensure that responsibility for cash items from time of receipt to time of deposit is clearly defined and documented
• Only the minimum number of employees should handle cash from receipt to deposit
• Ensure proper separation of duties exists
• Cash item handling, record keeping, and reconciliations should be assigned to different people
• If the size of the departmental staff makes proper separation of duties impossible, a second person must verify reconciliations of cash item accounts
• Open and process mail (which might include cash items) by:
  • Creating an initial record for each cash item received, and where possible,
  • Open mail in the presence of co-workers
  • Restrictively endorse checks immediately upon receipt
• Issue a receipt for every currency transaction (and for checks, if possible) with either a University-approved, pre-numbered receipt or a cash register-generated receipt. Also see Cash Register Controls below.
• Ensure all transfers of cash items between persons--either within the office, between offices, or between the University and the bank--are documented (and signed by both persons, if possible)
• Do not mail currency or coin to the bank or to the University Cashiers Office through either the U.S. or messenger mail. If locked bags are needed for deposits using messengers, contact the University Cashiers Office
• Do not make disbursements from undeposited receipts. Keep undeposited receipts intact.
• Ensure the safeguarding of cash items. Cash storage guidelines are as follows:

• Access to undeposited cash items should be restricted to the minimum number of persons
• Deposit University funds only into appropriate University accounts, not into accounts such as: Personal bank accounts, University checking accounts not authorized by the Associate Comptroller, or Petty cash accounts
• Keep University and personal funds separate
• Deliver deposits directly to the bank (or to the Cashiers Office). Intermediate stops, overnight layovers, and taking deposits home for next morning deposit are not allowed. Ensure employees are escorted when making large deposits ($1,000 or more).
• Collect and report sales tax as appropriate
• Document the entire departmental procedure for handling cash items for clarity and for training purposes

2.3 Cash Register Controls

• Ensure the cashier does not have access to the audit tape nor to the programming key and/or programming function.
• The supervisor should review and document approval of all debit entries, corrections, and frequent no-sale entries at the end-of- day close-out.
• Validate all applicable forms in the register.
• Restrict each cash drawer to only one employee.
• Ensure each customer receives either a cash register receipt or a hand-written receipt.
• At the end-of-day close-out:
  • Remove the change fund before the day's cash receipts are counted.
  • Use a standard daily settlement sheet for cashier balancing.
  • Attach the register tape and supporting documents to the daily cash settlement sheet.
  • For voided sales, supervisors should initial approval for these transactions and voided sales slips should be retained.
  • Ensure the cashier and a reviewer sign the balancing sheet.
  • Ensure refund information is adequately explained and reviewed.
• Refund vouchers should be validated or cancelled when used.
• Ensure the validated bank deposit slips are delivered to someone other than the cashier for review.
• Monitor overages and shortages to identify possible problems.

2.4 Credit Controls

• Obtain authorization to extend credit from the University Comptroller
• Set a dollar limit on credit accounts.
• Establish procedures for collecting slow-paying accounts.
• Separate the duties of:
  • Maintaining the account receivable records
  • Credit Billings
  • Collections.
• Submit bad debt write-off requests to the University Comptroller. See also Policy V.B.2, "Credit and Collection" for more information on the University's Bad Debt Write-Off policy.

3.0 Definitions [Top]

Cash items include currency, coins, and checks.

4.0 References [Top]

Policy I.A.1, "Internal Control"
Policy II.C.1, "Records Retention and Disposition"
Policy V.A.2, "Rate Determination"
Policy V.A.3, "Responsibility for the Collection, Reporting and Remittance of Virginia Sales Tax"
Policy V.B.1, "Cashiering Activities"
Policy V.B.2, "Credit and Collection"
Procedure 5-5, "Preparation of Bank Deposits"
Procedure 5-6, "Preparation of Central Cashier Deposits"
Procedure 5-10, "Completing Sales Tax Worksheet"

5.0 Approvals and Revisions [Top]

Previous version in effect from 7/17/89 to 6/29/01 available in policy archive.