Presentation on theme: "Handling Cash and Cash Equivalents Training"— Presentation transcript:
1Handling Cash and Cash Equivalents Training UCSBNeil ClarkOffice of the ControllerMarch 2014
2Goals What you should get out of the training An understanding of the UCSB cash handling processAn understanding of the key controls in the UCSB cash handling processUnderstanding of your responsibility as a Campus Cash HandlerCampus Resources
3Topics What the training will cover The various forms of cash payments A review of the three types of Cash Handlers as defined by BUS-49A review of BUS-49 policy areas, and cash handling activitiesGeneral guidelines for Petty Cash and Change Fund custodiansPrinciples of good cash handling and their application in daily cashiering activities
4StewardshipStewardship The careful and responsible management of something entrusted to one’s care. As University employees we have a responsibility to our stakeholders, to be good “stewards” of the public trust.
5Why is the Proper Handling of Cash Important to UCSB? Public TrustTaxpayer DollarsStakeholdersDonorsFunding AgenciesParentsStudentsEmployees
6What are the Consequences of Improper Cash Handling? Public ImageLoss of FundingDepartment ReputationCriminal or Civil InvestigationCost of Investigation
7Terminology What is considered cash Several terms used in the BUS-49 need to be defined to help you understand the University's cash handling policy. The basic terms fall into one of the three following categories:What is considered cashDefining Cash Handlers and Fund CustodiansCash Handling Roles
8What is considered “cash” Currency and CoinCash EquivalentsMoney OrdersTravelers ChecksCashiers and Certified ChecksACH Payments and Wire TransfersCredit and Debit CardsSecurities (Easily transferable to $) such as Parking Permits, Stamps, Tokens, Meal Tickets
9What is a Main Cashier?Main Cashier A cashiering station to which official operating cash funds are issued, and from which, collections are deposited directly to the bank. Examples Cashiers Office UCen Cashier
10What is a Sub Cashier?Sub Cashier A cashiering station from which collections are deposited with a Main Cashier. Examples At least 9 Sub Cashiering stations on campus, including Parking, Arts & Lectures and Housing
11What is a Cash Handling Department? Cash Handling Department Campus operating unit that typically collects cash and deposits to either a Main Cashiering or Sub-cashiering station. Example Campus departments who receive gifts, donations, telephone or photocopy reimbursements.
13CustodianA person who has been assigned responsibility for administering either a petty cash or change fundThe custodian is solely responsible and personally accountable for the fund.Must be a University employee (career or limited appointment) or a registered UCSB student employed by the University.New employees must successfully pass a background check.
145 Steps of Cash Handling Step 1 - Accept Cash and Endorse Checks Verify check payee is "UC Regents" or "Regents of the University of California"Endorse check with appropriate stamp (UC Regents)To minimize customer disputes over an amount being paid in currency, leave the currency on the cash register ledge or other secure area visible to the customer until the transaction is completed.Count change back to the customer.At the end of the transaction make sure all currency, coin, or checks are placed into the cash drawer or other secure container or location.Give the customer a receipt
155 Steps of Cash Handling Step 2 – Prepare Deposit Prepare a deposit form as soon as total of cash and cash equivalents meet or exceed $500Practice dual custodyBalance receipts to cashKeep backups of deposit forms
165 Steps of Cash Handling Step 3 – Deposit Cash Sub-cashiers and cash handlers must deposit at least once a week or whenever collections meet or exceed $500.Transport cash in dual custodyDeposits > $2,500 employees should be escorted by a Campus Security or Police Officer.Step 4 - Reconcile depositsBalance to General Ledger report at month endStep 5 - Report lossesReport losses to supervisor
17Cash Collection Reports A report of cash collections signed by the preparer must accompany each deposit to a Main Cashiering Station from a Sub Cashiering Station. The report should include:Cash RecordedCash DepositedShortages or OveragesSupporting Documentation (including cash register audit tapes, as applicable)
19General Cash Handling Principles Business and Finance Bulletin BUS-49, the UC policy related to cash handling, defines the four critical policy activities:
20Individual Accountability One person has sole responsibility for a fund.Protects the University and the EmployeeAccess to cash should be restricted at all times to only the person (custodian) accountable for the fund.All transfers of cash and responsibility should be documented.A supervisor should sign and verify overages/shortages and all voids/refunds.
21Accountability Key Components FundsremainsecuredTransfers are documentedPasswordsare notsharedKeys are securedAll trans.identified to a personReceipts to each customerCash drawer to each cashierSafe combos are not sharedBackground checks are performed
22Separation of DutiesMore than one qualified person is involved in the key activities related to the collection, handling, depositing, and accounting processes for cash received.
23Cash Handling Roles Matrix The matrices below shows appropriate separation of duties for cash handling roles for three person and two person operationsRoleHandling CashPreparing DepositReconciling receipts to depositMaking Cash DepositComparing deposits to GLIndividual #1XIndividual #2Individual #3RoleHandling CashPreparing DepositReconciling receipts to depositMaking Cash DepositComparing deposits to GLIndividual #1XIndividual #2
24Dual CustodyInvolving two people in a critical cash handling task is a special kind of separation of duties called dual custody.Dual custody should be practiced when transporting and counting large amounts of cash, or when performing other risk critical actions.Benefits of Dual Custody:Encourages cash handlers to check each others workReduces the opportunity for robbery and theftIf loss does occur, protects cash handlers from unwarranted suspicion
25Physical Security Per BUS-49: Individuals who handle cash and cash equivalents are protected from physical harmCash and cash equivalents are protected from loss.Technology resources involved in process cash and cash equivalents (i.e., hardware and confidential personal information) are protected from loss, corruption, or compromise to confidentiality.
26Physical Security Per BUS-49: Counting of cash must not be visible from outside the office.Level of security, such as cash box, safe, or alarm requirements depends on amount of cash being stored.Deposits must be adequately protected from loss while in transit.Only authorized individuals are allowed in the work area.
27Physical Security Per BUS-49: Safe combination should be given ONLY to supervisory/authorized personnel.Safe combination should be committed to memory.A record of the combination must be maintained away from the safe area and sealed to prevent undetected access.
28Physical Security Per BUS-49: Safe combination should be changed whenever an employee leaves the unit/position, or at a minimum of once per year.A log must be maintained showing the date of combination change and the reason for the change.
29Physical Security Key Components Assets are properly storedAlarm syst. alerts police dept.Shortages/overages are reportedKeys are securedCash counting not visibleSafe combos are changed2nd employee presentDeposits protected while in transitBackgroundchecks performedDeposits are timely
30ReconciliationCash and cash equivalents collected and reported as deposited, are reconciled with the General Ledger, and are verified as accurate.A supervisor or someone other than the custodian should perform surprise counts of the petty cash and change fund.
31ReconciliationReconciliation involves the following three levels of personnel:Level 1 – Cashier / Sub CashierReconciles daily receipts by cross balancing the funds collected against the cash register totals, the receipts issued, and deposit documents receivedLevel 2 – Manager / SupervisorReconciles to ensure that receipts were issued in numerical order. Verifies that register totals and beginning and ending readings are in order. Performs surprise cash counts to ensure accuracy of staff and compliance with cash control procedures.Level 3 – Accounting OfficeReconciles deposits by Major Cashiering sites to UC bank accounts.
32Petty Cash FundPurpose: Used by units who have a need to provide funds to employees or students to acquire low value goods and services from outside vendors on an immediate or short term basis.UCSB Policy 5255
33Petty Cash Fund Procedures Using the FundAll expenditures must be supported by receipts.Receipt must be legible, dated, itemized, indicate amount and name of vendor.Receipt must be signed by the purchaser, indicating receipt of goods.Receipt must show evidence of having been paid.
34Petty Cash Fund Procedures Reimbursement of the FundAttach receipts to a Miscellaneous Form-5 Check Request, submit to Business & Financial ServicesUse the Petty Cash Reimbursement FormAll receipts must be reimbursed by June 30 for fiscal closing
35Petty Cash Fund Procedures Transferring CustodianshipFormal documentationSend copy of transfer information to Business & Financial Services (BFS)Returning the FundReimburse all outstanding receiptsPrepare Deposit and Recording Advice (DARA)Take DARA and fund to Cashiers OfficeSend copy of DARA to BFS
36Petty Cash Reimbursement Form Allows for immediate reimbursement for petty cash expenses from the Cashiers Office. It was designed for those units who do not have a petty cash fund.ProceduresAttach original receipts to the formObtain authorized signatureMake a copy for department recordsTake original to Cashiers Office
37Change FundPurpose: In a department that performs cash sales, a change fund may be established to provide the department with the ability to provide its customers with change following sales transactions.UCSB Policy 5250
38Change Fund Procedures Setting up the FundSubmit request to Business & Financial Services (BFS) with Department Head approval.BFS will contact department when check is ready.Custodian signs acknowledgement of receipt, and understanding of the policy, and cashes check at the Cashiers Office.
39Change Fund Procedures Transferring CustodianshipFormal documentationSend copy of transfer information to BFS.Returning the FundPrepare Deposit and Recording Advice (DARA)Take DARA and fund to Cashiers OfficeSend copy of DARA to BFS
40Change Fund Procedures Using the FundNo expenditures may be made from the fund.Fund must be kept separate from any other fund.Overages/shortages in income are not to be cleared through the fund
41Change Fund Key Points Fund should not be used for expenditures Fund should not be combined with petty cashMore than one person should not have access to the fundTransfers of fund should be documentedOverages/Shortages should not be cleared through the fund.
42Petty Cash and Change Fund 4 Critical Policy Activities AccountabilityCustodians of Petty Cash and Change Funds are solely responsible for the funds entrusted to them.Campus policy requires that individuals who will be the custodian of a fund, successfully pass a fingerprint/ background check.The custodian can be held personally liable for losses due to the custodian's negligence.
43Petty Cash and Change Fund 4 Critical Policy Activities Separation of DutiesThe supervisor or someone other than the custodian, should occasionally perform a surprise count of the fund.The supervisor, unit head, or designee reviews and approves all forms related to the operation of the fund.The supervisor also ensures that the custodian manages the fund in accordance with established policies and procedures.
44Petty Cash and Change Fund 4 Critical Policy Activities ReconciliationThe custodian should regularly ensure that the amount of the fund (cash and receipts) remains intact.Physical SecurityThe fund should be locked up except when in use. See Business and Finance BUS-49 for secure storage requirements for funds in excess of $1,000. Each fund is to be maintained and stored separately, for example, in it's own cash box.
45Audit of FundsAudits may be performed by either Business & Financial Services or Audit and Advisory ServicesAudits may also be done by a supervisor.Purpose of the audit is to verify the fund exists and is secure, the fund is complete, and the fund is being used appropriately.
46Resources Policy Neil Clark, Campus Cash Handling Coordinator UC Business and Finance Bulletin, BUS-49: Policy for Cash and Cash Equivalents ReceivedUCSB Policy 5250: Change FundsUCSB Policy 5255: Petty Cash FundsNeil Clark, Campus Cash Handling CoordinatorX7667 orJonelle Miller, Acting Credit Card CoordinatorX3959 orTracy Coy, Cashier ManagerX2177 orAudit and Advisory Services