Cash Handling Training Ohio University Cash Handling Training

Background Cash is handled by over 200 locations across the University Internal Audits – cash handling a common problem Ohio University Board of Trustees supports our initiative to develop a training program and improve internal controls

Cash Handling – It’s my job Whether you take in lots of money or…… ……you collect “pennies”

Segregation of Duties Security Reconciliation Management Review Cash Handling Controls ……..the principles of good cash handling are: Segregation of Duties Security Reconciliation Management Review Documentation Main policy points pertaining to cash handling

What is included in “Cash Handling” ? It’s not just “cash”. It includes the following: Coins Currency Checks Money Orders Credit Card Transactions Cash Equivalents Accounts receivable charges Tokens Tickets Stamps Gift Cards Chemistry Breakage Cards Library Media Cards

WHY? First, lets talk about risk and controls…. Who or what is at risk? The Money You WHY?

Risk and Controls!! Remember – In the cash collecting process, YOU are just as important as the cash……….. Responsibility as management to reduce exposure for improper cash handling procedures. The controls (rules) that we will discuss are designed to protect both YOU and the cash you are handling.

Risk? Cash is lost Cash is stolen Bank Statement doesn’t agree with dept records No audit trail Finger pointing/Accusations Lost revenues

Before cash collection begins….. “The planning checklist” “Controls” Departmental cash handling supervisor develops a plan: Is a change fund needed? How is cash received? Mail or in person? Who is going to collect the cash? Record the cash? How is the cash going to be secured? Who is going to prepare the deposit? How? Deposit at the Bank or Business Office? When? Reconciliation? Management Review? Who needs training? Developed for areas new to collecting cash but should also be kept in mind for existing areas collecting cash as a review.

= “Making change” Is a change fund needed? If you are going to make change, then you need a change fund. (Refer to Policy #41.122) Complete a PettyCash/Change Fund form to request a change fund and send to: Controller, 204 HDL Center. Keep amount at bare minimum. Talk with the Controller’s Office…they will help you determine how much you need. Keep the cash safe! ( More on that later) The fund should be balanced each day of use, but at least once per week, and records kept. Never, never use the change fund for making purchases, cashing checks, giving loans, or for travel advances. Never, never make change from your personal cash! Change fund and cash advances should be requested and received from A/S. DO NOT EVER HOLD BACK CASH COLLECTED! =

“Collecting the cash” How is cash received? Mail or in person? Who is going to collect the cash? Record the cash? In person: Enter cash amount on a cashiering system or pre-numbered duplicate receipt. Give one copy of receipt to the customer. IMMEDIATELY RESTRICTIVELY ENDORSE CHECKS “For Deposit Only Ohio University” You can use a stamp with this message or just write it on the back of the check – either works fine. Note: It would be helpful to list a departmental code on the back of the check in case of a check being returned. Cash recorded as received. Electronic templates will be provided on website can use to print receipts.

“Collecting the cash” How is cash received? Mail or in person? Who is going to collect the cash? Record the cash? In person (continued): Only one person should have access to the cash register, receipts book or cash drawer during any one shift. Balance receipts in the cash drawer at the end of each shift. If there is more than one person receiving cash at the same time, each person must have their own cash drawer and cash receipts book. For proper segregation of duties, the person collecting cash can not have any other responsibilities related to cash handling including recording or changing charges on customer accounts.

“Collecting the cash” The List How is cash received? Mail or in person? Who is going to collect the cash? Record the cash? By Mail: One person should open the mail and immediately restrictively endorse each check – remember the endorsement should say “For Deposit Only Ohio University.” Enter each check into a cashiering system if you are using one. If not, then prepare a daily list of the checks... The List Receipt # Payer Name Date Received Check # Check Amt. Received By

“Collecting the cash” How is cash received? Mail or in person? Who is going to collect the cash? Record the cash? By Mail (continued): Checks received from externally sponsored agreements should be sent to: Grant Accounting Office, 280 HDL Center, for deposit. If you receive a check for the Foundation, forward it to the Foundation Office, 218 HDL Center. Checks intended for other departments should be forwarded to the correct Department. If you receive a check that doesn’t belong to your department and it isn’t clear where it belongs, forward it to the Bursar’s Office, 010 Chubb Hall.

Balance Deposit Reconcile Secure “Now that we have collected the $$$$$$, what do we do with it?” Secure Balance Deposit Reconcile Let’s go back to Our checklist......

“Securing the cash” How is the cash going to be secured? WHILE IN USE….. Each person collecting cash should have their own till. While in use till money and/or collected cash must be secured in a cash box. Permanently attach the cash box in a drawer that can be locked and limit access to the drawer to the person responsible for that till. The cash box should remain locked when not in use. When collecting payments in a high traffic area, you may want to consider installing a contact alarm. When activated, this type of alarm will alert you that the drawer or cash box has been opened.

“Securing the cash” How is the cash going to be secured? OVERNIGHT STORAGE Ideally, your department has a safe close to the area where cash is collected....if you do, be sure that all collected cash is kept in the safe until deposited and all till money is kept in the safe when not in use. Access should be limited to supervisory and authorized personnel. Locate the safe where it is continually visible to department employees. Change the lock or combination on a regular basis (e.g. once each year) and when an employee who knows the combination leaves the unit. Must analyze cost/benefit of $ amount collected on regular basis to cost of a safe ($300-$500).

“Securing the cash” How is the cash going to be secured? What if your department does not have a safe for over night cash storage?? If your department does not have a safe, then you must have a cash box that can be locked. The cash box must be secured in a locked drawer to which access is limited to the person collecting the cash and his/her immediate supervisor. Make sure that the key is kept in a secure, secret place. Can also use cash box or locked filing cabinet. Important thing is locking it up and limited access.

“Balancing” Cash receipts must be balanced every day. Compare the total cash, checks, credit card receipts, etc. to the cash register total or pre-numbered receipts. Balancer investigates and resolves discrepancies, then initials (or signs) & dates to document balancing. Balancer should not deposit or receive cash to maintain proper segregation of duties (can reconcile accounts).

“The Deposit” Who is going to prepare the deposit? How? Deposit all funds intact. Do not use any of the money for purchases or to cash checks. Deposit should be prepared by someone who did not collect the cash. Hand deliver the deposit to the Bursar’s Office or to the Regional Campus Accountant. Funds must be deposited with the appropriate office by the business day following the day of receipt, unless, at the end of a business day, the amount to deposit is less than $1,000 AND the funds can be safeguarded. (Refer to University Policy #51.001 Deposits of Funds.) You are strongly encouraged to make deposits daily even if the cash collection for the day is below the threshold stated above. STRESS - Must deliver deposits at least weekly or when cash on hand _> $500.

“Reconciliation” Reconciliation! Management Review! Do not ever overlook this step!! Cash reconciliation must be performed by a person with no cash handling responsibilities. Reconcile the cashier-approved deposit ticket to the departmental copy after the deposit has been made. Reconcile receipts to the departmental financial reports on a monthly basis to verify the processing or recording of all transactions. Maintain proof of these reconciliations with signature. STRESS - Recon to be done ONLY by person with NO other cash handling responsibilities.

Management Responsibilities Establishing an effective internal control system Delegating responsibility for cash handling duties, maintaining proper segregation of duties Requiring that staff handling cash be properly trained & follow all procedures of the University’s cash handling & depositing policies. This includes ensuring that staff meet the Staff Certification of Individuals requirements covered at the end of this presentation. Reviewing receipts and reconciliations on a regular basis, then initial (or sign) & date documentation reviewed

Review “Management Review” No matter who is collecting, depositing, and reconciling, Management is ultimately accountable. It is management’s responsibility to regularly review the cash handling and reconciliation process to assure timeliness, accuracy and resolution of all outstanding issues. Can't stress enough how important it is for this step and that management is ultimately responsible and MUST enforce the rules! Review

Segregation of Duties This is the most important control in the cash collection process, and often, the most difficult to manage. A different person should be involved in each step: recording of charges/billing, cash receipting, cash depositing, and reconciliation. Let’s talk about how to manage segregation of duties....... As mentioned through out the presentation, this is very important and usually is a problem area when a unit is audited. Need management oversight.

Segregating Duties We want to see a different person doing each of the procedures! This is the best way to ensure that the process works well. What if you don’t have 3 or 4 people to bill, collect, deposit and reconcile? Billing should be managed by the Bursar. Contact the Bursar, Sherry Downs, (740-593-4129 or downs@ohio.edu) to discuss billing for your department. Point out what to do if don't have enough people to perform each component of this process.

Segregating Duties If you don’t think that you have enough people to segregate the collecting, depositing and reconciling functions, then you will have to develop “mitigating controls”. Is there a way to share responsibilities with another department? Can cash collections be centralized in the Bursar’s Office? If the segregation of duties is a problem for your department, please contact: the Bursar, the Controller, or Internal Audit. DON'T have to hire more people if don't have enough for segregation. Deposits can be done by a neighboring dept. and any UI employee can make deposits.

External Billing Authorizations Miscellaneous A/R External Billing Authorizations The Office of the Bursar bills external customers on behalf of departments and regional campuses Complete an External Billing Authorization www.ohio.edu/bursar Select Forms & Manuals Bursar Send completed authorization to Paula Maiden, 010 Chubb Hall

Available Cashiering/Collection Options Departmental Deposits Departments can build their deposits directly in CASHNet rather than completing a paper deposit slip detailing the general ledger accounts impacted by the deposit. Operators in the Cashier’s Office can then verify and complete the deposit, eliminating the need for any duplication of keying. eMarkets Provides campus departments an easy way to create web storefronts where customers can select and pay for items in that store's catalog. Great for on-line conference registration. Contact Carole Gilkey (gilkey@ohio.edu; 593-4217) for more information.

Keeping Records - Record Retention The following documents must be kept in the department for the current year plus three prior years: Cash receipt information Carbon copy of a pre-numbered receipt Sales log Deposit slips Cash over/short record Credit card receipts must be kept 18 months. Destroy credit card receipts Redact credit card number Credit card receipts/reports - must be kept secure location due to confidential customer info.

Transporting Cash If you have responsibility for taking the cash deposits to a Business Office or to a bank, please use good common sense. Secure the cash and checks in a locked cash pouch. Don’t be conspicuous. Don’t take the same route or go at exactly the same time every day – don’t be predictable. Could try to look like a student (if that look works for you)!

Cash Equivalents If you have the responsibility for cash equivalents such as chemistry breakage cards or gift cards, remember that they must be treated as if they are cash: Secure in a locked safe or drawer. Record the sale. Balance sale – sales log against the list of available tickets, etc. Deposit cash promptly. Reconcile sales against statement of accounts. Resolve all outstanding issues. As valuable as cash and must take same steps to secure them.

Cash Handling Policies and Procedures Review Ohio University Policies: www.ohio.edu/policy #41.122: Petty Cash and Change Funds #51.001: Deposits of Funds Review the Ohio University Cash Handling Guidelines online at: www.ohio.edu/bursar Select “Other Bursar Services” Revising policy slightly to reflect training and current process.

What is Required by the University? Written departmental cash handling procedures Departmental procedures should be reviewed annually by departmental management for any procedural changes. Department is responsible for updating the procedures and communicating changes to affected staff. Staff certification for individuals with cash handling responsibilities Departmental management must ensure that current and new staff handling cash meet the requirements of the staff certification process. Annual cash handling training for all staff with cash handling responsibilities.

Staff Certification Responsibility Current staff are required to review this training presentation annually. Review current University Cash Handling Guidelines. Review department’s cash handling procedures. Understand your role in your department’s cash handling process. New staff must comply with these requirements within one month of starting cash handling duties.

Questions?