Departmental Cash Handling By: Maria De Jesus Sussy Palomo Accounting Group Supervisor

Introduction Cash represents one of the College’s most sensitive asset. There must be clear accountability for cash handling. Departments that collect and handle cash must adhere to strict internal controls. The primary purpose of the cash handling procedures is to assist College departments with –Collection –Custody –Reporting of cash. 2

Overview Board Policies Definition of Cash Payments Responsibility of Department Employees Departmental Cash Collection and Deposit Procedures Shortages and Overages Internal Controls Change and Petty Cash Funds 3

Board Policies Board Policy # 5110 – Controllership Function: –“The Comptroller, as authorized by the Vice President of Finance and Administrative Services, shall have sole responsibility to perform all accounting functions pertaining to the College and grant funds, including, but not limited to, collection, deposit, and disbursement.” –Authorized representative shall be designated by the Comptroller in writing. 4

Board Policies Board Policy # Establishment and Control of Petty Cash Funds – “ to authorize, establish and maintain petty cash funds required to provide funds for purchases in income producing activities and for the Business Office to furnish limited change and petty cash replenishment to other income producing activities.” –“College policy also requires that adequate controls over petty cash funds be maintained to prevent loss through theft or misappropriation. “ –The Vice President of Finance and Administrative Services will approve the establishment, change in amount, or the discontinuance of petty cash funds. 5

Definition of Cash Cash – Coins, currency, checks, money orders, credit cards, cashier checks. 6

Department Approval Each department receiving cash –Must be approved by the Business Office. –Comply with guidelines and procedures. Financial Manager –Should assign the responsibility of receipting and accounting for funds to one individual or few people as possible. Responsible Individual –Certified by the Business Office as a cash collector –Must be a full- time, permanent employee Part-time or temporary employees (including student workers) may assist the responsible person Maintain a single collection point 7

Payments Directed To Cashiers Only All payments should be directed to the Cashiers Office. Departments may not request payments be mailed to their location. All mailed receipts should be mailed to: Cashiers Department P.O. Box 9701 McAllen, TX

Conferences and Special Events Departments should immediately contact the Business Office. Guidance will be provided for revenue and expense codes A review will determine adequacy of procedures –Cash handling, safeguarding, depositing, reconciling and other internal controls –Provide cashiering services if needed. 9

Responsibility of Department Employees Financial Manager – establish effective internal controls, delegate responsibility and maintain segregation of duties. Cash Collector – Conduct transactions with customers (endorse checks, provide receipt, maintain log). Cash Collector Supervisor – Monitor cash receipting functions and authorize various transactions as voids. Deposit Preparer – Count and verify receipts, prepare deposit worksheet and take to Cashiers Office. Reconciler – Account for cash as it is received, reconcile to Banner Accounting System. 10

Cash Collection Receiving Cash in Person or in the Mail –All checks must be endorsed immediately –Receipts must be provided to every individual paying in person. –Transaction must be logged. –Cash must be counted at the end of the day and deposited. –Checks must not be cashed at collections point. –Cash collection point must maintain clear separation of duties. An individual should not have responsibility for more than one cash handling components. –Collecting –Depositing –Reconciling 11

Cash Collection and Receipts Business Office BANNER Departmental Receipt Books –The Business Office will issue official receipt books Regular employee who is to serve as custodian of the book All used individual receipt books must be returned to the Business Office. –Use of receipts other than official college receipt is prohibited. Departments receiving funds Issue a receipt Sequential numbered receipts must be provided One copy must be included with the deposit One copy must be kept with the department files –Voids Must be maintained in sequential order and approved by a supervisor. 12

Deposit Procedure Daily Balancing of Collections –Total daily collections, cash, checks, money orders, etc. –Assure that the amount equals the amount of receipt issued. –Financial manager or designee should verify the balancing. Deposit Support Forms –Deposits must be summarized and documented –Identifies the type of monies being deposited –Approved by cashiers Transporting Deposits –Bags or envelopes should be utilized for the transport of deposits from the department to the Cashiers’ Office. 13

Credit Card Payments –Credit Card information is very sensitive and it should not be maintained by the department. –Acceptance of Visa/MasterCard/Discover requires pre- approval by the Business Office. –The department may arrange with the Cashiers Office to have the credit card payments taken by telephone. 14

Shortages and Overages Immediately report any balancing discrepancies in the amount of $25.00 or more – Director of Student Accounts and Bursar. Norma Jimenez Discrepancies will be investigated 15

Internal Controls Principles of good cash handling 1.Proper segregation of duties – different individual Receiving of cash Depositing of cash Reconciliation 2.Adequate safeguards for handling, transporting, and storing cash Cash kept overnight must be secure –Safe, locked desk or cabinet in a locked office 3.Independent reconciliation of deposit documents to the Banner statement of accounts. 16

Internal Controls Education Code § (b) “Funds that are to be deposited in the depository bank or banks must be deposited within seven days from the date of collection.” –Promptly depositing cash at the Cashier’s Office Deposits must be made no later than the close of business on the next day following the date of collection. Collections under $20.00 may be held until $20.00 is met, but a deposit must be made, at least once per week, even when less than $20.00 has been accumulated. At least once a week and at month end. 17

Change and Petty Cash Funds Request must be by Financial Manager to Comptroller A memo/ should contain the following: 1.Intended use of the fund 2.Amount requested 3.Length of time funds will be needed 4.Custodian of the fund Custodians must adhere to additional change and petty cash fund procedures. 18

Change and Petty Cash Fund Procedures 1.Custodian must be designated in writing by the Financial Manager 2.Custodian must received training 3.Funds must be kept in a secure place, never left unattended. 4.Funds should only be accessible to the official custodian or an alternate. 5.The funds can not be use for financing IOU’s, loans, accounts receivable, or cashing personal checks. 6.Personal use is prohibited. 7.Personal/private funds should not be commingled. 8.Cash funds must reconcile at all times. 9.Sales tax will not be reimbursed. 19

Change and Petty Cash Fund 10.Miscellaneous receipts of cash should not be added to cash fund. 11.Cash funds must be accessible for an audit 12.Business office should be notified of change of cash custodian or location. 13.Disbursements from cash funds must be approved by VP- FAS and must be supported by documents (date of payment, price, description of expenditure, signature, charge account). 14.Disbursement from a Petty Cash Fund may not exceed $50.00 per transaction 15.Disbursements should be reimbursed at least quarterly and at August 31, requested on a purchase requisition. 20

Cash Disbursements 1.Custodian must be designated in writing by the Financial Manager 2.Custodian must receive training 3.Custodian should count the money at time of receipt and disbursement 4.Money must be secure all the time 5.Distribution of money must be done by custodian 6.Excess money should be secure all the time and returned to Business Office 21

Source: STC JAGNET – Cash Handling Procedure JAGNET - log in – Employee »Business Office Procedures »Departmental Cash Handling Procedure 22

To request training contact : Maria (Sussy) Palomo (956)