CREST
Bank and Cash Financial
Procedures
Contents
1.1
Introduction …………………………………………………………………………..
2
1.2
Opening/Closing of College Bank Accounts …………………………………….
2
1.3
Bank Accounts in Operation ………………………………………………………
2
1.4
Maximising Return on Surplus Funds ……………………………………………
2
1.5
Treasury Management …………………………………………………………….. 2
1.6
Cash Flow Forecast ………………………………………………………………..
2
1.7
Internet Banking …………………………………………………………………….
2
1.8
Departments Routinely Receiving Payments ……………………………………
3
1.9
Other Departments – Non Routine Receipts ……………………………………
3
1.10
Unanticipated Receipts with Other Departments ……………………………….
3
1.11
Receipts ……………………………………………………………………………..
4
1.12
Storage of Cash and Transfer of Lodgements to the Bank ……………………
6
1.13
Lodgements and Lodgement Reconciliations …………………………………...
7
1.14
Security of Cash in Transit and Financial Stationery …………………………...
8
1.15
Cheque/BACS Payment Requests Signing ……………………………………..
8
1.16
Disbursement of Cheques …………………………………………………………
9
1.17
Direct Debit Receipts and Payments …………………………………………….
9
1.18
Bank Reconciliations ……………………………………………………………….
9
Appendix A – List of Authorised Cheque Signatories
Bank and Cash Financial Procedures – April 2012
1
1.1
Introduction
The Finance Department has overall responsibility for the management and security of cash
within the College.
1.2
Opening/Closing of College Bank Accounts
No department or student organisation within the College may open a bank account in the
College name or any other name for College business. Prior written authorisation to open
any new College bank accounts must be obtained from the Principal. The Principal must
also give written permission to close a College bank account.
1.3
Bank Accounts in Operation
A list of all College Bank Accounts is held by the Head of Finance.
1.4
Maximising Return on Surplus Funds
The College has a policy of maximising the return on any cash not being used for
operations. The current account for the College currently has an automatic sweep facility
with any funds greater than £30k being moved to an interest bearing call account on a daily
basis. In addition, the College makes use of a deposit account that earns interest.
1.5
Treasury Management
Please refer to the College Treasury Management policy.
1.6
Cash Flow Forecast
A cash flow forecast is prepared to effectively manage cash balances. The forecast is built
around the basic aspects of cash management, as follows:

Operations;

Cash Flow; and

Financial Condition.
The cash flow forecast is prepared on an annual basis and is broken down by month.
Performance against forecast is monitored on a monthly basis by the Head of Finance who
investigates and documents variances between actual and forecast balances.
1.7
Internet Banking
The College currently has an online banking facility which permits the review of bank
statements and transactions. Payments of some minor routine transactions that are required
to be made on a faster basis than can be achieved by BACS or by cheque are made via
internet banking e.g. payment of monthly childcare vouchers. Occasional other urgent
payments are made in this way.
Any such payments are approved in advance in
accordance with the routine approval processes in place for payments made by any other
means.
Access to the facility is password secured and restricted to the Head of Finance (who is also
the Administrator), the Assistant Accountant and to the Administrative Officer Finance –
Cash Management. Permissions available to each person are dependent upon their
respective roles and determined by the Administrator.
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1.8
Departments Routinely Receiving Payments
1.8.1 Finance Department
Ideally all payments received from staff, students and visitors/customers - both in person or
via the post - should be received by the Finance Department so that:
-
a receipt can be issued to the person paying,
the payment can be locked away securely in accordance with the Colleges
insurance cash handling obligations and safe cash holding limits – see section 1.11,
checks can be made to ensure that all income due is received,
staff are protected from the possibility of cash and cheques going missing and
against allegations that payment has been misappropriated.
The Halls Office is also authorised to receive certain payments connected with Residence
and Catering related activity – see section 1.11.
1.8.2 Other Departments – Routine Receipts
Certain other departments outside Finance routinely receive funds. These Departments are
-
Library
-
Learning Resources (previously LSS) and
-
Hospitality Services including Halls Office, Refectory and Betty’s Coffee Shop.
Each of these departments has its own detailed individually documented cash handling
procedures in place.
To ensure that best practice in the safe handling of receipts is observed, any proposed
changes to existing systems or requirement for a new system in these Departments must be
agreed with the Head of Finance prior to being implemented.
Other departments who may need to routinely request payments from students and other
customers, e.g. Academic Registry for student application processing and Lifelong Learning
must discuss the arrangements with the Finance Office in advance to avoid the receipt of
payments directly within their department either in person or via the post.
1.9
Other Departments – Non-Routine Receipts
Departments setting up new non-routine arrangements that involve the receipt of payments
e.g. student contributions to courses costs and field trips should not issue any payment
instructions to participants without first discussing the arrangements with the Finance Office.
Lists of students who are to make payment for e.g. resources or courses can be provided to
the Finance Office in advance and the student instructed to make payment in the Finance
Office.
In addition, courses offered to students can be advertised generally to students and the
students book their place by making payment at the Finance Office.
The Finance Office will liaise with the relevant department/co-ordinator as appropriate
regarding uptake of places and outstanding contributions.
1.10
Unanticipated Receipts within Other Departments
On the rare occasions when a department unexpectedly receives payment by cash or
cheques from any source, these funds must be forwarded as soon as practicable after
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receipt but no later than one week after receipt, to the Finance Department for receipting,
storage and lodgement.
1.11
Receipts
1.11.1 Finance and Halls Office Kalamazoo Receipts
Finance and Halls Office (excluding Chatz (Refectory) and Betty’s Coffee Shop) receive
payments from customers in person, by post and over the telephone. Payment may be
received by cash, cheque and debit/credit card.
Halls and Finance Office use Kalamazoo type pre-numbered duplicate cash receipt books to
record all non-cash register receipts for the College. Both these departments must
immediately record payments received and issue receipts to the customer when possible.
Kalamazoo receipts for payments made by debit/credit card should be issued only after the
transaction has been successfully completed.
If it is not possible to issue a receipt, e.g. no contact details have been supplied by the
customer, the receipt must be retained, ideally with any supporting paperwork if this has
been received. If no supporting paperwork is received, a full written explanation of what the
payment relates to should be attached to the receipt and this should be filed with all other
receipt paperwork.
No deletions or corrections should be made to any receipts. In the event of a receipt being
incorrectly completed, it should be marked “void” and all parts should be retained in the
receipt book with an explanation regarding why the receipt was spoiled.
Customers wishing to make payment by cash in person to other departments e.g. Lifelong
Learning must be brought to the Finance Office so that the payments may be receipted,
recorded and safely stored awaiting lodgement.
Finance Office receipts can be issued by any member of the finance team.
normally in place to ensure that there is appropriate segregation of duties.
A rota is
Halls Office receipts are normally issued by either of the two staff who work on the counter at
Halls Office.
Halls Office make up their own lodgements, normally twice per week, and provide Finance
with a copy of their Kalamazoo receipt book on a weekly basis. Halls Office lodgements are
then traced to the College bank accounts and each transaction is recorded on the
accounting system by the Administrative Officer Finance – Cash Management. Please refer
to section 1.14 for guidance on the safe transit of cash to the bank.
The Payroll Officer is responsible for managing receipts forwarded to Finance for lodging by
Library and Learning Resources.
The Administrative Officer Finance – Cash Management issues kalamazoo receipts for all
payments made by customers/funders directly into the College bank account.
Stocks of unused Kalamazoo receipts are securely stored by the Finance Department.
1.11.2 Other Departments Issuing Receipts
The only other departments authorised to receive payments in person, by cash or cheque
are the Library, Learning Resources, Chatz and Betty’s Coffee Shop who each issue cash
register receipts for purchases which are made in person by the customer.
Chatz will introduce the ability to pay by debit/credit card in due course.
Bank and Cash Financial Procedures – April 2012
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No other department is authorised to receive money, either temporarily or permanently,
within the College unless written permission has been received from the Head of Finance
who will ensure that suitable controls have been put in place.
1.11.3 Management of Receipts
1.11.3.1 Library & Learning Resources Receipts
The Library and Learning Resources Departments make lodgements of their takings,
normally on a weekly basis, via the Finance Department. These departments must each
provide Finance with:
-
a summary schedule setting out the amount received according to the cash register
reports since the last lodgement was made compared with the cash takings for the
period,
-
the related cash register receipts,
-
the cash for lodgement.
These are forwarded to the Payroll Officer who will immediately check the cash amount
received and the cash register reports. When all is in order, a Kalamazoo receipt will be
issued to the relevant department and a separate bank lodgement will be prepared by the
Payroll Officer for lodgement at the next available date for Finance Office lodgements.
1.11.3.2 Chatz and Betty’s Coffee Shop Receipts
Chatz and Bettys’ lodgements are made by the Halls Office and thus the checking routines
undertaken in Finance are different to those for the Library and Learning Resources.
Cash register till receipts and summaries are forwarded by Halls Office to Finance where
checking is carried out and the lodgement is traced to the bank statement.
1.11.4 Payments received by Post
Other departments within the College have an important role in generating income for the
College e.g. Lifelong Learning.
However, in order to safeguard staff responsible for handling incoming post and college
resources, customers must be discouraged from making payments by cash through the post.
Special arrangements are in place for the recording of payments received by post which
apply to the opening of post received at Halls Office and Main Reception only. Post must be
opened in the presence of two people immediately upon receipt and payments received
recorded in a post received log book. Both persons must initial and date the log book
immediately after the post is opened to evidence their involvement in the process. The
payments received are then immediately receipted (Halls Office for post received there and
in Finance for post received at Main Reception) and the supporting letter/remittance advice,
the receipt and the log book are then reviewed and the log book initialled by an independent
person within Finance or Halls Office to validate that all monies received by post have been
receipted and checked.
Departments who may from time to time request payments from customers/students must
clearly identify the recipient of related correspondence within the College in all their
promotional materials and instructions to potential customers to ensure that the department’s
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post will be opened by Main Reception. This is required only in order to avoid the
inadvertent handling of payments received within their department.
1.12
Storage of Cash and Transfer of Lodgements to the Bank
The following limits for the storage of cash in College safes are currently in operation:
Location
Safe Type
Safe Limit
Finance
Stratford Stronghold
£3,000
Finance
Chubb
£2,000
Learning Resources
Stafford
£2,000
Halls
Stafford
£2,000
Halls
Stafford
£2,000
Halls
Chubb
£2,000
The limit for cash stored outside business hours and not held in a safe is £350.
Cash received awaiting lodgement may need to be stored in more than one safe to comply
with the above safe cash holding limits. A lodgement must be made up prior to the cash
holding limit being exceeded and stored securely in the departmental safe(s) until it can be
safely lodged. These limits do not apply to cheque payments.
The College’s insurance policy provides for the following thresholds relating to the transit of
cash both on campus and en route to the bank:
Amount of Cash in Lodgement(s)
No of Able Bodied Persons Present
Up to £2,499
One able bodied person
£2,500 - £4,999
Two able bodied persons
£5,000 – £7,499
Three able bodied persons
£7,500 - £10,000
Four able bodied persons
Over £10,000
Professional Security Company
In addition:
-
the College is not insured for cash in transit in excess of £5,000,
cash up to a maximum of £5,000 can be held outside a safe at any time during the
working day.
The Finance Office and Halls Office alone have responsibility for arranging their own
lodgements. Both departments must ensure that the safe cash holding limits are not
exceeded.
If the limits are exceeded due to the unanticipated receipt of a large amount of cash,
immediate action is required to store the funds securely in separate safes until an
emergency bank lodgement can be arranged.
Bank and Cash Financial Procedures – April 2012
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1.13
Lodgements and Lodgement Reconciliations
1.13.1 Funds Transfered from Library and Learning Resources to Finance for
Lodgement
All cash receipts and supporting documentation should be forwarded to the Payroll Officer
on an agreed day each week to facilitate lodgement. After checking and receipting, the
Payroll Officer will then arrange for the lodgement of all funds received since the last
lodgement was made.
Lodgements take place at various times on a weekly basis or more often as required
depending on the scale of cash receipts held in order to comply with safe cash holding limits.
1.13.2 Halls Office Lodgements
Twice weekly, or more often as required depending on the scale of receipts held in order to
comply with safe cash holding limits, Halls Office will arrange the lodgement of funds
received directly to the College bank account. Please refer to section 1.14 for guidance on
the safe transit of cash to the bank.
The Halls Secretary will provide a copy of the Halls cash book to the Administrative Officer
Finance – Cash Management together with all the supporting documentation on a regular
basis – ideally this should be done on a weekly basis. This provides details of all money
being received each day and a total of all money lodged to the bank.
The lodgements from the Halls cash book are then traced to the College bank statements by
the Administrative Officer Finance – Cash Management who enters the details of these
transactions onto the Colleges computerised accounting system (Integra). The checking
undertaken will include verifying the completeness of the receipt sequences, checking the
coding and invoice allocation information provided and ensuring that all monies recorded as
received have been lodged.
1.13.3 Lodgement Reconciliatons Halls and Finance Offices
On a daily basis a written Daily Count reconciliation is undertaken of all receipts recorded for
the day against funds received. This is normally undertaken by the Payroll Officer in
Finance and Halls Office Secretary in Halls Office. This Daily Count reconciliation is
independently reviewed by someone else within the relevant department.
When lodgements are being prepared for transfer to the bank, a lodgement summary of all
the kalamazoo receipt numbers covered by the period that the lodgement relates to is
prepared by the Payroll Officer re the Finance lodgement and the Halls Secretary re the
Halls lodgements.
The lodgement summary is then independently checked and countersigned prior to the
lodgement being made ensuring that all funds are being lodged, that there are no
unexplained gaps in the receipt number sequence and there are no gaps between the first
receipt number in the current lodgement against the last receipt number on the previous
lodgement.
A hard copy of the lodgement summaries for Finance and Halls are kept on file by the
Administrative Officer Finance – Cash Management.
The Head of Finance must be made immediately aware of any significant differences found
in all reconciliation checks including those for Library and Learning Resources and an
investigation will be required.
Bank and Cash Financial Procedures – April 2012
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1.14
Security of Cash in Transit and Financial Stationery
No cash can be transferred via internal or external mail. All cash deposits, apart from those
lodged directly to the bank on behalf of Halls Office, should be hand delivered to the Finance
Office, either by an individual designated by the Head of Department or by the Security
Supervisor.
Halls Office lodgements are normally made by the Security Supervisor.
As Halls Office lodgements may be included along with all other College lodgements which
are managed by the Finance Department, Finance will be responsible for ensuring that,
where any combination of lodgements has cash in excess of £2,499, the correct number of
additional persons will be available to transfer the lodgements to the bank. The numbers of
persons required to accompany cash is in accordance with the table at 1.12 above.
All monies received should be stored in a locked safe ensuring that the safe cash holding
limits imposed by the insurers are observed.
1.14.1 Storage of Financial Stationery
It is important that financial stationery is securely stored to guard against misuse.
Accordingly the following procedures should be followed:
1.14.2 Kalamazoo Receipts, Cheque Books and Lodgement Books
All current Kalmazoo receipts, cheque books and lodgement books, including the current
batch of computerised cheques must be stored in the safe in the Head of Finance’s Office.
Cheque stubs of used cheque and lodgement books and unused Kalamazoo receipts,
cheque and lodgement books including supplies of computerised cheques should be locked
securely away in designated cabinets in the Finance Office.
Only authorised Finance Office staff should remove the cheque and lodgement books, and
should replace them in the safe immediately after use.
Any concerns over the security of any financial stationery should be brought to the attention
of the Head of Finance.
1.14.3 College Credit Card
The College credit card must be kept in the safe in the Head of Finance’s Office. Approval
for use must be sought from the Head of Finance before removal from the safe. The College
credit card will only be used in exceptional circumstances. Complete and fully authorised
procurement paperwork is required before any payment by the College credit card can be
made.
1.15
Cheque/BACS Payment Requests Signing
All cheques/BACS Payment Requests produced for payment must be signed by any two of
the authorised signatories to the College bank accounts (Appendix A). Cheques/BACS
Payment Requests should be signed only after each signatory has reviewed the appropriate
supporting documentation such as invoices, travel claims etc.
Bank and Cash Financial Procedures – April 2012
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Each piece of supporting documentation should be initialled and dated by each person
signing the associated cheque/BACS Payment Request.
1.16
Disbursement of Cheques
Ideally cheques/BACS Payment Requests should be signed within the Finance Department
so that any queries can be promptly resolved. However it may be necessary in exceptional
circumstances for cheques/BACS Payment Requests be signed outside the department.
Once the relevant second signatory has signed the cheque/BACS Payment Request, it
should be returned in person to the Finance Department. The Purchasing Officer within the
Finance Department then sends the cheque to the relevant supplier. For BACS payments an
e-mail will be sent to the payee’s nominated e-mail address.
1.17
Direct Debit Receipts and Payments
To reduce administration and promote secure transfer of funds from customers, the College
seeks to increase the number of customers who make payment directly into the College
bank account.
The College does, however, seek to keep to a minimum the number of payments that are
taken directly from the College bank account by suppliers by Direct Debit.
Advance permission of the Head of Finance with the countersignature of another cheque
signatory will be required before any new direct debit payment arrangement can be made.
Records of all direct debit payments arrangements/agreements will be maintained by the
Administrative Officer Finance – Cash Management.
1.18
Bank Reconciliations
1.18.1 Preparing Bank Reconciliations
Bank reconciliations will be prepared on a monthly basis for all bank accounts apart from
those relating to the Support Funds which are reconciled on a quarterly basis.
Reconciliations must be prepared by the Assistant Accountant in line with the Finance
Department period-end close down timetable.
Any unusual reconciling items will be investigated during the process and in rare cases when
adjustments are required, these must be approved by the Head of Finance. Each quarter the
Head of Finance will be consulted about the course of action to be taken in relation to all
cheques that are more than 6 months old and not yet presented to a bank.
The Assistant Accountant will evidence the preparation of the reconciliations by way of dated
signature.
1.18.2 Review of Bank Reconciliations
The bank reconciliations should be reviewed by the Head of Finance on a timely basis after
their preparation. This review should be evidenced by way of dated signature.
Dr Anne Heaslett
Principal
Bank and Cash Financial Procedures – April 2012
20 April 2102
Date
Review Date: April 2014
For distribution to: All Staff
9
Appendix A – List of Authorised Cheque Signatories
Dr Anne Heaslett
Principal
Dr Clifford Boyd
Vice Principal
Ms Audrey Curry
Assistant Vice Principal
Ms Ursula Doherty
Head of Human Resources
Mrs Christine Nesbitt
Head of Hospitality Services
Ms Jo O’Boyle
Head of Finance
Mr John Chapman
Head of Estates