Departmental Cash Handling
By: Maria Sussy Palomo
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 the collection, custody
and reporting of cash.
Overview
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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
Board Policies
• Board Policy # 5110 – Controllership
Function: Collection, Deposit, And Disbursement of College
and Grants Funds
– “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 of the Comptroller shall be designated by the
Comptroller in writing.
Board Policies
• Board Policy # 5630 - 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.
Definition of Cash
• Cash – Coins, currency, checks, money orders, credit
cards and cashier checks.
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
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 78502-9701
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.
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.
Cash Collection and Deposit Procedure
• 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
Cash Collection and Deposit Procedure
(continuation)
• Preparing the Cash Receipt
– Departments receiving funds
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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.
– 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.
• Voids
• Must be maintained in sequential order and approved by a
supervisor.
Cash Collection and Deposit Procedure
(continuation)
• 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.
Cash Collection and Deposit Procedure
(continuation)
• Credit Card Payments
– Credit Card information is very sensitive and it should not be
maintained by the department.
– Acceptance of Visa/MasterCard/Discover requires preapproval by the Business Office.
– The department may arrange with the Cashiers Office to have
the credit card payments taken by telephone.
Cash Collection and Deposit Procedure
(continuation)
• Cashiers’ Office Receipts
– Issue to the person making the department deposit.
• Person making the deposit should returned receipt to the
department.
• Timely Review of Accounts
– Financial Manager
• Review accounts monthly – assure that all accounts were
receipted and accurately deposited.
Shortages and Overages
• Immediately report any balancing discrepancies in the
amount of $25.00 or more to the Bursar.
• Discrepancies will be investigated.
Internal Controls
• Principles of good cash handling
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Proper segregation of duties – different individual
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Receiving of cash
Depositing of cash
Reconciliation
Adequate safeguards for handling, transporting, and
storing cash
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Cash kept overnight must be secure
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Safe, locked desk or cabinet in a locked office
Promptly depositing cash at the Cashier’s Office
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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.
Internal Controls (continuation)
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Education Code §51.003-(b)
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“Funds that are to be deposited in the depository bank or banks
must be deposited within seven days from the date of
collection.”
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Independent reconciliation of deposit documents to the
Banner statement of accounts.
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Management oversight and review.
Change and Petty Cash Funds
• Request must be by Financial Manager to Comptroller
• A memo/email should contain the following:
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Intended use of the fund
Amount requested
Length of time funds will be needed
Custodian of the fund
Custodians must follow additional change and petty
cash fund procedures.
Change and Petty Cash Fund (continuation)
• Procedures
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Custodian must be designated in writing by the Financial
Manager.
Custodian must received training.
Funds must be kept in a secure place, never left unattended.
Funds should only be accessible to the official custodian or
an alternate.
The funds can not be use for financing IOU’s, loans,
accounts receivable, or cashing personal checks.
Personal use is prohibited.
Personal/private funds should not be commingled.
Cash funds must reconcile at all times.
Sales tax will not be reimbursed.
Change and Petty Cash Fund(continuation)
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.
Source: STC Web Page
• http://finance.southtexascollege.edu/businessoffice/pro
cedures.html
– Business Office Web Site
• Procedures & Forms
– Business Office Forms
» Departmental Cash Handling Procedure
To request training contact:
Maria (Sussy) Palomo
(956)872-6451
MDPALOMO@SOUTHTEXASCOLLEGE.EDU