Transcript Cash Handling Training - Business & Financial Services

UCSB
Neil Clark
Office of the Controller
March 2014
Goals
 What you should get out of the training
 An understanding of the UCSB cash handling process
 An understanding of the key controls in the UCSB cash
handling process
 Understanding of your responsibility as a Campus Cash
Handler
 Campus Resources
Topics
 What the training will cover
 The various forms of cash payments
 A review of the three types of Cash Handlers as defined
by BUS-49
 A review of BUS-49 policy areas, and cash handling
activities
 General guidelines for Petty Cash and Change Fund
custodians
 Principles of good cash handling and their application
in daily cashiering activities
Stewardship
Stewardship
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.
Why is the Proper Handling of Cash
Important to UCSB?
 Public Trust
 Taxpayer Dollars
 Stakeholders
 Donors
 Funding Agencies
 Parents
 Students
 Employees
What are the Consequences of Improper
Cash Handling?
 Public Image
 Loss of Funding
 Department Reputation
 Criminal or Civil Investigation
 Cost of Investigation
Terminology
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 cash
 Defining Cash Handlers and Fund Custodians
 Cash Handling Roles
What is considered “cash”
 Currency and Coin
 Cash Equivalents
 Money Orders
 Travelers Checks
 Cashiers and Certified Checks
 ACH Payments and Wire Transfers
 Credit and Debit Cards
 Securities (Easily transferable to $) such as Parking
Permits, Stamps, Tokens, Meal Tickets
What 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
What 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
What 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.
Cash Flow
Custodian
 A person who has been assigned responsibility for
administering either a petty cash or change fund
 The 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.
5 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
5 Steps of Cash Handling
 Step 2 – Prepare Deposit
 Prepare a deposit form as soon as total of cash and cash
equivalents meet or exceed $500
 Practice dual custody
 Balance receipts to cash
 Keep backups of deposit forms
5 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 custody
 Deposits > $2,500 employees should be escorted by a
Campus Security or Police Officer.
 Step 4 - Reconcile deposits
 Balance to General Ledger report at month end
 Step 5 - Report losses
 Report losses to supervisor
Cash 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 Recorded
 Cash Deposited
 Shortages or Overages
 Supporting Documentation (including cash register
audit tapes, as applicable)
General Cash Handling Principles
 Business and Finance Bulletin BUS-49, the UC policy
related to cash handling, defines the four critical
policy activities:
Individual Accountability
 One person has sole responsibility for a fund.
 Protects the University and the Employee
 Access 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.
Accountability
Key Components
Funds
remain
secured
Transfers
are
documented
All trans.
identified to
a person
Safe
combos are
not shared
Passwords
are not
shared
Receipts to
each
customer
Keys are
secured
Cash drawer
to each
cashier
Background
checks are
performed
Separation of Duties
 More than one qualified person is involved in the key
activities related to the collection, handling,
depositing, and accounting processes for cash
received.
Cash Handling Roles Matrix
The matrices below shows appropriate separation of duties for cash handling roles for three person and two person
operations
Role
Handling
Cash
Individual #1
X
Individual
#2
Individual
#3
Preparing
Deposit
Making
Cash
Deposit
X
Comparing deposits to
GL
X
X
Role
Handling
Cash
Preparing
Deposit
Individual #1
X
X
Individual
#2
Reconciling
receipts to deposit
Reconciling
receipts to deposit
X
X
Making
Cash
Deposit
X
Comparing deposits to
GL
X
Dual Custody
 Involving 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 work
 Reduces the opportunity for robbery and theft
 If loss does occur, protects cash handlers from
unwarranted suspicion
Physical Security
Per BUS-49:
 Individuals who handle cash and cash equivalents are
protected from physical harm
 Cash 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.
Physical 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.
Physical 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.
Physical 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.
Physical Security
Key Components
Assets are
properly
stored
Alarm syst.
alerts police
dept.
Cash
counting not
visible
Background
checks
performed
Shortages/
overages are
reported
Keys are
secured
Safe
combos are
changed
2nd
employee
present
Deposits are
timely
Deposits
protected
while in
transit
Reconciliation
 Cash 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.
Reconciliation
Reconciliation involves the following three levels of personnel:
 Level 1 – Cashier / Sub Cashier
 Reconciles daily receipts by cross balancing the funds collected
against the cash register totals, the receipts issued, and deposit
documents received
 Level 2 – Manager / Supervisor
 Reconciles 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 Office
 Reconciles deposits by Major Cashiering sites to UC bank accounts.
Petty Cash Fund
 Purpose: 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
Petty Cash Fund Procedures
Using the Fund
 All 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.
Petty Cash Fund Procedures
Reimbursement of the Fund
 Attach receipts to a Miscellaneous Form-5 Check
Request, submit to Business & Financial Services
 Use the Petty Cash Reimbursement Form
 All receipts must be reimbursed by June 30 for fiscal
closing
Petty Cash Fund Procedures
Transferring Custodianship
 Formal documentation
 Send copy of transfer information to Business &
Financial Services (BFS)
Returning the Fund
 Reimburse all outstanding receipts
 Prepare Deposit and Recording Advice (DARA)
 Take DARA and fund to Cashiers Office
 Send copy of DARA to BFS
Petty 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.
 Procedures
 Attach original receipts to the form
 Obtain authorized signature
 Make a copy for department records
 Take original to Cashiers Office
Change Fund
 Purpose: 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
Change Fund Procedures
Setting up the Fund
 Submit 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.
Change Fund Procedures
Transferring Custodianship
 Formal documentation
 Send copy of transfer information to BFS.
Returning the Fund
 Prepare Deposit and Recording Advice (DARA)
 Take DARA and fund to Cashiers Office
 Send copy of DARA to BFS
Change Fund Procedures
Using the Fund
 No 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
Change Fund Key Points
 Fund should not be used for expenditures
 Fund should not be combined with petty cash
 More than one person should not have access to the
fund
 Transfers of fund should be documented
 Overages/Shortages should not be cleared through the
fund.
Petty Cash and Change Fund
4 Critical Policy Activities
 Accountability
 Custodians 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.
Petty Cash and Change Fund
4 Critical Policy Activities
 Separation of Duties
 The 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.
Petty Cash and Change Fund
4 Critical Policy Activities
 Reconciliation
 The custodian should regularly ensure that the amount
of the fund (cash and receipts) remains intact.
 Physical Security
 The 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.
Audit of Funds
 Audits may be performed by either Business &
Financial Services or Audit and Advisory Services
 Audits 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.
Resources
 Policy
 UC Business and Finance Bulletin, BUS-49: Policy for Cash
and Cash Equivalents Received
 UCSB Policy 5250: Change Funds
 UCSB Policy 5255: Petty Cash Funds
 Neil Clark, Campus Cash Handling Coordinator
 X7667 or [email protected].
 Jonelle Miller, Acting Credit Card Coordinator
 X3959 or [email protected]
 Tracy Coy, Cashier Manager
 X2177 or [email protected].
 Audit and Advisory Services
Questions?