4-OP-D-2-B Cash Management | Policies and Procedures

Responsible Executive: Finance and Administration

Approving Official: Vice President for Finance and Administration

Effective Date: January 1, 2014

Last Revision Date: May 15, 2018 (formatting only)

INTRODUCTION
1. OBJECTIVE
  1. The purpose of this policy is to provide guidance to help ensure the accountability and safeguarding of University cash and cash equivalents. Department heads and managers of units that collect University funds remain primarily responsible for ensuring that adequate control procedures have been put in place and maintained to secure collections and change funds. This policy has been established to provide a framework for guidance and coordination in this area and for establishing minimum control standards relative to cash handling.
2. DEFINITIONS
  1. Cash – For purposes of this policy cash is defined to include coin, currency, checks, money orders, credit and debit cards, and electronic funds transfers (ACH and Wires).
  2. Cash Collection Point – A cash collection point is defined as a department, event, club or other entity which collects more than $5,000 annually, with the exception of those entities whose collections occur infrequently and are for the recovery of expenditures such as telephone, copies, etc. All Cash Collection Points must be authorized by the Controller's Office before collections begin.
  3. Internal Controls – Internal controls generally comprise all the coordinate methods and measures adopted within a business to safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies. For purposes of this policy the emphasis on controls will generally be related to the methods and practices necessary to ensure the safeguarding of University cash collections and change funds. The establishment of internal controls for cash collections is necessary to prevent mishandling of funds and to safeguard against loss. Strong internal controls are also designed to protect employees by defining responsibilities in the cash handling process.
POLICY
1. CASH COLLECTION POINT
  1. Any department or unit collecting cash on a regular basis is required to obtain written authorization from the Controller’s Office before becoming a Cash Collection Point. A Cash Collection Point Application (TM-01) should be submitted to the Controller's Office at least four weeks prior to the start of the collection date. Once approved departments or units will need to be re-authorized as Cash Collection Points every three years.
  2. Only those departments or units that can demonstrate the ability to establish appropriate control procedures and comply with prescribed cash handling guidelines will be approved as Cash Collection Points. Departments or units functioning as a Cash Collection Point without receiving the required authorization by the Controller's Office incur the risk of losing budgetary spending authority for the funds collected, in addition to the possibility of incurring other appropriate disciplinary action. Any significant changes within a Cash Collection Point relating to personnel duties or procedures should be brought to the attention of the Controller's Office.
  3. The Controller's Office periodically reviews Cash Collection Points and may request that employees of the areas attend periodic training. In addition, the University Office of Inspector General Services and the State Auditor General's Office routinely conduct audits of Cash Collection Points. Failure to follow appropriate procedures may result in audit criticism and the loss of authority to serve as an authorized Cash Collection Point.
2. GENERAL INTERNAL CONTROL REQUIREMENTS
  1. It is recognized that no one control model effectively or efficiently fits the needs of all cash collection areas. However, there are certain standard control procedures that are expected to be in place, unless there is a demonstrated and justifiable reason for not doing so. In such cases, there would be an expectation that alternative or compensating control procedures be put in place. The standard control procedures generally expected to be established at each Cash Collection Point are as follows:
    1. For collections received in person, proper receipting devices should be used (cash registers, cashiering terminals, and pre-numbered receipt forms).
      1. Funds should be receipted at the initial point of collection and all customers should be provided a receipt or cash register tape.
      2. Cash registers should have appropriate control features and the operator should not have the ability to reset totals.
      3. Only official University receipt forms obtained from the UPS Store at Oglesby Union may be used unless an exception is granted by the Controller's Office.
      4. Unused pre-numbered receipt forms should be adequately secured and accounted for. The individual receipting the cash and issuing the individual receipt forms should sign for the pre-numbered receipt forms that he or she had been assigned to use.
      5. If official University receipt forms are no longer needed, they should be delivered to the Controller's Office, Treasury Management, UCA6315, for proper disposal.
      6. Voided receipts or transactions should generally be approved by supervisory personnel. All copies of the voided receipt form should be retained.
      7. Collections received through the mail should be receipted or logged and restrictively endorsed at the earliest point in the collection process. These receipts or logs should subsequently be compared with the deposit and collections recorded.
    2. Cash handling duties should be assigned so that collections, deposit preparation, and reconciliations are assigned to different employees. In addition, employees who handle cash should not be assigned duties for creating invoices or updating accounts receivable records or general ledger records.
    3. Different employees should not work simultaneously out of the same cash drawer and whenever funds are transferred among employees, responsibility should be fixed through some receipting mechanism.
    4. Deposits should generally be made daily. Exceptions may be made when collections of currency and coins are under $100 or checks and money orders total less than $500. However, no collections should be held more than five business days before being deposited. Debit or credit card payments should be settled daily with Student Business Services.
    5. Cash collections and change funds should be adequately secured at all times. Cash drawers should be locked when a cashier must be away from his or her workstation. Safe combinations should be changed whenever staffing changes occur among those that know the combination.
    6. Persons with assigned cash handling responsibilities should be provided clear written departmental procedures regarding their responsibilities for the handling and control of cash collections or change funds.
    7. Personal loans or the cashing of personal checks from cash collections or change funds is prohibited.
    8. Police background checks must be performed on any employees who will have cash handling responsibilities.
3. PAYMENTS RECEIVED BY CHECK
  1. Checks received should be made payable to Florida State University (FSU).
  2. The identity of the individual presenting a check in person should be validated.
    1. For checks received from University students, faculty or staff the following information should be recorded on the check:
      - Full name
      - Residence address
      - Home Phone number
      - Last eight digits of their FSU Card number
    2. For checks received from individuals other than University students, faculty or staff, validation may be performed by either:
      1. Reviewing a driver’s license or state identification, specifying the state of issuance of the presenter, and recording the identification number on the check;
      2. OR
      3. Recording the following information regarding the identity of the presenter on the check (Ref. 832.07(2) (b), F.S.):
        Full name
        
        Residence address
        
        Home phone number
        
        Business phone number
        
        Place of employment
        
        Gender
        
        Date of birth
        
        Height
  3. Refer to the Returned Check List Query provided by the Controller's Office to determine if individuals have previously tendered a dishonored check. Checks should not be accepted from individuals on this list.
  4. Checks should be restrictively endorsed immediately upon receipt. Restrictive endorsement stamps should be obtained from Student Business Services.
4. PAYMENTS RECEIVED BY ELECTRONIC FUNDS TRANSFER (EFT) ACH OR WIRE TRANSFER
  1. Departments must request permission from the Controller’s Office for an agency to electronically transfer payments into the University’s bank account. The Controller’s Office will provide the customer with the necessary banking information. Prior to each receipt, departments must provide the Controller’s Office with a completed Notice of Expected Electronic Transmission Form (ET3031), or if you have multiple transmissions select this form here. This will facilitate the tracking of the incoming payment and will result in the proper recording of the funds.
5. PAYMENTS RECEIVED BY CREDIT AND/OR DEBIT CARDS
  1. Arrangements to accept credit and/or debit card payments should be made through the Controller's Office. See Payment Card Policy (4-OP-D-2-G)
6. PREPARING AND TRANSMITTING DEPOSITS
  1. Daily sales reports should be prepared and overages and shortages appropriately noted. Deposits should be made intact and agree with the totals of the daily sales reports.
  2. The deposit is to be forwarded to Student Business Services or, if armored car service is available, directly to the bank. Deposits should not be transmitted to Student Business Services through campus mail. Departments should ensure that appropriate security is provided when deposits are transported across campus or from off-campus sites.
  3. Departments not processing deposits directly in the cashiering system must submit a University Revenue Deposit Form (DT118) to Student Business Services regardless of how the deposit is routed to the bank. Individuals delivering deposits to Student Business Services should obtain a validated receipt at the time the deposit is delivered.
  4. Credit and debit card collections are to be transmitted daily. A copy of the summary total report along with a University Revenue Deposit form should be forwarded to Student Business Services within two business days of transmittal.
7. AUTHORIZATION TO ESTABLISH A PETTY CASH OR CHANGE FUND
  1. A Petty Cash Fund provides departments flexibility to complete minor business cash transactions as part of their daily operations. A Change Fund is a cash advance that is issued to provide change for cashier functions. To request a Petty Cash or Change Fund a department should provide the Controller’s Office-Disbursement Services with a complete Request for Employee Advance Form (FA252).
8. SALES AND UNRELATED BUSINESS INCOME TAXES
  1. University departments or related entities should be aware that the sale of certain goods or services may be subject to State sales tax and/or Federal Unrelated Business Income Taxes (UBIT). Concerns or questions regarding tax issues should be addressed to the Tax Administrator within the Controller's Office.
9. BANK ACCOUNTS
  1. All University funds are required to be deposited through appropriate University bank accounts. The University Controller has responsibility for provision of banking services for the University. Accordingly, bank accounts in the name of Florida State University or accounts using the University’s tax id number can only be established by the University Controller. University departments should never open an account with a bank or credit union without the expressed written authorization from the University Controller.
LEGAL SUPPORT, JUSTIFICATION, AND REVIEW OF THIS POLICY
- This policy shall be reviewed by the Associate Vice President for Finance & Administration (AVP) every seven years for its effectiveness. The AVP shall make recommendations to the Vice President for Finance and Administration for any modification or elimination.