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Cash Handling Handbook

Introduction

The purpose of this handbook is to establish and document the flow of cash and cash receipts, and provide guidelines for the proper management of monies for those employees responsible for receiving, handling, and safeguarding cash and cash equivalents.

The custodian of every cash fund is responsible for the integrity of the cash fund. Employees should understand their accountability for all monies which are the property of the State.

These policies and guidelines are for the protection not only of the State monies, but also those employees charged with cash handling.

Definition: "Monies" - money in any form including currency (coins and bills), check, wire transfer, credit card charge, ACH (direct deposit), other electronic funds transfers, etc. Also referred to as cash or cash receipts.

Table of Contents

Cash Handling General Policy

Purpose: Provide direction for campus departments in the collection, custody, and reporting of monies, and outline specific cash handling procedures for department use.

Persons/Areas Affected: All campus departments receiving cash and cash equivalent payments.

Policy:

  • All incoming monies should be acknowledged by receipt when accepted or received by mail, and forwarded to the OSU Cashier's Office for processing within one business day, using the OSU Cash Receipts Record form to indicate where the funds should be deposited.
  • Monies should never be unattended. This applies to cash registers, desk tops, and cash drawers. If an employee leaves his or her work station for any reason, regardless of how briefly, cash must be appropriately secured in a locked place.
  • Unauthorized persons should not be allowed in areas where cash is handled.
  • Doors should be locked at all times in areas where cash is handled.
  • Large sums of cash should be counted and handled out of sight of the general public.
  • Individuals should keep working cash funds to a minimum at all times. Excess funds should be in a locked device or deposited in the Cashier's Office.
  • Cash received must not be used for making change, petty cash purposes, etc. Expenditures or refunds cannot be made from cash receipts.
  • For overnight storage and during other periods when cash is not being used, it should be kept in a safekeeping device, either a safe or locked container.
  • Under no circumstances should an individual keep University cash with their own personal funds, deposit University funds in a personal bank account or take University funds to one's home for safekeeping.

Responsibility of campus departments:

  • Ensure appropriate stewardship of public funds.
  • Protect employees from risk by following policies and procedures.
  • Provide for the safekeeping and timely, accurate deposit of funds.

References:

  • Oregon Accounting Manual See Internal Controls, and Cash
  • Financial Accounting Standard Operating Manual, Section 100, regarding Depositing and Recording
  • Oregon Revised Statutes (ORS)
  • Oregon State Treasury Cash Management Manual

Deposits General Policy

Purpose: Provide direction for campus departments in the forwarding of monies to the Cashier's Office for recording in Banner, and outline specific procedures for department use.

Persons/Areas Affected: All campus departments receiving cash deposits and payments.

Policy:

  • Departments must deposit monies within one business day after collection or receipt of such monies.
  • The timely deposit of monies received provides for improved control of funds which reduces the risk of loss due to errors, carelessness, or theft.
  • Monies held overnight must be secured in some form of locking device, such as a safe or locking file cabinet.
  • All checks must be properly endorsed upon receipt.
  • Expenditures or refunds cannot be made from cash receipts.
  • Departments depositing gifts must follow outlined accounting procedures, and not commingle the monies with general or self-support monies.

Responsibilities: It is the responsibility of departments receiving any monies to:

  • Meet next-business-day deposit requirements.
  • Provide appropriate and accurate information when presenting deposits.
  • Safeguard deposits.

References:

  • Oregon Accounting Manual
  • Oregon Revised Statutes (ORS)

General Information

  • It is the policy of Oregon State University that departments handling cash shall comply with standards established in the State Accounting Manual, the Financial Accounting Standard Operating Manual (FASOM), and Oregon Revised Statutes (ORS).
  • Monies include currency, coins, checks, credit card settlement reports, and wire transfers. All incoming monies should be acknowledged when accepted, and forwarded to the OSU Cashier's Office for processing by using the OSU Cash Receipts Record form. For help completing the Cash Receipts Record form, refer to Preparing a Cash Receipt, on the OSU Cashier's Office website.
  • Monies may be payment for various charges, rebates, or refunds. For a complete list of revenue types, refer to sections 100 and 200 of FIS (Fiscal Operations Policies and Procedures Manual) at FASOM.
  • Departments holding workshops, conferences or issuing invoices that are not recorded as a part of an accounts receivable should notify the Cashiers office so that incoming checks and transfers can be readily identified for deposit to the proper fund/index/account.

Accepting Monies And Payments

Currency Payments

All currency received from walk-in customers is to be receipted immediately on sequentially prenumbered cash receipts or through a cash register. Currency should be counted in the presence of the person presenting it for payment. A copy of the receipt should be given to a walk-in customer. No foreign currency is ever accepted.

Check Payments

Checks of all types received in-person or through the mail, should be restrictively endorsed immediately. Walk-in customers should receive a pre-numbered written or cash register receipt. Documents enclosed with mail payments are to be date stamped by employee opening the mail. All checks made out to OSU must be deposited to OSU. For checks made out to OSU but intended as gifts or contributions, see Monies as Gift or Donation, below.

Every check or money order must be reviewed for completeness as follows:

  • Verify that Account holder's name, address, and phone number is included on the check. A daytime phone number is preferred.
  • Verify that the check has a bank name listed, and that the routing number, customer's bank account number, and check number are encoded on the bottom edge of the check.
  • Note the date. Do not accept a post dated check (a check with a date in the future), or agree to hold the check for future deposit.
  • Verify that amount written in numbers matches amount written in words. If different, make special note on the cash receipt so that the Cashier's Office can handle appropriately. In general, banks will honor the written amount over the numerical amount.

Conditions for Acceptance of Checks

There are several different categories of checks. They should all be handled as checks.

  • Cashier's Check: A check purchased at a bank for any amount; the bank completes all information on the face of the check with a bank officer signing as the maker.
  • Certified Check: A personal check that is written by the account holder and then stamped and signed by a bank officer on the front of the check.
  • Money Order: An item purchased at a bank, post office, or other business establishment for any amount up to $1,000.00. The bank completes only the amount information.
  • Traveler's Check: A special check supplied by banks or other companies for the use of travelers; these checks already bear the purchaser's signature and must be countersigned and dated in the cashier's presence.
  • Personal Check: A written order payable on demand, drawn on a bank by a depositor; a personal check is written against an individual's checking account as opposed to a cashier's check, certified check, money order, or traveler's check, all of which are written against bank funds.
  • Starter Check: A non-personalized encoded check that a person receives from a bank when they establish a checking account. These are for the person's use prior to receiving encoded checks from the bank. However, they should only be accepted if the bank has encoded the routing number and account number on the bottom of the check.
  • Foreign Check: A check written on a foreign bank. Even if the check amount is written with "USD" following it, it cannot not be paid in U.S. currency unless it states on the front of the check that it is payable through a U.S. bank. If a foreign check is accepted, make special note on the cash receipt so that the Cashier's Office can handle appropriately. (See also Foreign Currency and Checks)

Foreign Currency and Checks

Only US currency (coins and bills) is accepted. Checks drawn on foreign banks or issued in foreign currencies require special processing by the OSU Cashier's Office, and the State Treasury. Collection on such checks can take the Treasury several days or weeks to receive the funds. The initial deposit to the department's fund will be the amount reflected on the check, even though it is in a foreign currency. The Treasury will process the item and negotiate the exchange rate. Any exchange rate differences will be charged to the depositing department, as a reduction of the deposit (debit to revenue account listed on the original cash receipt).

Making Deposits

Safeguarding Monies

Departments receiving any monies are responsible for safekeeping and timely deposit. Departments should do the following:

  • Endorse checks with a restrictive endorsement immediately.
  • Deposit all monies with the Cashiers Office within one business day.
  • Deposits should be made more frequently if the department lacks secure safekeeping for holding funds.
  • All monies held overnight should be in a secure area.
  • If a department finds isolated events where it is unable to comply with the next business-day deposit requirement due to unusual circumstances beyond its control, it is encouraged that the department document the reasons for the occurrence and retain the documentation in department files, as this may prove beneficial to the department in the event of an audit.

Cash with Deposits

Guidelines for sending currency and coin to Cashier's Office for deposit:

  • Bills should be "faced" (all facing front and right-side up). This allows for more accurate recounts.
  • Bills should be sorted by denomination, and if the number of a denomination is enough, clipped or banded into the following bundle amounts:
    • Ones = 25 or $25
    • Fives = 20 or $100
    • Tens = 20 or $200
    • Twenties = 25 or $500
    • Fifties = 20 or $1,000
    • Hundreds = 10 or $1,000
  • Coin can be accepted rolled if in "shot gun" type rollers that ensure the exact count of the coin. Hand pinched rolls have to be recounted by the Cashier's Office. Please bundle tightly, or envelope, any bills and paperwork if sent in the same bag as coin.
  • If sending multiple bags as one deposit, the Cash Receipts Record must list the bags separately and the dollar amount included in each bag. If using numbered bag, please note the number on the Cash Receipts Record. This ensures that all cash can be accounted for with each deposit.

Deposit of Credit Card Batches

Credit card payments are completed when a batch settlement is transmitted. All credit card payments must be settled and submitted for deposit on a daily basis. A Settlement Report must accompany a completed Cash Receipts Record. The Settlement Report (goes by various names depending on the credit card reader or machine used for processing), is a summary of transactions for a specific date or date range, and lists the total number of transactions and the total dollar amount. Most Settlement Reports will subtotal by types of credit cards used, and by charges versus credits/refunds.

Deposits Made Directly to a Bank Branch

There are some departments that have been approved to deposit directly to a designated bank. Those departments use pre-encoded deposit slips. A copy of the deposit slip (yellow or pink or actual copy) is sent as back-up with a completed Cash Receipts Record to the Cashier's Office for processing and entry into Banner.

Guidelines for completing a bank deposit:

  • Date the deposit slip.
  • Note the department or Index on the deposit slip.
  • List coin and currency separately in area provided.
  • List checks, and include adding machine tape.
  • Sort all cash in front of checks, faced and in order of denomination.
  • Endorse all checks.
  • Include Traveler's checks with checks.

Accounting On The Cash Receipts Record Form

Monies as Income

Monies may be deposited to:

  • An operating fund by using an index and account code
    • The account code should be selected from the 0xxxxx series
  • A general ledger fund
    • The general ledger account code should be selected from the Axxxx (Asset) or Bxxxx (Liability) series.
  • See the Financial Administration Standard Operating Manual.

Monies as Gifts or Donations

A gift is defined as a donation other than an endowment with no legal consideration imposed by the donor, i.e., nothing is expected by the donor in return for the gift. Deposits to department gift accounts should consist of charitable donations made to the department. Donations made to a department, even if for general department use, are considered restricted funds. This money should not be commingled with general funds or self-support funds. These funds are spent in accordance with university regulations and must not be overdrawn.

OSU Foundation (OSUF) and Agriculture Research Foundation (ARF)

  • Checks issued by OSUF to OSU must be recorded in specified funds (FSxxxx, FExxxx, 438xxx, 8xxxxx or 9xxxxx).
  • Only Research Accounting deposits funds to FAxxxx.
  • Deposits from ARF to OSU must be recorded in FAxxxx funds.
  • Checks made out to OSU intended for OSUF or ARF
  • Deposits to OSUF and ARF are restricted to true gifts or proceeds from fund raising events in which the donor intends that the gift go to the foundation(s).
  • Gifts deposited into foundations must be payable to the foundations. If checks are made payable to OSU, they must be deposited directly with OSU. If there is evidence from the donor that the intent was to gift the monies to the OSUF or ARF, please contact those foundations for instructions.
  • For further information see the Grant, Contract, Gift Accounting Policy & Procedure Manual

Monies as a Reduction of Expense

Cash receipts which may be deposited as a reduction to expense are very limited. Vendor refunds may be the result of overpayment, returned prepayment, returned defective merchandise, credit for early payment, etc.

Deposits which result in credits to account codes beginning with 2xxxx through 4xxxx should:

  • Be credited to the fund and account code to which the original purchase was charged.
  • Show the invoice number and/or check number of the original payment or Accounts Payable approval for refund, rebate or overpayment.
  • If the refund is received prior to the original payment being recorded in Banner, account code should be 08001 or 08008.
  • Include in the description the reason (refund, overpayment).
  • Refunds of workshop/conference registrations:
    • Should be recorded using a 2xxxxx account code.
    • Include a copy of the original payment documentation as noted above.

Returned Items

Non-sufficient funds (NSF) checks are checks that are returned from the bank to Business Affairs, due to lack of funds in the individual account to cover the item. Business Affairs will route the check back to the bank a second time to attempt to recover the amount as written. If the check is returned to Business Affairs a second time, to record the lack of funds available for the department deposit, a JV will be processed to reverse the payment (debit to department revenue account). The item will then be forwarded to the depositing department for them to pursue as they see fit.

Definitions

Advices
notification regarding wire transfers, ACH transfers, and bank corrections.
Automated Clearing House (ACH)
an ACH transfer is an electronic item that is processed through the Automatic Clearing House established as a clearing and settlement facility for financial institutions. ACH transfers take 2 to 4 business days to reach their destination and can be recalled or returned for a variety of reasons.
Cash
currency; coins and bills. Also used for all cash equivalents such as checks. Often used in the plural: cash receipts or monies.
Cash receipts (used throughout this handbook)
money in any form: currency (coins and bills), check, wire transfer, credit card charge, ACH (direct deposit), other electronic funds transfers, etc.
Electronic funds transfer (EFT)
generic term for any movement of funds by non-paper means; can be an Automated Clearing House (ACH) or a wire transfer. All incoming EFT payments for the Oregon University System are processed through the Oregon State Treasury's Cash Management Branch.
Endorse/endorsement
the act of writing or stamping, usually upon the back, but sometimes on the face, of a check or other negotiable instrument, by which the funds or property therein are assigned and transferred.
Monies (used throughout this handbook)
money in any form: currency (coins and bills), check, wire transfer, credit card charge, ACH (direct deposit), other electronic funds transfers, etc.
Receipt
noun: A written acknowledgment that a sum of money or specified article has been received; the paper that provides the audit trail of the monies. The OSU Cash Receipts Record form.
verb: To give or write a receipt for money paid or goods or services delivered; to account for the transfer of cash.
Wire transfer
funds sent through the Federal Reserve Wire Network from one financial institution to another. They can only be recalled with the permission of the recipient. Wire transfers typically are used when large amounts are needed along with the ability to confirm receipt, and when international payments are made.

Additional Sources Of Information