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  1. 1. SECTION: Treasury SUBJECT: Cash Handling Process – Cash and Checks Documented Procedures APPLIES TO: Receiving, depositing and reconciling cash and checks NOTE: Changes for FY2010 are identified in red text Cash Handling (cash and checks) Overview The objective of the Cash Handling process is to ensure that all funds are received, deposited and reconciled in a timely, accurate and well controlled manner. Cash Handling Process Activity Responsibility Reference/Comments RECEIVING CASH & CHECKS The following positions are authorized to [insert appropriate Positions responsible for receiving funds receive cash/checks for the [insert name of person(s)/position(s)] should not be responsible for depositing funds school/college/unit/department] as Admin. Accountant, and should not have any responsibilities determined by [insert appropriate A/R Clerk, etc. related to billing. person/position] (Lead Budget Administrator, Director of Administration, etc). All authorized cash handlers should The MyLINC course number for the Cash receive proper cash handling training and Handling Course is TME103. certification prior to receiving cash/checks. The [insert name of school/college/unit/ department] may receive funds for a variety of purposes including (but not limited to): [insert examples that may apply to your school/college/unit/dept.] Goods/services provided Employee reimbursements (i.e. P- Card, telephone, etc.) Conference fees Donor gifts Count all funds received for each [insert appropriate If a check is received that does not belong to transaction. person(s)/position(s)] your department, ensure it gets to the proper A/R Clerk, Cashier, destination in a timely and secure fashion. etc. If unable to determine where the check should Page 1 of 9
  2. 2. go, contact bankingservices@umich.edu for assistance locating the proper destination. Obtain approval by a higher level of [insert appropriate Write-offs and adjustments must also be authority for all refunds. person(s)/position(s)] approved by a higher level of authority. A/R Clerk, Cashier, etc. Review and approve refunds, write-offs [insert appropriate and/or adjustments. person(s)/position(s)] Supervisor, Senior Manager, etc. For transactions where amount is known, [insert appropriate When using a cash register or cash drawer, ensure the amount received or refunded person(s)/position(s)] ensure only one person has access to it during equals the anticipated amount by A/R Clerk, Cashier, a shift / business cycle. comparing funds received to the invoice, etc. To ensure single accountability, conference fee, P-Card statement, etc. reconcile/balance the register/drawer between shifts and have an independent person confirm it by initialing and dating it. Review funds received to ensure they are [insert appropriate Refer to Preparing & Making Deposits Quick U.S. funds only – no foreign currency or person(s)/position(s)] Reference – page 4 for tips on identifying checks drawn on foreign banks. A/R Clerk, Cashier, foreign currency. etc. Review checks to ensure they are payable [insert appropriate If check is not correctly written, contact the to the Regents of the University of person(s)/position(s)] check issuer; make arrangements to return Michigan or UMHS and not to individual A/R Clerk, Cashier, check, and ask them to issue new check faculty or staff members. etc. payable to Regents of the University of Michigan. In some cases, if check is made out to an individual (professor, doctor, etc.), the individual may endorse the check and write “payable to Regents of the University of Michigan.” Restrictively endorse all checks using the [insert appropriate Instructions and forms for ordering Treasury- U of M Treasury-issued rubber person(s)/position(s)] issued deposit supplies are available on the endorsement stamp. A/R Clerk, Cashier, Treasury Management website. etc. Page 2 of 9
  3. 3. If necessary, issue a pre-numbered receipt [insert appropriate Receipts are encouraged for all transactions. for funds received and retain a copy of the person(s)/position(s)] receipt for balancing purposes A/R Clerk, Cashier, All receipts should be traceable to the etc. individual who issued the receipt. In the case of Development Funds, the Development Office will issue a receipt but a log of funds received should still be maintained by the unit. Record funds received into a daily log [insert appropriate Entry should include: date, amount, payer, detailing each transaction if a pre- person(s)/position(s)] purpose, type of payment, etc. numbered receipt is not given. A/R Clerk, Cashier, etc. Secure cash and checks by placing them in [insert appropriate Only department supervisors and authorized a locked [insert appropriate secure place person(s)/position(s)] personnel have access to the secure place (i.e. (i.e. cash register, safe, cash box)]. A/R Clerk, Cashier, safe or cash box). etc. Funds received should not be used to make The [safe, cash box, drawer etc.] is purchases, cash personal checks, issue continually visible to authorized “IOU’s”, or retained for making change. department employees. (where applicable) The combination is changed [insert frequency (i.e. monthly, semi-annually, etc.) at a minimum when employees transfer or are terminated]. (where applicable) Keys to the [safe, cash box, drawer etc.] are kept in a secure, secret place. Only the following individuals have access to the keys: [insert appropriate person(s)/position(s)] DEPOSITING CASH & CHECKS Positions responsible for depositing funds The following positions are authorized to [insert appropriate should not be responsible for receiving funds deposit cash and checks for the [insert person(s)/position(s)] or performing reconciliation. name of school/college/unit/department] Admin. Accountant, as determined by [insert appropriate A/R Clerk, etc. person/position] (Lead Budget Administrator, Director of Administration, etc). ---OR---(if applicable) The [insert name of school/college/unit/ department] makes deposits on behalf of the [insert name of your school/college/ unit/department] Page 3 of 9
  4. 4. All authorized depositors should receive Information on both classroom-based and proper depository training and web-based depository training classes is certification prior to depositing available on the Treasury Management cash/checks. website. For Health System units not yet converted, Or contact them at: applicable training should be given. TreasuryTraining@umich.edu (not applicable to those units not making their own deposits) Obtain funds and pre-numbered receipts Depositor and/or daily receipt log from A/R Clerk, Cashier, etc. Verify that funds received balance to the Depositor Balancing of funds received should not be pre-numbered receipts issued and/or the performed by the individual(s) receiving daily transaction log (as well as funds unless supervised by a higher level goods/services provided, A/R updates, P- authority. Card statement, cash register Z-tapes, etc. where possible) When discrepancies are noted/identified, each transaction should be checked by date, payer/payee, payment/refund amount, and receipt number. Verify that all pre-numbered receipts are Depositor accounted for. Record balances so they can later be Depositor reconciled with deposit amounts. Prepare the cash/checks for deposit. Depositor Refer to Preparing & Making Deposits Quick Reference – page 1 or Section 2 in the Depository Training Guide for instructions on preparing cash & coin, checks, and bulk coin for deposit. For Development Funds, follow the Development depository process. Any cash gifts should be deposited, checks are to be forwarded to the Development Office through a Development Office gift drop box. Complete the currency/coin and/or checks Depositor Refer to Preparing & Making Deposits Quick portion of the deposit ticket(s) with the Reference – page 5 or Section 2 in the appropriate amounts – all funds received Depository Training Guide for instructions on should be deposited. preparing the deposit ticket for cash & coin, checks, and bulk coin. Page 4 of 9
  5. 5. Place the total funds (consistent with the Depositor Checks must be deposited separately from deposit ticket amount) into the proper cash deposits when using a deposit station or deposit bag and insert the deposit ticket armored car service (cash/coin bags can be into the clear outer pouch on the back of used for both cash and checks at a bank the bag. branch). For checks, be sure to include a calculator tape listing the amount of each check and a total. Create a Cash Receipt Ticket (CRT) if Depositor Access online CRT application through necessary (i.e. need for additional Wolverine Access  University Business  Chartfields other than the default) to Treasury Management  Cash Receipt Ticket ensure all funds are being allocated to the proper accounts. Refer to Section 3 of the Depository Training Guide for detailed instructions on how to create a CRT. For further assistance, see the Create an Online Cash Receipt Ticket simulation. Review and approval should be performed by Review chartfield allocations to ensure Approver, someone who is not doing the deposit and each deposit is posted in the correct Supervisor, etc. who would be in the position of authority to General Ledger account. Intial/sign. confirm that chartfield allocations are (originally part of “Accounting & accurate and appropriate. It should also not Reconciliation” section) be performed by a direct report of the person preparing the deposit. Ensure all funds are being deposited into Depositor For assistance w/determining the appropriate the proper expense or revenue account. G/L account, contact your unit’s FinOps Coordinator, [insert FinOps Coordinator name, phone number and/or email address]. Ensure all funds are being deposited into a Depositor All bank accounts used for depository Treasury authorized University account. purposes must be established in a manner consistent with SPG 519.01, and the University Treasurer must be an authorized signer on the account. Page 5 of 9
  6. 6. Maintain a record of all deposits and Depositor Record details such as “who” gave the deposit deposit information for reconciliation to “whom”, date, time, bag serial number (if purposes. applicable), amount, delivery method, etc. ---OR---(if applicable) Maintain a record of all deposits given to the [insert name of school/college/unit/ department] who makes deposits on behalf of the [insert name of your school/college/ unit/department] Secure the deposit so that funds are not Depositor lost or comingled with other funds. Store deposit in a locked [insert Depositor Only department supervisors and authorized appropriate secure place (i.e. safe, cash personnel have access to the secure place (i.e. box, drawer)] until deposit is made. safe or cash box). The [safe, cash box, drawer etc.] is continually visible to authorized department employees and the combination is changed on a regular basis. Keys to the [safe, cash box, drawer etc.] are kept in a secure, secret place. Deposit funds Depositor All funds collected by any unit or department of the University must be deposited into a [select Unit’s deposit method] University account on the date of collection. At a University depository bank Where this is impractical and where the total branch deposit is less than $500, the deposit may be made within one business day of collection. By using a Treasury approved The Treasurer’s Office must approve any armored car service or Treasury exceptions to this policy. approved courier Through an automated deposit While in transit to point of deposit, deposit station contents and/or deposit bag should be Through the Hospital Cashier’s concealed from the view by others. Office Refer to Section 5 of the Depository Training Guide for detailed instructions and additional guidance on how deposits should be made. For Development Funds, follow the Development depository process. Any cash gifts should be deposited, checks are to be forwarded to the Development Office through Page 6 of 9
  7. 7. a Development Office gift drop box. For more information on special depository situations, see Section 2.5 in the Depository Training Guide. Receive acknowledgment of deposit Depositor made: [select Unit’s method] Receipt detailing the amount, date and account from the bank teller when depositing at a University depository branch A signed acknowledgment of receipt detailing the deposit bag serial number(s) from armored car/ courier personnel Receipt detailing the deposit bag serial number and date of deposit from the automated deposit station Acknowledgement (i.e. receipt, email, etc.) detailing date, amount and recipient from the department making the deposits (where possible) ACCOUNTING & RECONCILIATION Verify weekly deposit activity using SOA Reconciler Refer to the Run the FN03 JrnDetail Report Business Objects report FN03 JrnDetail in Business Objects Step-by-Step Procedure Location Deposit Activity.rep or Section 6.1 of the Depository Training Guide for detailed instructions on how to access this report. Review and approval should be performed by Review chartfield allocations to ensure SOA Reconciler someone who is not doing the deposit and each deposit is posted in the correct G/L who would be in the position of authority to account. Intial/sign. confirm that chartfield allocations are (moved to “Depositing Cash & Checks” accurate and appropriate. It should also not section) be performed by a direct report of the person preparing the deposit. Page 7 of 9
  8. 8. Reconcile SOA to ensure all current SOA Reconciler Person performing reconciliation should not period deposit activity is accurately be the individual making the deposits. reflected on the SOA by comparing it to For more information on reconciling deposits CRT confirmation pages, ticket book to the SOA, see Section 6.2 of the Depository copies, etc. Initial and date. Maintain Training Guide. proper evidence of reconciliation. For discrepancies, each deposit should be SOA Reconciler If a discrepancy is detected and cannot be checked by date, amount, deposit method, resolved, call the Bank of America Vault and account allocation. customer service number, representative at 1- 888-841-8159 1-800-446-0768, option 2 4, Reallocate funds thru a JE if deposit is not extension 24177, for further assistance. If the allocated correctly and take appropriate source of the discrepancy cannot be steps to ensure future allocations are determined working with Bank of America, correct. contact Banking Services in Financial Operations at 647-3784 BankingServices@umich.edu. MONITORING & OVERSIGHT On a periodic basis, compare planned Approver, Unit budgets to actual and trends over time to Administrator, etc. ensure reasonableness and appropriateness. On a periodic basis, use the standard Cash Approver, Unit Reports can be found in M-Reports under the Handling reports provided to monitor the Administrator, etc. Internal Controls menu within the FIN. following: MGMT tab. All certified depositors in unit and The title of the reports are: their activity Deposit Locations by DeptID or Discrepancy trends DeptGrp Deposit Discrepancy by DeptID or DeptGrp Reports are currently under development Other related information: Key Contacts: Treasury@umich.edu or (734) 763-1299 Related Standard Practice Guides: See SPG 519.01 for banking and treasury services related policies See SPG 519.03 for cash management and deposit related policies Page 8 of 9
  9. 9. Record of Revisions: Date of Issue Description of Change Page(s) Approved By Affected 6/10/2009 Original template created All [insert name] 10/19/2009 Updates made for FY2010 Certification 1,5,7,8 Document Owner: [insert name], [insert title] Administrative Owner: [insert name], [insert title] Page 9 of 9

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