FIN-016: Receiving and Depositing Cash & Other Monetary Instruments

Date: 12/13/2016 Status: Final
Policy Type: University
Oversight Executive: Vice President for Finance
Applies To: Academic Division and the College at Wise.
Reason for Policy:

The University of Virginia is committed to safeguarding University assets and has established requirements governing cash receipts and handling in order to reduce the risk of misappropriations.

Policy Summary:

The University discourages departments from collecting cash  and encourages, where practical, departments to accept credit cards or checks for payment. If accepting cash cannot be avoided, departments must establish appropriate internal controls in accordance with this policy. Each collection point may: have different requirements for receipting, use different numbers of employees, and deposit at different locations. Appropriate departmental fiscal personnel must perform all receipting, recording, and depositing of cash and other monetary instruments. Departments are advised to use remote deposit for checks, and the nearest bank location/night depository for cash/coin deposits whenever possible.

Definition of Terms in Statement:
  • Bank:

    The financial institutions that the University uses for commercial banking services.

  • Cash:

    Currency and coins.

  • Cashiering:

    The collection, recording, safekeeping, and deposit of cash and other monetary instruments.

  • Other Monetary Instruments:

    Checks and money orders.

  • Receipt:

    Documentation that shows vendor name, address, items purchased, cost, and date.

  • Remote Deposit:

    The process of using a desktop scanner that creates images of checks that can be deposited to a bank account without physically depositing at a bank branch or UVA Cashier’s Offices.

  • Segregation of Duties:

    The process of safeguarding assets by assigning the authorizing, recording, and reconciling of transactions to different individuals.  This practice assists in detecting errors, deterring improper activities, and mitigating collusion opportunities.

Policy Statement:

All University employees involved with the collection of cash and other monetary instruments must comply with the University’s requirements governing cash receipts and handling as set forth in this policy. Departments should avoid operations in which cash is accepted.  When accepting cash cannot be avoided, departments must establish appropriate internal controls and follow cash handling procedures. These controls must include proper segregation of duties, securing cash and other monetary instruments appropriately, and depositing in a secure and timely manner.

University employees involved in receipting must adhere to the following requirements:

  • All items received must be recorded immediately, entered into a receipt/deposit log, restrictively endorsed and deposited as follows:
    • Daily- aggregate items exceeding a $500 total must be deposited within 1 business day of receipt.
    • Weekly - a weekly deposit must be made, regardless of amount.
    • Monthly - on the last business day of the month, all receipts on-hand must be deposited, regardless of amount.
    • Deposits must be made to the nearest bank location/night depository or Cashiers Office.
    • Deposits consisting solely of checks must be remote deposited via desktop scanner (contact Office of the Treasurer for assistance).
  • Cash and other monetary instruments must be properly secured.  Proper security includes the use of a departmental safe, a locked file cabinet/desk, and/or cash box.
  • Departmental systems and procedures must provide adequate and appropriate controls over the receipt, storage, and deposit of cash and other monetary instruments.
  • Departments must conform to the guidelines and requirements detailed in University Policy IRM-017, Records Management.

Any requests for exceptions to this policy, e.g., less than $100 with adequate safekeeping facilities, must be referred to the Office of the University Comptroller. Certain situations, such as inability to meet deadlines for processing during peak workload periods may justify an extension of the depositing requirements and will be considered by the University Comptroller on an exception basis.

All cashiering operations are subject to review by internal and external auditors. Departments are required to show that all receipts are related to a deposit and all deposits are entered into the University’s Integrated System General Ledger.

  1. Safeguarding Cash and Other Monetary Instruments:
    Departments must:
    • Request and receive authorization from the Office of the Treasurer in order to physically deposit University funds directly to a bank. (See policy FIN-020, Establishing and Managing Bank, ATMs, and Other Financial Institution Accounts for University Funds.)
    • Utilize department-specific deposit slips that identify the depositing department by Locator Code on the Deposit Slip Magnetic Ink Character Recognition (MICR) Line and in the banking system.  The MICR Line is the string of 14 characters in a unique font that conveys the bank routing information.
    • Institute proper segregation of duties by assigning different people to cash handling, record keeping and reconciliations. If the size of the departmental staff makes proper separation of duties impossible, a second person must verify reconciliations of cash/clearing accounts.
    • Assign appropriate fiscal personnel to be responsible for the accurate collection, proper documentation, judicious safekeeping, and timely deposit of all receipts.
    • Not send currency and coin through messenger or U.S. mail.
    • Document the entire departmental procedure for handling cash and other monetary instruments for clarity and for training purposes.
  2. Implementing Receipt Controls:
    Departments must implement the following receipt controls for their collection location:
    • A receipt is issued for every item transaction with either a University-approved, pre-numbered receipt or a cash register-generated receipt. The receipt history cannot be altered.
    • Each cashiering drawer is restricted to only one employee at a time, and is balanced out prior to another employee gaining access.
    • All applicable forms are validated if a register is used. End-of-day close-out procedures are completed.
    • The supervisor reviews and documents approval of all entries, corrections, and “no-sale” entries.
    • Validated bank deposit slips are delivered to someone other than the cashier for review.
    • Sales tax is collected and reported as appropriate.
    • Overages and shortages are monitored to identify possible problems.
    • University funds are deposited only into authorized University bank accounts or to bank accounts of a vendor, where a vendor service agreement exists.
    • Deposits are remote deposited, or delivered directly to the nearest bank location/night depository or to the Cashiers Office in a timely manner.  Intermediate stops, overnight layovers, and taking deposits home for next morning deposit are not allowed. [Note: The employee depositing funds should request to be accompanied by an additional employee if they are uncomfortable in making the deposit alone, especially if the deposit consists of cash/currency/coin.]
Procedures:

Procedure 5-5, Preparation of Direct Bank Deposits
Procedure 5-6, Preparation of Central Cashier Deposits
Procedure 5-10, Completing Sales Tax Worksheet

Related Information:

Policy FIN-005, Extension and Collection of Credit
Policy FIN-020, Establishing and Managing Bank, ATMs, and Other Financial Institution Accounts for University Funds

Policy FIN-021, Internal Control

Policy FIN-032, Collecting, Reporting, and Remitting Virginia Sales Tax

Policy FIN-039, Obtaining a Cash Advance

Policy FIN-042, Managing Change Funds

Policy IRM-017, Records Management

Policy V.A.2, Rate Determination

Major Category: Finance and Business Operations
Next Scheduled Review: 12/13/2019
Approved by, Date: Policy Review Committee, 12/02/2016
Supersedes (previous policy):
II.E.4, Controlling Cash Items; V.B.1, Cashiering Activities.