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Policy 4305

Funds Handling and Deposit Procedures

I. Purpose

The purpose of this policy is to establish a responsible system for handling institutional funds, to include the establishment, maintenance and elimination of change fund accounts.

II. Definition

  1. Cash Items: Coins, currency, and checks.
  2. Change Fund: A set amount of money used by a department to make change for customers who are purchasing goods or services. The selling of such goods or services must have been previously approved through appropriate channels.
  3. Custodian: The department employee who is appointed to operate and maintain the change fund.

III. Policy For State and Local Funds

  1. It is the University's policy to minimize the number of departments collecting cash items. Any cash collection location must be approved by the Director of Cashiering and Student Accounts (CSA). Written procedures must be established by each designated cash collection department.
    1. Exceptions: These procedures must be followed in all circumstances, unless the department has requested and been granted permission in writing from the Director of CSA to change or modify them.
    2. Review: All cash operations are subject to review by the institution's internal and external auditors. Departments should ensure that all receipts can be tied to a transmittal and that all transmittals can be traced to an entry on the University's accounting system.
    3. Banking Arrangements: All University banking arrangements, including acceptance of debit and credit cards, are established by the Office of Cashiering and the Director of Financial Operations and Materiel Management. Departments processing credit/debit card transactions must do so in accordance with Credit and Debit Card Security Policy #1015. Bank accounts may not be established in the University's name, i.e. Longwood University, or any derivative thereof. Additionally, accounts cannot use the University's Federal ID Number.
  2. Cash Handling:

    Departmental collections must be recorded using a cash register, or approved cashiering software. The original cash register or cashiering software receipt should be given to the payer. Copies of receipts should be retained by the department.

    If circumstances necessitate the use of handwritten receipts, duplicate prenumbered receipts forms should be used and should include department name, dollar amount, description of product/service, date, receipt number, and name of individual remitting payment. Departments are responsible for obtaining receipt forms. Samples are available in the Office of Cashiering.

    Register or cashiering software receipts should include, at a minimum, the date, dollar amount, receipt/transaction number, cashier identification number, and name of the area in which the good/service is provided.

    Cash, checks, and receipts must be kept in secure locations. To protect the funds, they should be kept in a lockable container, such as a cash box, and stored in an area that is not visible or accessible to unauthorized individuals. The container should not be left unattended during the work day. After business hours, all funds must be kept in a secured storage area, such as a file cabinet or safe.

    Departments receiving funds by mail must maintain a mail log. The mail log should provide the following information for each check: date received, a dollar amount, name of person or company making payment, description of service/product, account to be credited, and date remitted to the Office of Cashiering.
  3. Deposits:

    Funds must be deposited within twenty-four (24) hours (or the following business day) once the total receipts exceed one hundred (100) dollars, or at least once a week regardless of the amount. Daily receipts exceeding one hundred (100) dollars should be deposited by 2:00 p.m. each day the Office of Cashiering is open for business.

    The department should assign cash handling responsibilities to at least two (2) employees to guarantee a separation of duties and control of cash receipts. One employee, the cash handler, should receive payments and issue original receipts to customers at the point of sale. Duplicate copies of receipts should be proved to the funds received. The receipt numbers and total funds collected are recorded on a cashier log. The cashier log should include the following information: date of collection, receipt number, total amount of funds collected, name of cash handler, name of depositor, and date funds were remitted to the Office of Cashiering.

    A second employee, the depositor, should prove the funds and receipts, verify the amount to the cashier log, and prepare a transmittal. The depositor should also record the date remitted and sign the cashier log. The depositor will complete a transmittal for each deposit with the following information: date, department name, telephone number, name of individual preparing the deposit, description, accounting codes, deposit amounts and receipt numbers issued.

    The completed transmittal (a copy should be maintained at the department), copies of receipts or register tape, and funds must be taken to the Office of Cashiering. Checks should be batched together with an adding machine tape listing each check amount. Receipts should be batched together in numerical order with an adding machine tape attached. The receipt obtained from the Office of Cashiering should be verified to the cashier log by the cash handler and retained with the cashiers log. Supporting documentation and/or receipts should be kept and filed by each department.

    Departments collecting cash should bring their receipt bags to the Cashiering Office in non-descript packages at varied times so to not draw attention to the receipts being delivered. An example would be a manila envelope. It is also recommended that two employees from the cash collecting department go together to deliver the receipts to the Cashiering Office. Transmittals should be made in person. Campus mail must not be used to deliver funds to the Office of Cashiering. The person making the deposit will be asked to remain in the Office of Cashiering until verification of the funds has been made. If at all possible, transmittals should be brought during the morning hours.
  4. Correcting or Voiding Receipts:

    If a correction is made on a receipt or if a receipt is voided, the receipt number must be recorded on the cashier log and clearly indicate the correction or void, the date, signature of the person making the change, reason for the change, and signature of an approving manager. The approval should be from an individual other than the one initiating the correction. All copies of voided receipts (except the transmittal copy) should be kept together and filed for audit.
  5. Cash Over/Short Situations:

    All deposits are made intact, inclusive of any over/short amount. These amounts increase (overage) or decrease (shortage) revenues for the accounts listed on the transmittal.

    A cash over/short log should be kept for each cash collection area. This record is to be used for any unexplained differences between the total of funds and receipts. The supervisor should investigate and document overages or shortages that have a value of five (5) dollars or more or that are recurring. The supervisor should sign off on this log as part of the daily routine.
  6. Recording and Reconciliation:

    The transaction will be entered into the University's financial system upon receipt by the Office of Cashiering. A copy of the cash register/computer receipt will be given to the individual delivering the deposit.

    All departments collecting payments or involved in specific revenue generating activities must reconcile transmittals and other supporting documentation to the University's financial system. Ideally, reconciliations should be performed by someone other than the person receiving funds or making deposits. Reconciliations should be dated and signed by the preparer, and reviewed, dated, and signed by a manager or supervisor on a monthly basis. Reconciliations will be reviewed by the Financial Reporting Office on a periodic basis.
  7. Checks and Money Orders:

    All checks and money orders must be made payable to "Longwood University" and be payable through a U.S. bank.
  8. Lost or Stolen Funds:

    In the case of a loss of funds or if a supervisor suspects irregularities in the handling of funds, a Longwood Public Safety Officer must be contacted immediately.

    Within five (5) working days from the time of occurrence, the department must file a report with the Director of CSA, giving a brief description of the loss. A copy of this report should be sent to the Internal Auditor. Additionally, the department must include changes in the departmental funds handling procedures, if necessary, to prevent the situation from reoccurring.
  9. Change Funds:

    Change funds are established through the Office of Cashiering by request in writing with justification for the need of the fund. If approved, Cashiering will make the necessary arrangements to issue a check to the requesting unit. Change funds are issued specifically to a designated custodian. Funds should always be held separately and should not be comingled with personal money. Custody of the change fund may not be transferred. If for any reason a fund is no longer required, or there is a change in the custodian, the fund must be returned to Cashiering terminating the responsibility of the present custodian. A receipt will be issued relieving the custodian of his/her responsibilities. If a need for the fund continues, a new fund can be issued in the name of the new custodian. The custodian of a change fund is responsible for ensuring funds are adequately safeguarded. An overage should be reported and deposited with Cashiering. Similarly, shortages should be reported in writing to Cashiering. Disposition of the shortage will be determined on an individual basis.

    If oversight of the change fund and/or funds handling is temporarily delegated to another individual, the custodian is still ultimately responsible. The custodian is also responsible for ensuring the designee is properly trained and knowledgeable of University policies and procedures.

Revised and approved by the Board of Visitors, September 7, 2002.
Revised and approved by the Board of Visitors, June 15, 2006.
Revised and approved by the Board of Visitors, September 15, 2006.
Revised and approved by the Board of Visitors, March 26, 2010.
Revised and approved by the Board of Visitors, December 03, 2010.
Revised and approved by the Board of Visitors, June 15, 2012.