Cashier/ Cash Custodian Training

Handling Cash and Cash Equivalents TrainingNeil ClarkOffice of the ControllerMarch 2014UCSB1GoalsWhat you should get out of the trainingAn understanding of the UCSB cash handling processAn understanding of the key controls in the UCSB cash handling processUnderstanding of your responsibility as a Campus Cash HandlerCampus Resources2TopicsWhat the training will coverThe various forms of cash paymentsA review of the three types of Cash Handlers as defined by BUS-49A review of BUS-49 policy areas, and cash handling activitiesGeneral guidelines for Petty Cash and Change Fund custodiansPrinciples of good cash handling and their application in daily cashiering activities3StewardshipStewardshipThe careful and responsible management of something entrusted to ones care.

As University employees we have a responsibility to our stakeholders, to be good stewards of the public trust.4Why is the Proper Handling of Cash Important to UCSB?Public TrustTaxpayer DollarsStakeholdersDonorsFunding AgenciesParentsStudentsEmployees

5What are the Consequences of Improper Cash Handling?Public ImageLoss of FundingDepartment ReputationCriminal or Civil InvestigationCost of Investigation

6TerminologySeveral termsused in the BUS-49 need to be defined to help you understand the University's cash handling policy. The basic terms fall into one of the three following categories:What is considered cashDefining Cash Handlers and Fund CustodiansCash Handling Roles

7What is considered cashCurrency and CoinCash EquivalentsMoney OrdersTravelers ChecksCashiers and Certified ChecksACH Payments and Wire TransfersCredit and Debit CardsSecurities (Easily transferable to $) such as Parking Permits, Stamps, Tokens, Meal Tickets

8What is a Main Cashier?Main CashierA cashiering station to which official operating cash funds are issued, and from which, collections are deposited directly to the bank.

ExamplesCashiers OfficeUCen Cashier9What is a Sub Cashier?Sub CashierA cashiering station from which collections are deposited with a Main Cashier.

ExamplesAt least 9 Sub Cashiering stations on campus, including Parking, Arts & Lectures and Housing 10What is a Cash Handling Department?Cash Handling DepartmentCampus operating unit that typically collects cash and deposits to either a Main Cashiering or Sub-cashiering station.

ExampleCampus departments who receive gifts, donations, telephone or photocopy reimbursements.11Cash Flow

12CustodianA person who has been assigned responsibility for administering either a petty cash or change fund

The custodian is solely responsible and personally accountable for the fund.

Must be a University employee (career or limited appointment) or a registered UCSB student employed by the University.

New employees must successfully pass a background check.135 Steps of Cash HandlingStep 1 - Accept Cash and Endorse ChecksVerify check payee is "UC Regents" or "Regents of the University of California" Endorse check with appropriate stamp (UC Regents)To minimize customer disputes over an amount being paid in currency, leave the currency on the cash register ledge or other secure area visible to the customer until the transaction is completed.Count change back to the customer.At the end of the transaction make sure all currency, coin, or checks are placed into the cash drawer or other secure container or location.Give the customer a receipt

145 Steps of Cash HandlingStep 2 Prepare DepositPrepare a deposit form as soon as total of cash and cash equivalents meet or exceed $500Practice dual custodyBalance receipts to cashKeep backups of deposit forms

155 Steps of Cash HandlingStep 3 Deposit CashSub-cashiers and cash handlers must deposit at least once a week or whenever collections meet or exceed $500.Transport cash in dual custodyDeposits > $2,500 employees should be escorted by a Campus Security or Police Officer.Step 4 - Reconcile depositsBalance to General Ledgerreport at month end Step 5 - Report lossesReport losses to supervisor

16Cash Collection ReportsA report of cash collections signed by the preparer must accompany each deposit to a Main Cashiering Station from a Sub Cashiering Station. The report should include:Cash RecordedCash DepositedShortages or OveragesSupporting Documentation (including cash register audit tapes, as applicable)

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18General Cash Handling PrinciplesBusiness and Finance Bulletin BUS-49, the UC policy related to cash handling, defines the four critical policy activities:

19Individual AccountabilityOne person has sole responsibility for a fund.Protects the University and the EmployeeAccess to cash should be restricted at all times to only the person (custodian) accountable for the fund.All transfers of cash and responsibility should be documented.A supervisor should sign and verify overages/shortages and all voids/refunds.20Accountability Key ComponentsTransfers are documentedFundsremainsecuredKeys are securedPasswordsare notsharedAll trans.identified to a personReceipts to each customerSafe combos are not sharedCash drawer to each cashierBackground checks are performed21Separation of DutiesMore than one qualified person is involved in the key activities related to the collection, handling, depositing, and accounting processes for cash received.

22Cash Handling Roles Matrix RoleHandling CashPreparing DepositReconciling receipts to depositMaking Cash DepositComparing deposits to GLIndividual #1XXIndividual #2XIndividual #3XXRoleHandling CashPreparing DepositReconciling receipts to depositMaking Cash DepositComparing deposits to GLIndividual #1XXXIndividual #2XXThe matrices below shows appropriate separation of duties for cash handling roles for three person and two person operations23Dual CustodyInvolving two people in a critical cash handling task is a special kind of separation of duties called dual custody. Dual custody should be practiced when transporting and counting large amounts of cash, or when performing other risk critical actions. Benefits of Dual Custody:Encourages cash handlers to check each others workReduces the opportunity for robbery and theftIf loss does occur, protects cash handlers from unwarranted suspicion

24Physical SecurityPer BUS-49:Individuals who handle cash and cash equivalents are protected from physical harmCash and cash equivalents are protected from loss.Technology resources involved in process cash and cash equivalents (i.e., hardware and confidential personal information) are protected from loss, corruption, or compromise to confidentiality. 25Physical SecurityPer BUS-49:Counting of cash must not be visible from outside the office.Level of security, such as cash box, safe, or alarm requirements depends on amount of cash being stored. Deposits must be adequately protected from loss while in transit. Only authorized individuals are allowed in the work area.

26Physical SecurityPer BUS-49:Safe combination should be given ONLY to supervisory/authorized personnel.Safe combination should be committed to memory.A record of the combination must be maintained away from the safe area and sealed to prevent undetected access.

27Physical SecurityPer BUS-49:Safe combination should be changed whenever an employee leaves the unit/position, or at a minimum of once per year.A log must be maintained showing the date of combination change and the reason for the change.

28Physical SecurityKey ComponentsAlarm syst. alerts police dept.Assets are properly storedKeys are securedShortages/overages are reportedCash counting not visibleSafe combos are changedBackgroundchecks performed2nd employee presentDeposits protected while in transit

Deposits are timely29ReconciliationCash and cash equivalents collected and reported as deposited, are reconciled with the General Ledger, and are verified as accurate. A supervisor or someone other than the custodian should perform surprise counts of the petty cash and change fund.

30ReconciliationReconciliation involves the following three levels of personnel:Level 1 Cashier / Sub CashierReconciles daily receipts by cross balancing the funds collected against the cash register totals, the receipts issued, and deposit documents receivedLevel 2 Manager / SupervisorReconciles to ensure that receipts were issued in numerical order. Verifies that register totals and beginning and ending readings are in order. Performs surprise cash counts to ensure accuracy of staff and compliance with cash control procedures.Level 3 Accounting OfficeReconciles deposits by Major Cashiering sites to UC bank accounts.

31Petty Cash FundPurpose: Used by units who have a need to provide funds to employees or students to acquire low value goods and services from outside vendors on an immediate or short term basis.

UCSB Policy 5255

32Petty Cash Fund ProceduresUsing the FundAll expenditures must be supported by receipts. Receipt must be legible, dated, itemized, indicate amount and name of vendor.Receipt must be signed by the purchaser, indicating receipt of goods.Receipt must show evidence of having been paid.

33Petty Cash Fund ProceduresReimbursement of the FundAttach receipts to a Miscellaneous Form-5 Check Request, submit to Business & Financial ServicesUse the Petty Cash Reimbursement FormAll receipts must be reimbursed by June 30 for fiscal closing

34Petty Cash Fund ProceduresTransferring CustodianshipFormal documentationSend copy of transfer information to Business & Financial Services (BFS)Returning the FundReimburse all outstanding receiptsPrepare Deposit and Recording Advice (DARA)Take DARA and fund to Cashiers OfficeSend copy of DARA to BFS

35Petty Cash Reimbursement FormAllows for immediate reimbursement for petty cash expenses from the Cashiers Office. It was designed for those units who do not have a petty cash fund.ProceduresAttach original receipts to the formObtain authorized signature Make a copy for department recordsTake original to Cashiers Office

36Change FundPurpose: In a department that performs cash sales, a change fund may be established to provide the department with the ability to provide its customers with change following sales transactions.

UCSB Policy 5250

37Change Fund ProceduresSetting up the FundSubmit request to Business & Financial Services (BFS) with Department Head approval.BFS will contact department when check is ready.Custodian signs acknowledgement of receipt, and understanding of the policy, and cashes check at the Cashiers Office.

38Change Fund ProceduresTransferring CustodianshipFormal documentationSend copy of transfer information to BFS.Returning the FundPrepare Deposit and Recording Advice (DARA)Take DARA and fund to Cashiers OfficeSend copy of DARA to BFS

39Change Fund ProceduresUsing the FundNo expenditures may be made from the fund. Fund must be kept separate from any other fund.Overages/shortages in income are not to be cleared through the fund

40Change Fund Key PointsFund should not be used for expendituresFund should not be combined with petty cashMore than one person should not have access to the fundTransfers of fund should be documentedOverages/Shortages should not be cleared through the fund.

41Petty Cash and Change Fund 4 Critical Policy ActivitiesAccountability Custodians of Petty Cash and Change Funds are solely responsible for the funds entrusted to them.Campus policy requires that individuals who will be the custodian of a fund, successfully pass a fingerprint/ background check. The custodian can be held personally liable for losses due to the custodian's negligence.42Petty Cash and Change Fund 4 Critical Policy ActivitiesSeparation of DutiesThe supervisor or someone other than the custodian, should occasionally perform a surprise count of the fund. The supervisor, unit head, or designee reviews and approves all forms related to the operation of the fund.The supervisor also ensures that the custodian manages the fund in accordance with established policies and procedures.

43Petty Cash and Change Fund 4 Critical Policy ActivitiesReconciliation The custodian should regularly ensure that the amount of the fund (cash and receipts) remains intact.Physical SecurityThe fund should be locked up except when in use. See Business and Finance BUS-49 for secure storage requirements for funds in excess of $1,000. Each fund is to be maintained and stored separately, for example, in it's own cash box.44Audit of FundsAudits may be performed by either Business & Financial Services or Audit and Advisory ServicesAudits may also be done by a supervisor.Purpose of the audit is to verify the fund exists and is secure, the fund is complete, and the fund is being used appropriately.

45ResourcesPolicyUC Business and Finance Bulletin, BUS-49: Policy for Cash and Cash Equivalents ReceivedUCSB Policy 5250: Change FundsUCSB Policy 5255: Petty Cash FundsNeil Clark, Campus Cash Handling CoordinatorX7667 or neil.clark@bfs.ucsb.edu.Jonelle Miller, Acting Credit Card CoordinatorX3959 or jonelle.miller@bfs.ucsb.eduTracy Coy, Cashier ManagerX2177 or tracy.coy@bfs.ucsb.edu.Audit and Advisory Services

46Questions?47