Cash Collections Certification - PowerPoint Presentation

1. Cash Collections Certification

2. Who is required to take this course?Employees who have been identified as cash handlersAny department /unit / office that has been identified as an official cash collection area2What happens next?Certification is required in order to serve as a cash handler at USFComplete this coursePass the Cash Collection Certification quiz with a 100%

3. AgendaThe role of Accountability and Internal ControlsBest practices in Cash CollectionsHow to apply appropriate segregation of duties criteriaThe steps involved in the Cash Collection process at USF3Four Functions of Segregation of Duties

4. What is considered Cash?Currency and CoinChecksCredit CardsMoney OrdersTravelers ChecksElectronic Funds4

5. Accountability & Internal Controls Defining AccountabilityInternal ControlsExamples

6. Defining AccountabilityThe delegation of authority to qualified employees to:Initiate, approve, process and review business transactionsHolding these employees responsible for:The validity, correctness and appropriateness of their actions6

7. AccountabilityEveryone is accountable for their own actionsOf all the individuals involved in the receipt, recording and balancing of funds is the person of ultimate responsibility as the custodianPayment processors are accountable forRecording payments accuratelyObserving all of the USF internal controlsProtecting the cardholder’s informationSupervisors are accountable forProper allocations of paymentsAssignment of duties that comply with separation of duties guidelinesOthers are accountable forProper transfer of custody of paymentsAccountable officers are ultimately responsible for payment transactions7

8. Internal ControlsDesign to protect:USFUSF staffAre designed to provide reasonable assurance regarding:Effectiveness and efficiency of operationsReliability of reportingCompliance with applicable rules, laws, and regulations 8

9. Internal Controls as they relate to Cash ManagementInternal controls specifically ensure:The safety of all fundsTimeliness of recording the receipt of all fundsThat the assignment of duties complies with separation of duties guidelinesReconciliations are completed and reviewed on a monthly scheduleA sound audit trail and adequate documentation are created9

10. Internal Controls - ExamplesAccess to credit card terminals and POS systems must be limited to a primary and a secondary custodianPhysical safety of the information and equipment must be ensured at point of collection and then stored overnightAll adjustments must be documented and approved by a supervisor (authorizer)Transfers of funds must be documentedWhen handed from one person to anotherWhen delivered to the Cashier OfficeCashiers must balance the funds they collect to the system where the payments were recordedFunds must be deposited in a timely mannerDeposit whenever funds are greater than $500 or within five business days, whichever comes firstDeposits must be reconciled to the general ledger10

11. Internal Controls – Examples (continued)When funds are initially received, the event must be documented in one of the following ways:Mail logsCash receipt slipsCash registers Credit card systemAn enterprise business system(e.g. FAST or OASIS)11

12. Internal Controls – A real life exampleRocky the Bull, a USF student, arrives at the bookstore to purchase 6 books for his upcoming Spring semester. Informing the cashier of his upcoming classes, the cashier then looks up the books he needs for each class. Rocky then purchases all the books retrieved by the cashier for his classes. After paying for all 6 books, Rocky reviews his receipt and realizes that all the books were charged incorrectly. He returns back to the cashier, who then calls their supervisor to void the receipt and charge the correct price for all the books. Rocky leaves the bookstore, with all his books for the correct price, excited and ready for the new semester.What did you notice?A list was used for inventory and pricing controlRocky paid the cashier; no one else could accept paymentRocky was given a receiptThe cashier had to deliver the product to Rocky (prevents theft and customer errors)A supervisor had to make the corrections; they acted as an authorizer12

13. Segregation of DutiesDefining Segregation of DutiesThe Four Functions of Segregation of DutiesRecord KeepingAuthorizationCustodyReconciliationWhen Segregation is not possibleExamples

14. Segregation of DutiesSeparation of duties protects USF and the individual by ensuring that no one person has the ability to control all of the steps involved in handling and accounting for money received by USF.14CustodyRecord KeepingAuthorizationReconciliationThe idea is that any one person performs only one function; four people are needed for the four functions.

15. Segregation of Duties15

16. When segregation is not possibleIf one person performs two or more of the functions:Risk exists that presents the opportunity for something to go wrongA compensating control is needed to reduce the riskThe compensating control might be an extra layer of reviewProvide mitigating or compensating controlsDesign additional procedures to reduce riskDesign data system security roles to restrict access16

17. Examples of Compensating Controls17Management can:Perform a high level of review of detailed transaction reportsPeriodically sample transactions and request supporting documentation to ensure the transactions are complete, appropriate, and accurate.An employee another area may perform an external review of a reconciliation. For instance, two departments within a college may share responsibility to review each other’s reconciliations.Utilizing the centralized business support service departments within some colleges or unitsWhen a cashier receives a payment, they must also record the paymentIf a cashier is acting as a custodian and a record keeper, this creates riskAfter cashier balances at end-of-day, a supervisor reviews the balancing and signs off for accuracy

18. Record KeepingDefining Record KeepingRecord Keeping - Retention

19. Defining Record Keeping19Record keeping is the process of creating and maintaining official recordsThis may occur manually or through an automated data systemExamples:Mail log – paper or electronicCustomer receiptsOfficial USF pre-numbered cash receiptsSystem generated cash receiptsDeposit slipsCredit card receiptsCash register reportsEFT (electronic funds) payment documentsBalancing and reconciliation reports

20. Record Keeping - RetentionObserve record retention requirementsFind information on Online Business ProcessesAlso find information on the Purchasing web siteRecords serve multiple needsCompliance with best business practicesHelpful in researching a question20

21. AuthorizationDefining AuthorizationBest Practices

22. AuthorizationAuthorization is the process of granting formal approval to perform a specific functionExample:Someone must be authorized in order to perform one of the following functions:Verify cash collectionsReview daily balancing reportsApprove discounts, voids, or refunds22

23. Authorization – Best PracticesThe employee who originally created a transaction should not be the one who:Makes a correctionCreates a voidCreates / Approves a refundThe best practice is to have a supervisor review and approve the correction using an ID of their own23

24. CustodyDefining CustodySystem PasswordsRegister KeysStorage of Funds

25. Defining CustodyHaving access to or control over any physical assetCustodians:Collect and handle paymentsPrepare depositsHave access to safes, lock boxes, & file cabinets where funds are keptCustodians of petty cash funds or change fundsDeposits:Funds totaling more than $500 are deposited dailyFunds are always deposited within 5 working days25

26. Custody – Guidelines and ProceduresWhen funds are received by mail:Record payment on a mail logStandard mail logs are recommendedThe log should include:The date the payment was receivedWho the payment was received fromThe amount of the paymentThe check numberWho received the paymentEndorse all checksContact Controller’s Office (UCO) for endorsement stampsWhen funds are received at a cashier counter:Endorse all checksContact the Controller’s Office (UCO) to request endorsement stampsIssue a receipt to the customer (required)Your register or cash receipt system may produce a receiptYou may also give the customer an official USF cash receiptContact Controller’s Office (UCO) for receipt books26

27. Custody – Guidelines and Procedures (cont…)Never combine USF funds with personal fundsCashiers should place personal possessions in a safe environment away from the cashier stationEach cashier should have their own cash drawerCashiers should only use their own cash drawer for receiving paymentsIndividual cashier drawers should be placed in the safe overnight separating their funds Change funds are for making change only! Never use for:PurchasesTo cash personal checksTo make loans27

28. Custody – ChecksChecks should be made payable to eitherUSFUniversity of South FloridaIf checks are made payable to an individualThe best practice is to return the check to the payer and ask for a replacement check28Custody – Foundation ChecksImmediate actionsStamp checks with restrictive endorsement stampDeliver to USF Foundation within 24 hoursAfter business hours use the drop boxDelivery of USF Foundation depositsHand carry to USF FoundationNever use campus mailContact the USF Foundation for questions, endorsement stamps, or locking bank bags

29. Custody – Transfer of FundsA transfer is the hand-off of funds from one custodian to anotherDocumenting a transferThe receiving custodian:Recounts the fundsInitials and dates the mail log, balancing sheet or deposit back-upBoth custodians keep a copy of the documentation29What transfers need to be documented:From customer to cashierCustomer should receive a receiptFrom cashier to supervisorSupervisor initials on balancing form From collection area to cashier officeCashier staff should sign off on transmittal formFrom cashier office to courierCourier signs off at time of pickup

30. Custody – System PasswordsAll cash registers or Point of Sale (POS) systems should be password protected to assign accountability and fix responsibilityEvery person must have their own passwordPasswords must never be sharedDon’t write your passwords downIf you need to leave the work area, sign off your password and log back on when you returnPasswords should be changed periodicallyPasswords should be inactivated whenever a custodian vacates the position30

31. Custody – Register KeysIf your cash register or point-of-sale system requires key access:Only essential staff should possess the keysAn inventory of the keys should be keptKeys should never be sharedKeys must be collected whenever a custodian vacates the position31Custody – Storage of FundsDuring business hours, funds should be stored in a safe and secure area with limited access.Safe and secure locked examples:Cash registerLock boxFiling cabinet

32. ReconciliationDefining ReconciliationWhy Reconcile?Transaction ReconciliationNon-Inventory ReconciliationCredit Card ReconciliationReconciliation Guidelines

33. Reconciliation & BalancingCashier BalancingCheck Log Balance33

34. Defining ReconciliationA reconciliation is simply a comparison of two sets of information as of the same point in timeIdentify the differences between what actually did post in Finance Mart vs. what you expected to post in Finance Mart34Why Reconcile?Good internal controls and sound business practices necessitate the reconciliation of funds by business staffUSF needs assurance that all assets are safeguarded and used to the best benefit of the university

35. What do we Reconcile?Point of sale transactions (POS)Check logsBank card paymentsE check paymentsTransaction posting in FAST and FMCredit CardsInventory35

36. Point of Sale Transactions (POS)The POS system shouldRecord sales and cash collectionsProduce a daily detailed sales reportProduce a pre-numbered customer receipt Reconciliations to performBalance the cash drawerBalance the day’s sales to actual collectionsReconcile daily balancing sheet to deposit36

37. Point of Sale (POS) – Cashier BalancingA standard cashier balancing form should be used by all cashiersDepartments may design a formCashiers must balance cash receipts per the system / cash register to actual cash receiptsCashiers should be required to complete a balancing sheet before leaving for the dayThe balancing form should be reviewed and initialed by a supervisor Elements of cashier balancingA transaction report for the individual cashier for the specific sessionThe cashier drawer supported by calculator tapes for currency and checksThe cashier balancing report form37

38. Check Log ReconciliationReconciliations to performCompare the check log to the actual depositReconcilers should not be the person who creates the depositReconcile pre-numbered cash receipts to the deposit38

39. Transaction ReconciliationReconcileDeposits to Accounts Receivable postingsDeposits to General Ledger postingsInventory to salesFinance Mart is the official reporting systemConfirm that correct chartfields were usedSubmit corrections immediatelyConfirm that corrections posted correctlyFind details in FAST or OASIS39

40. Non-Inventory ReconciliationSome sales may not involve tangible inventoryTo ensure that all billings have been completed, reviewRoom usage logsEquipment or lab usage logsParticipant lists or class rollsOrder forms or contracts for services40

41. Credit Card ReconciliationWhen credit cards are used with a POS:POS system should produce a report of credit card transactionsCompare the POS report to the daily settlement reportSupervisor must review this41

42. Reconciliation - GuidelinesReconciliation must be performed by a person with no cash handling responsibilitiesThe reconciliation must be dated and signed or initialedThe reconciliation should be reviewed by an independent partyThe prescribed procedure should be followed, find reconciliation resources on the UCO web site42

43. Good Business PracticesOversight and Monitoring of Accounts Receivable (AR)

44. Oversight & Monitoring of Accounts ReceivableCashiers must balance drawers at the end of every shift, daily. Each cashier has their own drawerWhen a cashier takes a break; such as lunch, the cashier removes their drawer and logs off the POS system. If another cashier takes their place, the new cashier with their own drawer logs in the POS systemSupervisors should conduct surprise cash counts at least semi-annuallySupervisors should review no-sale records, voids, errors, overages/shortages, timeliness of depositsOutstanding AR is reviewed at least monthlySomeone other than the person who maintains AR should conduct the review44

45. The University Controller’s Office ResourcesContactsAdditional Information

46. ResourcesOffice of University Audit & ComplianceAdditional training resources are available on the University Controllers Office websiteBanking and Cash ManagementCredit Card Reconciliation ProcessLock Boxes and ACH’sInternal ControlsSeparation of Duties46

47. 47Helpful ResourcesEmailDepartmentaphelp@usf.edu Accounts Payable HelpAsset-help@usf.eduAsset Management Helpbillingarhelp@usf.eduBilling and AR Helpcashiers@usf.edu Cashiers Office Helpfinancemart@usf.edu Finance Mart Questionspayrollhelpdesk@usf.edu Payroll Questionspcard@usf.eduPCARD Questionstravelhelp@usf.eduTravel Questionsusfpurchasing@usf.eduPurchasing Help

48. 48Online Business ProcessesAllows for keyword search or category searchLook for information and ask questions about:Accounting practicesHR-payrollPurchasingResearchThe USF FoundationAnd many other subject areasLook for the TRAINThe Research Administration Improvement NetworkThe GoalsBuilding the knowledge base of research administratorsEnhancing professional competenciesImproving business processes and reporting

49. Are you ready for the quiz?Let’s review some important information

50. Review for the Quiz AccountabilityPayment processors are accountable forRecording payments correctlyObserving USF internal controlsInternal controls existTo protect the staffTo protect the cashCustodyHaving access to or control over any physical asset50

51. Review for the QuizRecord KeepingThe process of creating and maintaining departmental documentsA supervisor should always review your balancing report, then initial and date the formAuthorizationThe person who receives a payment should never make a correction, issue a refund, or void a transactionThe authorizer performs these actionsBalancingYour department should have a standard balancing report 51

52.