Cash controls at OSU What is “CASH”?

Cash controls at OSU

What is “CASH”?Currency, coin, and cash equivalents: Checks

Traveler’s checks

Cashier’s checks Credit card records EFTs: ACH and wire transfers Items of cash value: ticket, gift cards/certificates

BEST PRACTICESFor handling currency and coin:

Be watchful for counterfeit bills

Count cash out of public view

Count cash in double custodyAlways give a receiptStore cash in secured locked

receptacles

Deposit in person at the Cashiers Office

For accepting checks:Endorse all items promptly upon receiptStore checks in secured locked receptaclesExamine the legal lineDeposit daily. Late deposits increase the risk of NSF or stop payment checks.

BEST PRACTICES

Protect assetsProtect reputationProtect employeesWeaknesses in internal controls can result in substantial losses.

INTERNAL CONTROLS

Physical safekeeping of assetsSeparation of dutiesAccountability

INTERNAL CONTROLS

Cash processing areas are secured from entry by unauthorized peopleCash is stored securelyCash is not left unattendedSAFEKEEPING OF ASSETS

Frequency of cash revenueNature of businessThe physical layout of the officeIMPACTING SAFEKEEPING

No individual has control over the entire transaction cycle ReceivingDepositingRecording

Reconciling

SEGREGATION OF DUTIES

Frequency of cash revenueLack of staffManagement trustIMPACTING

SEGREGATION

OF DUTIES

Who has access to cash and whyWhere an asset is at all timesWhere keys are at all timesTransfers are documented

All transactions can be traced

ACCOUNTABILITY

Cash is deposited within 24 business hours of receiptWeb departmental depositsDeposits can be submitted electronically and tracked.Can be scanned w/backup and sent to:Departmental.deposits@oregonstate.edu

DAILY DEPOSITS

A documentation file containing processes that are clearly definedCash handling procedures for your departmentCopies of these procedures signed & dated by the employees responsible for the execution of these proceduresDocumentation, including regular reconciliations and custody assignment, for the petty cash or change fund.

Cash

transfers are done in dual custody

DOCUMENT YOUR INTERNAL CONTROLS

Verify employee’s employment historyPerform background checksMake sure they have cash handling trainingKnow your cash custodians

KNOW YOUR PEOPLE

MISSOURI STATE BOOKSTORE

MISSOURI STATE BOOKSTORE“Converted checks from textbook companies to cash”

“ found $81,000 in cash in desk while manager was

on vacation. . .”“Admitted he embezzled more than $1.1 million over eight years. . .” Missouri State Bookstore Manager:

Trust your employees but verify their work. Regularly have someone oversee the work of employees handling financial transactions.Set the right tone so that all employees know that dishonesty won’t be tolerated.Use your understanding of the business to conduct investigations whenever actual results are different than you think they should be.

SOME ADVICE ON TRUST

One example:City of Dixon, IllinoisRita Crundwell, Comptroller is in prison afterStealing $53 million in public funds.

City of Dixon, primary account holder, with

a second account holder listed as

RSCDA c/o Rita Crundwell.. . .the biggest municipal embezzler in US history

“Rita Crundwell is a big asset to the city. She looks after every tax dollar as if it were her own.”

But won’t the funds be missed?Not if there is little or no reconciliation going on!Must be able to show that you are reconciling:Receipts to depositDeposit to Banner

RECONCILIATION

Must be reconcilable. Custodian has the actual cash or a receipt for any cash not on hand.Custodian’s manager should verify that the fund balances periodically.Only the custodian should handle the fund.

PETTY CASH FUNDS

They “disappear”They “grow” or “shrink”Custodians are changed without documentationResolve these problems quickly, they are audit issues

PROBLEMS WITH

PETTY

CASH FUNDS

Where the heck are they?Business Affairs—link to Business Center ResourcesFIS Manual: 1402-10

PETTY CASH FORMS

Get ReadyReview your own office like an auditorDocument proceduresSeparate the dutiesTrain employeesDeposit dailyReconcile monthly

PREPARE A CHECKLIST