Cash and Check Handling Policy

EFFECTIVE DATE: January 27, 2012 |LAST UPDATED: June 17, 2014 | Policy Section: cash-handling-receipts-1

Responsible Executive

Carolyn Ainslie, vice president for finance and treasurer

Responsible Office

Asset Administration

Contact

Hanna Bigelow, university cash manager, hbigelow@princeton.edu or (609) 258-5056

I. Policy StatementBACK TO TOP

This policy defines the responsibilities of anyone who handles University currency, cash equivalents, or checks (“Cash”). Departments that receive Cash must have appropriate internal controls and follow documented procedures to ensure the good stewardship of these University assets. In addition to preventing financial loss, these controls promote security and accurate financial reporting. Appropriate internal controls include the segregation of duties, safekeeping of Cash, prompt deposit of all Cash receipts, and accurate recording of revenue into University financial systems.

II. Who is Affected by this PolicyBACK TO TOP

Anyone who handles University Cash.

III. Definitions

Automated Clearing House (ACH) Payment
The electronic transfer of money between checking or savings accounts via a communications network that uses the Federal Reserve banking system (Automated Clearing House). 

Armored Car Service
A security service that picks up cash, cash equivalents, or check deposits from pre-assigned University locations, and delivers them to the University’s bank on a scheduled basis.

Cash
Currency, cash equivalents, or checks.

Cash Box
A locking box or container designed with compartments to secure coins and bills of different denominations.

Cash Equivalent
Money taking the form of a money order, travelers’ check, cashier check, or certified check.

Cash Exchange
The exchange of one currency or coin denomination for the equivalent value in another currency.

Cash Handling Department
Any department that handles cash, cash equivalents, or checks.

Cash Management and Operations
Management of all University cash flows by the Office of Finance and Treasury to accelerate the collection of receivables and manage cash flow, and ensure availability of cash for operations.

Cash Receipt Voucher (CRV)
A document serving as evidence for a Cash receipt. The CRV System is the Office of Finance and Treasury’s management system that contains a record of all Cash and other financial receipts.

Check
A negotiable demand draft on a bank to pay to the named party the indicated sum of money on a stated date or thereafter.

Currency
Ready money in the form of coin and bills.

Debit Card
Bank card used in Cash transactions which is not a credit card. In a debit card transaction, the amount of a purchase is withdrawn from the available balance in the cardholder’s account.

Departmental Cash Handling Procedure
A documented cash handling plan that establishes, at a minimum, the internal controls named in this policy and its related procedures.

Deposit Bag
A bag with a lock or a tamper-proof plastic bag with seal used to contain cash, cash equivalents, or checks intended for deposit.

Electronic Funds Transfer (EFT)
The electronic exchange or transfer of money from one account to another through computer-based systems, either within a single financial institution or across multiple institutions.

Safe
A receptacle for the protected storage of currency, cash equivalents, or checks that has a combination or dual lock. In certain cases, a safe will have an alarm that is connected to the University public safety system.

Segregation of Duties
Process of safeguarding assets by assigning the acceptance of Cash receipts, recording, and reconciling of transactions to different individuals.

Wire Transfer
Electronic transfer of funds that typically settles the same day.
 

IV. PolicyBACK TO TOP

Anyone who handles University Cash has the responsibility to receive and process it according to this policy and its related procedures. In order to minimize Cash handling, the acceptance of debit cards is encouraged where technically feasible; and electronic funds transfers (ACH and wire transfers) should be used whenever possible for all non-point-of-sale and non-point-of-service payments to the University. Please see Electronic Funds Transfers to Princeton University for more information.

Responsibility of Departments That Accept Cash
Any department that accepts Cash has a responsibility to:

  • establish and document a Departmental Cash Handling Procedure that meets the minimum standards of this policy and its related procedures. However, departments may elect to be more specific or restrictive, as is appropriate for that departmental need. For guidance, please contact the policy contact named in the header of this policy.
  • collect and record tax on any applicable sales transactions. Please refer to the New Jersey Sales Tax Guide for a list of items for which the University must collect and withhold tax.
  • be prepared to provide a receipt upon request. Or, if required within a specific Cash handling procedure, routinely provide a receipt.
  • safeguard Cash assets against loss, theft, or misappropriation.
  • deposit Cash promptly.

Departments that receive gifts to the University in the form of Cash are responsible for processing the gift according to the Gift Acceptance Policy and depositing the gift according to the policy entitled Transmittal of Gifts, Grants and Pledges Received Outside of the Development Office or the Office of Corporate and Foundation Relations. Please refer to Gift Acceptance, Documentation & Tracking for general information.

Internal Controls for Cash Handling Procedures
Establishing appropriate internal controls and documenting Cash handling procedures ensure the good stewardship of Cash assets and minimize the risk of loss. Before undertaking any new Cash handling operation or activity, approval for the activity must be received from the policy contact named in the heading of this policy.

The set of basic Cash handling procedures supporting this policy is outlined below. These procedures define roles and responsibilities, explain how the operation or activity is accounted for, and instruct how deposits are made. For activities that extend beyond basic Cash handling procedures, departments should consult the contact named in the policy header. 

Minimum Procedural Requirements
Unless more restrictive controls are documented in Departmental Cash Handling Procedures, follow these minimum procedural requirements to promote security, appropriate stewardship of assets, and accurate financial reporting:

Segregation of Duties
To minimize the potential for mistakes or misappropriation of Cash, the segregation of Cash handling duties is required in departments handling Cash. The duties of collecting Cash, maintaining documentation, preparing deposits, and reconciling records should be distributed between two or more individuals. 

In departments where the segregation of duties is not feasible, alternative and compensating controls may be implemented to achieve the desired objectives. Please contact the policy contact named in the policy header above for information on how to establish appropriate controls for your area. Establishing clear accountability for the handling of Cash ensures that receipt is properly accounted for, the revenue is secured, and the revenue is traceable to specific handlers.

Securing Cash
Departments handling Cash are responsible for the safekeeping of these University assets. Department managers should review the Cash receipt process, and physical security should be emphasized to every employee handling Cash. 

The following measures promote a safe work environment and ensure secure handling of Cash.

  • Restrict access to Cash to as few people as possible.
  • Lock Cash in a secure location that is appropriate for the amount of Cash on hand.  Provide combinations and passwords only to authorized personnel.

Use this chart to provide the appropriate level of security for the amounts of currency on hand.

  • Change combinations and passwords annually, and with any turnover of related personnel.
  • Count Cash in a non-public, secure area that is not easily visible to others.
  • Call Public Safety if you would like an officer to escort you while transporting currency. A Public Safety escort is recommended if you are transporting more than $1,000 of currency.
  • Do not photocopy or scan checks, unless specified in a Cash handling procedure approved by the policy contact named in the heading of this policy.
  • This practice will enhance the security of private banking information.
  • Please see Cash Collection, Deposits & Reconciliation for more information.

Prompt Deposit of Cash
Cash must be deposited promptly. If daily deposit of Cash is not practical, the chart below dictates when receipts totaling a certain amount must be deposited at the Financial Service Center. For departments that have specific approval to maintain currency on hand that is “necessary to meet business needs” (see Petty Cash Policy), receipts in excess of that amount should be deposited according to this chart.

For departments that routinely deposit Cash via armored car service, the deposit frequency is governed by the agreement with the armored car service.

For departments that receive gifts to the University in the form of Cash, all gifts must be deposited within 24 or 48 hours, via the Gift Transmittal Form, and in accordance with the policy entitled Transmittal of Gifts, Grants and Pledges Received Outside of the Development Office or the Office of Corporate and Foundation Relations.

Compliance with this Policy

Failure to comply with the University Cash and Check Handling Policy, and its related procedures, may result in disciplinary action and possible involuntary termination. Please see the Office of Human Resources Policies and Regulations for more on termination policies.

V. Procedures BACK TO TOP

VI. Forms BACK TO TOP

VII. Contact Roles and Responsibilities BACK TO TOP

Asset Administration/Cash Management Establish Cash-handling policy and procedures, establish minimum standards for Cash handling, communicate and monitor cash handling practices, manage banking and armored car services, designate authorized signers on University bank accounts, fund University operating accounts.  
Cash Operations Deposit and processing of all checks, ACH and wire receipts, maintain University bank accounts, post Cash and other receipts into the Cash Receipt Voucher (CRV) System, review CRV entries and follow-up of unidentified accounts receivable.  
Financial Service Center Process currency deposits by Cash handling Departments, post currency deposits into Cash Receipt Voucher (CRV) System.  
Cash Handling Department Finance Representative Establish Cash handling process in accordance with minimum standards, oversee directly Cash handling personnel and department cash operations, periodic review with Cash Manager of Departmental Cash Handling Procedures and compliance with Cash Handling Policy.  
Campus Administrators/Human Resources Hiring process, background check, bonding/insurance of employees handling cash.  

VIII. Update Log BACK TO TOP

1/19/12

Approved


 

CONTACT US

finance@princeton.edu
Tel (609) 258-3080
Fax (609) 258-0442

Princeton University
Office of Finance & Treasury
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Princeton, NJ 08540

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FINANCIAL SERVICE CENTER

7 New South
Tel (609) 258-3080
Fax (609) 258-5040
Open Monday through Friday,
8:30 am — 4:30 pm

SERVICES INCLUDE

Customer service, cashiering,
check pick-up, financial system access

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