Cash Collection, Deposits & Reconciliation
This policy defines the responsibilities of anyone who handles University currency, cash equivalents, or checks (hereinafter collectively referred to as “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 Policy
Anyone who handles University cash.
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.
Currency, cash equivalents, or checks.
A locking box or container designed with compartments to secure currency.
A money order, travelers check, certified check, or any asset readily convertible into cash.
Cash Handling Department
Any department that handles cash, cash equivalents, or checks.
A negotiable demand draft on a bank to pay to the named party the indicated sum of money on a stated date or thereafter.
Ready money in the form of coin and bills.
A payment card that is used to deduct the amount of a purchase directly from the bank account to which the card is linked.
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.
Electronic Funds Transfer (EFT) / Wire Transfer
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.
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.
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 or credit cards is encouraged where technically feasible; and electronic funds 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.
- 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 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 Gift Transmittal. 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 Cash and Investment Services.
Minimum Procedural Requirements
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 Cash and Investment Services for information on how to establish appropriate controls for your area.
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, including:
- 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.
- Currency on hand of up to $499.99 must be secured in a locked drawer or cash box
- $500 to $24,999.99 must be secured in a safe; consult the Department of Public Safety (DPS) if cash balances frequently exceed $5000
- Arrangements should be made with Cash and Investment Services for armored car pickup or other secure transport for cash balances of $25,000 or more
- 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 DPS if you would like an officer to escort you while transporting currency. A DPS escort is recommended if you are transporting more than $1,000 of currency.
- Do not photocopy or scan checks, unless specified in an approved cash handling procedure.
- Please see Cash Collection, Deposits & Reconciliation for more information.
Prompt Deposit of Cash
Cash must be deposited promptly; the best and most secure practice is the same day or before close of the next business day. For departments that routinely deposit cash via armored car service, the deposit frequency is governed by the agreement with the armored car service.
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.
09/19/19 - General: Updated Cash Management to Cash and Investment services; General language clean-up, remove redundant information.
Definitions: Those that are not mentioned in the policy or that are not essential have been removed (ACH, Cash Exchange, Cash Management and Operations, CRV, Deposit Bag); Debit card updated to be consistent with definition in Credit Card Policy for Merchant Locations; Wire transfer and EFT consolidated into one definition.
Policy: Added “or credit” to first paragraph in IV; Securing Cash – removed link to separate document for currency guidelines, included information as bullets; Prompt deposit of cash – removed link to separate document for deposit timeframes, rephrased guidance to deposit promptly no later than close of next business day regardless of amount.
Procedures: Removed links, not needed.
Forms: Removed links, not needed.
Contact Roles and Responsibilities: Removed, not needed.
10/1/18 - Updated Executive Sponsor listing.
9/10/18 - Updated responsible offices, minor edits to capitalization.
1/19/12 - Approved.