cash controls at osu. what is “cash”? currency, coin, and cash equivalents: checks traveler’s...

CASH CONTROLS AT OSU

WHAT IS “CASH”?

• Currency, coin, and cash equivalents:

ChecksTraveler’s checksCashier’s checks

Credit card records

EFTs: ACH and wire transfers

Items of cash value: ticket, gift cards/certificates

BEST PRACTICES

• For handling currency and coin:

• Be watchful for counterfeit bills• Count cash out of public view• Count cash in double custody• Always give a receipt• Store cash in secured locked receptacles• Deposit in person at the Cashiers Office

• For accepting checks:

• Endorse all items promptly upon receipt

• Store checks in secured locked receptacles

• Examine the legal line

• Deposit daily. Late deposits increase the risk of NSF or stop payment checks.

BEST PRACTICES

• Protect assets

• Protect reputation

• Protect employees

•Weaknesses in internal controls can result in substantial losses.

INTERNAL CONTROLS

• Physical safekeeping of assets

• Separation of duties

• Accountability

INTERNAL CONTROLS

• Cash processing areas are secured from entry by unauthorized people

• Cash is stored securely

• Cash is not left unattended

SAFEKEEPING OF ASSETS

• Frequency of cash revenue

•Nature of business

• The physical layout of the office

IMPACTING SAFEKEEPING

•No individual has control over the entire transaction cycle

Receiving

Depositing

Recording

Reconciling

SEGREGATION OF DUTIES

• Frequency of cash revenue

• Lack of staff

•Management trust

IMPACTING SEGREGATION OF DUTIES

•Who has access to cash and why

•Where an asset is at all times

•Where keys are at all times

• Transfers are documented

• All transactions can be traced

ACCOUNTABILITY

• Cash is deposited within 24 business hours of receipt

•Web departmental deposits• Deposits 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 defined

• Cash handling procedures for your department• Copies of these procedures signed & dated by

the employees responsible for the execution of these procedures

• Documentation, 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 history

• Perform background checks

• Make sure they have cash handling training

• Know 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, Illinois

Rita 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 deposit• Deposit 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.

Cash on Hand

Receipts on Hand

Recorded Amount of the Fund

PETTY CASH FUNDS

• They “disappear”

• They “grow” or “shrink”

• Custodians are changed without documentation

• Resolve these problems quickly, they are audit issues

PROBLEMS WITH PETTY CASH FUNDS

•Where the heck are they?

• Business Affairs—link to Business Center Resources

• FIS Manual: 1402-10

PETTY CASH FORMS

•Get Ready• Review your own office like an auditor• Document procedures• Separate the duties• Train employees• Deposit daily• Reconcile monthly

PREPARE A CHECKLIST