1 “Practical Cash Handling” Practical - defined as “being capable of being put to use.” Cash...

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“Practical Cash Handling”

Practical - defined as “being capable of being put to use.”

Cash – defined as “money or its equivalent such as checks, money orders, credit or debit cards, which can be used as payment for goods or services.”

Handling – defined as “having overall responsibility for supervising or directing or to perform a required function.”

Source: Definitions provided by the Merriam-Webster Online Dictionary

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Presented by:

Practical Cash Handling

Dan Allen, MBA, CFE, CISA

Student Affairs Controller and Director of Fiscal Support Services

PH: 688-3318

E-mail: [email protected]

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THANKS!!!


There have been MANY involved in the development of this material, including:

• Student Affairs Fiscal Council Members• Internal Audit

• University Police• Office of the Treasurer

A special thanks to Ed Ward from Recreational Sports for his work & participation.

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Course Objectives

Provide overview Cash Handling training to help prepare you to assume cash handling duties at The Ohio State University.

This information is intended to augment your department-specific cash handling policies and procedures, by providing overview, higher-level

University and best practices information.

The overall intent of this course is to:

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Objectives

• Discuss the importance of effective cash handling procedures

• Discuss federal, state, and University requirements

• Discuss potential risks associated with cash handling and actions to be taken

• Discuss cash handling procedures and best practices

• Discuss error/problem reporting procedures, and

• Provide a “walk-through” example of cash handling procedures

In this course, we will:

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Course Topics

Topic 1: Importance of Effective Cash Handling Procedures

Topic 2: Potential Risks and Actions• Theft• Robbery• Fraud

Topic 3: Cash Handling Procedures & Best Practices

Topic 4: Error/Problem Reporting

Part I. Cash Handling Overview and Procedures

Part II. “Walk-Through” Example - Cash Handling Procedures

Part III. Conclusion

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Topic 1: Importance of Effective Cash Handling

Procedures


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Importance of Effective Cash Handling Procedures

Answer:

• Helps to ensure that we are effectively protecting our staff

• Helps to ensure that we are effectively protecting our fiscal resources and keeping our costs as low as possible to our students, customers, and supporters

• Helps to ensure we are accurately reporting our financial condition

• Helps to ensure “public trust”

• Through effective fiscal resource management, we are better able to provide the best facilities, meals, programs, and services

• Because management and staff involved with handling cash are personally responsible and accountable

Why is Cash Handling important?

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• The department’s money?

• The Vice President’s/Dean’s/Chair’s money?

• The University’s money?

• The Student’s money?

• The Taxpayer’s money?

Whose Money Is It?

When we handle money in any of our University operations, whose money is it?


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Whose Money Is It?

Answer: A combination of the University’s, Students’ and Taxpayers’.

It is the “Public’s” Money

Because it is the “Public’s” Money – we must comply with a number ofFederal, state, and University requirements.


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What are some of the requirements?

Answers: We must comply with…

• Generally Accepted Accounting Principles (GAAP)

• The Ohio Ethics Law

• Various tax codes related to such things as Sales Tax or Unrelated Business Income Tax (UBIT)

• Internal controls requirements, including the University’s policies and procedures


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Why are we discussing (GAAP) accounting requirements?

Because every time you:

Your entries are the “Front End” of our accounting system!

Every cash, check, or credit card transaction must be properly recorded in the University’s general ledger.

• Enter a sales transaction into the cash register or onto a cash receipts log• Process credit card payments• Process BuckID payments• Process meal plan swipes• Process sales tax transactions• Enter a sales/deposit transaction into the general ledger• and more


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What is the Ohio Ethics Law?

Enacted in 1973 to promote confidence in government.

As a public employee, we should not accept any:

• Gifts• Gratuities• Additional Pay• Other Incentives of Significant Value

Each employee involved in the handling of public funds must be held to thehighest degree of public trust.


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Internal Controls

• All Deans and Vice Presidents along with their fiscal officers are required to annually sub-certify their level of compliance with sixteen internal controls.

• Six of the sixteen relate to “Cash Handling”

# 1 – Requires training for staff with fiscal responsibilities

# 9 – Requires retention of financial transaction documents per University guidelines

#10 – Requires monthly reconciliations of GL transactions

#12 – Requires monthly reconciliations of non-cash assets and liabilities

#14 – Requires processes and monitoring activities to ensure compliance with the University Treasurer’s policies on “Cash Handling”

#15 – Requires staff to understand and observe the Ohio Ethics Law


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University’s Policies and Procedures

The University’s Treasurer’s Office has established cash handling policies and procedures. These policies and procedures are available from the University Treasurer’s web site at:


http://www.treasurer.ohio-state.edu/PDFs/cash_handling_Manual.pdf

Records Retention Schedule

According to the University Archives, all cash register tapes (ACC1000) and banking documentation (FIN1000) are required to be retained for 4 years.

The retention schedule is available from the University Archives web site at:http://library.osu.edu/sites/archives/retention/general-schedule.pdf

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Answer:

• Helps to ensure that we are effectively protecting our staff

• Helps to ensure that we are effectively protecting our fiscal resources and keeping our costs as low as possible to our students, customers, and supporters

• Helps to ensure we are accurately reporting our financial condition

• Helps to ensure “public trust”

• Through effective fiscal resource management, we are better able to provide the best facilities, meals, programs, and services

• Because management and staff involved with handling cash are personally responsible and accountable

Recap - Why is Cash Handling important?

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Topic 2: Potential Risks and Actions


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Potential Risks

• Theft - depriving the owner of property or services without permission like taking a bicycle, passing counterfeit money, or stealing meat from the restaurant kitchen.

• Robbery – Committing or attempting to commit theft while using force or the threat of force or harm. Using a deadly weapon is armed robbery.

• Fraud – Intentional misrepresentation or concealment of information or resources in order to deceive or mislead. Fraud is illegal.

Potential Risks of Cash Handling

Safety is our highest concern!!

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Theft

• Do not physically try to stop or interfere with the theft.

• If a theft is suspected, call the University Police at 2-2121 as soon as possible. If it is in progress, make sure to tell the police that the thief is still at the scene. If you believe anyone may possibly be in danger, call 911 instead.

• Notify your supervisor of the theft and actions taken – as soon as possible

• If possible and without risking personal danger, follow the person from the site to determine the direction they are traveling and what type of vehicle was used if any. Try to remember as much descriptive information about the vehicle as possible.

• Record as much descriptive information as possible about the person and the item(s) taken. Be prepared to give that information to the first officer who responds.

• Preserve any evidence being sure not to touch or handle if not necessary.

• Help the police identify others that may be potential witnesses.

If a person is committing a Theft --

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Theft

• Use the same procedures as when responding to a theft.

• If you notice that the bill is counterfeit while the customer is there, use your judgment, but consider asking the individual to stay and discuss the circumstances with the police. Recognize that many people that pass counterfeit money do not know that it is counterfeit. If the individual is not willing to stay, record identification information as soon as possible. You don’t need to accept it for payment – but it must be reported (regardless of accepting it or not)! If you mistakenly accept it for payment, the amount will be recorded as “cash short.”

• Minimize touching the money. Set it aside or place it into an envelope.

• Notify your supervisor of the counterfeit money and actions taken – as soon as possible.

• It is our responsibility to report it to the local Secret Service office who will take possession of the counterfeit currency. Do not try to pass it on to others.

If you believe you have received counterfeit money, you must:

How can you detect counterfeit money?

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Theft

• One of the easiest ways is to use a “counterfeit detector” pen. Simply make a small mark on the money. If it is amber or yellow, it is generally OK. If it turns dark brown or black, it may be counterfeit.

• Know the money. There are a number of brochures available to educate you what to look for. You can also obtain considerable information from the U.S. Secret Service web site available at http://www.ustreas.gov/usss/index.shtml


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Theft


Due to increases in color copier technology, two security features were added to Series 1990, 1993 and 1995 U.S. currency. These new features appeared in denominations $5 through $100.

Inscribed Security Thread

A clear, inscribed polyester thread has been incorporated into the paper of genuine currency. The thread is embedded in the paper and runs vertically through the clear field to the left of the Federal Reserve Seal.

Printed on the thread is a denomination identifier. On $100 and $50 denominations, the security thread has "USA 100" or "USA 50" repeated along the entire length of the thread. Lower denominations (i.e. $20, $10 and $5) have "USA" followed by the written denomination. For example, "USA TWENTY USA TWENTY" is repeated along the entire length of the thread. The inscriptions are printed so that they can be read from either the face or the back of the note. The thread and the printing can only be seen by holding the note up to a light source.

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Theft


Microprinting

Concurrent with the addition of the security thread, a line of microprinting appears on the rim of the portrait reading "THE UNITED STATES OF AMERICA" and is repeated along the sides of the portrait.

To the naked eye, the microprinting appears as little more than a solid line and can only be read by using magnification. Microprinting cannot be accurately reproduced by office machine copiers or printers.

If it doesn’t look right or feel right, it probably isn’t right!

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Robbery

• Do not resist or interfere. Provide any cash or property asked for but do not offer anything the robber has not asked.

• As soon as it is safe to do so, call University Police at 911. Explain exactly where you are, what has taken place, if a weapon has been seen or a threat made, and the direction of travel of the robber. Provide as much descriptive information about the robber as possible – be specific. (You may want to write down as much information as you can remember prior to the police arriving.)

• Do not try to follow the person or place yourself or others in personal danger.

• Notify your supervisor and explain the situation and actions taken – as soon as possible.

• Go to a secure place and await police. Do not discuss the description or the events with ANYONE until Police arrive.

• Close operations and lock the doors if possible to preserve any evidence.

If a person is committing a Robbery --

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Theft or Robbery

• Direction of Travel

• Height

• Weight

• Hair Color

• Clothing

• Facial Hair

• Race

• Age

• Marks, Piercings, Tattoo's,

• etc.

Description Information to remember and record:

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Fraud

Fraud – Intentional misrepresentation or concealment of information or resources in order to deceive or mislead. Fraud is illegal.

Cash Fraud Schemes – are not limited to schemes in which customers or employees steal currency. They also involve checks, bank drafts, and other forms of negotiable instruments.

Most cash fraud schemes committed by customers or employees focus on either currency or checks.

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Fraud

Larceny – the removal of cash from an organization AFTER the cash has been recorded in the organization’s books (e.g., after the transaction has been entered into the cash register).

Skimming – the removal of cash from an organization BEFORE the cash has been recorded in the organization’s books (e.g., prior to the transaction being entered into the cash register).

Types of Cash Fraud/Theft Schemes:

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Topic 3: Cash Handling Procedures& Best Practices


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The University does accept checks for payment of various fees and charges providing certain criteria are met.

In efforts to minimize loss of University resources, OSU has created a set of guidelines that must be followed when accepting checks.

Cash Handling Procedures & Best Practices

Check Acceptance

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Acceptable Checks:

Cashier’s Check – A check purchased at a bank for any amount; the bank completes all information on the face of the check with a bank officer signing as the maker.

Certified Check – A personal check guaranteed by the bank; the check is stamped “certified” and signed by a bank officer.

Money Order - An item purchased at a bank, post office, or other business establishment for any amount normally up to and including $200. The bank completes only the amount information.

Travelers Check – A special check supplied by banks or other companies for the use of travelers; these checks already bear the purchaser’s signature and must be countersigned in the cashier’s presence.

Personal Check - A written order payable on demand, drawn on a bank by a depositor; a personal check is written against an individual's funds as opposed to a cashier's check, certified check, money order, or traveler's check, all of which are written against bank funds.


Check Acceptance

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Unacceptable Checks:

Counter Checks - A non-personalized, non-encoded check that is available at most banks.

Starter Checks - A non-personalized check that a person receives from a bank when they establish a checking account.

Third Party Checks - A check made payable to a person or organization other than the one accepting or cashing the check (for example, a paycheck).

Foreign Checks - A check written on a foreign bank (e.g., a Canadian bank) not specifically prepared as U.S. currency. The maker's address might be outside the United States; however, it is the bank's address that must be examined.

Check Acceptance


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Check Acceptance:

• All checks must be restrictively endorsed immediately upon acceptance• Proper identification is required or the check may be refused• Identification must be documented or recorded on the check but you must ask for consent before recording a social security number on any check• All checks must be immediately initialed by the accepting cashier• Every check must be reviewed for completeness as follows:

Preprinted Information

Name & Address – must be printed on the check and must be complete and current.

Check Number – must be printed in the upper right hand corner and often is included in the MICR encoding line

Bank Name & Location – Verify that the bank is in the USBank Encoding - MICR encoding with routing and account numbers

should be professionally printed along the bottom of the check

Check Acceptance


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Written Information

Date – Must be completed by maker and not post dated. Checks more than 14 days old must be refused.

Payee – All checks must be made payable to “The Ohio State University” but may be abbreviated appropriately as “OSU” or “Ohio State”.

Signature – The signature of the maker must be present and should be compared to a valid form of identification.

Amount – The amount written in numerals must agree with the written amount and equal to or less than the amount of purchase. No change will be given from checks written in excess of the amount due.

Check Acceptance


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Proper Identification

University Student – A student may use either their BuckID OR a valid unexpired driver’s license. Other forms of government issued photo IDs may be accepted when the student doesn’t have a driver’s license.

University Employee – A current validated employee ID.

Non-University Customer – A non-University customer must provide a driver’s license or other form of government issued photo ID AND some other form of valid unexpired identification such as a major credit card, employee ID or passport.

Check Acceptance


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Safe and effective cash handling requires everyone involved to be aware of their responsibilities. The following are guidelines to be followed when handling cash payments.

Safety and Security Personal safety should be your highest priorityBecome familiar with US CurrencyUse counterfeit detection pens on all bills $10 and greaterNever leave cash unattended

Never share a cash drawer

Accuracy Matters When possible, count cash three timesUse a calculator or adding machine to verify your addition“Face” your currency in the same directionSales totals must balance with cash/checks/credit cards at the end of your shift

Common Sense Take your time by waiting on one person at a timeAsk for help if you need itDo not put the customer’s cash away until change is madeDo not accept foreign currencyDon’t accept mutilated currency

Cash


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• Obtain secured cash drawer/box from supervisor

• In a secure location, count/verify cash balance before shift begins (never count cash in public view)

• Ensure appropriate denominations are in the cash drawer/box to be able to make change

• Ensure the drawer/box is able to be locked/secured

• Ensure appropriate “tools” are available: counterfeit detection pen, receipts, endorsement stamp, etc.

Best Practices


Preparation

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• Keep area looking clean and neat

• Constantly be on the lookout for suspicious looking people or activity

• Don’t leave cash or register unattended

• Never share the cash drawer with others

• Take your time

• All sales should be recorded on the register (or appropriate cash receipts log)

• Receipts should be provided to customers for all sales

Best Practices


Perform – Cash Handling

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• The cash drawer should never be left open unless a transaction is in process

• Use counterfeit detection pen on all denominations of $10 or higher

• Do not put customer’s cash away until change is made

• “Face” all of the cash in one direction in the drawer

• Check customer identification and check that all required items are on the check

• Write customer’s identification information and your initials on the check

• Immediately endorse the back of the check with the endorsement stamp

Best Practices



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• Do not accept mutilated currency, starter checks, third-party checks, foreign checks, checks that have been altered or smudged, checks marked “Paid in Full”, checks that are post-dated, or checks with the date greater than 14 days old.

• Check for identification and expiration date on all credit cards

• All refunds and voids must be reviewed and approved by management

• All corrections must be made through the register

• Minimize cash in the drawer by moving excess money to the safe

Best Practices



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• Don’t count cash or receipts in public view

• All register totals (log totals) must be balanced at the end of the shift and reconciled at least daily

• Overages and shortages must be logged and fully explained

• Provide register totals and cash to management to o Recount/verify amounts o Verify change fund and sales receipts balance with cash on hando Ensure money is secured at end of shift

Best Practices


Close Out

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• Ensure that everyone that handles cash is trained

• Ensure the overall security of the area and security of cash/checks and credit card receipts (including access to safe)

• Ensure staff are not sharing cash drawers

• Ensure cash is counted and balanced before each shift and after each shift and management documents completion and agreement

• Ensure cash (change fund) is balanced at least daily and documented

• Ensure overages and shortages are logged and fully explained

• Review all refunds and voids

Best Practices


Management

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• Perform periodic unannounced cash counts and reconciliations

• Ensure no bags or ways to hide cash are permitted near cash registers or deposit centers, including wallets, purses, etc.

• Frequently observe the overall sales and cash handling environment, looking for organization, cleanliness, suspicious persons or activities, and compliance with policies and procedures

• Consider use of video recording camera

• Ensure an appropriate returned check fee sign is posted at check-acceptance sites

Best Practices


Management

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• Ensure deposits are made at least once a week or when $500 or more in cash and checks has accumulated, whichever comes first

• Ensure supporting documentation is kept in accordance with records retention schedules (4 years)

• Ensure all accounting transactions are reconciled to the University’s general ledger in a timely manner.

Best Practices


Management

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Error/Problem Reporting

In the event that you believe that there may be problems or issues regarding cash handling:

• If possible, address it with your supervisor first.

• If you are uncomfortable with this, you can always report concerns to a higher level.

• Feel free to contact:

• Internal Audit

OR

• The OSU Anonymous Reporting Line at 1-866-294-9350

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Topic Review

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Topic 1: Importance of Effective Cash Handling Procedures

Topic 2: Potential Risks and Actions• Theft• Robbery• Fraud

Topic 3: Cash Handling Procedures & Best Practices




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Part I. Objectives Review

• Discussed the importance of effective cash handling procedures

• Discussed federal, state, and University requirements

• Discussed potential risks associated with cash handling and actions to be taken

• Discussed cash handling procedures and best practices, and

• Discussed error/problem reporting procedures

In Part I, we

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Part II. “Walk-Through” Example


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Situation:

Walk-Through Example

Department ABC is sponsoring a two-day international conference here at OSU. It is anticipated that there will be approximately 300 participants from around the country. The conference will be held at the Blackwell Inn. Registration is from 7:30 AM to 9:30 AM both days.

The department has worked hard to keep the conference costs as low as possible and it intends to just “break-even”. The fees will be $22.00 per person (250 participants expected) for those attending the first and second days, and $16.00 (50 participants) for those that are attending only the second day of the conference.

You have been asked to collect the cash for the conference and to work with another person to register the participants and to handout conference materials and “goodies.”

Participants have been informed that payments must be in the form of cash or checks and that only US currency and checks will be permitted.

The department has received $100 as a change fund, mostly in $1 and $5 denominations, and will work from a lockable change box. Blackwell has agreed to secure the money in their safe over night.

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Situation (continued):

It is now 6:30 AM on the first day of the conference.

What do you do?


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• Obtain secured cash drawer/box from supervisor

• In a secure location, count/verify cash balance before shift begins (never count cash in public view)

• Ensure appropriate denominations are in the cash drawer/box to be able to make change

• Ensure drawer/box is able to be locked/secured

• Ensure appropriate “tools” are available: counterfeit detection pen, receipts, endorsement stamp, etc.

Best Practices

Preparation


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• Keep area looking clean and neat

• Constantly be on the lookout for suspicious looking people or activity

• Don’t leave cash or register unattended

• Never share the cash drawer with others

• Take your time

• All sales should be recorded on the register (or appropriate cash receipts log)

• Receipts should be provided to customers for all sales

Best Practices



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• The cash drawer should never be left open unless a transaction is in process

• Use counterfeit detection pen on all denominations of $10 or higher

• Do not put customer’s cash away until change is made

• “Face” all of the cash in one direction in the drawer

• Check customer identification and check that all required items are on the check

• Write customer’s identification information and your initials on the check

• Immediately endorse the back of the check with the endorsement stamp

Best Practices



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• Do not accept mutilated currency, starter checks, third-party checks, foreign checks, checks that have been altered or smudged, checks marked “Paid in Full”, checks that are post-dated, or checks with the date greater than 14 days old.

• Check for identification and expiration date on all credit cards

• All refunds and voids must be reviewed and approved by management

• All corrections must be made through the register

• Minimize cash in the drawer by moving excess money to the safe

Best Practices



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• Don’t count cash or receipts in public view

• All register totals (log totals) must be balanced at the end of the shift and reconciled at least daily

• Overages and shortages must be logged and fully explained

• Provide register totals and cash to management to o Recount/verify amounts o Verify change fund and sales receipts balance with cash on hando Ensure money is secured at end of shift

Best Practices

Close Out


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• Ensure that everyone that handles cash is trained

• Ensure the overall security of the area and security of cash/checks and credit card receipts (including access to safe)

• Ensure staff are not sharing cash drawers

• Ensure cash is counted and balanced before each shift and after each shift and management documents completion and agreement

• Ensure cash (change fund) is balanced at least daily and documented

• Ensure overages and shortages are logged and fully explained

• Review all refunds and voids

Best Practices

Management


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• Perform periodic unannounced cash counts and reconciliations

• Ensure no bags or ways to hide cash are permitted near cash registers or deposit centers, including wallets, purses, etc.

• Frequently observe the overall sales and cash handling environment, looking for organization, cleanliness, suspicious persons or activities, and compliance with policies and procedures

• Consider use of video recording camera

• Ensure an appropriate returned check fee sign is posted at check-acceptance sites

Best Practices

Management


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• Ensure deposits are made at least once a week or when $500 or more in cash and checks has accumulated, whichever comes first

• Ensure supporting documentation is kept in accordance with records retention schedules (4 years)

• Ensure all accounting transactions are reconciled to the University’s general ledger in a timely manner

Best Practices

Management


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Part III. Conclusion


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Part I. Objectives Review

• Discussed the importance of effective cash handling procedures

• Discussed federal, state, and University requirements

• Discussed potential risks associated with cash handling and actions to be taken

• Discussed cash handling procedures and best practices, and

• Discussed error/problem reporting procedures

In Part I: Cash Handling Overview and Procedures, we

In Part II, we

• Created a cash handling scenario and performed a “walk-through” of cash handling “best practices”

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Course Objectives Review

Provide overview Cash Handling training to help prepare you to assume cash handling duties at The Ohio State University.

Have we met our objective?

The overall intent of this course was to:

If you have questions, please contact• Your unit management• Your Senior Fiscal Officer• Office of the Treasurer, or• Internal Audit

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