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 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: 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

“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 after Stealing $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: 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