Office of Internal Audit

Cash Handling

1. Are there procedures to establish accountability for revenues immediately upon receipt?
  • Ideal Answer: YES. A cash register, cash receipt journal/log, or other logging mechanism should be used to establish accountability immediately as monies are received. This will provide an audit trail of the funds received and support the recording of the transaction into the University records. It also provides a record for Public Safety in case of loss, misappropriation, or theft. Please refer to Office of Business Operations’ (OBO) Cash Handling webpage to obtain the recommended cash receipt journal/log for use when a cash register is not available.
2. Are all checks properly endorsed "for deposit only" to the University?
  • Ideal Answer: YES. Checks should be endorsed immediately upon receipt "for deposit only" to the University to prevent diversion and unauthorized cashing. You can use a stamp or hand-write the following text: "For deposit only, University of Northern Iowa, Department of  ________________". The unit’s account number for the deposit must also be recorded on the back of the check in case it is returned for non-sufficient funds (NSF). Please refer to OBO’s Cash Handling website for additional information.

3. Are cash and cash equivalent items (checks, credit card receipts, parking stickers, stamps) physically safeguarded against theft and loss?

  • Ideal Answer: YES. Cash and cash equivalent items are extremely vulnerable to theft and should be secured at all times with access limited to authorized personnel. Ideally, a safe should be used for storage of cash items until deposited. Alternatively, a locking box bolted/secured into a drawer that is also locked could be used. Access to a safe or lock box should be limited to very few and should remain locked while not in use. Safe combinations should be changed periodically and when employees with access leave the department and/or terminate. Combinations and keys should be kept in a secure, secret place. Any substantial shortage or apparent theft must be reported immediately to Public Safety. Please refer to OBO’s Cash Handling website for additional information.
4. Is there proper separation of duties in the cash handling function (an individual should not have responsibility for more than one of the cash handling components: recording of charges/billing, collecting, depositing, and reconciling)?
  • Ideal Answer: YES. There should be proper separation of duties so that one employee is not performing all cash handling duties. Different employees should be accepting money, making the deposit, recording the deposit (and customer payment), and reconciling the accounting records. Deposit records should be reconciled to the daily and monthly accounting reports to ensure deposits have been posted to the appropriate account for the appropriate amount. To ensure that differences are discovered, someone who does not handle cash should perform the reconciliation.  Proper separation of duties enhances accountability and reduces the risk of possible wrongdoing. In addition, OBO through the Cashier’s Office requires all employees handling cash and revenue to be certified. Please refer to OBO’s Cash Handling website for additional information.
5. Are cash shortages identified, analyzed, recorded, and reported?
  • Ideal Answer: YES. Operational cash overages and shortages should be recorded as part of the deposit process to provide an audit trail of these occurrences. The deposit process should identify the amount of cash overages/shortages. Management oversight should monitor trends and investigate to determine the underlying cause. Appropriate corrective action should be taken to prevent further losses or errors. Any substantial shortage or apparent theft must be reported immediately to Public Safety. Please refer to OBO’s Cash Handling website for additional information.
6. Are funds collected and deposited at least weekly or when the amount on hand is greater than $250, whichever occurs first?
  • Ideal Answer: YES. In order to reduce the amount and risk of loss to the University, funds must be deposited at least once a week or whenever collections exceed $250. However, daily deposits are encouraged. Please refer to OBO’s Cash Handling website for additional information.
7. Are all funds collected properly deposited intact?
  • Ideal Answer: YES. To ensure that all receipts are posted properly to the unit's account(s), the entire amount of receipts collected must be deposited. None of the cash collected in the unit may be used prior to deposit. For example, the unit cannot use $10 of its cash receipts to purchase postage and then reduce the amount of its cash deposit by the $10 used. In case of cash overages/shortages, the cash overage/shortage amount should be recorded as part of the deposit to equal the total receipts collected. The unit’s authorized change fund should be maintained at its authorized amount at all times and cash overages/shortages not allowed to flow through it. Please refer to OBO’s Cash Handling website for additional information.
8. Is someone independently reviewing and approving voids and refunds?
  • Ideal Answer: YES. A strong internal control is to require someone with proper authority to approve voids and refunds before they are processed. The person providing this approval should not be the same person who initiated (received) the transaction. The approval should be documented and retained with the daily records. Please refer to OBO’s Cash Handling website for additional information.
9. Are steps taken to ensure the safety of the person transporting the deposit to the Cashier's Office or drop site location?
  • Ideal Answer: YES. Secure the deposit in a locked money bag/pouch. Be as inconspicuous as possible by disguising the money bag in some fashion, such as placing it in a book bag. Alter the route and time of delivery to the designated deposit drop-off location. Please refer to OBO’s Cash Handling website for additional information.

10. Is your change or reimbursement (petty cash) fund an authorized advance from the Office of Business Operations (OBO)?

  • Ideal Answer: YES. All University funds must be recorded and properly accounted for. If you are going to make change, then you will need an authorized change fund. Please contact the Cashier's Office to obtain a departmental change or reimbursement fund request form. It must be completed and approved by the applicable department head and submitted to the Cashier’s Office in OBO. Keep the amount of the cash fund to a minimum; it can always be increased if necessary. Do not hold back receipts to create or increase your authorized change fund. The entire  amount of receipts collected must be deposited to the unit's account(s).

    A Departmental Reimbursement Fund is necessary for numerous reasons, most commonly for "petty cash". With the ability to put most purchases on a departmental procurement card, please conduct a thorough analysis prior       to requesting an advance of this type and subjecting the department to       additional responsibility of safeguarding the money. Please refer to OBO’s Cash Handling website for additional information.

11. Are the departmental change and/or reimbursement funds balanced daily?

  • Ideal Answer: YES. To ensure that University funds are properly accounted for, departmental change and reimbursement funds must be balanced monthly and every time they are used. The cash amount (plus original detailed purchase receipts for the reimbursement fund) should always equal the amount that OBO has authorized for the department.

    Employees are prohibited from using the receipts or authorized funds to make loans(IOU's) or cash personal or payroll checks. The funds must be kept locked in a secure location except when being used to accept funds or transact business. Please refer to OBO’s Cash Handling website for additional information.