University Income Recognition and UPPS No.
03.01.05
Associated Cash-Handling Procedures Issue No. 8
Effective
Date: 10/22/2010
Review:
November 1 E4Y
01. POLICY STATEMENTS
01.01 This policy sets forth requirements and
procedures for the collection and recording of university income, as well as
associated cash-handling and electronic payment procedures. The Finance and
Support Services Division has the responsibility and authority for promulgating
policies and guidelines associated with this policy, so as to safeguard the
assets of the university. This policy applies to all university income,
regardless of the method by which payment is made. It is also applicable to
deposits for the reduction of expenditures.
01.02 Account managers, deans, directors, and other administrators
of departments or areas that collect and record university income must ensure their
departments have adequate control policies to secure proper payment collection
and receipt, and employee compliance with those policies.
01.03 All income received, deposits, and
reconciliations are subject to audit and review by the Office of Audits and
Analysis, as well as the Cashiers’ Office (Treasurer’s Office). These offices
are also authorized to conduct cash counts without prior notice.
02. DEFINITIONS
02.01 University Income – may originate from a
variety of sources including:
a. state appropriations;
b. services provided to students, faculty,
staff, and the community;
c. sale of supplies, equipment, land, and other
assets;
d. externally-funded grants and contracts;
e. interest and investment earnings;
f. rental of university property;
g. property or security deposits; and
h. donations.
This UPPS refers to university income as
income.
02.02 Cash and Cash Equivalents – refers to
currency, coins, checks, travelers’ checks, cashiers’ checks, money orders,
savings bonds, or other negotiable instruments readily converted to cash. It
also includes payments made to the university with credit cards, debit cards,
electronic checks, ACH debits or other electronic methods.
02.03 Cash-handling Procedures – is a generic term
that encompasses all procedures related to the collection, receipting,
recording, and security of university income including payments made via cash,
check, and electronic methods.
02.04 Electronic payment methods include: credit
cards, debit cards, stored-value cards, ACH transfers, electronic checks, and
wires.
03. PROCEDURES FOR RECEIPT AND
DEPOSIT OF FUNDS
03.01 The Cashiers’ Office is the depository and
custodian of all monies received for the university and has primary
responsibility for receipting, depositing, and recording income (and reduction
of expenditures) into the financial records of the university. Departments may
never deposit a check payable to Texas State University or cash paid to the
department into any personal checking account.
03.02 The university encourages departments that
receipt university income to have written procedures for control of these
funds. Departments may contact Student Business Services or the Office of
Audits and Analysis for assistance and guidance for proper cash-handling
procedures.
03.03 Separation of Duties – Different individuals
should perform each of the duties of collecting funds, maintaining
documentation, preparing deposits, and reconciling records. However, staffing,
timing, and other constraints may necessitate that one individual perform two
of these duties. In such cases, individual accountability, and thorough
management supervision and review are required.
a.
The
department head should assign the responsibility of receipting and accounting
for funds to one individual (or as few as possible, depending on the volume of
funds received).
b.
Permanent
employees must perform these duties as university insurance does not cover
part-time employees. Part-time or temporary employees (including student
workers) may assist the responsible person in carrying out these duties.
03.04 Recording University Income – University
departments must have controls to safeguard, account for, and document funds
received as soon as those funds are received. Department records must detail
the purpose, source, date, and amount of payment prior to the funds’ deposit
with the Cashiers’ Office.
The department should examine cash for
counterfeit and, if suspected, refer to http://www.ustreas.gov/offices/domestic-finance/acd/if-you-suspect.shtml for information on
how to detect or respond to counterfeit money. Each payer must receive a receipt
detailing the date, amount, and purpose regardless of which form of receipting
or record keeping is chosen in subsection a. below.
It is the responsibility of the department
receiving checks to ensure that the check meets the following criteria:
·
Made
payable to Texas State University
·
Not
a post-dated check
·
The
check is not dated more than 90 days prior to the date of acceptance, unless a
shorter time period is indicated on the face of check before the check becomes
stale-dated
·
The
numerical dollar amount and the written dollar amount on the check are
consistent and correct
·
Single
party account and is signed by the account holder
·
Drawn
against a bank registered within the United States and in US dollars
·
The
check is not restricted as “payment in full” or equivalent
a.
Collection
receipts and support records systems:
1)
Cash
Registers or POS Systems – Retail business operations may use a cash register
or POS systems to record income after consulting with Student Business Services
to ensure compliance with security.
2)
Checks
Received Log (Maintained on a spreadsheet or database program) – Logs include,
as a minimum requirement, the check date, received date, check number, remitter’s
name, and check amount. Departments should keep a copy of the log. If departments
copy checks, not a recommended practice, they should secure the check copies
and destroy them when no longer needed. Check endorsements, made immediately
upon receipt, should include:
For
Deposit Only
Texas
State University–San Marcos
Department
Name
3)
Pre-numbered
Receipt Books (at least three parts) – The receipt book design should match the
collection type. Departments will use the receipts in numerical order, account
for each receipt, including voids, and maintain used books in a secure area. Use
receipts as follows: one copy to payer (if cash, or if requested), one copy to
Cashiers’ Office with the deposit, and one copy remains in receipt book for
audit purposes.
4)
Invoices
or Account Statements – Identify each invoice and account statement with a
unique number, update at time of payment with date and payment method,
recording either check number or credit card reference number, and mark paid.
5)
Registration
Forms – Record payment information on the form at the time of payment. If the
form allows for credit card information, the department must secure the form
with limited access, process the card information immediately, and destroy it
based on department credit card retention rules.
6)
Tickets
for Admissions – Refer to UPPS No.
03.01.20, Admission Tickets for All University Events.
7)
Computer-Generated
Receipts – Identify receipts by a unique receipt number. Include on the printed
receipt: Texas State University, department name, department phone number,
date, method of payment, and amount of payment.
8)
On-line
Receipting – An office or department that receipts a high volume of income may
contact the director of Student Business Services to determine the feasibility
of utilizing electronic receipting methods.
9)
Other
Approved Methods – Contact the director of Student Business Services.
03.05 Safeguarding of Funds – All departments must
provide adequate safekeeping and security of funds received. Examples are a
lockable cash box kept in a locking file cabinet, locking credenza, desk, or a
locked safe.
03.06 Daily Collections Balancing – Departments
should balance monies received to recorded receipts on a daily basis. The Student
Business Services Web site at: www.sbs.txstate.edu/departments/dept_receipting.html contains deposit
forms and guidelines to follow when preparing deposits.
03.07 Timeliness of Deposits – Departments must
transfer funds to the Cashiers’ Office not later than the close of business on
the next work day after receiving the funds. This time frame is necessary to
assure that deposits to the university’s depository bank meet the State’s
requirement for deposit within seven days of the date of collection (Education
Code §51.003-(b)). A department may never withhold money from daily receipts to
create any type of miscellaneous fund.
a. Departments that fail to make their deposit
with the Cashiers’ Office within one business day after receipt may receive a
charge against their operating account for lost interest, calculated at the
current money market rate for the time the funds were not on deposit.
03.08 Delivery of Deposits – The Cashiers’ Office
should receive deposits in a bank bag, never through campus mail. Departments
should hand deliver or courier the deposits to the Cashiers’ Office. High-volume
departments may use an armored car or security service to transport deposits.
The Treasurer’s Office will negotiate the use of this service on behalf of the
departments and may allocate the costs accordingly. Upon request, the
University Police will assist with escorting of funds when an appropriate
safety need exists. A cashier will issue a receipt to the person making the
departmental deposit at the window.
04. CASH-HANDLING GUIDELINES
04.01 The department must issue the receipt to the
person from whom they receive the money for all cash transactions.
04.02 Employees receiving cash funds should count
the cash, and any change given to the customer should be counted out.
04.03 Departments are not authorized to use
collected funds for any purpose other than for deposit.
04.04 Departments may not hold cash receipts for the
purpose of creating unofficial and unapproved departmental petty cash funds.
04.05 Departments may only have authorized change
funds and may not comingle funds with other monies.
04.06 Generally, two employees should receive and
open the mail.
05. RECONCILIATION PROCEDURES
05.01 Departments review the SAP financial system
and reconcile that funds collected and funds deposited were posted for the
correct amount to the correct account.
05.02 Departments should perform reconciliations
monthly to ensure timely error identification.
05.03 A different person from the one who collected
the funds or prepared the deposit should perform reconciliations.
05.04 The Cashiers’ Office will answer questions
regarding deposit amount or the general ledger account to which the deposit was
posted.
05.05 The account manager should review and sign off
on all reconciliations.
06. CREDIT CARDS AND OTHER
ELECTRONIC FORMS OF PAYMENT
06.01 The director of Student Business Services is
responsible for determining activities for which the acceptance of credit cards
and other forms of electronic payment (such as wire transfer and electronic
checks) may benefit the university. Such determination may include a
cost/benefit analysis, security risk evaluation, separation of duties review,
anticipated volume, and other relevant factors. Departments with delegated
receipting duties may accept credit cards and other forms of payment only with
prior written approval of the director of Student Business Services. The
Cashiers’ Office will establish the department as an approved merchant with the
university’s bankcard service provider and will provide initial training for
credit card procedures and equipment.
06.02 Cost of Credit Card Acceptance and other
Electronic Forms of Payment – Student Business Services will add fees charged
by bankcard service providers, financial institutions, and associated
processors to the department accepting such payment forms for departments other
than the Cashiers’ Office.
06.03 Electronic
Payment Standards and Practices – Numerous external entities expect and require
university compliance with various standards and practices for handling
electronic payments. Among these are merchant and bankcard service providers
that adhere to the Payment Card Industry’s Card Information Security Program
(PCI CISP) (https://www.pcisecuritystandards.org/). The Texas
Department of Information Resources (DIR) also promulgates rules to assure the
security of the electronic payment systems used by state agencies and higher
education institutions. These standards and practices continue to evolve along
with the technologies employed, making it impractical to list them in this
policy.
To facilitate ongoing
compliance with these ever-changing standards and practices, university
departments are required to seek an analysis of any new or modified electronic
payment methods or processes from the Cashiers’ Office prior to their
implementation. The Cashiers’ Office will involve Technology Resources as
necessary to identify and address security and technology issues. The
university does not guarantee it will authorize departments accepting electronic
payment by one method (e. g., to process credit cards via payment terminal) to
accept electronic payments by another method (e. g., online via the Internet).
Not storing payment
card information on university systems makes the vast majority of security
concerns unnecessary. Consequently, no university computer system may store
payment card information (credit/debit card numbers, card expiration dates,
checking account numbers, etc.) for any period longer than is necessary to
process the individual payment transactions.
06.04 Online Payment Applications – Departments conducting
business via online payment applications shall utilize the university’s established,
certified PCI DSS compliant gateway. These gateways have been certified PCI DSS
compliant and are critical to the stability and security of the university’s
online business.
Departments wishing to conduct business via
online payment applications shall obtain prior approval via the university
established Electronic Payment Infrastructure (EPI) Team. The EPI Team will
assess a department’s various needs and determine the resource required to
create, implement and support an online payment application. All online payment
application projects will be prioritized by university established priorities
committees.
Student Business Services, with assistance
from Technology Resources and departmental and EPI resources, will monitor all
online payment applications for production fitness in accordance with this
document.
06.05 The offices processing debit or credit card
transaction documentation, including
duplicate debit or credit card transaction records, must keep the records in a
secure location such as a vault, locked cabinet, or a locked room with
restricted access, as long as business needs require, but no more than two
years after the month of transaction execution.
07. FINANCIAL RECORDS
07.01 The Director of Student Business Services
oversees the deposits to Texas State to ensure that they are receipted as
directed and deposited in the bank to the proper fund group.
08. REVIEW OF DECENTRALIZED CASH COLLECTION
OPERATIONS
08.01 The director of Student Business Services or
designee oversees the decentralized cash collection operations. If departmental
cash collection sites fail to follow this UPPS or inquiries disclose irregularities,
the director of Student Business Services may modify cash collections at a
decentralized site, up to and including cessation of such activities. The director
of Student Business Services will work with the department’s administrative
management regarding problems found and changes to such operations.
09. RELATED POLICIES
09.01 Departments receipting university funds should
know related university policies including the following:
UPPS No. 03.05.01, Soliciting,
Accepting, and Processing Gifts and Grants from Private Sources
UPPS No. 03.01.20, Admission Tickets
for All University Events
Finance and Support Services policies and
procedures, available at
www.vpfss.txstate.edu/division1.htm
10. REVIEWERS OF THIS UPPS
10.01 Reviewers of this UPPS include the following:
Position Date
Treasurer November
1 E4Y
Director of Student
Business Services November 1 E4Y
Vice President for
Information November 1
E4Y
Technology
11. CERTIFICATION STATEMENT
This UPPS has been approved by the following
individuals in their official capacities and represents Texas State policy and
procedure from the date of this document until superseded.
Treasurer; senior reviewer of this UPPS
Vice President for Finance and Support
Services
President