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.treasury.gov/about/organizational-structure/offices/Treasurer-US/Pages/if-you-suspect.aspx 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