CASH RECEIPTS
For
purposes of this manual, cash receipts shall mean any and
all cash received, such as revenues, patient or inmate trust
receipts, and sales of securities and other assets. All checks
should be stamped "For Deposit Only" as soon as
practical after received.
INITIAL RECORD OF CASH RECEIPTS
The
system of control must ensure that all cash which should be
received is actually received and is promptly recorded and
deposited. It is imperative that initial accountability be
established over cash receipts by listing or otherwise recording
them as soon as received. Cash receipts stolen before a record
of receipt is made are much more difficult to trace than cash
received and recorded, followed by a theft and manipulation
of the records. The initial recording of receipts should be
by someone who will have no further control over cash handling
or accounting. Then, there will be no opportunity to conceal
any failure to list all cash received, through access to accounts
receivable or other records.
The receipt of cash should be centralized whenever possible.
The initial record of cash receipts may be a press-numbered
receipts form, a summary of press-numbered license tickets
or permits issued, a cash register tape, a mailroom listing,
or remittance advices. The choice depends on the type of agency
and the nature of its revenues.
SERIALLY PRESS-NUMBERED RECEIPT FORMS
Serially press-numbered receipt forms should be used for recording
cash receipts, if other means of control over receipts are
not otherwise provided. They should be used for all currency
collections regardless of source.
Where
it is necessary to initially record cash receipts at different
locations, the receipt form may be used as a subsidiary cashbook.
In such cases, all cash receipts including currency, checks,
money orders, etc., should be entered in the press-numbered
receipt book.
To
maximize control over press-numbered receipt forms, the following
procedures should be adhered to:
a. The forms should be press-numbered
and printed in triplicate. The original should be given
to the payor, the duplicate used to establish accountability
for the cash collected, and the triplicate retained in numerical
sequence to establish accountability for the forms printed
and used. The duplicate and triplicate copies should contain
the printed statement "COPY - THIS IS NOT A VALID RECEIPT."
Where appropriate, signs should be displayed advising payors
to request a receipt form. The sign should include a facsimile
copy of the form.
b. A Certification should be obtained
from the printer as to the quantities of forms delivered
and the corresponding numbers.
These certificates should be used as a basis for inventory
control over the forms available for use and for reconciliation
of issued forms.
The custody of perpetual inventory records and forms should
be assigned to an employee who is independent of the cashiering
function, and who does not have access to the bookkeeping
records for cash. The inventory records should show:
(1) The quantity and serial press-numbers for each shipment
of forms received.
(2) The quantity and serial press-numbers for each block
of forms issued to an employee or collecting station.
(The signature of the employee to whom they are delivered
should be obtained.)
(3) The serial press-numbers and the quantity (balance)
of the forms on hand.
(4) The book inventory of the forms on hand should be
periodically verified by a physical count of the forms
on hand. This verification should be performed by an employee
other than the custodian of the forms and records.
c. Provision should be made
on the forms for indicating the purpose and type of money
received. The latter might be accomplished by having descriptive
terms printed on the forms, with an appropriate box to be
checked for currency, check or money order.
d. Moneys received at collection
stations should be turned over to a designated cashier for
deposit at prescribed intervals. If possible, this transmittal
should be made at the close of each day. If daily transmittal
is not feasible due to location of collection stations,
or if amounts of collections are nominal, transmittals may
be made less frequently, but in no case, less often than
once a week. Each cash transmittal should be accompanied
by the corresponding duplicate copies of the press-numbered
receipt forms issued, and a covering document identifying
the dollar amount and sequence of form numbers transmitted
and the period of time covered by the transmittal. The cashier
should "audit" each transmittal received to assure:
(a) that the receipt forms have been transmitted promptly,
(b) that all press-numbered forms issued and/or voided since
the prior transmittal have been accounted for, and (c) that
the monies were turned over in the form originally received.
This can be done by inspecting the checked boxes on the
receipt forms which show currency, check or money order.
The cashier should issue to the employee who transmitted
the funds a receipt form for the total amount of moneys
turned over.
e. When it is necessary to
void or cancel a receipt form, the original should be marked
in such a manner that it cannot be reused.
This is important because no system of cash control, through
the use of press-numbered receipt forms, is effective unless
a strict accounting is made of all forms.
f. In many cases, receipt
forms are printed in bound pads to facilitate control of
the forms issued. When all forms in a bound pad have been
issued, the used pad should be returned to the employee
responsible for keeping the book inventory of the press-numbered
forms. This employee should examine the pad to see that
all forms have been properly accounted for and that all
copies of "void forms" are in the pad. He should
make appropriate entry of his inventory control records
indicating return of the used forms.
MAIL RECEIPTS
In many agencies, the majority
of cash remittances (taxes, licenses, permits, fees, etc.)
are received by mail. This mail should be opened at designated
times (usually once or twice a day) by two or more designated
personnel. To assure that remittances are all accounted
for and properly deposited, the following procedures, or
ones providing comparable control, should be used.
a. If cash receipts are simultaneously
received for different purposes, any accompanying documents
should be sorted by revenue type.
b. Each document should be
assigned a cash line or serial number in strict numerical
sequence which should be stamped on both the document and
the remittance (check) accompanying it. If currency is received
in the mail, a "dummy" document may be created
on which the serial number is recorded. An accompanying
letter or envelope may serve this purpose. A press-numbered
receipt form should be issued to the payor acknowledging
receipt of the currency.
c. The documents for each
operating bureau, if they are numerous, should be batched,
usually in groups of 50 or less, to facilitate handling.
d. Remittances should be
listed on a cash report to be distributed as follows: the
original, together with the remittances, should go to the
cashier for deposit; one copy should go to the accounting
office for posting to appropriate records; other copies
should go to the appropriate operating bureau(s) along with
the documents to be processed (tax return, license, permit,
etc.).
MISCELLANEOUS MAIL RECEIPTS
Agencies
that receive the majority of their cash receipts over the
counter, may also receive some remittances by mail. The following
procedure is suggested to control these mail remittances.
a. The mail should be opened
by a designated employee in the mailroom. Press-numbered
receipt forms should be issued for any currency received.
b. The mailroom should prepare,
in triplicate, a listing of all remittances received. This
list should show the amount and form of each remittance;
the name of the beneficiary, if any, for whom the money
was received (in the case of moneys received for inmates
or patients of State institutions); the name of the remitter;
and the purpose for which the cash was received, as indicated
in the accompanying correspondence. Remittances for which
the mailroom cannot determine proper distribution should
be listed on a separate transmittal. To aid in the identification
of these items, the envelopes for these remittances should
be retained.
c. Remittances should be
transmitted daily to the cashier, who in the presence of
the employee delivering the transmittal should verify that
the amount received agrees with the total of the items on
the list, receipt the original list and return it for filing
in the mailroom. The duplicate listing should be retained
by the cashier while the third copy should be forwarded
by the mailroom to the accounting office for posting to
appropriate records.
d. The correspondence accompanying
the remittances should be stamped and the payment data recorded
thereon. These documents should then be forwarded to the
accounting office and/or the appropriate operating bureau(s)
of the agency.
CASH REGISTERS
Where
cash receipts are controlled by the use of cash registers,
assurance must be obtained that all receipts are recorded
on the register, properly accounted for and appropriately
deposited.
Various
techniques can be used to assure that all receipts are recorded
on the cash registers. For example, cash register sales of
certain commodities can be controlled by keeping a perpetual
inventory at retail of the merchandise available for sale.
Physical inventories should be taken periodically and the
cashiers should account for the value of the book inventory
under their control either in (1) physical stock on hand,
or (2) cash collected. Another technique is to have "spotters",
unknown to the cashiers, periodically observe the cashiering
function. Also, cash registers should be located where customers
can readily see the amounts rung up, and should prepare a
customer's receipt for each transaction.
Receipts
recorded on cash registers are easy to account for if there
are adequate controls. The following procedures should be
used to account for receipts recorded on cash registers.
a. Control must be maintained
over all cash registers by manufacturer's number, or other
suitable means, to preclude substitution or the use of cash
registers not authorized.
b. Cash registers should
be equipped with a tape on which cash collected is listed
and accumulated. All register tapes must be accounted for
as discussed below:
(1) The best control method is to have the machine "locked"
so that the cumulative total cannot be cleared and turned
back. The register can readily be locked by a cash register
serviceman.
(2) Another satisfactory method of determining that all
tapes are accounted for is to use a register that prints
a transaction number on the tape opposite each amount
recorded. It is then possible to determine that all tapes
are accounted for by comparing the first transaction number
on each tape with the last number on the previous tape.
The transaction numbers should not be able to be turned
back.
(3) Another method is to use a register that has a "reset"
counter. The accumulated total may be cleared by inserting
the key into the register at which time the reset counter
is increased by one. A record of each reset number and
the corresponding tape must be kept. Of the three methods
discussed this one is the least desirable because: errors
in resetting the machine often result in "void"
reset numbers; errors in recording reset numbers may occur;
there is a risk that actual tapes may be replaced by spurious
tapes of lesser amounts.
c. Someone other than the
register cashier should (in the cashier's presence) count
the cash and extract the register tape. This function is
normally performed by the business office of the agency.
The amount collected should be balanced with the register
total, as shown by the tape or the cumulative locked-in
totals. All register tapes and reports of register readings
should be collected by the business office and filed chronologically.
d. A record should be maintained
of all cash shortages or overages with explanations for
all differences.
RECONCILIATION OF CASH RECEIPTS
All
cash receipts should be reconciled daily, by an employee charged
with the cashiering function, to the cash reports prepared
from press-numbered receipt forms, licenses, permits, cash
register tapes, mailroom tabulations, etc. This cashier should
furnish a receipt form for any monies transferred to his (her)
custody for deposit.
Serially numbered licenses, permits, etc., provide an accountability
over the revenues collected. Periodically, at least annually,
the number of licenses, etc., issued should be reconciled
with the number available for issuance and the revenue collected.
Other
mechanisms such as treadles, turnstiles and other meters independently
record the number of customers serviced. Readings from these
control devices should be reconciled daily with cash collections.
DEPOSIT OF CASH RECEIPTS
All
cash receipts should be deposited promptly. Deposits should
be made daily, but under no circumstances should they be made
less than once a week. Each deposit should include all monies
collected since the previous deposit and in the same form
as originally received. Personal checks are not to be "cashed"
out of receipts. Deposit slips should be prepared in triplicate:
one copy to be retained by the bank, one copy to be retained
by the cashier and a bank validated third copy transmitted
to the employee responsible for comparing deposits with recorded
receipts.
UNDEPOSITED RECEIPTS
Notwithstanding
the fact that deposits are made daily, large amounts of cash
often accumulate. Adequate protection of the cash must be
provided. An adequate safe must be utilized and, pending deposit,
the cash should not be accessible to anyone except properly
authorized employees. Cashiers should be relieved of cash
collections several times during the day, providing the cashiers
with an appropriate receipt each time. When warranted, agencies
should use night depositories of banks.
BANK ACCOUNTS
Cash receipts
should be deposited in one or more authorized bank accounts.
Authorization for establishing bank accounts, bank collateral
requirements, agency reporting requirements for the accounts
and other matters relating to agency bank accounts are set
forth in Section 106 of the State Finance Law, Parts 14.3
through 14.6 and 16.9 of the State Comptroller's Rules and
Regulations and Section 4.0000 of this manual. Strict control
over the establishment of bank accounts should be exercised
to prevent the diversion of agency funds to unauthorized bank
accounts. Banks should be instructed not to cash checks payable
to the agency, but to accept them only for deposit to official
accounts.
RETURNED CHECKS
On
occasion, checks are returned by the bank as uncollectible
after they have been deposited. When this occurs, the reason
why the check is not collectible should be noted and the maker
contacted to effect its collection. The returned checks should
come to an employee other than the one making the deposits,
preferably the employee responsible for the bank reconciliation.
An
adjusting entry decreasing cash receipts by the amount of
the check should be made in the cash receipts journal and
the amount should be posted to an accounts receivable record
to control the collection and deposit of such items. Adjustments
for such items should not be made to the cash disbursements
journal, since this procedure results in overstating both
receipts and disbursements. When the amount of a returned
check is collected from the maker, the collection should be
recorded in the cash receipts journal and this entry cross
referenced to the corresponding adjustment entry made when
the check was returned by the bank. The re-deposit
of a returned check should not be made as part of a deposit
of current receipts. A separate deposit ticket should be used
when such items are made good and redeposited. This will cause
the check to appear on the bank statement as a separate item
which will facilitate tracing return deposit items when the
bank reconciliation is conducted.
MONITORING CASH RECEIPTS JOURNAL
Both cash receipts and disbursements journals should be maintained
as permanent records, prepared in ink or type form. Erasures
should not be permitted.
Accurate
cash receipts journals are necessary to assure that all cash
receipts are properly recorded and accounted for. Some fundamental
controls and procedures associated with the maintenance of
cash receipts journals are discussed below.
a. An employee independent of those
responsible for receiving and depositing cash should maintain
the cash receipts journal. In some instances this may not
be possible because of the small size of the agency, staffing
limitations, etc. When this happens an employee independent
of both the cashiering and bookkeeping functions should
be designated to periodically check the detailed receipt
record documents against corresponding bank deposits. This
should be done daily if volume warrants, but in any case,
at least once a week.
b. As accountability is established
for cash received, a statement of the amount thereof should
be furnished to the employee who maintains the cash receipts
journal. This statement should be signed by the employee
responsible for the collection of the cash receipts. Where
collections are made at more than one location, the statement
should be a duplicate of the one forwarded to the central
cashier when the cash receipts are forwarded for deposit.
This statement of accountability may consist of a record
of press-numbered receipts or documents (licenses or permits)
issued, a reconciliation of a cash register reading or a
mailroom tabulation. In all instances, these statements
should be numbered and all numbers accounted for. A separate
series of numbers should be used to control the statements
submitted by each collection location.
c. The total of each statement
should be entered in the applicable cash receipts journal.
Columns should be provided for each major type of revenue.
Each entry should be referenced by date, type of revenue
or receipt, and number of the statement of accountability.
The statements should be numerically filed by collection
station.
d. As the monies are deposited,
a validated deposit ticket for each deposit should be furnished
to and retained by the employee maintaining the cash receipts
journal. The amount of each deposit should be entered in
a deposit column in the applicable cash receipts journal
in such manner as to indicate the specific receipt entries
covered by the deposit.
e. A monthly reconciliation
should be made between the total bank deposits and the total
receipts recorded in the cash receipts journals. This reconciliation
may be made in connection with the monthly reconciliation
of the bank balances.
f. In some agencies, deposits
are required for various purposes, such as for rental of
equipment, dormitory room deposits, pre-registration deposits,
contractors' bid deposits, etc. Records should be established
to record the receipt and disposition of such deposits.
In most cases, subsidiary records are required to show the
name of payors to whom individual deposits will be refunded
or credited. Periodically, the total of the balances of
the subsidiary records should be reconciled with the cash
in the deposit account
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