Cash and Check Handling Policy

Policy Statement

Scope: Who should know this policy?

Any individual who handles Dartmouth College cash, and any individual who has the responsibility for receiving, depositing, or accounting for such cash and/or checks.

This policy also applies to any department, including professional schools, or student group that conduct business through currency (such as cash and cash equivalents) and/or check transactions.

For proper handling of credit card receipts refer to the Merchant Services and PCI Compliance Policy.

POLICY STATEMENT

The policies described in this document are designed to implement best practices for cash management.  The policies are aligned with internal control concepts, including the following:

Safeguarding Assets

Protect the people handling cash, the physical cash/assets and any related confidential information.

Segregation of Duties

Assets are safeguarded by assigning to different individuals the responsibility for acceptance of cash and/or checks, recording, and reconciling of transactions.  One person should not be in the position to authorize a transaction, execute a transaction, record the transaction, and provide the sole review of the transaction. Reconciliations should be performed on a regular basis, at least monthly, by a person independent of the process. In a small department, it may not be feasible to fully segregate all of the cash-related duties. In these circumstances, the department should have sufficient compensating controls to mitigate the risk that cash is misappropriated (e.g. increased monitoring or review of reconciliation by a supervisor). If the department does not have sufficient compensating controls, it should not receive cash.

Reconciliations

Reconciliation is the process to verify the accuracy of an account balance.  This requires knowledge of the opening and ending balance, and a determination that the activity in the account is reasonable, appropriate and accurate.

Department Policy and Procedure Requirements

Each department must adhere to the minimum requirements outlined in this policy.

Departments must also develop written procedures for their department's cash handling and accounting functions. These procedures should specify business processes, personnel responsibilities and be reviewed annually and updated as needed. Department procedures must meet the minimum requirements of this policy; however, departments may impose more specific and/or restrictive department policies and procedures based on the nature of their cash and check handling activities.

Policy

Check Receipts

Upon receipt of a check departments will:

• Verify check amount
• Examine the check to ensure:
  • The check has not been altered, and if any changes have occurred, the initials of the maker are next to each modification.
  • The check is signed, and the signature agrees with the pre-printed name
  • The check is made payable to Trustees of Dartmouth College or Dartmouth College
    • Third party checks are not accepted. (A third-party check is made payable to someone other than Dartmouth College but presented to Dartmouth in lieu of payment.)
    • If the check is for a specific purpose within Dartmouth College, the purpose should be written in the memo section and not as the payee.
• Match the numerical amount agrees with the written amount (also known as the legal amount)
• Ensure that the check date is valid and not post-dated.  Personal checks are normally valid for up to six months and business checks are up to a year unless otherwise noted.

The bank's optical processing requires clarity and acceptable readability of information of five "Areas of Interest" on all checks.  These include the Legal amount, Payee information, Date, Signature and Numeric Amount.  Any missing information of the five areas is considered a defect and may not be negotiated.

If a department is in receipt of a check they do not know how to handle, the check should be delivered to the Cashiers Office immediately for research and proper credit.

Cash Receipts

Cash is typically received as a result of point-of-sale transactions or in connection with other miscellaneous events.  Although the receipt of cash in certain cases is unavoidable, it is the least preferred method of collection due to the security and control risks associated with handling and transportation. Departments should not directly accept cash unless there is a strong business requirement to do so. 

Departments should have in place a documented cash handling procedure that establishes, at a minimum, the internal controls named in this policy and its related procedures.

Upon receipt of funds departments will:

• Verify the cash amounts
• Ensure cash is not comingled. Provide a receipt to the payer whenever possible. Pre-numbered receipts should be used.

For deposits handled through the Cashier's Office, departments must:

• Complete a Miscellaneous Receipt Form.
• All sections of the chart string must be provided on the miscellaneous receipt.
• Please contact your Finance Center for questions on the appropriate chart string to use when making a deposit.
• Cash:
  • ***The Cashier's Office no longer accepts cash deposits***
  • If your department continues to receive cash, you must obtain a money order for all cash received before bringing the deposit to the Cashier's Office.
• Checks:
  • Do not staple checks to the miscellaneous receipt.
  • If you receive two or more checks, please make sure the total amount of the checks match the total deposit amount on your miscellaneous receipt.

For depositors that make deposits directly to the bank departments must:

Cash Deposits

Unless the department has specific written authority from Institutional Accounting to make deposits directly to an authorized College bank account (see section on direct deposit requirements below), deposits are to be made at the Cashier's Office according to these policies. The Cashier's Office no longer accepts cash deposits.

• Departments must always deposit cash as soon as possible after receipt but no later than 3 business days. 
• If cash needs to be held in the department overnight, it must be kept in a secure area in a locked, fireproof device until deposited.
• If receipts exceed $500 per day on a frequent basis, the device should be immovable and other security measures should be taken, as suggested by the Controller's Office.
• Cash must never be left unattended and unsecured. This applied to cash registers, desktops and cash drawers.
• Large sums of cash should be counted and handled out of sight of the general public.
• All deposits should be secured in an appropriate deposit bank bag and transported within a non-descript carrier.
• All cash receipts must be deposited intact without any portion being retained and used for departmental expenditures.
• Departments must not commingle cash.  (i.e. individual personal cash, cash received in business transactions)

Electronic Remote Deposit Capture

Departments with significant deposit volume of checks may consider electronic remote deposit. Remote deposit allows direct depositors to scan checks and process deposits electronically.

Checks drawn on U.S. banks may be deposited through remote deposit capture.  The Cashier's Office and designated departments on campus deposit checks in this manner. Processes must meet the required timelines stated above.

After sending check images using remote deposit online, the endorsed deposited items must be safeguarded for a minimum of 14 calendar days from the date of transmission. After 14 days they must be destroyed or otherwise rendered incapable of transmission or presentment. Regularly scheduled check shredding timetables must be established and followed.

If reports are printed containing customer banking information, they must be secured so that access to customer banking information is limited to only those that have a business need to know.

When using portable information devices, i.e. laptops, etc., encryption is required.

As with any username and password the employee responsible for remotely depositing checks should not share this information with others.

For more information or to establish remote deposit capability contact Institutional Accounting.

Documentation and Reconciliation

The department should maintain adequate documentation for each deposit for use in reconciliation.

Note: Do not photocopy or scan checks. Photocopying or scanning checks decreases the security of private banking information.

For deposits made through the Cashier's Office, the Cashier's Office maintains appropriate documentation for each deposit and copies of canceled checks can be obtained if needed. Departments should keep copies of the deposit for the individual responsible for reconciling receipts to the general ledger.  For cash and checks deposited directly by departments, a copy of the deposit slip should be provided to the individual responsible for reconciling receipts to the general ledger.

A procedure to promptly identify and address any discrepancies in receipts must be part of departmental policies.

Departments must ensure the following reconciling activities are performed and reviewed:

• Reconciliation of cash daily at the collection site to corresponding cash receipt. All receipts should be accounted for and validated for the proper amount and date.
• Reconciliation of all deposits to accounting entries in the General Ledger, at least monthly.

Dartmouth Information Security Policy

All cash and check handling activity must be conducted consistent with Dartmouth Information Security Policy.

Loss or Theft of Funds

Any suspected loss or theft of funds must be immediately reported to the Safety and Security Department.

Ordinary operating errors should be reported as overages/shortages as long as the amount is deemed reasonable by an authorized individual.

Contacts / Responsibilities

Cashier's Office:  Cashiers.Office@dartmouth.edu

Controller's Office: Controllers.Office@dartmouth.edu

Institutional Accounting: Institutional.Accounting@dartmouth.edu