New Training Related to Deposits
Michael V. McKee, Assistant Vice President
and University Controller
On September 10, 2013, the new training – Explaining UF Cash/Check Controls (TRM200) – was made available to campus. This training is designed to promote an understanding of the university requirements associated with cash/check deposits and is intended for all university employees who receive, process and/or reconcile deposits.
Completion of the TRM200 training is necessary to receive and maintain the Cashier roles in my UFL; including UF_AR_CASHIER, UF_AR_DEPOSIT_CONTROL, UF_AR_CORE, and UF_AR_ADMINISTRATOR. Annual recertification will be required. Employees who work with or supervise deposits but do not have one the Cashier roles are also strongly encouraged to complete the training.
Because cash/check receipts are the most liquid of all university assets a well-designed system of controls to protect the asset is required. Basic controls that should be in place include segregation of duties, receipting/logging receipts, restrictively endorsing checks, timely deposits and reconciling collections received to deposits submitted.
In a recent audit of internal controls performed by the Office of Internal Audit (OIA), the following were identified for the units reviewed:
- 15 percent – did not have appropriate segregation of duties. Employees that received collections or prepared deposits were also performing the reconciliation with no additional monitoring controls.
- 15 percent – did not log checks or provide receipts.
- 20 percent – did not restrictively endorse checks at the point of collection.
- 20 percent – did not deposit collections within the timeframe indicated in the university directives and procedures.
- 18 percent – did not reconcile collections to the general ledger monthly or did not reconcile to the primary support.
Segregating duties ensures that no single individual has control over two or more phases of a transaction or operation. Instead, there is a crosscheck of duties to minimize mistakes or misappropriations. In those instances where duties cannot be fully segregated or where role conflicts cannot be avoided, compensating controls must be established. Compensating controls are additional procedures, such as supervisory reviews, designed to reduce the risk of errors.
Logging checks and providing receipts protects the employee receiving the money in that s/he has documentation of the amount received. To assure proper accounting for the funds, check logs should be designed to prevent unapproved alterations and pre-numbered, multi-ply receipts should be used.
Restrictively endorsing checks specifies how the check can be transferred, deposited, or paid out, which provides an additional layer of protection. For this reason, checks should be endorsed for deposit only to the University of Florida account at the point and time of collection.
Timely submission of incoming collections is necessary to alleviate the risk of lost or misappropriation. Timely submissions also ensure funds will be available when needed to cover operational needs.
Finally, departments should reconcile collections recorded in the General Ledger monthly, using the primary support. Timely reconciliations aids in the detection of errors that can be researched and corrected.
Additional resources related to this topic can be found on the Treasury Management website at http://www.fa.ufl.edu/departments/treasury-management/ and Finance and Accounting’s Internal Control Checklist at http://www.fa.ufl.edu/controller/internal-control/checklist/.
For assistance in establishing or reviewing good procedures, internal controls, segregation of duties or compensating controls, please contact Cheryl Bell, Associate Controller at firstname.lastname@example.org or (352) 392-9057 or Kim Simpson, Sr. Associate Controller at (352) 392-1321.