What are the internal control procedures for cash?
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The proper control of cash receipts is the responsibility of the agency director. This resource intends to aid an agency in understanding its risks and identifying applicable controls to minimize those risks. General Guidelines
InvoicingDES provides automated invoicing using the Agency Billing System (ABS) in Agency Financial Reporting System (AFRS). DES manages aged outstanding receivables. INTERNAL CONTROL GUIDECASH COLLECTIONSINTRODUCTIONCash is the most liquid of assets and is susceptible to loss if not properly controlled. Therefore, it is extremely important all departments handling cash implement and adhere to strong internal controls. For the purposes of this guide, "cash" includes coins, currency, checks, money orders, internal charges, credit card, and Tiger Card transactions. This Internal Control Guide provides guidance to Auburn University (AU) departments with regard to safeguarding cash. Please use this guide to develop cash handling procedures in your department. OVERVIEW OF CASH HANDLINGThe Office of Student Financial Services (SFS) is responsible for monitoring, processing, and recording the collection of funds that come into any department or division of AU other than Auburn University at Montgomery (AUM). Collections of funds at AUM are monitored, processed, and recorded by the AUM Cashier's Office. Departments may collect and deposit funds with SFS, the AUM Cashier's Office, or the bank, as appropriate, in the course of normal operations. All units collecting cash should ensure proper controls are in place to safeguard collections until deposit. Only in rare cases, and with the approval of SFS or the AUM Cashier's Office, should any unit establish or use an external checking account. All departments collecting funds may be subject to periodic, unannounced audits by Internal Audit. In addition to collections, cash may be present in departments for use as either a change fund or petty cash fund. A change fund earmarks an amount of cash to provide change for customers who make purchases from the department. A petty cash fund earmarks an amount of cash to be used by the department to handle small, miscellaneous emergency purchases. Petty cash purchases should not exceed $100.00. Change funds and petty cash funds must be pre-approved by SFS for AU departments, the AUM Cashier's Office for AUM departments, and Auxiliary Services for auxiliary enterprises. SEPARATION OF CASH HANDLING DUTIESCash handling duties can be divided into three stages: receiving, depositing, and reconciling. Ideally, all three stages would be performed by different individuals. The purpose of this segregation of duties is to minimize the opportunity for an employee to misappropriate funds and avoid detection. In a smaller department, it may not be feasible to fully segregate all of the cash-related duties. In these circumstances, the department may rely on compensating controls to mitigate the risk that cash is misappropriated (e.g., increased monitoring). RECOMMENDED CONTROLS -- RECEIVING CASHReceiving Checks and Money Orders
Controls Specific to a Formal Cashiering Environment (cash register)
Controls Specific to an Informal Cashiering Environment (no cash register)
Safeguarding Handling and Storage of Cash
RECOMMENDED CONTROLS -- DEPOSITING CASH
RECOMMENDED CONTROLS -- RECONCILING CASH-RELATED ACTIVITY
RESOURCESIf you have questions regarding cash handling procedures, you may contact SFS, the AUM Cashier's Office, Auxiliary Services, or Internal Audit. Additionally, any individual at AU who has a reasonable basis for believing a fraudulent act has occurred may contact Internal Audit or may file a report through EthicsPoint, the AU contracted reporting service. Reports can be submitted to EthicsPoint over the Web or by telephone at 1-866-294-4871. Links to the online report submission page are available on the Internal Audit website, and on the AU Access Finance webpage. Anyone choosing to submit a report through EthicsPoint has the option to remain anonymous. Last Updated: August 30, 2022 What are the internal controls for cash?No individual is to have complete control in the handling of cash. Specifically, no one individual's duties should include the actual handling of money, recording receipt of money, and the reconciliation of bank accounts or with the state treasurer. Incoming cash must be made a matter of record as soon as possible.
What are the four control measures for cash?These control activities include segregation of duties, proper authorization, adequate documents and records, physical controls, and independent checks on performance. Segregation of duties.
What is the most important internal control over cash?Records and Documentation
This is one of the most important internal controls on cash collection.
What is the purpose of internal control when it comes to a cash account?Strong internal controls are necessary to prevent mishandling of funds and safeguard assets.
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