Collection Security Guidelines

The following items are presented to provide managers responsible for operations that collect funds with a listing of operational controls designed to safeguard funds under their control. All controls may not apply to each area, but the safeguards intended by the practices should be met at all collection sites. Each collection area manager should develop a specific cash procedure document for their area specifying the controls that are established. A copy of the procedures should be filed with the campus Controller and updated as needed. Assistance in developing the procedures and evaluating the controls in place is available through the Controller’s Office.

Following are practices that should be considered to secure funds received by a collection site. Funds received could be in the form of cash, checks, money orders, credit card payments, etc. These controls address the act of collection and provide initial assurances of security, however, each area should review its unique operation and assign the items that fit its needs.

1. All funds related to campus functions are to be deposited to appropriate University financial system accounts established and approved by the campus Controller’s Office and bank accounts established by the University Treasurer’s Office. Under no circumstance should a University unit hold or open a bank account for the purpose of accepting and/or disbursing funds that relate to University functions.

2. Checks received by revenue-producing areas must be made payable to the University of Massachusetts (Name of the Operation). The appropriate campus assigned account number should also be indicated on the face of the check. The Bursar’s Office should be contacted to obtain directions on endorsing the checks for deposit.

3. Unless specifically approved otherwise by the Controller’s Office, checks should be accepted only for the exact amount of purchase. When possible, proper identification (driver’s license, student ID) should be obtained and written on the check.

4. All collections received by revenue-producing areas should be deposited intact to the Bursar’s Office daily. Weekend receipts should be deposited on the first business day following the weekend.

5. Revenue received must be kept in a safe or a bar locked cabinet until deposited. (See Item F.)

6. There should be appropriate segregation of duties in the collection and deposit process. At a minimum receipts should be verified and deposit tickets prepared by someone other than the person who collected the receipts.

7. Where possible, access to collection areas should be restricted.

8. Operations that need revolving change funds to provide change to their customers should request an amount be provided by the Controller’s Office for that purpose. Change funds should be drawn from and coded on a business system account as an advance. Change funds should not be established without Controller Office approval or with funds obtained through operation collections. Approved funds should be reduced during slow periods.
9. Funds should never be left unattended.

10. Cash disbursements for materials, supplies, or personal services from the cash receipts or from change funds are prohibited. All such expenditures must be made from approved accounts, following general campus procedures.

11. Payroll checks, personal checks, or checks made payable to the University or any unit of the University may not be traded for cash from collections or change funds.

12. Each time funds are deposited or change hands, a written acknowledgement should be obtained. Unless the receipts are in a locked bag, the funds should be counted in the presence of each person. In the case of a locked bag the acknowledgement should note that it was in a locked bag at the time of transfer. The acknowledgement should indicate the amount transferred and date, and be signed by both individuals. This process is useful to assign responsibility for the funds. It is not necessary for University Police personnel to provide a written acknowledgement of such transfers (See Section E3).

13. Returned Checks:

At times, a check submitted by a person or organization is returned unpaid by the bank, due to insufficient funds. This occurrence will result in a reduction of the operations collections and available cash balance. The unit should undertake action to recoup the lost funds as quickly as possible. Areas should request that replacements for checks that have been rejected by the bank should be made by certified check, money order, or cash.

The following processes are designed to verify the amount collected is deposited. These verifications are important to ensure that funds under the control of the operation are properly forwarded to the campus Bursar Office. The items provide a minimal level of monitoring to safeguard operation collections.

1. All receipts should be recorded on a control document (receipt form, cash register, tickets register, meters, etc.) at the time of the transaction. Control documents should be reconciled to the amount to be deposited.

2. Ideally, no more than one person should work from the same cash drawer. Minimally, each person collecting funds should have their own lockable cash drawers or method to establish accountability. Each drawer should be separately reconciled to the receipts recorded for that drawer.

3. A record of cash overages and shortages should be maintained and regularly reviewed by a manager not associated with the collection and deposit process. Shortages and overages should be identified and explained on the deposit ticket. Variances should be investigated by the manager and, if necessary, corrective action taken. Overages should not be held to apply against future shortages or for other purposes.

Any loss totaling more than $100 should be immediately reported in writing to the Controller explaining the situation and any actions taken to correct the situation. A monthly report of all instances is prepared by the Controller and forwarded to appropriate offices. Additional audit or review of the operation may result from such occurrences.

5. Collection and change fund reconciliations should be done at least at the beginning and end of each shift, preferably not in view of the public.

6. Records regarding collections and subsequent reporting and handling should be maintained for seven years.

7. The collection site manager should conduct and keep records of reviews of the area’s collection reconciliations.

A basic monthly report package is issued the project director responsible for each revenue account. Special reports regarding revenue transactions are also issued to account managers to aid in administering the account(s). Part Three of the campus Accounting Manual describes each of the standard reports issued by the Controller’s Office and steps that should be taken to reconcile monthly activity shown in the reports. Account activity can also be monitored through system inquiry. The Manual should be reviewed to determine if additional reports should be requested from the Controller’s Office to assist in the reconciliation process. Assistance in reading the reports and inquiring about its information can be obtained from the Controller’s Office.

1. Project collection and deposit records should be tracked and reconciled to the amount credited to the account on the monthly revenue reports. At least the following verifications should be done:

1. All deposits made during the month appear correctly on the Cash Receipts Report.
2. All invoices for which the project has received the yellow copy of the Bursar deposit tickets appear on the Cash Receipts Report.
3. All deposits should be reconciled to the unit’s control document (e.g., cash register totals, pre-numbered receipts).

2. Reconciliations should be documented and any discrepancies resolved with the campus Bursar’s Office. Unexplained discrepancies whould be reported to the Controller’s Office immediately.

Financial stationery is the paper evidence or means by which collections are controlled at the time of the transaction. Such items as tickets, bills, invoices, and pre-numbered forms are examples of financial stationery.

1. Cash registers should have meters that provide activity summaries and cannot be reset. Meters should be closed out by a manager or under manager supervision.

2. Financial stationery (tickets, receipts, counters, pre-numbered forms, etc.) issued to individuals should be controlled:

1. An inventory of unused items should be maintained and reconciled.
2. Assignment to individuals and return of stationery should be recorded.
3. Amounts indicated on the financial stationery should be reconciled to deposits.
4. All copies of voided financial stationery items should be collected and filed.
5. Variances should be investigated and resolved by the area manager immediately.

Cash bags are used by areas that have high levels of collections, often during off hours or weekends. Cash bags will be opened by the Bursar’s Office the next business day.

1. Whenever cash is transported from one location to another, it should be in a locked bag and the bag should be concealed.

2. Bags are numbered and assigned to specific areas. Keys should be assigned by the collection site to specific individuals. If a bag becomes damaged, it should be returned to the Bursar’s Office for replacement.

3. Bag transfers must be properly noted in a logbook. When the deposit bag is released to another individual the number on the bag, date, and time of pick up, and signatures of person releasing and accepting the bag must be recorded in the log. If University Police is accepting the bag a signature is not necessary. However, the log should indicate the University Police representatives badge number.

4. Each bag should contain the collections and a summary of the collections signed by the individual(s) responsible for the deposit. A confirmation of the deposit will be returned to the collection site. The confirmation should be matched to the site’s records of the deposit.

5. Persons should not transport cash or collections alone. University Police can be used when cash is being transported outside a building. Transfers involving more than $500 always should be done by University Police support. University Police can be contacted at 545-2121. When possible, a person transferring cash within a building should be escorted by a supervisor or his/her designee.

The campus Department of Public Safety maintains an inventory of safes or other revenue holding devices used throughout the campus. All items intended to hold funds must be approved by the Department of Public Safety before being purchased. It is important that combinations or keys providing access to the revenue holding devices be tightly controlled.

1. The area collection manager must maintain the following information for each safe under his/her control: internal control number, location, custodian, date of last safe combination change, and listing of persons having access to the combination. The knowledge of safe combinations and number of keys should be limited to the least number of person’s possible.

2. All safes must be kept locked except when cash is being taken out or being put in to the safe.

3. The custodian of the safe must have signatures of the persons who receive safe combinations or assigned keys.

When goods or services have been provided and payment is not immediately received, a bill should be issued. Once a bill has been issued, the amount owed by the person or organization becomes a campus account receivable. Therefore, it is necessary to maintain adequate records to document the disposition of the receivable. The campus has the responsibility to ensure the bill is properly satisfied and that collections are properly deposited and recorded.

At times it is necessary to adjust an outstanding bill. Once a bill is generated, it can only be changed through a formal adjustment to the bill with appropriate records maintained to record and justify the amount adjusted. Adjustments could be made to increase or decrease dollar amount, change customer information, or cancel a bill partially or completely. Adjustments should not be made to address collection issues or offset amounts the project may owe to the person or organization. In all cases, the reason for the adjustment should be documented and approved by the area collection manager.

1. This policy does not negate or replace any University cash handling policy. It is intended to enhance any such policy.

2. In case of a blackout, University Police should be notified and all cash locked in safes immediately.

3. Unannounced reviews of a collection area’s operation may be done at the discretion of University and/or campus administration.

4. University employees are bonded for activities done while acting in their official capacity for the campus.

5. Inappropriate administration of University assets could result in disciplinary action by the campus against all individuals involved in the action. If an obvious theft has occurred the Controller, University Police and Internal Audit should be contacted immediately. Persons who suspect a misappropriation or other financial irregularity may have occurred should contact the Controller’s Office.

Controller's Office
Room 405 Goodell Building
140 Hicks Way
University of Massachusetts Amherst
Amherst,  MA 01003-9272
Tel:  (413) 545-0806
Fax: (413) 545-6088

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