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1.7.4 Internal Controls

Internal controls provide important benefits to your department and to the university as a whole by improving the quality of accounting information, and it reduces the possibility of mismanagement, error and fraud.  Separation of duties is the cornerstone of internal control.  It is a coordinated system of checks and balances in which tasks necessary to complete a transaction either are performed by different individuals, two or more individuals working in tandem, or the tasks are independently reviewed.  No one individual should control all aspects of processing university funds (i.e., collect cash from payers, post receivables or credit other accounting records, prepare and make the deposit, and perform the departmental reconciliation, etc...).

Documenting policies and procedures will clearly communicate specific responsibilities to individual staff, facilitate training new staff, and enable departments to review and monitor their internal control system.

Schools/Colleges/Divisions interested in engaging in either Cash Collection, E-commerce or Stand-alone Merchant Terminal processing must adhere to the following internal controls:

1.1.     Written Procedures

Each department that handles cash must have its own written procedures tailored to its specific operation.  The departmental procedures should include, but are not limited to, the following:

  1. A description of your department and what activities generate cash receipts.

  2. description of how payments are received-in person, by mail, online, etc.

  3. A description of how mail is opened and logged.

  4. Check endorsement - each check must be restrictively endorsed with "For Deposit Only, Wayne State University" and include the department FOAPAL number.

  5. Identification of positions assigned to each step in the procedure to verify proper segregation of duties.

  6. A description of how deposits are made including method and frequency.

  7. Forms control - the process used to reconcile actual receipts to departmental records and to prepare the Bank Deposit Slip and Sundry Remittance Form.

  8. Reconciliation - the process used to compare departmental copies of Bank Deposit Slips and Sundry Remittance Forms with monthly or daily accounting reports to verify accurate posting in Banner.

  9. A description of how funds are secured between collection and deposit.

  10. A description of how cash receipts are transported to the Cashier's Office.

For assistance in developing departmental procedures contact the Cashier's Office.  The department/unit's Fiscal Officer/Business Manager should approve the written procedures.

Departmental procedures should be reviewed annually by the Department/Unit Head and the fiscal officer/business manager to ensure compliance with this policy and Internal Audit.

1.2.     Segregation of Duties

  1. Schools/Colleges/Divisions handling cash should separate, to the extent possible, all duties relating to cash handling.  A system of checks and balances should be implemented in which tasks are performed by different individuals in order to assure adequate controls.  For example, the same person should not collect cash from students or other payers, post receivables or credit other accounting records, prepare and make the deposit, and perform the departmental reconciliation.

  2. It is the Department/Unit Head's responsibility to ensure that any amount deposited with the Cashier's Office includes all monies received.

  3. The Department/Unit Head will contact the Cashier's Office with any questions regarding the development of or adequacy of mitigating controls.  The Department of Internal Audit is also available to review the adequacy of controls.

  4. The Department/Unit Head or her/his designee should be an independent person who does not handle or have access to cash.  She/he will verify that the original supporting detail records (Sundry Remittance Forms) agree with the Departmental Transaction Detail report.

1.3.     Safekeeping of University Funds

  1. All forms of cash should be physically protected through the use of vaults, safes, locked cash drawers, cash registers, locked metal boxes or bags, etc. Cash should not be retained in desk drawers or standard file cabinets since they are easily accessible and provide no security or safeguarding of funds.

  2. It is the responsibility of each department to make whatever provisions are necessary to properly safeguard cash in their area.  Any amount of cash on hand must be maintained in a vault or safe.  Departmental deposits must be dropped off at the Cashier's Office between regular office hours (Mon-Fri 8:30 am - 5:00 pm).

1.4.     Frequency of Deposit

  1. To maximize cash flow and safeguard assets, deposits must be promptly deposited with the University's Cashiers Office or via armored car service directly to the University's account at the bank. In no instance should cash receipts belonging to the university, regardless of the amount, be held away from the Cashier's Office for more than 2 business day. When receipts of university money totals $100 or more (whether coin or currency), a deposit is required within 24 hours or by the next business day and the two day rule previously cited above does not apply.

  2. Unless prior arrangements have been made for directly depositing to the bank, all deposits are made at the main Cashier's Office. Transportation of cash deposits to the Cashier's Office by university employees should not conform to any regular time or day of the week schedule.  Such transfers should be irregular, subject to change without notice, with times known only to a select few.  Consult the Cashier's Office regarding arrangements for transfers of large cash amounts that occur on a regular basis.

  3. If the deposit is hand delivered, a cashier will process the deposit using the Sundry Remittance Form and the Bank Deposit Slip. Deposits are not to be placed in or sent through campus mail.

  4. If the deposit is transported by armored car to the bank and the deposit total does not agree with the actual count of cash receipts, the bank will adjust the deposit and notify the Cashier's Office of the discrepancy. The Cashier's Office will post the adjustment to the appropriate departmental account and notify the unit of the action.

1.5.     Sundry Remittance Form and Bank Deposit Slip

A Sundry Remittance Form and Bank Deposit Slip must be completed for all Schools/Colleges/Divisions deposits that are submitted to the Cashier's Office observing the following guidelines:

  1. Prepare the bank deposit slip by indicating the types and amounts of each currency.

  2. Check for mathematical accuracy by running a calculator tape of cash and check totals;

  3. Verify check & cash totals are listed properly;

  4. Verify the FOAPAL number or detail codes, if applicable, are properly filled in;

  5. Verify the funds received are equal to the amount on the deposit form and properly recorded on the bank deposit slip and bag;

  6. Have a secondary individual within the department review the Sundry Remittance Form and sign off on the Bank Deposit Slip;

  7. Place all cash and two copies of the Bank Deposit Slip in the bank deposit bag.  This bag will be recounted at the bank.

  8. Attach the third copy of the Bank Deposit Slip to the Sundry Remittance Form.  The cashier will post the deposit to the departmental FOAPAL or index in Banner using the information provided on the Sundry Remittance Form.

1.6.     Money Deposited Intact

Money should be deposited promptly and intact to the Cashier's Office.  Cashing checks from university deposits, borrowing cash for personal use, lapping receipts to cover shortages in cash receipts, withholding checks for deposit in order to float checks, commingling of personal and University funds, and modification of cash records are all serious offenses and will result in an immediate referral to the Office of Internal Audit, Wayne State University's Police Department and Human Resources for proper disciplinary action and/or termination.

1.7.     Counterfeit Currency

All authorized cash handling personnel are responsible for exercising reasonable care in screening cash transactions for counterfeit currency.  If a questionable bill is received, the department should retain possession of the bill and contact Wayne State University's Cashier's Office.  Do not return the bill to the payer.  For more information about recognizing counterfeit currency, please visit http://www.moneyfactory.gov/.

1.8.     Returned Payment

Any payments returned by Wayne State University's depository bank as uncollected are sent to the Cashier's Office.  Examples of returned payments include; non-sufficient funds (NSF), account closed, payer?s signature missing, refer to maker and post dated or stale dated checks.

The Cashier's Office debits the originating department's account for the amount of the returned payment and sends notification to the originating department for collection.  It is the originating department's responsibility to notify the payer and exercise reasonable effort to collect payment from the payer.  Generally, restitution should be in the form of currency, money order, cashier's check or certified check.

If a collection problem exists, the Cashier's Office may be consulted regarding returned items which remain uncollected after 90 days from the date of debit.

1.9.     Overages and Shortages

If the deposit processed by the bank does not agree with the actual count of cash receipts, the bank will adjust the deposit and notify the Cashier's Office of the discrepancy.  The Cashier's Office will post the adjustment to the appropriate departmental FOAPAL and notify the unit of the action.

If the shortage was due to a suspected theft of funds, contact the Office of Internal Audit and Wayne State University's Police Department immediately to file a police report and notify the Department/Unit Head and Fiscal Officer/Business Manager as soon as possible.

1.10.  Employee Training and Background Checks

Schools/Colleges/Divisions engaging in cash collection services should conduct mandatory training for all employees involved with this activity.  Such training should include a thorough review of the department?s written procedures on cash collections.  Reviews of regulatory issues impacting cash collections include Gramm-Leach-Bliley Act (GLBA), Payment Card Merchant Services/PCI DSS, and Identity Theft should also be covered.  Schools/Colleges/Divisions are highly encouraged to provide periodic training, no less frequently than on an annual basis, to ensure employees are in compliance with these regulations.

Go to http://www.ftc.gov/privacy/glbact/glbsub1.htm for more information on Gramm-Leach-Bliley Act (GLBA) and

http://business.ftc.gov/privacy-and-security/red-flags-rule for information Red Flag Rules on Identity Theft Prevention

In addition, Schools/Colleges/Divisions must request background checks on all employees involved with cash collections.  For purposes of this requirement, "employee" refers to full and part-time employees, temporary employees and personnel, and contractors and consultants who are "resident" on the entity's site.  Applicants/employees must consent to a background check prior to Schools/Colleges/Divisions initiating the request.

See the Appendix of this APPM - Payment Card Merchant Services and Payment Card Industry Data Security Standards for information on maintaining and protecting credit and debit card payments.

1.11.  Internal Audits

Schools/Colleges/Divisions engaged in cash collection services should conduct periodic reviews/audits of their operation to ensure compliance with this policy.  The Fiscal Officer/Business Manager or her/his designee should conduct these audits annually with confirmation of the audit sent to the Office of Internal Audit.

1.12.  Bank Accounts

The President, the University Treasurer and their designees are the only officials authorized to open bank accounts and maintain bank relationships on behalf of Wayne State University.  Requests to open university bank accounts should be submitted to the Cash Management department. The use of Wayne State University's name and/or Federal Tax Identification number by departments to open bank accounts is unauthorized and strictly prohibited.  The use of departmental or personal checking and/or other bank accounts by university personnel for the depositing and/or safekeeping of university funds are strictly prohibited.  Any requests to deviate from this policy must be presented to the University Treasurer or his/her designee for proper authorization.