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Cash control procedures are based on UC Business and Finance Bulletin 49 (BUS-49) (PDF) and fall into 4 main areas, which are listed below. Click the links for more information about each area.
- Segregation of duties prevents employees from concealing errors or irregularities.
- Asset accountability ensures that assets are accounted for, properly documented and secured, and trackable to specific cash handlers.
- Physical security focuses on the safety of people and the proper maintenance and control of assets.
- Reconciliation procedures ensure proper documentation and approval of transactions.
Segregation of duties
Ideally, the functions in the table below should be performed by different individuals to maintain a system of checks and balances. Sometimes, however, staffing levels require that one individual perform 2 or more of the functions.
| Function |
Example of duties |
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Recordkeeping |
- Ring, process, post/ validate cash register transactions.
- Record sale transactions manually.
- Prepare cash receipt back-ups.
- Post only charges/ payments to an accounts receivable system.
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Authorization |
- Approve voids, refunds, and other correcting entries.
- Approve departmental deposits.
- Approve cash transfers.
- Approve movement of assets.
- Approve anything that is unusual.
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| Asset custody
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- Access any fund ("cash").
- Access stored cash or other assets.
- Maintain custody of petty cash or change fund.
- Maintain access or custody of returned checks.
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Reconciliation | Performed at a supervisory level or by the accounting office
- Compare funds collected to the accounts receivable postings.
- Compare collections to deposits.
- Compare a surprise count of the asset inventory to the appropriate records.
- Compare departmental records of revenue (sales) to the general ledger.
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Asset accountability
The functions in the table below enable cash handlers to maintain a proper accountability structure.
| Function |
Example of duties |
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Individual |
- Identify every transaction to an individual.
- Assign each cash handler a separate drawer.
- Assign each cash handler a separate password.
- Perform a background check for each cash handler.
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Cash |
- Secure all funds properly.
- Document all movement ("transfers") with receipts.
- Secure all cash transactions in a safe place.
- Give a receipt to every customer.
- Do not share safe combinations and passwords.
- Secure keys properly.
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| Process
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- Know where an asset is at all times.
- Document all transfers with receipts.
- Prepare, maintain, and secure all receipts.
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Physical Security
The physical security functions in the table below ensure the safety of people and assets.
| Function |
Example of duties |
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Monitoring |
- Use an armored car or a police escort to transport cash.
- Open and close a cash handling station with two people present.
- Store assets properly.
- Alert campus police with an alarm system as necessary.
- Secure keys properly.
- Change safe combinations annually or when there is turnover of staff.
- Avoid counting cash when visible to others.
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Physical layout |
- Follow the risk management standards cited in BUS-49 policy (PDF).
- Store assets and cash properly.
- Avoid counting cash when visible to others.
- Install and utilize the proper alarm system.
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| Personnel pre-screening |
- Perform background checks on all prospective cash-handling employees.
- Fingerprint all prospective cash-handling employees.
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Inventory control |
- Report shortages and overages to the appropriate contacts.
- Secure keys properly.
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Reconciliation
The functions in the table below ensure proper documentation and approval of transactions.
| Function |
Example of duties |
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Transaction recording, documentation and follow-up |
- Collect receipts.
- Reconcile daily receipts to the cash register totals.
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Authorization and approvals |
- Reconcile the receipts issued to maintain numerical order.
- Reconcile and verify the register beginning and ending balances.
- Perform surprise cash counts on an annual basis or during staff changes.
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Segregation of duties
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- Reconcile bank accounts to major cash handling deposits.
- Perform receipt number reconciliation control.
- Reconcile and control register transaction/ dollar values.
- Control and authorize error, void, and/ or refund transactions.
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Questions? Contact Marisela Garcia-Centeno, (858) 534-3747.
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