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Cashiering Services: Critical Cash Control Procedures

If you handle cash or checks for your department, please review the procedures on this page.

Cash control procedures

These 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. See the following 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
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.
  • Collect and forward all records of sales activity, cash register readings, and sales adjustment (i.e., voids, refunds/ returns, inventory adjustments, daily and monthly balancing records and sales audits) to the department’s accounting office for proper reconciliation to the general ledger.
Authorization
  • Approve voids, refunds, and other correcting entries.
  • Approve departmental deposits.
  • Approve cash transfers.
  • Approve movement of assets.
  • Approve anything that is unusual.
Asset custody
  • 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.
Reconciliation

Performed at a supervisory level or by department's 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.
  • Once reconciliation is complete, all records of reconciliation process should be stored by the department accounting office along with all records pertaining to sales activity.

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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
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.
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.
Process
  • 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
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.
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.
Personnel pre-screening
  • Perform background checks on all prospective cash-handling employees.
  • Fingerprint all prospective cash-handling employees.
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
Transaction recording, documentation and follow-up
  • Collect receipts.
  • Reconcile daily receipts to the cash register totals.
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.
Segregation of duties
  • 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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