Cash Transaction Procedures

Bridgewater College
Internal Control Procedures: Cash Receipts and Cash Disbursements
January 31, 2011
UPDATED BY: Mary Beth Schwab, Controller
Cash Receipts
The College’s cash receipts process begins when the mail is received by the
Administrative Assistant to the VP for Finance (AA) in the Business Office. She opens
the mail and sorts it by type – Perkins, student accounts, etc. She stamps the checks “For
Deposit Only” when she receives them in the mail.
Since the college has outsourced the billing for the Perkins loans, very few checks
for Perkins payments are received by the college. If any are received, the AA gives the
checks to the Administrator for Federal Perkins Loan Program (AFPLP) who notifies the
payment processing vendor. The AFPLP then delivers the checks to the Cashier, who
prepares the deposit slip and takes the deposit to the bank during the next daily run.
Checks for student account payments are delivered to the Business Office by the
AA and receipted by either the Cashier or the Student Account Assistant (SAA).
For a walk-in payment in the business office, the Cashier or SAA accepts the cash
or check and issues a receipt.
At the end of the day, the Cashier and the SAA reconcile their cash receipting
sessions (Colleague process) and then give the Student Accounts Manager (SAM) their
totals for checks and cash received that day. The SAM compiles the information and adds
it to the “Daily Close Out” report, an excel file that tracks the total activity for each day.
The checks and other currency are placed in a designated box in the safe to await deposit
the next day. The combination safe is locked when the staff leaves for the day, as well as
at any other times during the day when the staff will not be within sight of it. The next
day, generally around 10am, the Cashier will retrieve the funds from the safe and prepare
the deposit. She foots the items for deposit, and compares the total to the total receipts per
the Daily Close Out report. She then prepares the deposit slip and places all the money
and the slip in a bank bag. The bag is either on the Cashier’s desk or in the safe until she
takes the deposit to the bank which is usually around 11am. The deposit ticket is
provided to the Controller who compares it with the Daily Close Out report and then files
both.
Few wire transfers are made or received. The most common wires are usually
from the Dept of Education (student loan draw-downs) and investment managers

(investment fund calls or reallocation transfers). The College requests advance
notification for incoming wires, and most agencies provide such notification. Investment
accounts are established with authorized account(s) – generally, only one - to which the
investment firms can transfer funds. To add an account to the list, the fund managers
typically request significant documentation, sometimes a board resolution. These
industry-standard requirements of the fund managers mitigate the risk of any individual at
the College directing funds into an unauthorized account. Other agencies provide
different types of controls. The Commonwealth of Virginia, for example, sends emails to
at least two individuals at the College before transferring funds into a designated College
bank account for the state tuition assistance program.
Cash is sometimes received by departments other than the business office. An
example of such receipts would be athletic event concessions, t-shirts sold for a
fundraiser, etc. In these cases the department collects the money and then brings it into
the business office with a checklist. If the activity occurs after business hours, the
department places the deposit into a locking bank bag and puts it into one of the two safes
located outside the business office. One safe is in Nininger Hall and the other is in the
Kline Campus Center. The safes have two compartments with a drop slot into the top
compartment. The department notifies the Campus Police and Safety Department to
request a cash transfer. Either the Chief of Campus Police or the Sergeant of Campus
Police delivers the deposit to the business office the next morning. The Controller is the
only other person, besides the two named individuals from Campus Police, who has
access to the top compartment of the safes. The bottom compartments are used to secure
any petty cash funds before the event. The departments control the combination to the
bottom compartment.
Procedures for the receipt of cash, checks and securities as donations are
established jointly between the Office of Institutional Advancement and Finance. See
OIA Contribution Processing Procedures for these procedures.
Cash Disbursements
For disbursements made by check, the process is mostly performed by the
Accounts Payable Manager (APM) in accounts payable. The APM receives a voucher or
purchase order, approved from the appropriate department chair, with a general ledger
account number assigned. Sometimes the request comes via email. The APM is
responsible for contacting the department chair/manager for any missing GL numbers.
For invoices received directly by the APM, the APM first attempts to match the invoice
to an approved purchase order. If there is a match and all items from the invoice have
been properly received by the ordering department, then the invoice can be paid without
additional processing. Any discrepancies are resolved by the APM with the ordering
department before vendor payment is initiated. Some invoices are first received by the
ordering departments and are approved by the department chair/manager and then sent to
the APM to be paid. The APM runs accounts payable checks on Mondays and Thursdays.
See AP Check Processing Procedure for more details. After checks are written, the
Controller transmits a file to the bank which includes the check number, check amount
and the payee information. Any check that is presented for payment which is not on file

with the bank is flagged and must be approved for payment by the Controller on the bank
website. If it is not approved, the check will be returned.
Accounts payable checks are posted into the general ledger by the Controller. The
backup position for this task is the AA.
Checks are issued by the APM for employee travel advances upon receipt of a
properly approved form in the business office. Faculty travel advances require prior
approval by the Academic Dean. The employee then must return any money with receipts
to the cashier when their trip is complete. The Controller generates a list of outstanding
travel advances. Employees with advances outstanding longer than two weeks may not
receive another travel advance and after a month, the list of outstanding advances is
reported to the appropriate vice president for handling.
Petty cash may be used to reimburse employees for authorized purchases of less
than $25. A form with the necessary approvals is required before the funds are
reimbursed. The employee signs the petty cash form to indicate that they received the
funds. The Controller reconciles the petty cash box every two weeks and submits a
request for reimbursement of the funds.
To initiate an outgoing wire transfer, the Controller or the VP calls the bank wire
room to initiate the transfer; an individually-assigned pin number is required and the bank
periodically changes the pin number. The only employees with a pin number are the VP
for Finance, the Controller and the President. Some, but not all, of the investment
managers will call to verify that the transfer is legitimate. After the wire has been sent,
the Controller will confirm receipt with the destination agency. The bank randomly calls
an authorized person other than the person initiating a wire, for verification; the pin
number and wire details (amount, destination account, etc.) are required for that
verification.