Cash Management and Disbursement Controls

Cash Management and Disbursement Controls Policy
Updated: 8/1/16
Contact: Office of the Controller

Cash Management Controls
All College department or division directors/chairs whose office(s) accept cash or checks for any purpose is ultimately responsible for assuring that proper procedures for handling and safeguarding cash/checks are followed. Handling and safeguarding cash/checks requires special control measures that must be monitored continually by supervisory personnel to detect any control weaknesses. One seemingly insignificant weakness can result in substantial loss. Any questions or concerns should be immediately directed to the Controller in the College Business Office or the VP for Finance (CFO).

All activities that generate cash/checks collected in the College’s name, such as those sponsored by clubs, camps, student organizations, athletic teams, ticket sales, fund raisers, college or faculty-sponsored trips, must be handled by these procedures. Once funds are properly deposited in College-owned bank accounts, sponsors of these or other activities may arrange for funds to be released as expenses become due.

Timing of Deposits
All cash receipts and checks from any and all sources are to be brought to the College Business Office within 24 (twenty-four) hours of receipt. Deposits of these funds into personal bank accounts or any non-College owned bank account is strictly prohibited.

College Cashier
The Cashier in the College Business Office is responsible for preparing a bank deposit of all daily receipts for credit to the current banking day, and recording proper accounting entries giving credit to the department or activity generating the deposit.

Cash Deposit /Transfer Controls
When cash or currency is transferred from one College employee to another it must be counted in the presence of both parties. The amount should be recorded on a receipt, and the receipt signed by the individual accepting custody. This is necessary, in part, for the purpose of establishing responsibility relating to any overages/shortages.

The department representative making the cash/check deposit must get a receipt from the Cashier. It will not always be practical to wait at the Cashier’s desk for all cash and checks to be counted and a receipt to be issued at the time of deposit. To avoid the wait for a cash/check count, the Cashier can issue a receipt for deposits in locked bags only.

Bank Accounts
No employee except the VP for Finance (CFO) may establish, set up, or authorize bank accounts or petty cash funds to transact College business. All new bank accounts require a Resolution from the Board of Trustees; all Petty Cash accounts require a signed appointment by the VP for Finance (CFO).

Petty Cash Accounts
Department or division directors/chairs are ultimately responsible for adequate security, safeguards, and control of any College-approved petty cash funds. The fund should be secured at all times in a locked container such as a lockable file cabinet, safe, or other suitable device to which unauthorized access is difficult.

Each petty cash fund must have an appointed “Custodian” who has direct day-to-day responsibility for administration of the fund. The VP for Finance (CFO), with approval of the department or division director/chair, will appoint all Petty Cash Custodians. Access to the fund is limited to the Custodian. All losses of petty cash are the budget responsibility of the department and/or division.

Purpose and Use
Petty cash can be used to sell postage stamps and reimburse employees and current students for minor items and non-travel, out-of-pocket expenditures. A separate petty cash fund can also be established on a temporary basis and be used as a “change fund” for handling ticket sales, etc. At all times the total of cash, checks, postage stamps, and receipts in any petty cash fund must equal the established amount of the fund. Petty cash funds must be kept separate from personal funds and any other collected revenue. All petty cash disbursements must be supported by a signed original receipt.

Petty cash must not be used for any of the following:

  • Any expenditure over $50 (fifty dollars).
  • Personal check cashing for anyone at any time. Personal borrowing (IOUs) is strictly prohibited.
  • Reimbursements of travel expenses or providing travel advances.
  • Payment for items that are required to be purchased through the purchasing system according to College purchasing policy(s).
  • Payments to vendors for invoices submitted directly to the department.
  • Payments to independent contractors, consultants, etc., or to any non-College employee or non-student.
  • Payments to employees or students for services, wages, awards, bonuses, benefits, financial aid, etc.

Internal Audit
The College Business Office will perform periodic unannounced audits of all petty cash funds to ensure proper control is maintained. Each Petty Cash Custodian is required to provide the Business Office with a full reconciliation of the fund on a quarterly basis, at a minimum.

Bids, Sole Sources, and Preferred Vendors
In an effort to establish the worth of products and services in the marketplace, and to secure the best price, quality and service, those purchasing for the College should solicit competitive bids whenever possible. Occasionally, due to the unique nature of certain products and services, only one source may exist. In such instances, negotiation must ensure a fair and reasonable price for the quality specified and within the time frame required for the service or delivery of the product.

The College Business Office may from time to time require that certain goods and services be awarded to specific preferred vendors. These arrangements are designed to improve purchasing power across the College, to obtain the best price, quality, and/or service, or to meet specific standards.

Budget managers should verify with the College Business Office if preferred vendor arrangement exists prior to establishing any new vendor relationships.

Reimbursement of College-paid Expenditures
The College will reimburse employees and current students for actual, reasonable, and properly documented College-related expenditures if those expenses have the approval of a department or division director/chair with authority to authorize such expenditures.

All expenses must be reported exactly as incurred on a timely basis or upon completion of a College event or trip. Both the employee/student incurring the business expense and the department or division director/chair who approved the expenditure is accountable for the accuracy, procedural compliance, and reasonableness of expenses submitted. Falsifying expenses is a serious breach of conduct.

Reimbursement is made only for necessary expenses of an employee/student in the performance of his/her approved College activities and/or responsibilities. The College will not reimburse expenses already reimbursed by any other party or outside entity. Any unused travel advances must be returned to the College.

Please refer to Travel and Credit Card Business Practices Policy for further information. Please contact the College Business Office for any specific questions regarding reimbursable expenses, pre-approval steps, and/or substantiation requirements.

Purchase Requisitions
Below are the required pre-approval steps for purchases of materials/services in excess of $500 (five-hundred dollars):

  • Gather/document information relevant for making a decision (the requestor may utilize standard forms provided by the Business Office or create similar forms that include the same information.):
    • Description of goods/services being requested
    • Vendor name and address
    • Justification for the expenditure
    • Cost
    • Account number to be charged
    • Desired dates of delivery/performance of service
    • Provide contact information for the originator of the purchase requisition
  • Obtain appropriate approvals:
    • Signature of budget manager
    • Signature of Cabinet member
  • Submit approved documents to the College Business Office.
  • Upon recording the requisition, Business Office personnel will submit the request to the VP for Finance (CFO) or his/her designee for approval. Please allow at least a 72-hour turn around once the documentation has been submitted.
  • Upon CFO approval, an Expense Authorization (“EA”) number will be issued to the originator of the requisition and copy the individuals involved in the approval process.
  • Once the EA number has been issued, the originator is entitled to obligate the College by placing the order as requested and approved.
  • Once the goods have been received or the service performed, the requestor should reference the EA number when approving the final invoice for payment.

Payment Requests
This policy outlines check request and invoice payment policies in general terms and is not intended to cover every possible situation. More restrictive policies may be set at the department and/or division level. However, it is the responsibility of the Department Supervisor or Chair to document, communicate, and enforce any additional restrictions they impose plus obtain pre-approval of the restrictions by the Cabinet member with operational responsibility for the department and/or division.

Approval Requirements
All expenditures require approval from a Department Supervisor or Chair who has budget responsibility for the account coding used. All expenditures over $500 (five-hundred dollars) require VP for Finance (CFO) approval.

Employees are not permitted to approve any payments made payable to them, family members, or any payee that may create or suggest a conflict of interest.

Original signatures are required. Signature stamps and digital signatures are not acceptable unless such a process is audited and specifically pre-approved in writing by the Controller in the College Business Office.

Payment for services to all College employees must be approved by the Director of Human Resources. These payments are most likely compensatory and must be reported as W-2 wages.

Supporting Documentation
Supporting documentation is defined as an original document, such as an invoice or receipt, received directly from the vendor that contains the price and a complete description of the goods received or services provided. An invoice faxed or emailed to the College Business Office directly from the vendor is considered an original. Monthly credit card statements and canceled checks alone are not acceptable supporting documentation.

Acceptable supporting documentation must be obtained for all expenses and all original supporting documentation and must be forwarded to Accounts Payable in the College Business Office.

Check Requests
Please use a Check Request form to pay for goods or services that require a physical check be enclosed, to pay vendors that will not accept a credit or purchasing card, or to pay an independent contractor for goods or services.

Do not use a Check Request form to pay invoices. Simply mark “OK to pay” on the invoice, provide the correct account coding and an original signature as approval to pay, and then forward it, with any additional supporting documents, to the Accounts Payable department. The College Business Office can also provide a suggested block stamp that can aid in preparing invoices for payment.

Sales Tax Exemption
In general, purchases of items by the College for our own use are exempt from sales tax. The exemption applies to the College, not the individual making the purchase.

It is the budget manager’s responsibility to notify merchants that the College is a tax exempt entity. The Missouri state tax exempt number is 12624047. A copy of the tax exempt certificate is available on the “Jewell Central” intranet or from the Accounts Payable Department.

If sales tax is charged, the budget manager should contact the vendor and have the sales tax removed. If the vendor is unable to comply, please contact the College Business Office to investigate submitting a reimbursement directly from the taxing authorities.

Other Guidelines

  • In general, checks should be mailed directly to the payee. Please provide a written explanation of any checks that are asked to be returned to the requester for mailing.
  • The Accounts Payable department in the College Business Office writes checks on a weekly basis. Employees with invoice processing responsibilities should become familiar with the deadlines for submission of invoices and check requests. The College Business Office will announce through all-campus email any alterations to the normal check issuing cycle in advance.
  • Rush check requests should be limited to true emergencies and be infrequent in nature. In general, a lack of planning does not justify a rush check. Use of College-provided credit and procurement cards are the preferred alternative to rush checks. Reimbursements to employees will not be processed as a rush check request.
  • When paying an individual or any third-party who is not an employee for goods or services, the requester must ensure a complete and signed W-9 tax form is on file in the College Business Office.  Form W-9 is required by the Internal Revenue Service before payment can be made. In general, any payment to anyone who is not incorporated in the United States requires a W-9.
  • Contact the Business Office and/or Human Resources department regarding paying any one who is not a US Citizen as certain federally-mandated withholding and additional filing requirements may apply.

Payments to Independent Contractors
All payments to any individual for services rendered to the College must be paid through Payroll as compensation unless the individual qualifies as an independent contractor, in which case all such payments must be made through Accounts Payable. To qualify as an independent contractor, an individual must meet specified qualifications as required by the Internal Revenue Service. Further, the individual must provide the College with their Federal tax ID number and evidence that they are covered by their own adequate insurance (i.e. liability and workers’ compensation) before the services can be rendered.

All independent contractors must provide an original written invoice to the College for services rendered. The Internal Revenue Service requires that payments to independent contractors be reported as income on form 1099. Independent contractors are required to pay their own self-employment, sales, use, and income taxes.

Please contact the Controller in the College Business Office for specific questions regarding independent contractors.