FN01 Cash Revenues
Subject Matter Expert:
Policy Steward:Associate Vice President for Budget and Finance>
- APPROVAL AND ADMINISTRATION OF CASH REVENUE PROCESSES:
- RECORDING TRANSACTIONS:
- REPORTING CASH RECEIVED:
- DEPOSITING CASH:
- ACCEPTABLE TYPES OF CHECKS AND FOREIGN CHECKS RECEIVED:
- SAFEGUARDING CASH RECEIPTS:
- SEGREGATION OF DUTIES:
- CREDIT CARD PAYMENTS:
- REPORTING WIRE, EFT, AND ACH PAYMENTS:
- FURTHER INFORMATION:
- CROSS REFERENCES:
- REVISION HISTORY:
This policy assures that the Pennsylvania State University’s (“University”) cash revenues (coin, currency, checks, money orders, traveler’s checks, credit cards, wires, EFTs and ACH payments, or other negotiable instruments) are properly collected, safeguarded, deposited, and reported in a timely manner, whether received in person, by mail, or electronically and complies with the Office of Budget and Finance mission of providing quality financial, accounting, and information services that foster a culture of responsible stewardship and sound fiscal management of University resources. Other forms of revenue such as interest on University deposits, and proceeds from other University investments are beyond the scope of this policy.
The University’s financial policies are applicable throughout the University, including all direct and indirect subsidiaries, and are required to be followed by all University employees who engage in financial, accounting, purchasing or other transactions, including University employees who in the course of their assigned duties engage in such transactions on behalf of third parties such as the Penn State Alumni Association or other related entities. The University’s financial policies are not applicable to Penn State Health or its subsidiaries, or to Penn College of Technology, each of which has its own financial policies.
- Automated Clearing House (ACH) – an electronic funds-transfer system that facilitates payments in the U.S.
- Cash Revenue – coin, currency, checks, money orders, traveler’s checks, credit cards, wires, EFTs, ACH payments, or other negotiable instruments.
- Electronic Fund Transfer (EFT) – electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems, without the direct intervention of bank staff.
- Foreign Check - Any check not drawn on a U.S. bank or which does not have a U.S. clearing bank listed on it is considered a foreign check even if the check is payable in U.S. funds.
- General Ledger – the name for the formal ledger containing asset, liability, net asset, revenue, and expense accounts.
- Money Order – An item purchased at a bank, post office, or other business establishment for any amount up to and including $1000. The entity completes only the amount information.
- Personal Check – A written order payable on demand, drawn on a bank by a depositor; a personal check is written against an individual’s fund as opposed to a cashier’s check, certified check, money order, or traveler’s check, all of which are written against bank funds.
- Post Dated Check – a date on a check which follows the date of actual initiation or execution.
- Restrictively Endorsed – refers to affixing the signature, name, and account number to whom the transactions are to be credited and bank to be deposited.
- Stale Dated Check – a check that is dated in the past, usually six (6) months or more; or a check with instructions written on the face of the check, such as “void after 90 days.”
- Third Party Check – A check made payable to a person or organization other than the one accepting or cashing the check (for example, a paycheck).
- Transfer Logs – a permanent record that is signed and dated for funds that are transported by someone other than the person preparing those funds for deposit.
- Traveler’s Check – A special check supplied by banks or other companies for the use of travelers; these checks already bear the purchaser’s signature and must be countersigned in the cashier’s presence.
- Wire Transfer – monies that are transferred electronically from one financial institution to another.
The Treasury Office, a division of the Office of Budget and Finance, facilitates the cash management and banking functions of the University.
The accessibility of funds and fund records shall be restricted and administratively controlled.
Supervision of cash management activities shall be strictly and continually administered. See Procedures CR2004 Accountability for Transfers of Items of Value (Except Equipment), FN2005 Cash Revenues Transactions, and CR2007 Bank Deposit Bag Tracking for details on cash management activities.
Approved price lists shall be published to ensure a control over income for goods and services. See Policy FN27 Establishing and Billing Service Center User Rates. See Policy FN02 Charge Sales, Billing, and Accounts Receivable and Procedure CR2066 Guidelines for Decentralized Accounts Receivable.
The use of departmental or personal checking and/or other bank accounts by University personnel for the depositing of and/or safekeeping of University funds is strictly prohibited. An exception to this statement is Financial Officer Operating Funds. See Policy FN05 Financial Officer Operating Funds for complete details.
Cash related transactions shall be fully documented so that an undisputed audit trail exists.
Supporting documents and procedures must be used which minimize the risk of misappropriated or misplaced cash revenue, ensure the timely deposit of those revenues, and ensure the timely and accurate reporting of those deposits to University accounting records. Revenues must be fully traceable from the point of transaction to their appearance in University accounting records and depository accounts. It is the responsibility of the Financial Officer of each business area to determine the adequacy of documentation and local procedures based upon the constraints of this policy.
Acknowledgments or receipts must be generated by the individual initially accepting possession of the cash revenue on behalf of the University at the time the revenue is received. All receipts (whether computer generated or pre-numbered) must contain the University name, University mark, and campus name.
The person (or organization) paying must receive an acknowledgment that the cash revenue was received by the University if:
- paid in cash -OR
- the revenue is in payment of goods or services provided by the University -OR
- the revenue is a gift -OR
- the person paying requests that an acknowledgment of payment be issued
In both cases (computer generated and prenumbered receipts), suitable evidence of the transaction must reflect:
- the date and amount of the transaction,
- the reason for the revenue,
- the form of revenue (cash, check, etc.),
- the identity of the area and the employee accepting the revenue on behalf of the University.
Once the revenue has been initially accepted by the University, no duplicate records of the transaction should be generated. See Procedure CR2004 Accountability for Transfers of Items of Value (Except Equipment) and Procedure FN2005 Processing Cash Revenues for complete details.
Serially numbered forms shall be used to document cash related transactions to enhance reconciliation and accountability. See Procedure CR2032 Processing and Controlling Prenumbered Receipts.
Cash revenue received by mail for an unidentified purpose must be taken to the respective Financial Officer for determination of the proper recipient. Since the proper recipient is unknown and, therefore, no individual has accepted possession of the revenue on behalf of the University, no record of the transaction can be made at that time. Once the correct recipient has been identified by the Financial Officer, it is the responsibility of that recipient to generate the necessary record.
It is not necessary to issue an acknowledgment for:
- unearned revenue (utility commissions, grant payments, etc.) unless other University policies or legal obligations require such,
- revenue for areas where individual transactions average under $2 each and total no more than $250 per month,
- revenue from coin-operated machines,
- revenue received by mail in response to a billing by the University.
Refer to Policy FN03 Substantiation, Disclosure, and Accountability for the Receipt of Contributions from Non-Governmental Sources and Procedure CR2021 Flow and Accountability of Gifts and Grants from Non-Governmental Sources for specific information for processing gifts of cash and grants from non-governmental sources.
All cash received by any department or area of the University must be deposited as quickly as possible with the authorized depository bank (or with the Bursar for student A/R and Central Accounts Receivable for non-student A/R) and reported in a timely manner. See “Depositing Cash” (below) for deposit/time requirements.
Under no circumstance is cash (coin or currency) to be forwarded via interoffice mail. Adequate transfer of accountability must be recorded (name, date, and deposit amount) if the deposit is not made directly by the person preparing the Cash Deposit Journal Entry and/or the person making entry to LionPATH. Properly endorsed checks, money orders, and traveler’s checks may be sent through the interoffice mail. Refer to Procedure CR2004 Accountability for Transfer of Items of Value (Except Equipment) for the proper methods of transfer.
Provisions shall be made for the regular review and comparison of transaction documentation to detect errors and duplicate payments.
Cash related accounts shall be frequently reviewed and reconciled with subsidiary records.
All cash revenue must be deposited daily when $500.00 or more has been collected, however, not less frequently than once a week regardless of the amount collected. Revenue must be deposited at a bank before the end of the second business day that total revenues warrant a deposit. Weekly revenue should be deposited on Friday and not held over a weekend.
Departments may make deposits by (1) taking them to the Office of the Bursar, (2) taking them to an authorized depository bank, or (3) utilizing the Bank Deposit Bag Tracking System. See Procedures CR2004 Accountability for Transfers of Items of Value (Except Equipment), FN2005 Processing Cash Revenues, and CR2007 Bank Deposit Bag Tracking for the depositing process.
Campus deposits are made with the bank deposit slip to the authorized University depository account for that location. The deposit slip must identify the campus or department making the deposit.
All authorized cash handling units 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 University Police immediately. Do not return the bill to the payer.
All acceptable types of checks received must be made payable to THE PENNSYLVANIA STATE UNIVERSITY (not to the area selling the materials or services) and must be restrictively endorsed immediately upon receipt to further limit the negotiability of the items and shall be safeguarded until deposit is accomplished.
The Uniform Commercial Code (UCC) section three and four designate the following cash equivalents as checks and they are to be processed as any other check: Cashier’s Check, Certified Check, Money Order, Traveler’s Check, and Personal Checks.
NOTE: Personal checks are accepted for purchase of goods or services. Cashing of personal checks is prohibited.
The following are unacceptable types of checks and should not be accepted:
- Counter Checks, and
- Third-Party Checks (see definitions above)
Federal Reserve established regulations pertaining to standard check endorsements must be adhered.
Reference Procedure FN2005 Processing Cash Revenues for the information to be included on check endorsements.
Departments are not authorized to return currency to the payor for checks exceeding the amount due to the University. Payment by traveler’s check is the only time a department may return the difference between amount of traveler’s check and balance due to the payor. Departments may not accept post-dated checks.
It is the department's responsibility to collect amounts due the University whenever checks accepted by the department are returned by the bank. Therefore, it is required that the department to which the check will be credited identify itself on the back of the check as part of its endorsement. Reference Procedure FN2002 Processing Returned Checks (formerly CR2002).
Any check not drawn on a U.S. bank or which does not have a U.S. clearing bank listed on it is considered a foreign check even if the check is payable in U.S. funds.
Checks which are payable in foreign currency require special consideration and may not be deposited in the same manner as checks drawn on U.S. banks. Such checks must be converted from the foreign currency to U. S. dollars.
- At University Park - it is the responsibility of the Bursar to have the check converted through the University's banking institutions.
- At non-University Park locations - the Financial Officer assumes the responsibility for currency conversion.
Note that conversion costs are expensive and if the foreign check is for less than $50 U.S. dollars, it may be better to return the check and request payment in U.S. funds. Please see Procedure FN2005 Processing Cash Revenues for full details.
Cash receipts are not to be withheld from deposits in order to create change or petty cash funds for sales operations. If such funds are needed, they are to be requested in accordance with University Policy FN05 Financial Officer Operating Funds.
Cash receipts are not to be intermingled with petty cash funds, nor are they to be used for making purchases normally made from petty cash funds (see Policy FN05). Also, cash receipts are not to be used for making personal cash advances to employees, or for cashing checks.
Currency received as a refundable deposit for goods or services may not be held in the department in lieu of depositing funds and later issuing refunds.
Documents used in cash related transactions shall be safeguarded against reuse, tampering, or unauthorized disposal.
It is the responsibility of each department or non-University Park location to make whatever provisions are necessary to properly safeguard the cash receipts of their area.
Any amount of cash on hand that exceeds $1,000 must be maintained in an approved safe (fireproof, bolted to the floor or immovable). Amounts of $1,000 and under must be maintained in a file safe or reinforced file cabinet with a pad lock and bar that secures all drawers. Cash should not be retained in desk drawers or standard file cabinets since they are easily accessed with nominal forcing or readily available keys.
Cash pick-ups and transfers 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.
See Procedure FN2005 Processing Cash Revenues for guidelines in the event of a robbery.
Cash related duties, such as maintenance of accounts receivable, cashiering, accounting, disbursing, and collecting funds shall be segregated.
The processing of revenue is comprised of three main functions: collection/recording of the revenue; depositing the money; and reporting/reconciliation of revenue with the record of the transactions. Ideally, each function should be performed by a different individual. If possible, employees responsible for these functions should be rotated periodically without prior announcement. If staff is limited to two (2) individuals to perform the processing functions, the individual collecting the revenue and recording the transactions should also deposit the revenue. The second individual should perform the reporting/reconciliation of revenue with the record of the transactions and process the Cash Deposit Journal Entry. At no time may one individual have control over the entire process.
It is the responsibility of the area that receives payments by credit card to assure the payment is properly recorded in SIMBA (debiting the appropriate depository bank and crediting the appropriate cost object e.g. Cost Center, Internal Order).
Credit card transaction slips may be a suitable record of transaction if they meet the “Suitable Acknowledgment” criteria (see above). In operations where a cash register or other means of recording transactions are considered the primary means, credit card transaction slips become supporting documentation, and therefore are not in conflict with the “one record per transaction” rule. Each area should clearly establish what documentation will be considered the “record of transaction” and what will be deemed support.
See Policy FN07 Electronic Payments - Credit Cards for complete details on processing credit card payments.
Electronic funds transfer and direct deposit shall be used where feasible and advantageous.
It is the responsibility of the area that receives payments by wire, EFT or ACH to assure the payment is properly recorded in SIMBA (debiting the appropriate depository bank and crediting the appropriate cost object e.g. Cost Center, Internal Order). Wire, EFT and ACH payments must be reported in SIMBA or through the appropriate LionPATH reporting channels.
Prompt responses shall be made to reviews performed by Internal Auditing on cash management activities to correct cited deficiencies.
Violation of a financial policy should be reported to your supervisor, your human resources representative, unit manager and/or the office responsible for the policy. Where these resources are inadequate, you may choose to make an anonymous report through the Pennsylvania State University hotline or by calling 1-800-560-1637.
Units that do not follow the guidelines set forth in this policy will, at a minimum, be held responsible for any fines, penalties, or losses.
For questions, additional detail, or to request changes to this policy, please contact the Office of Budget and Finance.
- Policy FN02 Charge Sales and Billing
- Policy FN03 Substantiation, Disclosure and Accountability for the Receipt of Contributions from Non-Governmental Sources
- Policy FN05 Financial Officer Operating Funds
- Policy FN07 Electronic Payments - Credit Cards
- Procedure CR2004 Accountability for Transfer of Items of Value (Except Equipment)
- Procedure FN2002 Processing Returned Checks (formerly CR2002)
- Procedure FN2005 Processing Cash Revenues
- Procedure CR2007 Bank Deposit Bag Tracking
- Procedure CR2067 Guidelines for Decentralized Accounts Receivable
Most recent changes:
- January 10, 2024 – Editorial changes - Procedure CR2002 was renumbered and retitled to FN2002 Processing Returned Checks (formerly CR2002). All associated links were updated.
Revision History (and effective dates):
- December 7, 2023 – Editorial changes - Procedure CR2005 was renumbered and retitled to FN2005 Processing Cash Revenues. All associated links were updated.
- January 31, 2023 – Editorial changes. Changed all references to the Associate Vice President for Finance to the Associate Vice President for Budget and Finance, per the directive of the Associate Vice President for Budget and Finance
- January 5, 2023 – Editorial changes. Changed all references to the Office of the Corporate Controller to the Office of Budget and Finance, per the directive of the Associate Vice President for Finance
- September 2, 2022 - Editorial change to update Policy Steward from Associate Vice President for Finance and Corporate Controller to Associate Vice President for Finance.
- September 15, 2021 - policy rewritten for implementation of SIMBA financial system.
- November 11, 2018 - Subject Matter Expert added.
- September 20, 2018 - Editorial changes to update all GURU references from html formatting to cfm format.
- September 10, 2018 - Editorial changes to include a CROSS REFERENCES section and to remove the redundant Date Approved, Date Published, and Effective Date information.
- September 28, 2015 - Major revisions have been made to the RECORDING TRANSACTIONS, REPORTING CASH RECEIVED, DEPOSITING CASH, CHECKS RECEIVED, CHECK ENDORSEMENT, SAFEGUARDING CASH and REPORTING WIRE, EFT AND ACH PAYMENTS sections, to reflect current operations.
- September 12, 2013 - Editorial change- addition of policy steward information, in the event that there are questions or requests for changes to the policy.
- October 14, 2011 - Policy expanded to include wires, EFTs and ACHs as University cash revenues that must be properly accounted for, safeguarded, deposited, and reported in a timely manner. A new section entitled REPORTING WIRE, EFT AND ACH PAYMENTS has been added, defining the appropriate responsibilities in reporting such payment types.
- August 15, 2008 - Editorial changes, revising references to procedure CR2005 with the correct name; revised the "Cash Over or Cash Short" section to clarify the current process and documents for handling these situations.
- July 21, 2005 - Additional editorial changes to eliminate "General Forms Usage Guide" references, and to add the correct links for the forms referenced in the policy.
- March 30, 2004 - University Police provide expanded courier services for deposits at University Park. Sealable plastic bank deposit bags are required for that service.
- January 17, 2003 - Sample endorsement stamps changed due to change in banks.
- June 3, 1997 -
- Bursar no longer double counts departmental deposits; departmental deposits go directly to bank.
- At University Park, Police Services no longer provides an escort to a bank or takes deposits to Bursar.
- Instructions for handling ISIS over/shorts has been changed.
- March 31, 1994 - Title of policy changed from "Cash Sales and Receipts" to "Processing Cash Revenues". Substantial re-write that includes the new section RECORDING TRANSACTIONS, an expanded REPORTING CASH RECEIVED, and an increase in the threshold requirement for daily deposits from $200 to $250.
- May 1, 1992 -
- An increase in the threshold requirement for daily deposits from $100 to $200.
- Added retention periods for the bank-validated copy of the deposit slip which is maintained in departments.
- Changes to the locations at which deposits are to be made.
- Created standards for endorsements stamps which now may also be ordered from local sources in addition to the Bursar.
- January 21, 1991 -
- Policy designation changed from "CS-1 Cash and Sales" to "FN01 Cash Sales and Receipts."
- Defined what is included by the term "cash."
- Added provisions for deposits involving ISIS.
- Allows deposits to Bursar-approved banks in downtown State College, and downtown banks at campuses.
- Introduced the Accountability Transfer Form.
- Introduced Police Services courier service for deposits.
- Added the section CHECKS ENDORSEMENTS which delineates endorsement requirements.
- Added provision for dealing with foreign currency conversion fees.
- Added requirement for safeguarding cash on hand that exceeds $1000.
- January 23, 1987 -
- Report of Cash Receipts form replaced by IBIS form.
- Department name must appear on deposit slips as well as location making the deposit.
- August 30, 1985 - Added provision for depositing checks drawn on foreign banks.
- December 14, 1984 - Editorial changes involving wording for when monies must be deposited, and changing the "Hetzel Union Building" to "Bookstore Building."
- September 21, 1984 - All checks and money orders must now be immediately endorsed upon receipt.
- May 30, 1984 - Changes the endorsement of all checks and money orders to limit the negotiability of those items.
- February 15, 1984 - "Radnor Graduate Center" changed to "King of Prussia."
- August 17, 1982 - Added instructions for the handling of Renumbered Receipts.
- June 4, 1982 - Entire policy revised.
- June 27, 1979 -
- Expanded the scope of deposits from the "sale of materials or services" to include "the collection of fees and other receipts."
- Added the use of signatures for transferring the responsibility for locked deposit bags by couriers.
- Specified wording of the restrictive endorsement of checks.
- March 29, 1978 - New Policy CS-1 (Cash and Sales).
Date Approved:November 1, 2021>
Date Published:November 2, 2021>