Receiving and Depositing Money - Business Management Guide

The purpose of this section is to familiarize you with the University’s policies and procedures regarding the receipt of money by UT departments. Money received as payments is extremely vulnerable to theft or misappropriation. Therefore, it is essential that departments take appropriate actions to safeguard these funds until they are deposited.

Key Terms

Moneyincludes currency, checks, and other negotiable documents received by a department for goods or services or as a refund, reimbursement, or gift.

Depository account is a bank account into which University funds are deposited.

A monthly reconciliation consists of comparing the original receipts to the deposit document printed from IRIS (or the Report of Departmental Collections, Form T-33) and the official accounting records (departmental ledger).

Receiving Money

Departments must record all money received in an official University Receipt Book, Form T-43; in the online receipting system; on a cash register; or by another method approved by the campus internal audit department.

Departments that are unable to issue an acceptable UT receipt should not accept currency payments. If the payer must transact in currency and the department cannot issue an acceptable receipt, an employee should complete a Report of Departmental Collections (Form T-33) and accompany the payer to the central cashier to obtain a receipt.

Departments that regularly receive payment for goods and/or services should develop written procedures to collect and transmit the money to the campus central cashier or deposit it into a depository account. Sample procedures for accepting and depositing money received are available in University Policy FI0310.

Departments or activities that regularly receive payment for goods and/or services in routine operations are eligible to accept credit and debit cards as an additional method of payment. Departments interested in accepting credit and debit cards must request approval from the campus business office and notify the Treasurer. Departments must seek assistance from Audit and Compliance to ascertain that proper controls and procedures are in place before accepting credit and debit card payments. (See FI0310 for detailed guidance of credit card policy and procedures.)

Safeguards for Receiving Money

Payers should be instructed to make checks payable to “The University of Tennessee.” Checks should not be made payable to individual departments or employees.
All checks received must be endorsed immediately with a University of Tennessee restrictive endorsement stamp. The endorsement also must identify the receiving department.
Faculty may not collect money from students.
If a receipt for payment is prepared in error, it should be voided immediately and all copies retained. A new, correct receipt should be issued to replace the voided one.
Employees who invoice customers or record payments in accounts receivable records should not have access to money received.
Until deposited, funds must be safeguarded adequately at all times. Access should be limited to two or three responsible employees. See Policy FI0310 for acceptable methods of safekeeping.
In general, employees should not serve as custodian for third-party funds (i.e., funds belonging to outside organizations) as part of their official duties unless the money is recorded in an agency fund with the University. See Policy FI0310 for exceptions.

Depositing Money

University policy requires departments to transmit all money received to the campus central cashier or to a depository account within three business days of receipt. Departments that receive large amounts of cash should deposit or transmit more frequently, preferably daily.

Transmit all credit or debit card deposit information to the campus central cashier within three business days of processing. Deposits must be made intact and include all credit or debit card transactions received as addressed in Policy FI0310.

For all deposits (except debit and credit card deposits), the campus central cashier must be notified via a deposit document printed from IRIS (ZK document) or a Form T-33. The deposit ticket must accompany the printed ZK document or T-33.

All money received by a department on June 30 each year must be deposited on July 1 and clearly marked “July 1 as of June 30” to be properly recorded for the correct fiscal year.

Safeguards for Depositing Money

Departments should avoid retaining money received over nights, weekends, and holidays if large sums of money are involved or if the facilities do not provide adequate physical security.
Deposits should never be sent through campus mail.
Departments should use University security personnel to transport large deposits.
Departments must retain bank statements and supporting documents including reconcilements, deposit slips, canceled checks and check registers in good order for the time period stated in the University’s records retention schedule (Policy FI0120).
All funds must be deposited intact. Expenditures may not be made from money received, and the money may not be kept in a department for its use.
A monthly reconciliation should be performed, preferably by an employee who does not handle money. The department’s deposits must be reconciled to the appropriate University cost center or WBS element to verify that the correct amount was deposited and credited to the department’s ledgers.

Lesson Learned

An employee responsible for taking deposits to the bank altered the amount and removed some funds.

Routine reconciliation of deposits to supporting receipts and other records by another employee would have detected this theft in a timely manner.

Crediting Funds to the Appropriate Cost Center or WBS Element

Money collected from the sale of goods or services is generally considered to be revenue and should be credited to an income cost center.
Money collected to reimburse prior expenditures (e.g., personal copies made by employees) should be credited to the appropriate expense cost center and general ledger account.
Money collected as gifts should be credited to a gift fund balance.
Money may be collected for other purposes and should be credited appropriately, e.g., to accounts receivable, revolving accounts, etc.
State and local sales taxes must be collected on the retail sale of certain goods and services, such as ticket sales. For details, see Policy FI0310 or contact your campus/institute business office or the Treasurer.

Your Role in Managing Money Received

Your primary responsibility is to ensure that a system is in place to record and safeguard all money received until it is deposited. You should periodically review departmental records and the procedures used in this system.

In addition to maintaining the controls listed above for accepting and depositing money, your responsibilities are to ensure the following:

Employees assigned cash-handling duties should be trustworthy and trained adequately in the appropriate procedures. Written procedures should be available for these employees.
The department head (or a designee) must sign the Report of Departmental Collections (Form T-33). The department head’s signature certifies that the document accurately reflects the deposit of all money received and that the cost center or WBS element to be credited is correct.
Documentation of money received and deposits should be maintained in good order for the period specified in University Policy FI0120.
Appropriate sales tax should be collected for all taxable transactions and state sales tax returns completed and mailed to the campus/institute business office or Treasurer in a timely manner (by the tenth day of the month after which the tax is due).

For more details on receiving and depositing money received, see University Policy FI0310. Also see Policy FI0130 – Fraud, Waste, and Abuse for procedures to follow when losses such as shortages and thefts occur.