Essay on Internal Control

Essay on Internal Control Essay on Internal Control CASH CONTROL GUIDELINES General The term â€Å"cash† includes currency, coin, checks, money order, credit/debit cards, ACH online payments and electronic file transfers. All departments receiving any form of cash, including cash receipts, change funds and petty cash funds must be authorized by the Director of Student Accounts. This authorization is established through a Memorandum of Understanding that outlines the responsibilities of the cash site and assigns accountability to an individual – usually the Director or Manager – within the department who must sign the Memorandum. All cash sites are subject to audit and the authorized individual at those sites must ensure that the department complies with all governmental regulations, university policies/procedures and the recognized standards for internal controls as related to cash. All employees assigned cash handling responsibilities must be instructed regarding the cash regulations and guidelines that the department must followed. INTERNAL CONTROLS Strong internal controls are necessary to prevent mishandling of funds and safeguard assets. They protect both the university and the employees handling cash. The standard internal control categories that authorized individuals should be aware of are: Safeguarding Cash, Cash Receipts, Reconciliation, Segregation of Duties, and Other. Safeguarding Cash Youngstown State University’s cash control guidelines are governed by Ohio Revised Code, Section 9.39, and require that the funds held overnight be minimized. It requires that all public moneys received be deposited â€Å"on the business day next following the day of receipt, if the total amount of such moneys received exceeds one thousand dollars. If the total amount of the public moneys so received does not exceed one thousand dollars, the person shall deposit the moneys on the business day next following the day of receipt, unless the public office of which that person is a public official adopts a policy permitting a policy permitting a different time period, not to exceed three business days next following the day of receipt, for making such deposits, and the person is able to safeguard the moneys until such time as the moneys are deposited.† 1 Access to cash should be restricted at all times. It should be kept in a locked, secure storage facility to which only designated individuals have access. This could be a lockable cash drawer, safe, safe compartment or filing cabinet. The degree of security provided by the storage facility should be commensurate with the amounts being stored. Combinations or keys to safes and other storage facilities should be restricted to the custodian of the cash and designated back up. Combinations or locks should be changed as necessary, and whenever a person with the combination or key is separated. Appropriate precautions † commensurate with the amounts being transported † should be taken when transporting cash from the department to the Office of Student Accounts. All large deposits or those deposits made on a regular basis should be arranged by the department for transport by the YSU Police. Under no circumstances should cash be sent through campus mail or carried by an employee in an obvious container or after dark. Cash Receipts All cash should be recorded immediately upon receipt by use of: cash register, data entry to computer system, pre†numbered receipt or handwritten log. Each individual cash receipt should be identified and controlled by a unique, sequential transaction number, such as a cash register or hand receipt number. Checks should be made payable to YSU (department name optional) and restrictively endorsed (departmental name required) immediately upon receipt. An endorsement stamp may be obtained from the Office of Student Accounts and University Receivables for this purpose. Cash receipts should be