PROCEDURE FN2001 CASH RECEIPTS HANDLING, DEPOSITING, AND RECONCILIATION (FORMERLY FN2005)
Last Revision: 05/04/2026

Procedure FN2001 Cash Receipts Handling, Depositing, and Reconciliation (formerly FN2005)

Process Owner: Controllership Team

Policy Steward facilitating procedure: Associate Vice President for Budget and Finance & Controller

Table of Contents

Purpose

Policy reference: FN01 Cash Revenues - Purpose

This procedure outlines how units must collect, document, safeguard, deposit, record, and reconcile cash receipts in compliance with University policy, internal control standards, and audit requirements.

Exhibit A Policy FN01-Procedure FN2001 Operationalized Crosswalk aligns Policy FN01 Cash Revenues requirements to this procedure.

Scope

Policy reference: FN01 Cash Revenues - Scope

This procedure applies to all University personnel responsible for handling or processing cash receipts.

Definitions

All definitions applicable to this procedure are contained in Policy FN01 Cash Revenues. In the event of any inconsistency between this procedure and the policy, the policy prevails.

Procedure

Governance and Oversight

Policy reference: FN01 Cash Revenues - Governance and Oversight

  • Cash receipts must be deposited only into University-approved bank accounts managed by the Treasury Office
  • Units may not establish independent cash-handling processes without approval
  • All activities must align with University financial governance and internal control expectations

Risk Assessment Requirements

Policy reference: FN01 Cash Revenues - Risk Assessment Requirements

Units must:

  • Conduct annual risk assessments of cash-handling operations
  • Evaluate:
    • Physical security
    • Volume and type of payments
    • Segregation of duties
    • Fraud exposure
    • PCI DSS compliance (if accepts credit card payment)
  • Document and retain results for audit review

Recording and Documentation

Policy reference: FN01 Cash Revenues - Recording and Documentation

Policy FN01 Cash Revenues distinguishes between:

  1. The University's possession of a record of all transactions, and
  2. Providing acknowledgment to the person making the payment

University Records

All transactions must:

  • Be fully documented for:
    • General Ledger accuracy
    • Reconciliation
    • Customer/account tracking
    • Sales tax reporting
    • Audit trail requirements
  • Be captured using:
    • Cash registers or Point-of-Sale (POS) systems
    • Prenumbered receipt books
    • Transaction logs
    • Registration systems
  • Maintain one official record per transaction (no duplicates)
  • Be protected from unauthorized alteration or loss

Acknowledgment to Payers

Units must provide confirmation of payment via:

  • Receipts
  • Tickets
  • Confirmation
  • Statements

Credit card slips may serve as supporting documentation but not the official record when another system records the transaction.

Depositing and Transmitting Cash

Policy reference: FN01 Cash Revenues - Depositing and Transmitting Cash

Deposit Timing

Deposits must occur:

  • Daily when collections ≥ $500
  • At least weekly, regardless of amount
  • Within two (2) business day when volume requires

Deposit Methods

  • Direct deposit to University-designated bank
  • Courier service via Auxiliary & Business Services
  • Remote deposit capture (where approved)

Deposit Preparation

  • Use approved deposit bags (canvas or pre-numbered disposable)
  • Each deposit must:
    • Be clearly identified
    • Have a corresponding Cash Deposit Journal Entry

Bank Deposit Tickets

  • Must be completed in full
  • Include:
    • Cash totals
    • Coin totals
    • Check totals
    • Department name
    • Deposit bag number
  • Retain:
    • Bank-validated slip, or
    • Courier system confirmation

Check Acceptance and Restrictions

Policy reference: FN01 Cash Revenues - Check Acceptance and Restrictions

Endorsement Requirements

All checks, money orders, and traveler's checks must be restrictively endorsed.

Required endorsement:

  • FOR DEPOSIT ONLY THE PENNSYLVANIA STATE UNIVERSITY
  • Depository bank name
  • Bank account number
  • Business Area number, and
  • PSU Access ID (with space for handwritten entry)

Placement

  • Reverse side of the check
  • Within 1/2 inch of the edge
  • Aligned with the "Pay to the order of" line

Special Handling

  • U.S. checks: deposited via direct or remote methods
  • Foreign checks:
    • Deposited separately
    • Converted to USD
    • Processed per General Accounting guidance

Remote Deposit

  • Scan front/bank of checks
  • Verify totals before submission
  • Retain remittance materials for 14 business days, then securely destroy

Restriction on Use of Cash Receipts

Policy reference: FN01 Cash Revenues - Restrictions on Use of Cash Receipts

Cash receipts may not be:

  1. Used as petty cash
  2. Mixed with petty cash funds
  3. Used to cash checks
  4. Held instead of deposited
  5. Used for personal or unauthorized purposes

Safeguarding Cash Receipts

Policy reference: FN01 Cash Revenues - Safeguarding Cash Receipts

Units must ensure:

  • <$1,000 stored in locked, reinforced cabinet
  • ≥$1,000 stored in an approved safe
  • Transfers conducted on irregular schedules
  • Documentation protected from tampering

Segregation of Duties

Policy reference: FN01 Cash Revenues - Segregation of Duties

Cash handling responsibilities must be separated across:

  • Collection of funds
  • Deposit preparation
  • Reconciliation and journal entry

If full segregation is not possible:

  • Responsibilities must rotate
  • Additional oversight must be implemented

Dual Controls

Dual custody is required during high-risk cash handling activities, including large cash counts, transport, and end-of-day reconciliation. Two authorized individuals must be present and accountable.

Credit Card Payments

Policy reference: FN01 Cash Revenues - Credit Card Payments

Units must:

  • Use University-approved systems only
  • Comply with PCI DSS
  • Prohibit storage of:
    • Full card numbers
    • CVV codes
    • PIN data
  • Maintain secure handling and disposal of card data
  • Identify the official system of record

Electronic Payments (Wire, EFT, ACH)

Policy reference: FN01 Cash Revenues - Credit Card Payments

  • Record all transactions in the System for Integrated Management, Budget, and Accounting (SIMBA) or other approved financial system or LionPATH (student information system) within two (2) business days
  • Securely store banking information
  • Verify all banking charges to prevent fraud

Audit, Monitoring, and Compliance

Policy reference: FN01 Cash Revenues - Audit, Monitoring, and Compliance

  • Units must:
    • Maintain documentation for audit review
    • Provide records upon request
  • Internal Audit, Treasury, and Controllership may:
    • Conduct periodic or unannounced audits
  • Deficiencies must be:
    • Investigated
    • Documented
    • Corrected

Training Requirements

Policy reference: FN01 Cash Revenues - Training Requirements

All personnel handling cash must complete:

  • Initial cash-handling training for all employees handling cash
  • Annual refresher training
  • PCI DSS training for personnel working in the cardholder environment upon initial hire and yearly thereafter

Units must:

  • Track training completion
  • Restrict duties for non-compliant staff

Roles and Responsibilities

Policy reference: FN01 Cash Revenues - Roles and Responsibilities

Treasury Team

  • Oversees University cash management and banking operations
  • Establishes and maintains approved depository bank accounts
  • Provides guidance on deposit methods, banking requirements, and cash management practices
  • Approves exceptions related to banking and cash handling processes
  • Monitors compliance with banking agreements and treasury controls

Controllership Team

  • Oversees procedure compliance
  • Provides guidance and training
  • Coordinates audits

Unit Managers

  • Ensure staffing and internal controls
  • Oversee risk assessments

Cash Handlers

  • Follow all procedures
  • Report discrepancies or suspicious activity immediately

Operational Processing Requirements

Cash Handling Workflow

  1. Receipt of funds
  2. Recording transactions
  3. Reconciliation to records
  4. Deposit preparation
  5. Cash Deposit Journal Entry creation and submission
  6. Approval of Journal Entry

Journal Entry Processing

  • Must be completed same day as deposit or next business day if processed after banking cutoff
  • Entered in:
  • Must include:
    • Business Area coding
    • Supporting documentation

Reconciliation

  • Monthly:
    • Review SIMBA or approved financial information system reports
  • Daily: LionPATH (student information system-related activity)
  • Reconciliation must be performed by an individual independent of the cash collection processes
  • Discrepancies must be:
    • Investigated immediately
    • Documented with corrective action

Transporting Revenues

Processing Returned Checks

Exceptions

Policy reference: FN01 Cash Revenues - Exceptions

Request must:

  • Be submitted in writing
  • Include justification and compensating controls
  • Be approved prior to implementation
  • Be reviewed annually

Violations

Policy reference: FN01 Cash Revenues - Violations

Violations must be reported through:

Audit Coordination - Financial and Procedural

  • Controllership coordinates:
    • Internal audits
    • External audits
  • Financial Planning, Analysis, and Coordination (FPAC) collaborates with:
    • External auditors
    • Central University officers

University Records Retention and Disposition

University Records must be retained and managed in accordance with Policy AD35 University Archives and Records Management and the University's Records Retention Schedules.

Additional questions may be directed to the Office of Records Management.

Exhibits

Exhibit A Policy FN01-Procedure FN2001 Operationalized Crosswalk

Contact Information

For questions or additional information, please contact the Controllership Team.

To request changes to this procedure, please contact the Policy and Procedure Office by submitting a Technical Support Request form.

Cross References

Procedure Status

Date Approved

May 1, 2026

Most Recent Changes

  • Revision 8 - May 1, 2026: document completely rewritten for the launch of the finance shared services business model
    • Procedure numbered from FN2005 to FN2001 to align with the associated Policy FN01 Cash Revenues
    • Procedure name changed to accurately identify the business process
    • Financial Officer roles and responsibilities are now assigned to Finance Shared Services teams

Revision History

  • August 14, 2025 - Editorial changes:
    • Violation statement revisions - written by Chief Ethics and Compliance Officer and approved by Vice President and General Counsel
    • University Records Retention and Disposition statement revisions - written by the Records Management Officer and approved by the Records Management Advisory Committee
  • Editorial changes: - November 21, 2024 - "formerly CR2005" removed from title.
  • Editorial changes - October 15, 2024 - Check Endorsement stamp information updated to reflect change in required information.
  • Editorial changes - March 22, 2024 - SIMBA KB article Cash Deposit Journal Entry renamed to Creating a Journal Entry for Incoming Funds and all hyperlinks to KB article updated.
  • Editorial changes - January 19, 2024 - Procedure CR2002 Processing Returned Checks renumbered and retitled FN2002 Processing Returned Checks (formerly CR2002). All associated hyperlinks updated.
  • Revision 7 - November 21, 2023 - revised to document process changes as the result of the launch of SIMBA
    • Procedure numbering changed from CR2005 (CR = Controller) to FN2005 (FN = Financial) to better align with financial policies
    • IBIS business processes replaced with SIMBA business processes.
    • Addition of the Remote Deposit Capture business process.
  • Revision 6 - June 15, 2015 - revised to reflect current operations
  • Revision 5 - April 25, 2002 - Revised to reflect current operations and changes in handling Foreign Checks
  • Revision 4 - January 12, 1998 - Revised to reflect current operations, per changes in deposit handling
  • Revision 3 - February 10, 1994 - Revised per addition of Non-credit Registration & Record verbiage
  • Revision 2 - September 21, 1992 - Revised per University-wide use of Electronic ROCR
  • Revision 1A - June 20, 1989 - Minor revision
  • Revision 1 - June 8, 1989 - Complete revision with Title change
  • Original - December 17, 1984 - Making Deposits Directly to Branch Bank on Campus