Systems and Procedures
A Division of The Corporate Controller's Office

Procedure CR2063 - Generic Cash Collection from Coin Operated Machines

Office of the Corporate Controller

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

Table of Contents:


GENERAL:

A number of departments of Penn State are responsible for sales from coin operated vending machines (both non-PSU owned as well as PSU owned). Examples of coin operated vending machines at Penn State are: Change machines, Copy machines, and Video games (parking meters are excluded from this procedure). This procedure establishes the fiscal controls necessary for the collection, depositing, reporting, and reconciliation of the monies collected.

Several general provisions must be followed:

This procedure applies to all areas of the University not having a specific procedure covering the area's operation of coin operated vending machines. This procedure does not apply to food/beverage vending operations which are covered by separate contract ) refer to Policy AD26.

For areas collecting cash other than from coin operated machines, refer to Procedure CR2056 - Generic Cash Handling.

There are departments that may require exceptions to the instructions outlined in this procedure. These exceptions must be approved by the Corporate Controller's Office and System and Procedures. If a department has been granted exceptions to this procedure, they must be documented in an official procedure or letter and that procedure or letter will take precedence. Any questions should be directed to Systems and Procedures.

PROCEDURE:

SALES

General

Sales records must be kept to make sales statistics meaningful, to reconcile sales activities to monies received, and to reconcile sales activities to inventory records.

Instructions to users regarding refunds, and what to do if the vending machine fails to operate properly, must be clearly posted.

The budget administrator and those assigned and authorized designates are responsible for: accounting for all vending machine coin box keys; overseeing the operation of the vending machines; reconciling inventory; overseeing the cash/sales reconciliation when the monies are collected; verifying that funds are properly deposited and recorded; and assuring that the correct change fund (if applicable) is placed in the vending machines.

Change Funds

Change funds are replenished from the monies collected at the time they are collected. However, if the vending machine is equipped with a locked coin box, the change fund cannot be immediately replenished at the time of collection from the collection of monies, but must be replenished from a change fund the individual brings with him/her when he/she collects the monies.

Segregation of Duties

The control of cash receipts is segregated into three (3) main functions: collection/recording of cash; depositing the monies; and reporting/reconciliation of cash with the sales transactions.

Ideally, each main function would be performed by a different individual, to ensure that one person does not have complete control over the entire procedure. If at all possible, employees who collect cash and record the cash transactions should be rotated periodically without prior announcement.

If staff is limited to two (2) individuals to perform the main cash functions, the individual collecting the monies and recording the cash transactions should also deposit the monies with a depository bank. The second individual should perform the reporting/reconciliation of monies received with the monies deposited, and process the ROCR.

Exchanges and Returns

Selling units that are responsible for coin operated vending machines must maintain a fair exchange and return policy and make adjustments with respect to goods and service transactions whenever appropriate.

All exchanges and returns must be documented and reconciled.

Refunds

A sticker or decal must be displayed on each vending machine listing an identification number of the vending machine, customer refund information, a phone number, and available hours for emergency service.

If a vending machine operator is available (desk clerk), the customer may receive a cash refund, after completing a Cash Refund Receipt form (see page 1.15 in the General Forms Usage Guide for information regarding when this form can be used). However, the individual who issues refunds and the individual who removes the cash from the machine, must be different individuals.

If a vending machine operator is not available, vending refund forms must be obtainable at each coin operated vending machine. An individual requesting the refund completes the form and leaves the form at the machine location, or submits the completed form to the address listed on the form. All forms must request the following information:

When an employee collects the monies from the vending machines, he/she will also collect any completed refund forms, and return them to the selling unit.

The selling unit must process, document, and reconcile all refunds, but is under no obligation to fulfill a request for a refund unless the selling unit feels the request is a reasonable and fair claim.

COLLECTION OF MONIES

Non-PSU Owned Coin Operated Vending Machines

When Penn State receives a commission based upon sales, and the outside vendor collects the monies from the coin operated machine, a Penn State employee must accompany the vendor collector and record the amount of monies collected and commission earned. However, if the vending machine is equipped with a counter, a Penn State employee need only do a periodic (e.g., monthly) review of the sales records. The manager of the selling unit must confirm that the recorded sales amounts reconcile with the amount of commission monies received.

Penn State must have a record of the amount of services or inventory that was sold to reconcile the commission amount received with the amount of monies collected.

When the monies Penn State receives is not dependent upon sales, but a fixed amount governed by a contract, the specifics of the contract will govern the collection of the monies, as well as the review of sales records.

PSU Owned Coin Operated Machines

Unless the equipment is designed with a locked coin box or bag that cannot be opened by the individual collecting the monies, two individuals should be present when monies are collected from coin operated vending machines. If this is not possible, and there is an independent review of the machine's coin counter, at a minimum, individuals who collect the monies should alternate on a periodic basis.

When the monies are collected, the meter readings (if applicable), or a record of inventory (e.g., coins in a coin changer machine) that is replenished in the coin operated machine is recorded on a log sheet (Exhibit "A"). The type of coin operated vending machine will dictate the nature of the record. This record is used to record overages and shortages (discussed later) and to complete the reconciliation of sales and monies.

The log sheet should contain the following information:

  1. Name of the Selling Unit.
  2. Type of vending machine (video games, copies, etc.)
  3. Location of vending machine.
  4. Unique identification of vending machine.
  5. Amount of Change Fund placed in machine (if applicable).
  6. Date and time the monies are collected.
  7. Ending amounts (e.g., meter readings, inventory)
  8. Amount of inventory replenished (if applicable)
  9. The amount of monies collected.
  10. Amount of refunds issued (if applicable).
  11. The initials of the individual collecting the monies, and the witness (if applicable).
  12. Amount of over/short.
  13. IBIS document number of the ROCR.

When the monies are collected, they are placed in a secured bag that identifies the source and location of the monies. All locked cash bags are delivered to the selling unit's Accounting Clerk. Under no circumstances, are monies to be forwarded via interoffice mail. A transfer accountability log is maintained at each location to record all transfer of monies. (Refer to FN01 in the University Policy Manual for further information regarding Safeguarding Cash.)

The cash in the cash bags, less the change fund that was replenished (if applicable), is counted in the presence of the individual who collected the cash, and compared with the computed sales amount determined from the beginning and ending amounts of the "product" inventory that is recorded on the Log sheet. Any variance (over/short) between the two amounts must be identified, recorded on the Log Sheet, and initialed by the Accounting Clerk and Supervisor. This amount is ultimately included on the Report of Cash Receipts (ROCR) when the deposit is reported.

The budget administrator or Supervisor is responsible for ensuring that the Log Sheets for each vending machine are obtained, completed correctly, and the monies are collected. It is also important to have the budget administrator or Supervisor confirm the amounts of the Log Sheets with the observed meter counts and inventory and purchases.

DEPOSITING AND REPORTING

Depositing

All monies must be deposited according to University Policy FN01. A Report of Cash Receipts (ROCR) must be completed, and reported to the University.

The total monies are recorded on a bank deposit slip (if deposited with a bank), locked in a deposit bag, and placed in a safe until deposited. The deposit frequency is regulated by Policy FN01..

The deposit is made according to Procedure #CR2005, "Depositing Currency, Coins, Checks and Money Orders." All monies are transferred in a locked deposit bag according to Procedure #CR2004, "Accountability for Transfer of Deposit Bags from Departments to the Depository." (Both procedures are available from Systems and Procedures.)

Reporting

A Report of Cash Receipts (ROCR) is prepared and processed according to the instructions available in the IBIS document titled "Report Of Cash Receipts," available from the Administrative Training and Support Center. Total Cash Sales are typically credited to the department's budget, Sales Income (Fund 1005), and all sales tax collected (if applicable) is recorded to State Sales Tax, (Fund 0678). Any cash over/short is recorded on the ROCR to Fund 0752. If the cash overage or shortage exceeds the limit designated in Policy FN01., the ROCR must be approved by the budget administrator or budget executive.

RECONCILIATION

The Supervisor will compare the ROCR to the Log Sheet to verify that all monies collected were properly deposited. The Supervisor signifies his/her review by recording the IBIS Document Number of the ROCR on the Log Sheet, along with the date and his/her initials. The Log Sheet is filed by date. Any discrepancies are resolved by the supervisor or budget administrator.

Periodic reconciliations are to be performed under the direction of the Financial Officer to ensure that related sets of financial documents balance, and thus, test the integrity of the local record keeping system. Results of the reconciliation are to be reviewed by the Financial Officer.

On a monthly basis, University "Central Accounting" Monthly Budget Reports are examined to ascertain that the proper department accounts were credited with the income. Likewise, comparisons are made to determine that purchases to inventory are accurately reflected on both the University's budgetary accounting records and the department's internal records. Comparisons are made for reasonableness between monies collected and inventory sold.

AUDIT COORDINATION - FINANCIAL AND PROCEDURAL

The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area, as well as performing an annual audit that is submitted to the Assistant Controller.

RECORD RETENTION, DISPOSITION AND DESTRUCTION:

Record retention must be managed in accordance with Policy AD35 - University Archives and Records Management, and records schedules approved by the Records Management Advisory Committee, Office of General Counsel, and Office of the President. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and local statute or regulations, industry standards, and business needs. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions.

Upon expiration of a stated period of time, documents must be discarded and/or destroyed, unless permission granted by Records Management Officer or designee to retain the records. Archival records created more than 20 years prior to the current date must be reviewed before destruction. Units should also contact the University Archivist before discarding any document which may be of permanent or historical value to the University. To safeguard the privacy of individuals, documents that contain salary information, personally identifiable information (PII), or student records must also be shredded. See Policy AD53 - Privacy Policy and AD22 - Health Insurance Portability and Accountability Act for additional information regarding privacy and the protection of an individual's personal information. For documents that must be shredded, departments may arrange for Blue Bag service by contacting the Blue/White Shredding Program of the Office of Physical Plant. Exceptions to the practice are as follows:

Additional questions may be directed to the University Archivist or the Records Management Officer.

EXHIBITS:

CONTACT INFORMATION:

For questions, additional detail, or to request changes to this procedure, please contact the Associate Controller.

CROSS REFERENCES:


Procedure Status:

Date Approved: 12/19/92

Most recent changes:

Revision History: