Prior Action: On March 17, 2014 City Council passed and approved Resolution No. R-713 to adopt the Cash Handling Policy & Procedures.

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1 To: Mayor & City Council From: Li Jen Lee, Director of Finance Date: April 27, 2017 Agenda Item & Caption: Discuss and consider a Resolution- adopting the Cash Handling Policies and Procedures, repealing Resolution NO. R-713, and providing an effective date. Action Requested: Approval of consent agenda Prior Action: On March 17, 2014 City Council passed and approved Resolution No. R-713 to adopt the Cash Handling Policy & Procedures. Financial Considerations: N/A Overview and Background: The purpose of this document is to establish uniform policies and procedures for proper handling, custody, reporting, balancing and depositing of cash received by the City, in a manner to safeguard all cash and ensure it is properly accounted for and secured. The procedures will ensure proper authorization/accountability to collect cash, adequate segregation of duties, proper recording processes, safeguarding of assets, timely posting to City s financial systems and depositing to the depository bank. It is the City s intent that all transactions be properly controlled, managed, reported and deposited. Supporting Documents: Resolution Exhibit A-Cash Handling Policies and Procedures

2 RESOLUTION NO. R- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FATE, TEXAS ADOPTING THE CITY OF FATE, TEXAS CASH HANDLING POLICIES AND PROCEDURES, REPEALING RESOLUTION NO. R-713, REPEALING CONFLICTING POLICIES AND PROVIDING AN EFFECTIVE DATE. WHEREAS, it is the goal of the City to establish uniform policies and procedures for proper handling, custody, reporting, balancing and depositing of cash received by the City; and WHEREAS, the City Council of the City of Fate, Texas has reviewed the Cash Handling Policies and Procedures, attached hereto as Exhibit A, and wishes to adopt the Policies and repeal Resolution NO. R- 713 adopted on March 17, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FATE, TEXAS: Section 1. That the City of Fate, Texas hereby adopts the Cash Handling Policies and Procedures, attached hereto as Exhibit A. Section 2. That the City of Fate, Texas hereby repeals Resolution No. R-713 adopted on March 17, Section 3. That any policies previously in force are hereby repealed to the extent that any portion or provision thereof is in conflict with the attached Cash Handling Policies and Procedures. Section 4. That this Resolution shall become effective upon its passage by the City Council of the City of Fate, Texas. AND IT IS SO RESOLVED. PASSED AND APPROVED by the City Council of Fate, Texas, this 1st day of May, APPROVED: ATTEST: Lorne Megyesi, Mayor Victoria Raduechel, City Secretary

3 Exhibit "A" City of Fate, Texas Effective Date: May 1, 2017 Issued by: Finance Department Approval: Cash Handling Policies & Procedures I. Purpose The purpose of this document is to establish uniform policies and procedures for proper handling, custody, reporting, balancing and depositing of cash received by the City, in a manner to safeguard all cash and ensure it is properly accounted for and secured. The procedures will ensure proper authorization/accountability to collect cash, adequate segregation of duties, proper recording process, safeguarding of assets, timely posting to City s financial systems and depositing to depository bank. It is the City s intent that all transactions be properly controlled, managed, reported and deposited. City Cash is defined as coin, currency, check, cashier s check, money order, traveler s check, and credit/debit card payments, other electronic payment media, and other negotiable instruments payable in money to the City. II. Policy This policy establishes and maintains internal control procedures to ensure the proper handling and accountability of cash. Each departmental division manager/supervisor must ensure that cash handling of City funds be in accordance with these policies and procedures. It is the City s policy that all cash transactions be reviewed and approved by appropriate personnel such as managers / supervisors or their designees. The responsibility for the receipt of cash must be assigned to designated City employees approved by management. III. Internal Control Procedures Internal controls are processes designed to provide reasonable assurance regarding the achievement of effectiveness and efficiency of operations. It is the responsibility of all City employees who handle cash duties to ensure all cash is protected through sound loss prevention practices. A. Authorization/Accountability to Collect Cash City employees responsible for cash collections are to be authorized and approved by department management. Review and approval of a supervisor or his/her designee of Daily Collection Report Page 1 of 6

4 is required. The approval process is to verify proper recording of cash. All cash transactions are to be accounted for, properly documented, and secured and traceable to specific cash handlers. B. Segregation of Duties A division of responsibility must exist between the individual receiving the cash and the individual reviews and approves the prepared deposit. No one individual is to have complete control of cash handling duties. C. Recording of Cash The recording of cash for the daily collection should be submitted to the Accounting Division of the Finance Department with sufficient supporting documentation (receipts, register tapes, etc.), daily collection report and a cash deposit coversheet by each cash handler. The daily collection reports are to be reviewed and approved by an individual separate from the daily collection report and cash deposit cover sheet preparer. D. Security of Assets All forms of cash (coin, currency, checks and debit/credit card transactions) are to be physically protected in a secured location with restricted access to authorized personnel. Safes are recommended to be used to secure cash at all times. However, at a minimum, when safes are not utilized, the department must keep all forms of cash in a lockable cash box or cash bag and secured in a stationary location. Additionally, devices with combinations or locks should be changed as staffing changes occur among those who know the combination or location of keys to the secured location. IV. Cash Handling Procedures These procedures provide a City-wide guide for collecting, recording, transporting and depositing cash collected at City sites. A. Cash Boxes, Bags and Safes 1. Cash boxes or bags should be accessible only by the staff handling cash. 2. Cash should be physically protected during business hours through the use of a lockable box, bag or cash drawer. Cash boxes, bags or drawers must be locked whenever left unattended. In no circumstance, they may be left on the surface of the desk. 3. Keys to cash boxes or bags should be left in a secure location, accessible only by staff authorized to collect cash and their immediate supervisor(s). A written record of employees having keys should be maintained by the Department. 4. By the end of each business day, the change funds/start-up funds should be segregated from the cash collected during the business day. All cash collected during the business day should be kept in a secure location until given to the Accounting Division of the Finance Department Page 2 of 6

5 for deposit. Change funds should be put in the cash boxes or bags and should be locked and placed in a secure location. 5. Cash counts of change funds shall be performed by another staff other than the custodian of the cash boxes or bags at the end of each business day to verify the amount in cash boxes or bags even if there are no cash collections of the business day. The cash counts shall be documented by Cash Count Form (Exhibit 1) and signed by both the custodian and the person verifies the change funds. The signed Cash Count Form should be sent to Accounting Division of the Finance Department first thing on the next business day. 6. Cash maintained on City premises after business hours must be held in a safe, or as otherwise approved by the Finance Department. Cash may not be retained in desk drawers or standard file cabinets, since they are easily accessed with minimal forcing or readily available keys. B. Cash Collections/handling 1. Cash received by the City shall be adequately safeguarded at all times, and properly receipted and/or documented. Until deposited, all collections physically received will be kept in locked drawers, cash boxes, cash bags or the safes. All customers checks, cashier s checks, money orders, and traveler s checks should be restrictively endorsed by Remote Deposit Capture machine operated by the Accounting Division of the Finance Department. For checks are not able to be captured by the Remote Deposit Capture machine, restrictive endorsement should be made with a stamped imprint indicating FOR DEPOSIT ONLY, CITY OF FATE, with the City s bank account number by the Accounting Division of the Finance Department. 2. All cash received is to be reconciled to receipts or other source documents daily and summarized on the department s daily collections report(s). Collections must be transported by authorized departmental personnel. As long as the cash is in the possession of the cash handler, he/she must be aware of the custodial responsibility and liability of handling the City s cash. A cash handler who has received cash on behalf of the City is liable for that cash until the cash is taken to the Finance Department for deposit. 3. By the end of the day, each cashier shall post all collections through in person, drop box, mail or online payment to City s financial systems or software records department s collections, run a tape totaling all cash collected for the day, and match to daily collection reports from the financial systems or software of the department. The name and signature of the person responsible for balancing the collections and preparing the daily collection report should be present. 4. All cash collected by or on behalf of the City, daily collection reports and a Cash Deposit Coversheet (Exhibit 2) shall be directly remitted to the Accounting Specialist or Senior Accountant in the Accounting Division of the Finance Department first thing in the morning of next business day by each cash handler. For example, Friday collections shall be remitted first thing in the morning of the following Monday. Page 3 of 6

6 5. The Accounting Specialist or Senior Accountant is responsible for matching of cash, daily collection reports and daily cash deposit cover sheets received from all divisions/departments. If a discrepancy is discovered by the Accounting Specialist or Senior Accountant, the collecting department will be notified to resolve the issue. Deposits to the bank of checks, cashier checks, money orders and traveler s checks are made electronically through Remote Deposit Capture. Bank issued deposit slips are prepared for currency and coins daily for each division/department. The deposit slip, Cash Deposit cover sheet and the currency/coins are placed in a dual locking safe inside the main safe until transported to the bank. 6. Department of Public Safety transports the coin and currency deposits to City s depository bank twice a week, on Mondays and Thursdays. During transport of deposits, prudent measures shall be taken to assure that funds are adequately safeguarded. 7. Under no circumstances should disbursements be made from revenue received. No checks may be cashed from the cash received. Refunds or returns may be processed against liketender. Refunds of cash for checks are not permissible. Such unlike refunds or returns must be processed through the City s cash disbursement system with normal disbursement oversight and control. 8. After the Accounting Division of the Finance Department has made the daily deposit, the daily reports are retained and utilized as source documents to record the revenue in the appropriate revenue object codes and for collections recorded in software that does not interface with General Ledger. Records of collections of Utility Billing, Cash Collection, and Municipal Courts are interfaced to the General Ledger. C. Counterfeit Currency Cash handlers should use extreme caution in accepting currency. All authorized cash handlers are responsible for screening cash transactions for counterfeit currency by using a counterfeit currency pen. If a questionable bill is received, the cash handler should retain possession of the bill and contact Chief of the City of Fate Department of Public Safety as well as the Director of Finance immediately. D. Cash overages, shortages and losses should be monitored by individual departmental supervisors by observing the frequency and amount reported. The rate of recurrence and dollar amount reported in cash over and short, as wells any losses that occur, will determine the appropriate action departmental supervisors will take. E. All overages, shortages and losses must be communicated to the Accounting Division of the Finance Department via the daily collection report for proper recording. Page 4 of 6

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