Money includes currency and other negotiable documents, such as personal checks, money orders, cashier's checks, and traveler's checks, received by a department for goods or services or as a refund, reimbursement, or gift, etc. Credit and debit card transactions are discussed in†28-31†of this policy. All money received as payments to the university must be promptly forwarded to the†campus central cashier†or deposited to the credit of the University of Tennessee General Account in a bank designated as a university depository. When money is deposited in an approved bank, the central cashier must be notified immediately in one of two ways: (1) a deposit document printed from the university's accounting system (see†SAMPLE DEPOSIT TICKET) or (2) a†REPORT OF DEPARTMENTAL COLLECTIONS, FORM T-33†(see†SAMPLE). The deposit ticket must accompany the printed deposit document or the†FORM T-33.
All money must be deposited or transmitted to the campus central cashier within three business days of receipt. Deposits must be made intact and include all money received. Expenditures may not be made from money received, and the money may not be retained in a department for its use.
Because of the high cost of negotiating foreign checks, university departments may accept only checks in U.S. dollars drawn on U.S. banks or U.S. branches of foreign banks. The checks must contain ABA encoding (i.e., machine-readable codes at the bottom of the check).
Departments that receive money should develop written procedures to collect and transmit it to the central cashier or to deposit it into a university depository account. (SAMPLE WRITTEN PROCEDURES)
Generally, employees should not serve as custodian for third-party funds
(i.e., funds belonging to outside organizations) as part of their official
duties. See 32-36 of this policy for exceptions.
Departments That Use Receipt Books. All amounts must be spelled
out and a notation made on each receipt specifying whether payment was
by check or currency. The original receipt must be initialed and given
to the payor if the payor is present or when the payment involves currency.
Whenever a receipt is voided, the voided receipt must be properly explained
and both copies kept on file. Official receipt books are available from
the campus central cashier.
Departments That Are Unable to Issue Receipts. Every department
with a reasonable expectation of receiving payments in currency should
obtain an official university receipt book and deposit the payments as
described in 14-19. Departments that are unable to issue
an acceptable university receipt (see above) should not accept currency
payments. If a payor must transact in currency and the department cannot
issue an acceptable receipt, the department must complete a FORM
T-33 in duplicate for this payment and have an employee
accompany the payor to the campus central cashier to obtain a receipt.
The campus central cashier will receipt and deposit the payment. The receipt
number should be recorded on the department's copy of the T-33,
which should be maintained in the department's records.
To help protect the university's assets from theft or misappropriation, departments should follow certain procedures. Some important control procedures in handling money received include the following.
Checks Made to the University. All checks in payment to the university
should be made payable to "The University of Tennessee" and not to
departments or any university official or employees. Checks should be restrictively
endorsed immediately upon receipt with the university's official endorsement
stamp on the reverse left of the check. The receiving department should be
indicated on the endorsement stamp. Third-party checks must be endorsed by
the individual cashing the check and then stamped with the endorsement stamp
before deposit or transmittal.
Separation of Duties. When staffing permits, an employee who does
not handle money received should perform a monthly reconciliation. A reconciliation
consists of comparing the original receipts to the deposit document printed
from the university's accounting system (or REPORT
OF DEPARTMENTAL COLLECTIONS, FORM T-33) and the official accounting
records. Employees who invoice customers or record payments in accounts receivable
records should not have access to money received. If departments are unable
to separate duties as described, the campus internal auditors should be contacted
to help find an alternate solution.
Safekeeping of Money Received.
Department heads should see that official funds are protected until they are deposited or transmitted to the campus central cashier, as follows:
Proper safekeeping facilities should be used.
Deposits should never be sent through campus mail.
Safe combinations should be changed whenever security is compromised or knowledgeable employees leave the department.
No more than two or three responsible employees should have access to funds stored in a department.
Currency and checks should not be left overnight in cash registers, drawers, or other unsecured locations.
If a deposit includes large sums of currency and checks, the department should consider:
Requesting security officers to transport the deposit
Using night depository services
Making deposits daily (or more frequently)
Money Collected from Students. Routine laboratory supplies for a
course are normally covered by student fees. Other miscellaneous charges must
be approved by the campus
or institute chief business officer. Such charges should be collected by departmental
staff and not a member of the teaching faculty. Required course materials
and texts for the department will be handled by the university bookstore on
consignment. (See FISCAL
POLICY FI0425 for exceptions.)
Cash register procedures should be established in writing by the department. At a minimum, these procedures should include:
Documentation and approval of overrings and voided transactions
Documentation of beginning change fund counts by cashiers (i.e., before the first transaction involving that fund, that cashier, or both)
Proper reconcilement and check-out steps and documentation
Tape retention plans
Other procedures considered necessary
Whenever possible, access to cash register drawers should be limited to one cashier at a time. Following this procedure can help pinpoint responsibility if a shortage or theft occurs.
Clearing Cash Registers. Cashiers should never clear cash registers that have resettable cumulative totals. If available, a "clear" key should be placed in the custody of a department employee who has no monetary responsibilities and does not operate the cash register.
Retaining and Documenting Tapes. Cash register tapes should be retained for audit and be maintained neatly and stored safely. Some suggestions for retaining tapes are:
Tapes should be arranged in layers of one day or, at the most, one week.
Beginning and ending readings should be the first and last items, respectively, on each tape.
Tapes should never be broken.
Approximately two inches of blank tape should be included before the first reading and after the last reading. The date of the transactions and the cashier's name should be written at the end of the tape for easy identification.
Transaction numbers (if the cash register prints them) should be consecutive from tape to tape.
To comply with university policy and state law, money received should be
deposited or transmitted to the campus
central cashier within three business days of receipt. However, whenever
large amounts of money are involved, departments should attempt to make deposits
Under present university and state regulations, money received by all
departments through the close of business on each June 30 (the end of the
fiscal year) must be deposited promptly on July 1. The transmittals
must be clearly designated "July 1 as of June 30" so that credit for this
money is reflected on the records for the proper fiscal year.
Departments should follow the procedures below when preparing bank deposits:
A bank deposit ticket covering money received should be prepared in triplicate indicating the deposit is to "The University of Tennessee General Account." The checks should be properly endorsed and listed on the deposit ticket with sufficient information to identify the payor (e.g., payor's name, receipt number) and the amount. The original deposit ticket should accompany the deposit to the bank. One copy goes to the campus central cashier, and the third copy remains in the department's files.
Deposit information should be prepared in one of two ways:
The department enters deposit information into the university's
accounting system and prints the deposit document (see SAMPLE). See 16 below for more details.
Departments that are unable to enter deposit information should
prepare a REPORT
OF DEPARTMENTAL COLLECTIONS, FORM T-33, in duplicate.
The original is submitted to the campus central cashier. See 17
below for more details.
All checks and currency should be sealed in an envelope, sealed bag,
or locked money bag along with the deposit ticket. See 18
below for more details.
If a security officer picks up the deposit, the printed deposit document
(or original FORM T-33) and a
copy of the deposit ticket must be attached outside the sealed envelope
or bag. The security officer should sign and date the deposit document
(or original FORM T-33) or other
document. The department should keep a copy of the signed documentation,
along with a copy of the deposit ticket, in their files.
If a departmental employee delivers deposits directly to the campus
central cashier, the money must either be in a locked or sealed bag or
be counted by the cashier's office. The printed deposit document (or a
copy of FORM T-33) should accompany
the deposit. This document will be stamped in the central cashier's office
and should be retained in departmental files. See 6b.
Departments should regularly verify that their deposits were credited
to the appropriate cost center or WBS element, as indicated on the deposit
document (or FORM T-33).
Deposit information entered into the university's accounting system should include the responsible employee's name or department; deposit date; deposit ticket number; official receipt number(s); dollar amount(s); general ledger account number(s); and cost center, WBS element, and/or fund number(s) to be credited. The campus central cashier will post the entry in the accounting system.
OF DEPARTMENTAL COLLECTIONS (FORM T-33) should indicate
the date of the receipt(s); official receipt number(s); payor's name; description
of items covered; amount; deposit ticket number; general ledger account number(s);
and cost center, WBS element, and/or fund number(s) to be credited.
When circumstances warrant it, departments should consider using security
guards to transport deposits and change requests. These deposits or change
requests should be placed in a sealed bag or locked money bag. Deposits should
not be sent through campus mail. If a deposit consists mainly of endorsed
checks, it may be sent to
the bank in a sealed envelope. The transfer of responsibility should be documented
If the transmittal is for deposit (one way), the security officer should
sign and date the printed deposit document (or original FORM T-33) or other document.
If the transmittal is to obtain change (round trip), the department
should maintain a log that the security officer signs upon pickup and
return of the change bag. (See a sample CHANGE REQUEST TRANSMITTAL LOG.)
Note: These steps acknowledge only the receipt of the money bag or envelope. Departments are responsible for the contents of the bag or envelope agreeing with the amount to be deposited or exchanged.
The university returns funds to individuals, institutions and companies for a variety of reasons including: overpayments, duplicate payments, payments received in error, cancellations and some deposits. Each department that issues refunds must develop and follow its own policy concerning the amount and allowability of refunds. These refund policies must be reviewed and approved by campus Chief Business Officers. Departments are responsible for entering their own refunds in IRIS. (Campus Chief Business Officers can require refund processing to be handled centrally by Campus Accounts Payable Department.)
Each refund must be supported by documentation that includes:
the name of the person, institution or company receiving the refund (original payor)
the mailing address
the reason for the refund
the university receipt number or deposit information of when the money was originally received
the dollar amount of refund
the cost center, fund, WBSE, general ledger account where the refund is to be charged (usually the same cost center, fund, WBSE, general ledger account of the original receipt)
the department headís approval
See REFUND FORM.
The refund form or supporting documentation must be retained in the department for 6 years.
Prudent funds management requires that funds deposited into university bank accounts be concentrated (transferred) into one central bank account in a timely, efficient manner. To facilitate this process, the university has developed an automated cash concentration system. For campuses, institutes, or departments that do not deposit directly into the university's primary depository account, the campus business office is responsible for initiating the concentration process, as follows:
Each time a deposit is made into a local depository bank, the business office must report the amount by calling the Treasurer's Office deposit concentration line at (865) 974-4681. This call must be made before noon the day after the date of deposit.
The Treasurer's Office will monitor the deposit concentration calls daily and initiate an electronic transfer of funds, moving the funds from regional depository banks to one centralized bank account.
The Treasurer's Office will enter the funds transfer into the university's accounting system and forward a deposit report to the central cashier. The cashier is responsible for posting the transfer in the university's official accounting records.
Questions about the university's automated cash concentration system should be directed to the university's investment officer at (865) 974-2302.
State sales tax must be collected and paid to the Tennessee
Department of Revenue for all gross receipts or proceeds from retail sales
to a consumer for any purpose. A "sale" is defined as furnishing goods and
services or transferring title or possession (or both), as well as exchanging,
bartering, leasing, or renting any tangible personal property for payment.
Retail sales to the federal government, the state of Tennessee and its
political subdivisions, or qualified institutions (churches, non-profit
schools, hospitals, nursing homes, and orphanages) are exempted from
state sales tax.
Note: All organizations that are exempt from paying state sales
tax must furnish university departments a copy of their exemption certificate
issued by the Department of Revenue in order to be exempted. Departments
should retain these certificates at least three years for audit purposes.
State sales taxes must be collected on admission charges to the following events:
All athletics, recreational, amusement, and entertainment events sponsored by the university
All amusement, entertainment, or recreational events sponsored, promoted, or produced solely or in part by an outside organization that does not hold an exemption certificate from the Department of Revenue
Amusement, entertainment, recreational, or athletics events; exhibitions; or displays that are not sponsored by the university but held in university facilities under a lease agreement providing for ticket sales by the university
The following items are exempt from the collection of state sales
All student activities fees
University bookstore sales of required textbooks
The value of complimentary admissions unless given in exchange for valuable contributions to the university
Any university department that collects revenue from the retail sale of
goods or services or from admission charges to amusement, entertainment, recreation,
or athletics events subject to state sales tax must apply for and obtain a
certificate of registration number. An application for a certificate of registration
may be obtained from the Tennessee Department of Revenue, Andrew Jackson State
Office Building, Nashville, TN 37242-0100.
After the tax number is issued, the Department of Revenue will mail a STATE
SALES TAX FORM to the department each month. This form must be completed (original and one copy), signed, and forwarded to the Treasurer's Office
by the tenth day of the month after which the tax is due. The monthly tax
forms must be completed and forwarded to the Treasurer's Office even when
no state sales tax is collected.
All state sales taxes collected must be deposited intact with sales receipts
and credited to the appropriate income account. Whenever sales are made to
the exempted parties listed in 20 above and no state
sales tax is collected, departments must maintain appropriate records to identify
the exempted sales. These records will facilitate the preparation of the state
sales tax form, and the university will avoid overpayment of state sales taxes.
Sales tax will be remitted to the state by the Treasurer's Office and charged
against the appropriate income accounts. If operations cease, the Department
of Revenue and the Treasurer's Office must be notified in writing.
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. (Internal transfers should be used
for sales and exchanges between university departments. See FISCAL POLICY 520.) Departments interested in accepting credit and debit cards must request approval from the campus business office and notify the Treasurer's Office. Departments must seek assistance from the campus internal audit department to ascertain that proper controls and procedures are in place before accepting credit and debit card payments.
The university is assessed a monthly discount fee on all credit card deposits. Each month the university's depository bank(s) credit card processor sends detailed departmental merchant statements to the Treasurer's Office for payment of the discount fee. The Treasurer's Office pays the fees and charges each department for the fee applicable to its gross sales. Each department receives a copy of its activity statement to review and confirm. All fees related to the processing of credit and debit cards (e.g., equipment rental, forms, and server use charges) are the responsibility of the user departments. Consideration should be given to these costs to determine whether the advantages of accepting cards warrant the expense.
Note: In performing their official duties, employees are encouraged to confiscate stolen credit cards and may accept any reward offered.
Campus/Department Policies and Procedures. Departments accepting credit and debit cards must develop
comprehensive campus-specific policies and procedures that articulate a framework
and security structure. At a minimum, the policies and
procedures must contain complete descriptions of the following:
Credit card processing system to be used. (e.g. e-commerce, point-of-sale, etc.)
Steps for reporting deposits into the university depository (including university cost centers and WBS elements to be credited).
Steps for handling voids, returns, chargebacks, and all costs associated with such transactions (including university cost centers and WBS elements to be charged).
The data encryption system for credit card use.
A statement that the participating departments have reviewed the policies with their internal audit staff.
Processing Electronic Transactions. Two types of electronic transactions
may be made, through point of sale (POS) terminals or the Internet, both of
which rely on the electronic capture of data necessary for processing the
transaction. Departments or units that receive credit and debit deposits should
enter deposit information into the university's accounting system. Departments
or units that are unable to enter deposit information must prepare a
REPORT OF DEPARTMENTAL COLLECTIONS (FORM T-33)
for each deposit and forward to the appropriate campus/institute office for processing
and posting to official university records. Batch release reports generated
by the POS terminals or the Internet payment system must be attached to the
bank deposit statement (or FORM T-33).
POS Terminal Transactions. Cardholder and transaction information
is swiped or keyed into a POS terminal and electronically submitted to
the card processor (bank) for authorization or approval. At the close
of each business day, the department or unit reconciles all transactions
processed through the POS terminal to the actual sales drafts and transmits
the batch of transactions to the card processor (bank) for settlement.
Many cash registers are equipped with POS capabilities and can be used
in lieu of separate POS terminals. Departmental or unit sales drafts must
be maintained for seven years.
Internet Transactions. Cardholder and transaction information
is captured via the Internet and transmitted electronically to the university's
processor for authorization or approval. Each day at a predetermined time,
all approved transactions are submitted to the processor for settlement.
Each department or unit will receive a daily batch release report detailing
all transactions processed by its Web site. This report must then be reconciled
with orders received and processed during the same time period. Documentation
must be maintained for seven years.
Refunds must be issued as a credit against the customer's credit card. The Treasurer's Office (or business office) will be notified of all chargebacks, i.e., items disputed by the customer, through the university's accounting system.
Occasionally, outside organizations (e.g., student organizations such as fraternities) request the university to handle their funds. The standard practice in these cases is to establish an agency fund in the university's accounting system. Generally, University of Tennessee employees should not serve as custodians for the funds of outside organizations as part of their official duties unless the money is recorded in an agency fund with the university. Refer to Fiscal Policy FI0312 for information on handling third party funds.