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HomeMy WebLinkAbout(0014) Revenue Receipting Policy (Redline).pdfRevenue Receipting Policy I. II. Authority FORT WORTH. The Fort Worth City Council is responsible for legislation, policy formulation, and overall direction setting of the government. This includes the approval of financial policies which establish and direct the operations of the City of Fort Worth. The City Manager and the Assistant City Managers are responsible for carrying out the policy directives of the City Council and managing the day-to-day operations of the executive departments, including the Department of Finance. This policy shall be administered on behalf of the City Manager and the Assistant City Managers by the Chief Financial Officer/Director of Finance ("CFO"). Purpose This policy defines and provides the guiding principles with respect to Revenue Receipting, including the handling of cash, reconciling payments received, and reporting on receipting activity occurring within the City of Fort Worth ("the City"). The objectives of this policy are to ensure consistent revenue receipting practices and to safeguard against loss, unauthorized use, or misappropriation of assets. Controls are created to establish, maintain, and enforce a sound system of operational procedures in accordance with industry best practices and internal control objectives. These controls address the decentralized nature of the processes associated with receipting and depositing revenue while also providing standards and minimally acceptable practices for these activities. Annlicabitity and Scog All employees of the City, including uniformed employees having revenue receipting, cash handling, and payment reconciliation responsibilities shall conduct all related activities in compliance with rules and guidelines set forth by this policy, and by their respective departmental cash handling and reconciliation procedures. IV. Glossary See definitions related to this policy provided in the Glossary for Financial Management Policies. 11Page Revenue Receipting Policy V. General Policies FORT WORTH. A. Each department is required to maintain a listing of the locations and the employees who perform revenue receipting activities. Each department shall provide this listing to the Department of Financial Management Services ("FMS") on an annual basis. This list must include infennation .,beat the r..tue of the revenue the name, employee ID, login ID, and department number and position all staff that handle payments at each location. B. The number of employees with access to a change drawer shall be limited to staff that are required to handle payments as part of their job function. Separation of duties must exist between those employees receiving and receipting payments and those individuals who will perform the accounting and recordkeeping functions pertaining to revenue intakes. C. Where adequate separation of duties is precluded due to limited available personnel or other operational constraints, the Department Supervisor shall perform specific verification functions to discourage misappropriation and/or theft. The Supervisor shall not be involved in the original transaction steps subject to verification. Departments should confer with FMS to establish other mitigating controls where separation of responsibility is precluded. D. Generally, revenue receipted by all departments shall be deposited at the City's banking institution within twenty-four (24) hours of receipt. Departments, in conjunction with the CFO, shall assess the reasonableness, practicality, and security in determining deposit timing into the City's banking institution. Departmental receipts shall not be used to create or replenish other funds. E. All revenue receipted should be accurately recorded into the City's software systems real-time when such systems are available_, but no less than within twoffty fetir (24) ,,otffs o f- -Receipt of all payments should be recorded within the general ledger within one business day. Management review and approval of such recordings shall be completed within two business days of deposit. F. Employees performing payment receipting functions must use due diligence in handling City assets to ensure that reasonable protection is provided to those assets at all times. Employees must report to their department supervisor, who in turn should submit the report to FMS and the Internal Audit Department, of any instance where a City employee has knowledge or suspicion of a theft or dishonest act by 2 1 P a g e Revenue Receipting Policy another City employee. FORT WORTH 3 1 P a g e Revenue Receipting Policy FORT WORTH. G. Employees receipting payments shall not knowingly accept counterfeit bills, foreign, or mutilated currency. H. Employees receipting payments shall not make adjustments to invoices. The departmental supervisor or designated authorized employee shall make any necessary corrections, changes, or adjustments to amounts billed to a City customer. I. Discrepancies between the amounts deposited at the City's financial institution, written receipts, and/or cash register or computer system generated receipts, must be recorded along with appropriate supporting documentation. The supervisor must review, on a daily basis, such documentation and follow up with the appropriate corrective action. Any cash overages/shortages must be recorded to the appropriate account in the general ledger. Cash overages should be promptly deposited and cash shortages should be promptly replenished. Department Directors have the ultimate responsibility to ensure discrepancies are identified and corrective measures are taken. J. Funds from Cash/Change Drawers or Imprest Funds, which are no longer necessary for departmental operations must be deposited into a City owned bank account within forty-eight (48) hours from the date the determination is made the Cash/Change Drawer or Imprest Fund is no longer necessary for departmental operations. VI. Cash/Change Drawer and Imnrest Funds A. Cash/Change Drawers The following procedures will be maintained for all Cash/Change Drawers: 1. Each employee performing payment receipting functions and activities shall have their own Cash/Change Drawer from which to work. 2. Employees performing payment receipting functions on any given business day shall open their Cash/Change Drawer and reconcile to the pre -defined amount of cash/change assigned to the drawer before beginning revenue receipting activity. 3. At the end of the business day, all employees performing payment receipting functions will balance and close their Cash/Change Drawer through a review of 4 1 P a g e Revenue Receipting Policy FORT WORTH. the receipts and transactions recorded in an automated or manual point of sale system. All receipts shall be prepared for bank deposit. 4. The supervisor of the employee performing payment receipting functions shall verify the accuracy of the revenue received during the day through a review of the receipts and transactions recorded in an automated or manual point of sale system. 5. The ending balance of the Cash Drawer shall be the same as the beginning balance, and equal to the amount assigned to each respective drawer. 6. Completed daily deposits shall be kept in a locked combination vault or safe, or in a locked room in a locked drawer or file cabinet until it can be transmitted to the depository institution through an armored car service. 7. The amount of beginning cash within a Cash Drawer will be periodically evaluated based upon the number of transactions, the volume of cash versus other payment types, and the frequency change is forecasted to be needed in an average day. 8. Cash maintained for the purpose of making change must not be commingled with operational cash amounts and should not be used for any other purpose. B. Imnrest Funds Imprest Funds are designated amounts of cash held outside of the general treasury and the use of such funds is subject to the City of Fort Worth Police Department's operating procedures. VII. Requesting a New and/or Increase in a Cash/Change Drawer or Imnrest Fund Authority to establish or modify a Cash/Change Drawer or Imprest Fund must be initiated by a request from a Department Director and receive approval from the CFO. The CFO has the ability to delegate this function to appropriate staff within FMS. Departments shall collaborate with the CFO, or his/her designee, to establish and maintain a system of procedures, controls, and reporting activities associated with the receipting of payments and depositing of funds for all areas of their revenue receipting operations. Each Cash/Change Drawer and Imprest Fund shall be assigned an amount of cash as the beginning/opening balance. This amount shall be determined based upon the 5 1 P a g e Revenue Receipting Policy FORT WORTH. activity level of the department and the associated business operational requirement and should be maintained throughout the lifecycle of the Cash/Change Drawer or Imprest Fund. VIIL Petty Cash The City of Fort Worth does not allow any department to own or operate Petty Cash funds. IX. Trainin¢ All new employees who have payment receipting responsibilities must successfully complete the City's Cash Handling Policies and Procedures course within thirty (30) days of employment. Existing employees must contact the FMS Department to register to take the cash handling course upon obtaining the cash receipting responsibility. Employees performing payment receipting activities are required to complete an update the cash handling course annually, subsequent to the initial training. Successful completion of this course is defined as achieving at least a seventy percent (70%) passing grade on the test administered upon completion of the course. It is the responsibility of the department to notifying FMS; when a new or transferred employee becomes responsible e-f—for receipting activities and whenever an employee is no longer responsible for payment processing. In addition, it is the responsibility of the operating department to ensure all staff responsible for payment receipting activities have completed the City's Cash Handling training at leastannually. The FMS Department is responsible for providing all training related to Cash Handling and payment processing and in conjunction with the Budget and PeF f ,....anee ,.,r..nageme Offiee ("PA49 )IT Solutions Department, will notify their- empleyee(s)employees when they are due for their annual training. Notwithstanding, the operational department(s) retain ultimate responsibility for ensuring all employees attend and successfully complete the training outlined herein. The IT Solutions Department maintains training records for Cash Handling. Employees may access a list of courses completed in the system at any time. 6 1 P a g e Formatted: Body Text, Justified, Indent: Left: 0.6", Right: 0.6", Space Before: 0 pt, Line spacing: Multiple 1.15 li Revenue Receipting Policy FORT WORTH. 7 1 P a g e Revenue Receipting Policy X. Receipt of Pam FORT WORTH. A. Cash 1. The cash custodian should have complete control and responsibility when collecting and securing the cash received from customers. 2. The cash drawer must be securely locked when the cashier is away from the cash drawer. 3. To reduce the risk of error, all cash should be separated according to the denomination, and should be sorted face up in the same direction. 4. The cash custodian should test each negotiable instrument used to make a payment to the City of Fort Worth to ensure it is not counterfeit. B. Checks 1. Checks, traveler's checks, money orders and other negotiable instruments must be made payable to the "City of Fort Worth" and shall be promptly endorsed upon being received. 2. All checks made payable to the City of Fort Worth shall be accepted only in the amount of the transaction. Checks may not be written for more than the amount due to the City. 3. When accepting a check for amounts due to the City, the cash custodian shall capture the following payer's information and note same at the top of the check: (1) Driver's license number (2) Physical home address (3) Valid Telephone number 4. No temporary, post-dated, or third party checks are to be accepted by the City. 8 1 P a g e Revenue Receipting Policy XI. XII 5. Check cashing is strictly prohibited by this policy. C. Credit/Debit Cards FORT WORTH. Employees taking payments are required to follow the information security procedures covered in the IT Security Administrative Regulations -located on the City of Fort Worth Intranet. Employees are to be aware of and adhere to Payment Card Industry Data Security Standards ("PCI-DSS") practices at all times. Departments should exercise care with regard to credit card terminal and receipts in compliance with PCI- DSS requirements. 1. Employees should encourage customers to pay with a credit/debit card whenever possible. Credit/debit card use promotes a stronger internal control environment. 2. Employees should never write down or store a customer's credit card information. 3. Employees should request customer identification (i.e. Government issued Driver's License or Identification Card) to ensure the customer name matches the credit card provided for payment. Transaction Receipts Customers are entitled to, and should always be provided with, a receipt detailing information about the payment made. All departments with revenue receipting operations must maintain a permanent collection record such as a cash register tape or point of sale system report detailing all payment related transactions including voids, refunds, or cancellations. Receipts shall be sequentially numbered and unique to each transaction. Refunds and Overgavments Refunds from Cash/Change Drawers or Imprest Funds are prohibited unless the overpayment/void occurs within the same day as the original receipt. There must be a system to track and report any voided transaction(s) and the approval by the appropriate 9 1 P a g e Revenue Receipting Policy FORT WORTH. departmental supervisor. Refunds and voids relating to a prior day's activity may only be made through Accounts Payable and must be properly approved by the appropriate departmental supervisor. In situations where the department has a computerized systemto process refunds/voids, the operating department is responsible for ensuring the accurate accounting and approval of refunds and voids through the computerized system. XIII. Safeguarding Access to the Cash Drawer should be limited to one person. The Cash Drawer shall be counted and balanced before another person takes possession of the Cash Drawer. Both parties involved in the Cash Drawer transfer shall be present when cash is counted, and a receipt shall be signed by the person accepting custody of the CashDrawer. A. All areas surrounding the cash handling sites shall be visible and without obstruction. B. Dual control over the processing and storage of all monetary intakes should be utilized. C. All funds shall be kept out of public view and shall be available for inspection by authorized City personnel such as the Revenue OffieeFMS Department, the City Auditor, or other authorized personnel as approved by the CFO. D. Physical protection of payments through the use of bank facilities, armored vehicles, vaults, locked cash boxes, tamper proof bags, or locked drawers shall be utilized at all times. Only assigned personnel shall have access to keys and vault combinations. E. Armored car services should be utilized based on a mutually agreeable schedule between the department and the CFO or his or her designee. The operating department and the CFO shall agree upon a schedule that promotes timely deposit of revenue, but does not create a cost for this service outweighing the benefit. F. Cash should never be transported to the City's banking institution by any method other than Armored Car service. 101Page Revenue Receipting Policy XIV. Liability for Loss FORT WORTH. Departments performing payment receipting activities retain the ultimate liability for misappropriation and loss or theft of all funds on hand (including, but not limited to cash and change drawers, daily receipts, imprest funds, equipment containing cash, etc.) until such time as the custody is transferred to an armored car service or to the Department of Financial Management Services throueh delivery of a deposit for nrocessine. Win. FN4S department for deposit pick up staging. Departments are required to notify the Assistant Director over Treasury, the City Auditor, and the Risk Management Division, in writing, by the next business day, in the event any funds are lost or stolen. This written notification must include the date and amount of the loss in addition to an explanation and description of the sequence of events that lead to the discovery of the loss, and-yIus a copy of the police report. XV. Monitoring Performance Departmental controls shall include a practical means for employees to report instances where system controls, processes and/or procedures are overridden that could increase the City's risk exposure. Department Directors, Assistant Directors, and Managers/Supervisors shall monitor and annually assess any risk areas and adopt appropriate strategies to manage these functions, thereby minimizing loss opportunities. XVI. Audits The D&ven .e nca,.e e The FMS Department will perform Cash/Change Drawer audits to determine whether each Cash/Change Drawer and Imprest Fund balance is in agreement with the associated balance on the City's General Ledger. The operational department(s) are responsible for auditing and validating all Cash/Change Drawer and Imprest Fund balances on a quarterly basis and providing authorized FMS DgpartmentD e.., nue-O Free personnel full access to all funds at all revenue collecting locations. The FMS Ddepartment is responsible for notifying the operational department(s), within a reasonable lead time, to ensure the person with authority is available during the audit. At 111Page Revenue Receipting Policy FORT WORTH. the conclusion of each Cash/Change Drawer and Imprest Fund audit, the FMS department will provide a memo detailing the results of the audit which will include instruction for how to handle identified discrepancies. For additional information or questions concerning this policy, please contact the FMS Treasury Office at (817) 392-8500. Revised Policy Approved by Council: 121Page