SOP For House Funds and Cash Audits

SOP Number: Finance and Accounting – 07

Department: Cash Control

Date Issued: 22-Jun-2021

Time to Train: 45 Minutes

Purpose of House Funds and Cash Audits:

The purpose of this policy is to establish proper controls to protect property cash assets.

The Controller and the appropriate Executive Committee member must sign all completed Bank Contracts prior to issuance of banks. Bank amounts will be approved by the Controller and the General Manager.

Check Controls SOP House Funds and Cash Audits:

Individual Cashier Banks:

The General Cashier is responsible to issue individual cashier banks and maintain a current log of bank contents. Every bank contract should be “CLEAN”. If a change needs to be made to a contract, i.e. the amount, the deposit box number, etc., the contract should be voided and a new one was drawn up.

Prior to issuing a house bank to a designated employee, the following should happen:

1. A complete background check should be completed.

2. A House Bank Contract should be prepared, authorized by the appropriate General Manager and Controller, and signed by the employee upon receipt. This Contract should be maintained in the General Cashier’s safe.

3. Guidelines for House Bank funds should be reviewed with the employee and signed upon receipt of the bank. A copy of this form should be given to the employee and a copy filed in the employee’s file.

4. The House Bank Contract should also state that the property maintains an additional bank key, to which no ONE person has access, and that this bank key will be used to make surprise counts by two people.

Upon Employee termination, the following should occur:

1. The Cashier should return the bank and key to the General Cashier who will verify the contents. The “House Bank Return” portion on the back of the contract should be completed.

2. The employee’s file should be copied with this updated contract

General Cashier Bank

1. The General Cashier must sign a contract for the total of all House Funds (including individual cashier bank contracts).

2. This contract for the General Cashier should be maintained by the Controller and/or General Manager with a copy in the General Cashier’s personnel file.

3. The General Cashier’s Fund should be balanced daily with written details maintained for three (3) months.

Temporary Banks

1. When the Accounting Office is closed on weekends or a temporary bank is required, a separate bank contract must be completed for each bank issued.

2. These banks should be picked up within the timeframe designated by the Controller’s office and returned to the General Cashier immediately after its intended purpose is completed. This can be done in person or by dropping the bank in the drop safe.

Bank Audits

1. All House Banks should be counted on a surprise basis minimally once per month.

2. Once per quarter on a random basis, selected House Banks should be counted on a surprise basis while the employee is working a shift.

3. Cashier Banks are to be counted and verified by a representative of the Controller’s office and a witness; the General Cashier’s Fund is to be verified on a surprise basis by either the Financial Controller, General Manager at least twice each month.

4. When auditing House Banks, a documented count of the funds must be completed for each cashier/bank. Variances require immediate follow-up and resolution of the variance by the appropriate department head.

5. If an overage or shortage exists, the bank should be brought back to the contract amount and the difference charged to the Over/Short Account via a Petty Cash Voucher.

6. Each month a summary of all cash counts should be prepared which details the actual counts against the issued bank contract amount and filed with the balance sheet reconciliations.

7. The Cash Count sheets should be kept by the Cashier for three (3) months and the summary should be retained and filed with the balance sheet reconciliations.

8. Upon termination of an employee responsible for a House Bank, the department head should alert the Controller’s office that the bank needs to be audited and returned.

Training Summary Questions:

Q1. What is the purpose of the House Funds and Cash Audits SOP?

Q2. Explain the procedure for General Cashier Bank?

Q3. What need to be done if an overage or shortage exists while bank audit?

Q4. What is the purpose and use of Temporary Banks?