Section 10 Receivables Management and Cash Handling
10.1 Overview
Schools can receive revenue from several sources. This may involve invoicing families and sundry debtors as well as the receipt of cash. It is important that schools recognise this revenue appropriately. Cash receipts must be handled in a manner that minimises any associated risks.
10.2 Managing receivables
A receivable is money owing to the school from the provision of services or the sale of goods. It may be owed by families for items such as camps and excursions or third parties (sundry debtors) for items such as hire of school facilities.
10.2.1 Mandatory policy (Must do)
10.2.1.1
Comply with the Parent Payments policy.
10.2.1.2
Enter family and sundry debtor invoices into CASES21 in a timely manner using relevant general ledger and GST codes.
10.2.1.3
Regularly review (preferably monthly) the sundry debtor balances to assess collectability and take any appropriate action.
10.2.1.4
Ensure that any adjustments to receivables (i.e. families or sundry debtors) have been approved by the school council prior to the adjustment being made. Adjustment could include the write-off of invoices where collection is not going to occur. For example, part of End of Year process is to write off charges that are not expected to be received. The reversing of these charges needs to be approved by school council prior to processing.
10.2.1.5
Undertake a balance day adjustment as part of End of Year for any revenue that has been invoiced in advance. For example, camps/excursions and activities for a future year that were invoiced in the current year. Refer to CASES21 Finance Business Process Guide — Section 10 Balance Day (login required) to determine if any balance day adjustments are required to be made.
10.2.2 Prohibited policy (Must not do)
10.2.2.1
Enter curriculum contributions, other contributions or donations into CASES21 until the revenue/cash has been physically received by the school. Both voluntary contributions and donations are not considered a receivable. These must not be invoiced and must only be recognised on a cash basis.
10.3 Cash handling
Cash is the most vulnerable asset of the school. It is essential that schools have robust controls in place to minimise the risk of loss. It is recommended that schools investigate non-cash receipt options as a part of their risk minimisation.
10.3.1 Mandatory policy (Must do)
10.3.1.1
Implement a local cash handling policy approved by school council. For example, having 2 people present when handling cash and a safe and secure place to hold the cash until it is banked.
10.3.1.2
If the school council has approved the use of electronic receipting (BPAY, EFTPOS, third party online revenue collection, etc.) the school must have an electronic funds management policy that is reviewed annually and approved by school council.
10.3.1.3
Issue an official receipt immediately for all monies received from all sources (for example, cash, cheques, EFTPOS, etc.) and process through CASES21.
10.3.1.4
The principal or their delegate and one other person must sign all the entries entered in the remittance book. Open cheques must be crossed ‘Not Negotiable’ immediately upon receipt.
10.3.1.5
Prior to banking monies, schools must reconcile total receipts with total monies collected (cash, cheques, credit card transactions to be banked).
10.3.1.6
If the school operates an EFTPOS terminal, they must perform settlement on the EFTPOS terminal at the same time as the CASES21 batch is updated.
10.3.1.7
The segregation of duties between receiving cash and banking activities must be implemented where possible and practical. The method of ensuring this safeguard is to separate those responsibilities for duties which, if combined, would enable an individual person to receive and bank the cash. It can be implemented, by alternating sequential tasks, so that no one person has complete responsibility for the entire transaction.
10.3.1.8
If segregation of duties is not practical (limited number of administrative staff are available for the accounting and finance function in a very small school), the principal or nominee must randomly verify the cash handling and recording process has been correctly undertaken. A minimum of two checks to be carried out per term and a signed record of the checks maintained.
10.3.1.9
If monies are collected away from the office, schools must undertake the following procedure:
- two people count money (where practical — refer to point 10.3.1.8)
- control receipt prepared for total amount
- original control receipt attached to class list/sales book/attendance sheet. Duplicate control receipt retained by the teacher, manager or coordinator
- office staff reconcile list of collections/control receipts with monies handed to office and receipt.
10.3.1.10
All cash, cheques, etc. must be banked intact and in a timely fashion (preferably daily) to avoid having money on school premises overnight.
10.3.1.11
Money kept on school premises must be locked in a secure location.
10.3.1.12
In preparing the banking of funds collected, schools must:
- prepare bank deposit slips in duplicate
- reconcile the total money received with the total amounts recorded in CASES21
- all bank deposit slips must be signed by the depositor.
10.3.1.13
Any refunds must be in line with the school’s parent payment arrangements and must be by cheque or electronic funds transfer payment and never cash.
10.3.1.14
On receipt of advice from the bank that a cheque has been dishonoured, the principal or their delegate must communicate with the drawer of the cheque to correct any irregularities or obtain a fresh remittance.
10.3.2 Prohibited policy (Must not do)
10.3.2.1
Cash personal cheques under any circumstances.
10.3.2.2
Alter any receipt. If an error is made, the receipt must be cancelled, and a new receipt issued. The original of the incorrect receipt must be attached to the copy of the new receipt.
10.3.2.3
Issue any duplicate receipts. If a duplicate receipt is requested the receipt of money can be acknowledged by a typed note on school letterhead for general ledger receipts. For family and sundry debtor receipts, a copy of the family or sundry debtor statement will show the receipt of money.
10.3.2.4
Leave money on school premises during vacation periods.
Definitions
BPAY
Electronic bill payment system that enables payments to be made through a financial institution’s online, mobile or telephone banking facility.
CASES21
CASES 21 (Computerised Administrative System Environment in Schools) is the software package provided to Victorian government schools to support school administration, finance and central reporting.
Control receipt
A control receipt is a list of total revenue collected. For example, for a class list/sale for attending an excursion.
Dishonoured cheque
A cheque that has not been paid by the bank due to insufficient funds or some other irregularity.
EFTPOS
An electronic payment system involving electronic funds transfers based on the use of payment cards, such as debit or credit cards, at payment terminals located at points of sale.
Non-cash receipt options
Options that allow for the receipt of monies without using cash or cheques. For example, BPAY, EFTPOS, direct deposit, etc.
Provision for non-recoverables
An estimate of the receivables (money owed to the school) that will not be recovered or paid.
Segregation of duties
The method of separating those responsibilities or duties which, if combined, would enable an individual person to process and record a complete transaction, such as ordering, receiving, approving and paying for goods. This is an internal control intended to prevent fraud and error to ensure that no one person has complete responsibility for the entire transaction. Functions that must be separated include authorisation, payment, custody and recording.
Reviewed 01 May 2024