II-1: Cash Management
Policy Number: II-1
Effective Date: January 21, 2013
Last Reviewed: January 21, 2013
Responsible Dept.: Financial Services
The purpose of this document is to outline policy as it relates to the handling, collecting, recording, depositing, and/or accounting for monies received or disbursed by the college, including but not limited to accounts
receivable and accounts payable transactions.
This policy is applicable to all students, faculty and staff at Virginia Western Community College, including
those at off-campus facilities.
All college employees shall comply with Commonwealth of Virginia Policy as outlined in the CAAP Manual
Topic 20505 Accounts Receivable and the Office of the Comptroller Directives No. 3-84, Cash Management;
No. 2-89, Reporting Receivables; and No. 4-89, Management and Collection of Receivables as it relates to the
handling, collecting, recording, depositing, and/or accounting for monies, including but not limited to accounts
receivable and accounts payable transactions.
- Billings and Accounts Receivable:
To collect accounts receivable in a timely manner in order to keep outstanding balance to a
minimum, to adhere to the collection policies and guidelines established in the
Commonwealth of Virginia CAAP Manual Topic 20505 and the Office of the Attorney General
Collection Procedures dated June 2004, including later revisions.
- Operating Procedures
- The Accounts Receivable (AR) Journals are recorded as receivables and are recognized
and posted to ledgers at month end closings. This will ensure that quarterly AR
reports reflect the actual receivable balance.
- College accounts will be billed within two (2) weeks after the add/drop period has
ended or on an as needed basis. Invoices will include a remittance of 15 days from
date of invoice (See Enclosure 3). Accounts are recognized as being past due if
payment is not received within 30 days of the invoice date. Invoices not paid within 15
days after the due date will be sent a second notice (See Enclosure 4) requesting
- Procedures for adjusting doubtful accounts and write-offs to accounts receivable:
- The collection procedures for collecting bad debts as outlined in
Memorandum, Subject: Cash Management, dated October 27, 1989, will be
- Each semester all receivables past due will be reviewed by the Vice President
of Financial and Administrative Services to assess their collectability. Those
receivables that are considered to have a low probability of collection and
have been submitted to the Set-Off Debt Office at least once (for individuals)
will be written off the financial account and reporting of the college.
- Management has established an allowance for doubtful accounts (for accounts
greater than 60 days past due) that reflects the amount of an agency's
accounts receivable that management estimates will be uncollectable. The
establishment of an allowance account ensures that the Agency's accounts
receivable are not overstated for financial reporting purposes.
- The President will have final authority to "write-off" past due accounts
receivable (see Enclosure 1). These "write-offs" will still remain as a legal
obligation to pay, they will only be "written-off" for accounting purposes.
- (1) Write-offs must be recorded on the quarterly Receivables summary
Report. Records must be maintained detailing those accounts written
off including original indebtedness documentation, Request for
Permission to write-off, and collections after write-off.
- (2) Collections on written-off accounts will be treated as current revenue
and be deposited in the usual manner. Those accounts that have been
written off will be reversed by an Accountant so that payment can be
processed. The Quarterly Receivables Summary Report should reflect
such transactions as Recoveries on Accounts Written-Off in Prior
Semesters in the Analysis of Uncollectable Debts.
- (3) Those accounts over $25.00 which have been written-off must be
resubmitted annually to Set-Off Debt for collection. New information
received on written-off accounts should cause collection efforts to be
reinstated as appropriate.
- Federal Grants or Contracts
- Federal funds will be requested, deposited and disbursed in accordance with
the appropriate federal/state regulations.
- The College will request payment as expeditiously as possible if reimbursable
methods of payment are used.
- Processing and Deposit of Cash Receipts:
- To process and deposit promptly all cash receipts.
- To report to the Department of Treasury all state deposits in the manner prescribed by
the state Treasurer.
- Operating Procedures
- Funds received shall be deposited on a daily basis.
- Funds received in which State funds are included with private funds (Ex. Payments from
third party vendors for tuition, fees and books) shall be deposited into the "clearing" account on a daily basis and a Local Funds check is processed to the State Account and the
private funds account.
- Checks will be accepted subject to collection for authorized charges only. A check in
excess of the amount due, which would necessitate a return of cash to the payer, will not
be accepted normally. Either the Financial Services Manager or Accountant Senior must
approve exceptions, Cashing of checks for any reason and by any person is not permitted. Exception: At the discretion of the Financial Services Manager or Accountant Senior,
certain categories of checks such as Federal checks or Financial Aid checks may be cashed
although they are made payable for more than the amount of tuition and fees (when
funds are available).
- Procedures for processing returned checks.
- Returned Checks are sent to The Financial Service Accountant Senior by the
bank. The original check is given to Fiscal Technician/Cashier. A check is
processed out of the Petty Cash Account for returned State checks and Federal
checks. In the case of returned Local Funds checks, Local Funds would be
utilized. The check/checks are deposited in the Return Item Account along
with the fees charged by the bank for returned checks.
- (1) The Fiscal Technician/Cashier initially tries to contact the student by
telephone and informs him/her that the bank has notified us of a
- (2) A letter is immediately sent to the student, requesting payment to the
college of the amount of the returned check and service charge (see
enclosure 2). The student account in the Student Information System
(SIS) is flagged with a Return Check Service Indicator. The student is
notified that future payments to the college must be made by cash,
certified check, credit card or money order. A Service Indicator "No
Check Presentation" is added to the student file.
- (3) When cash is collected from the maker of the returned check
originally exchanged for petty cash funds, the cash is to be deposited
into the petty cash fund. Service Charges are assessed in accordance
with VCCS Policy 4,2.3.1 - Procedures Regarding Bad Checks. Service
charge fees, less fees paid to bank, are deposited into state SIS
- (4) After reasonable effort to collect from the person who wrote the bad
check has failed, an AP Voucher is submitted in the Administrative
Information System (AIS) to reimburse the Petty Cash Fund for the
amount of the returned check. The Revenue Refund Voucher must be
coded consistently with the original deposit and made payable to
VWCC Petty Cash. Payments originally made with a check returned
unpaid are reversed in SIS which places the funds due back on the
student's account as a receivable/unpaid obligation. Reimbursement
to the state is pursued through the Collection Agency and the
Department of Taxation. A negative service indicator "Debt to
College" remains on the student account until restitution is received,
along with the "No check Presentation" indicator.
- Revenue Collection:
- To insure that monies owed the college through auxiliary' operations are received
accurately, timely and in accordance with the existing contractual agreements.
- Operating Procedures
- The Contracting Officer for auxiliary contracts (i.e. vending, food sales, bookstore,
etc.) shall monitor the timeliness of receipts and verify that payments are based upon
established contract commission rates.
- A separate spreadsheet shall be prepared for each vendor and the following minimum
information shall be collected:
- Vendor Name
- Contract Reference Number
- Outline or Schedule of Payments due
- Date and Amount of Payment received
- Verification of compliance with Contract Document
- All funds shall be deposited promptly in Local Funds.
- Funds shall be accounted for and included in the finance reports provided to the
College's Local Advisory Board.
- Detailed reports, as described above, shall be utilized to support auxiliary collections
and financial reporting to the President, members of the Local Advisory Board Finance
Committee, and members of the Local Advisory Board and filed for reference along
with contractual documents.
- Accounts Receivable/Third Party Contracts:
- Third Party Contracts
- A written contractual agreement shall be required in order to establish a third party contract in
SIS that defers the student's tuition and fee charges to another entity for payment. In many
cases, the contract authorizing the third party contractual billing will be on the contractor's
form. In cases where the college generates the agreement, the college's contract shall be
used. This occurs most frequently with workforce service agreements.
- Upon notification from another college employee, presentation or receipt of a written
contractual agreement, the Cashiers shall place a term specific Do Not Drop (DND) service
indicator on the student's account and forward the contractual agreement to the Accounts
Receivable Technician for handling.
- The Accounts Receivable Technician shall construct a third party contract in SIS and invoice the
contractor as soon as practicable following the last day to add or drop a class with a refund.
Up until this date, students are not "locked into a class" and; therefore, the accuracy of the
invoice may be disputed.
- At the end of each semester and no later than the first day to register for a subsequent term,
all of the DND service indicators for a previous term must be removed. The Cashiers shall run
a query in SIS to identify all DND service indicators. A batch process shall be utilized to remove
the DND Service Indicators.
- Enrollment Cancellation:
- An enrollment cancellation schedule shall be developed in advance of each semester by the
Business Manager and Accountant.
- The schedule shall be utilized in order to construct the payment and due date calendar In SIS.
- The schedule shall be published on the college's intranet site and also be utilized in order to
encourage the use of consolidated notifications to the Cashier's office of students who should
have DND Service Indicators applied to their accounts. Consolidated listings from various
departments across campus will enable Cashiers to upload these in a batch process mode
- In every case, an attempt will be made to protect all known students who may be the
beneficiary of a third party contractual payment situation with a DND Service Indicator, prior
to running an enrollment cancellation.
- The Accounts Receivable Technician shall have the authority to place term specific DND
Service Indicators for future terms in cases where contractual agreements extend over several
semesters or beyond the current semester. These shall be managed exclusively by the
Accounts Receivable Technician and reviewed annually by the Accounts Receivable Manager.
- Disbursements/Accounts Payables:
- To promote effective disbursement policies.
- To disburse funds consistent with the Commonwealth of Virginia Prompt Payment Act.
- Operating Procedures
- An invoice will be approved for payment with written verification that the goods or services
have been received by the end-user. An invoice or packing slip signed and dated by the enduser
and indicated as complete and "Okay to Pay" shall serve as sufficient documentation.
- The due date on all invoices shall be determined in accordance with the Prompt Payment Act.
The due date shall be set as 30 days from receipt of the goods or service or the date of the
invoice, whichever is the latest. The 30 day prompt payment window may be reduced or
modified based upon vendor discount, documented benefit to the agency, or contractual
- Invoices will be submitted for payment to the Department of Accounts immediately upon
receipt of appropriate invoice and receiving report.
- Discounts will be taken whenever possible but not when the time required to process the
payment to the vendor exceeds the discount period, Every effort will be made to negotiate
realistic terms of payment.
- Interest penalties for late payments to vendors will be paid on a timely basis. An explanation
for the payment of interest penalties will be made a part of the voucher file.
- Administrative and Management Review:
- To provide adequate resources to administratively support the statewide cash management
- To provide the appropriate management review to ensure that the meaning and intent of
directives Nos. 3-84, 2-89 and 4-89 are carried out at Virginia Western Community College.
- The Accountant will review the status of the accounts receivable on at least a quarterly basis.
All accounts that are deemed to be uncollectible (have a net realizable value of zero) by the
Accountant and approved by the President and/or his designee will be written off of the
financial accounting and reporting records of the institution, individual accounts must be
submitted to the Set-Off Debt Department.
- Operating Procedures
- The Vice President of Financial and Administrative Services is designated as the agency Cash
- The College will maintain written internal procedures to ensure the effective management of
State billings, collections, deposits and disbursements.
- VCCS and State auditors will be asked to review our adherence to these procedures.