|Approved by||Chief Financial Officer|
|Date Procedure Took Effect||16 April 2002|
|Last approved revision||14 August 2014|
|Sponsor||Chief Financial Officer|
|Responsible officer||Revenue Management Accountant|
Teaching and Research outputs create the majority of income with the remainder coming from various sources including departmental activities, student accommodation, investments and trading activities.
A significant amount of income is derived through University departments in the form of cash and cheques as well as through EFTPOS and credit cards.
All this income is deposited into the University bank account as departmental bankings. Issues relating to banking are covered here including the procedures to be followed in preparing a banking, the issue of receipts, special receipts etc.
The Cashier is located in the Registry and should be contacted for further advice. The Cashier is available free of charge (generally) to assist with any special needs which your department may have in establishing cash receipting and banking systems.
- Accounts Department
- Financial Services Accounts Department
- The Cashier
- Financial Services Cashiers Office
- Revenue Management Office
- Financial Services Revenue Management Office
Sources of income
The Government Grant is based on the expected number of EFTS enrolments at the University. The EFTS information system is used to provide all returns to the Ministry of Education. Departments are required to provide forecasts and confirm their enrolments at various times during the year. EFTS calculations and returns are managed by the Planning Support and Funding Office.
Student tuition fees
Course fees are set by the University Council after careful consideration of the forecast Government Grant and the quality of the courses to be offered. Revenue Management Office (Financial Services Division) administer the invoicing and collection of the fees. For more information on student fees, contact the Revenue Management Office.
External research grants are sourced from numerous national and several international bodies. The Research and Enterprise Office co-ordinates University applications for research grants. Research funding is discussed in greater detail in Chapter 18. Any queries relating to applications and administration of research grants should be made to the Research and Enterprise Office, phone extension 8413.
The sources of the income are varied, for example:
- The School of Dentistry charges for services provided to the public in training dentistry students.
- Goods and services provided to other departments result in internal charges which are reflected as departmental income in the charging departments accounts.
- Work is performed by department staff for external parties and a charge is made.
- A commercial activity generates departmental income.
Halls and flats
The University provides accommodation for students studying at the University. This activity is self funding in that the charges made are designed to cover the full costs of providing the accommodation.
The activities relating to accommodation are contained in the A section of the ledger. The Director of Accommodation Services is responsible for this activity.
Cash, surplus to monthly requirements, is invested in accordance with University Investment Guidelines and the Public Finance Act. A comprehensive cash management function is performed by the Treasury Accountant in conjunction with the Revenue Management Office to ensure that the optimum return is achieved from day-to-day cash management. The level of income derived is very dependent on interest rates and the cash flow patterns in the University.
The management of departmental cash flow can have a significant influence on this income by ensuring:
- any sales are for cash, not credit
- any invoices issued are processed promptly and paid on time
- banking of cash is performed regularly
The University is the beneficiary of many donations each year. Many of these donations are held by the University in Trust. Further information is available in the Trust Funds Procedures.
Cash and cheques are received by University Departments as part of the day-to-day management of the department. The receipts may result from cash sales or the payment of invoices issued previously by departments. This section describes the procedures for collecting (receipting) and banking (departmental banking) cash and cheques.
The Revenue Management Office is responsible for the administration and supervision of all University banking. The Revenue Management Office is situated in the basement of the Clocktower Building, Dunedin.
There are also Cashiers located at the Otago Dental and Medical Schools and the Christchurch and Wellington Schools of Medicine.
Security of cash on departmental premises
No department can hold more than $500 of cash and cheques. One member of staff should be responsible and ensure that all monies are kept in a safe or lockable cash box secured in a locked cupboard or drawer with secure overnight storage. Cash should be counted out of public view.
Cash should not be sent through the internal mail to the Revenue Management Office for banking – any cash should be delivered in person.
Where departments hold petty cash for cash requirements please contact the Accounts Payable Manager, Accounts Department.
Where significant amounts of cash are likely to be collected, appropriate security should be arranged to ensure the safety of staff. Contact the Revenue Management Office for further information regarding security.
Frequency of departmental banking
Banking should be done weekly unless receipts exceed $500, in which case banking must be done on the day. Special arrangements to exceed the weekly criteria can be made with the Cashier, however these will not supersede the $500 requirement.
Departments with EFTPOS facilities should liaise with the Cashiers Section in respect of banking times and frequency.
Standard banking procedure
There are two methods of departmental banking:
- through Cashiers Section, Registry
- direct lodgement to University's bank account
Both methods require the use of a sub receipt book and a banking summary form described in the next sections and available from the Revenue Management Office.
For banking through the Cashiers Section
Deliver banking to the Revenue Management Office in the Clock Tower Building who will check the cash and cheques and the validity of the general ledger codes and invoice numbers, then a Cashiers receipt will be issued while the person depositing the banking is present.
For direct lodgements to the University's bank account
Deliver the banking to a branch of the National Bank of New Zealand for deposit to the University's bank account. Deposit slips for this purpose can be arranged by the Revenue Management Office.
Once the deposit has taken place, promptly fax or email the Revenue Management Office a copy of the banking summary form to identify the deposited credit to the University's bank account.
The Revenue Management Office will receipt this deposit to the supplied ledger codes and invoice numbers as per the banking summary.
The receipt number can be located from the ledger code in Finance One for your reference for the deposit.
Issue of Sub Receipts
The Revenue Management Office issues receipts for all departmental banking. Departments issue Sub Receipts for any funds they receive.
Sub Receipts must be issued and signed for all funds received. The only exception is student tuition fees which will be processed by the Revenue Management Office, Registry and Christchurch and Wellington Schools of Medicine and the University's Auckland Office. WSM,
The supporting documentation for each Sub Receipt should be held in the department (with the exception of student tuition fees).
Lodgements should not include Sub Receipts from more than one Sub Receipt book.
Sub Receipts Register form
A Sub Receipt Register form is on the cover of each Sub Receipt book. This should be maintained by the Department for audit purposes.
The register form should be completed for every banking by entering:
- The sub receipt numbers from the banking summary form
- Total dollars receipted
- The date
- Signature of person completing the banking
- Enter the receipt number and date of the receipt once the Cashiers have receipted the banking. The receipt number can be found under the general ledger code in Finance One.
Once the sub receipt book is completed, this is held by the Department.
Any cancelled sub receipts should be noted on the front form and both copies left in the sub receipt book (marked cancelled).
Note: Where a cash register is used that provide till tapes and totals at the end of each day, the use of a sub receipt is not required. However, these till tapes must be held in the Department as documentation agreeing to the banking summary. Attach these tapes to the relevant banking summary form copy which is held by the Department for audit purposes. Do not send till tapes to the Revenue Management Office.
Cash and cheques
All cheques must be made payable to University of Otago, not the department or any other name. The University of Otago is the only payee for all inwards remittances as per the Bills of Exchange Amendment Act 1995. It is recommended that departments obtain a stamp to cross cheques made out in person – “University of Otago – Not Transferable”.
Overseas drafts or cheques must NOT be stamped on the front and should be entered on a separate banking summary form. Overseas cheques in foreign currency will be converted to New Zealand currency by the Revenue Management Office at the current day's exchange rates and the converted amount will be credited to the nominated debtor or ledger account. The Cashiers receipt will show the New Zealand amount banked.
Note: overseas drafts/cheques must meet certain criteria in order to be banked. If the criteria are not met, items cost a minimum of $50 to be sent overseas “on collection”. In this case the Revenue Management Office will advise the department concerned so payment can be arranged by an alternative method. Contact the Revenue Management Office for further information.
The number of the sub-receipt issued should be written on the reverse of the cheque. When paying in person, the payee should also put their name, local address and telephone number on the back of the cheque. This saves time in pursuing dishonoured cheques should this occur.
Surpluses/deficits – ideally there should be none but if these occur they are to be advised in the first instance to the cashier who will advise procedures. Should there be a recurrence the internal auditor is to be advised.
Dollar notes: Banknotes are counted by weighing, so to save time for bank staff when weighing them, please don't fold the notes nor hold them together with bands, paper clips etc. Simply flatten them and put all notes together in order of denomination and put one rubber band around the whole lot. A full bundle is $20s – $2,000.00; $10s – $1,000.00; $5s – $500.00 (NB: If you have enough for a “full bundle” as above, this should be separated within its own rubber band, otherwise all notes should be banded into one pile).
Coins: Coin is also counted by weighing, therefore if you have a full bag in any one denomination, please ensure it holds only $100 gold (or $10 silver). If you have lesser amounts than $100 (or $10), please bag each denomination separately i.e. do not mix the various coins, as wrong denominations in wrong bags will create problems when weighing the coin. If the coin is less than $20.00 it can all go in one bag. Further to this, please do not make up bags to $100 (or $10) with different denominations.
From 1 August 2006 the following rounding will apply to cash transactions:
- Where the total price ends in 5 cents or less – round down to the nearest 10c.
- Where the total price ends in 6 cents or more – round up to the nearest 10c.
If a cheque is dishonoured by the bank as “Refer to Drawer/Account Closed or Payment Stopped,” the Cashier's receipt will be reversed by journal and a copy of this and the cheque sent to the department to obtain repayment – it is recommended this be in cash or a bank cheque. A sub receipt should be issued for the repayment and the cheque included on the banking summary crediting the appropriate general ledger code.
Personal cheques are not to be cashed, or have change given.
Preparation of banking summary forms
A banking summary form must be used for every banking whether through the Revenue Management Office or a direct lodgement to the bank. The forms are available in Excel format by using one of the templates listed below. The spreadsheet format will ensure that additions and extensions are correct and will automatically calculate GST and the banking totals.
There are four banking summary forms for use:
- General Ledger Only
- General Ledger and Debtors Only
- Credit Card Only
- Eftpos Only
These forms are available at the Financial Services Forms Store.
There are two methods for completing the banking summary form:
1. Entering into Excel spreadsheet on computer:
Add all sub receipts issued since the last banking, entering the total sum in the sub receipt-book.
Key the sub receipt numbers covering the lodgement in the space provided on the banking summary form along with department name, date of lodgement, contact name and telephone number.
Analyse and enter particulars and individual general ledger codes or invoice numbers into the spreadsheet in the appropriate fields, entering the total sums for each code in the Total column – the GST and Sub Totals will automatically calculate. If the Total figure is GST exempt enter a 'Z' into the appropriate "Z=No GST" field – the GST amount will change to “N/A” (not applicable) and the Sub Total figure will amend accordingly.
Ensure the automatically calculated Grand Total sum at the bottom of the spreadsheet agrees with the previously recorded total in the sub receipt-book.
Enter cash, cheque, EFTPOS or credit card details into the appropriate fields at the top right hand corner of the banking summary spreadsheet.
The Total Banking figure must agree with the Grand Total of banking summary. If it doesn't match, the narration “DOESN'T BALANCE!” will automatically display, only disappearing when the two figures are matched.
Print the spreadsheet and sign the banking summary.
Credit card, EFTPOS or overseas funds should be entered on separate banking summary forms.
2. Handwritten on banking summary form:
Add all sub receipts issued since the last banking, entering the total sum both in the sub receipt-book and in the Grand Total section of the departmental banking summary sheet.
Write the sub receipt numbers covering the lodgement in the space provided on the banking summary form along with department name, date of lodgement, contact name, signature and telephone number.
Analyse and enter individual general ledger codes or invoice numbers and amounts to be credited in the appropriate fields. Ensure this breakdown correctly adds to the Grand Totals.
Calculate GST on sums being credited to General Ledger account codes and extend to the Total column.
When payment is received for an invoice, the invoice number MUST be entered. GST is not deducted from invoices.
Enter cash, cheque, EFTPOS or credit card details on the banking summary. The Total Banking figure must agree with the Grand Total of banking summary.
Credit card or overseas funds should be entered on separate banking summary forms.
Treatment of GST on receipts
Donations and “Unconditional Gifts exempt from GST”
Extra care must be taken with “donations”. If the donation is made as a result of the provision of goods or services then IRD do not consider this a donation and the payment must have GST deducted. The donation must be given without conditions and this exemption will apply only in rare instances.
If a remittance is received from a non-profit body and is believed to represent an “unconditional gift” the cheque must be forwarded to the Registry Revenue Management Office, together with full supporting documentation. The Revenue Management Office will ensure that the GST treatment is correct based on the information supplied. If there is any doubt, the University will set out in a letter its understanding for the receipt to clarify the most appropriate GST treatment. It is likely that GST will be deducted from the receipt as the IRD impose severe penalties where tax is not returned according to the law. Hence we take a conservative approach in evaluating these situations.
An unconditional gift has a special meaning for GST purposes. Generally it is a payment made to the University where the donor receives no “identifiable direct value benefit” as a result. However, if a donor is provided with a GST tax invoice in respect of a sum received the parties are acknowledging that there has been a supply of goods and services.
A donor may be assumed to have made an unconditional gift even though a condition, specifying the purpose for which it may be used, is attached to the gift. This is provided the gift is voluntary, for the purposes of the University, and the donor received no “identifiable direct value benefit”.
It is only in circumstances where the entity paying the university is not registered for GST where this will make any difference. This is because the GST component of any payment made by a registered person will be recovered from the IRD.
If your department receives money which may fit into this category, but you are unsure, please contact the Revenue Management Office in the first instance – they have access to specialist advice.
Some departments perform receipting functions on behalf of parties external to the University (the principal). For example Recreation Services collect subs for some sports clubs. The receipts from these activities are kept in an agency account. This money is not owned by the University and normally no GST is to be deducted as the principal is responsible for returning the GST, if you believe you are carrying out an agency function but are unsure, contact the Revenue Management Office for advice.
Payments from overseas
Each payment will be treated on a one to one individual basis and the cheque should be forwarded to the Registry Revenue Management Office, together with full documentation. The staff will ensure that the GST treatment is correct based on the information supplied.
Electronic Funds Transfer – Point of Sale units have been installed in some departments where significant amounts of receipts are collected. Benefits will arise from reduced labour for cash handling, better security as less cash is on hand, guaranteed payment for valid transactions (no dishonoured cheques), quicker to process than cheques, and increased customer satisfaction on payment options. The only fees associated with an EFTPOS machine is the rental cost and ETSL charge.
Points to note regarding University EFTPOS transactions are:
While EFTPOS terminals can accept both debit and credit cards each terminal needs to be set up to handle credit card transactions, if your terminal does not accept credit cards, please contact the Revenue Management Office.
Cash is not to be issued from the EFTPOS sites. EFTPOS is to be offered as a method of payment only.
A daily &lquo;financial settlement time” needs to be chosen for each day's transactions, the $ total at this settlement time being credited to the University's bank account daily. This will normally be a time that suits each type of operation i.e. a Hall, a department, a business activity. The EFTPOS terminal is settled at the nominated time so to obtain totals which are entered on the EFTPOS banking summary which is to be faxed to the Revenue Management Office each working day.
Because an EFTPOS receipt is produced for the customer with each transaction it will not be necessary to issue individual sub receipts, but when the terminal is “settled” daily a sub receipt should be written for the bulk total of the EFTPOS transactions.
The Revenue Management Office will coordinate installation and necessary procedures associated with EFTPOS and can advise the associated costs.
Credit card receipts
Visa and Mastercard will be accepted by the University for all payments except for the following:
- All student fees
- Student accommodation payments
- Payments for amounts on debtor statements
Credit cards other than Visa and Mastercard will not be accepted.
All credit card payments incur a merchant service charge. This will be charged to the department accepting the payment. The current charge is 1.55 per cent of the value of the transaction. This is subject to change.
Departmental applications for accepting payment by credit card should be forwarded to the Revenue Accountant for consideration.
Issue a sub-receipt for credit card payments.
A separate banking summary form must be used for credit card transactions.
A ledger expenditure code must be provided on the banking summary in order to debit the merchant service charge.
The detail required to process a mail order transaction includes:
- Cardholder's name
- Expiry date of credit card
- Cardholder's number
- $NZD amount
- Card Security Code (three digit number on the reverse side of the credit card)
Payment details are to be attached to the banking summary form.
The Revenue Management Office will advise if any transactions are declined, departments are advised to delay the dispatch of purchased goods until the receipt for credit card banking is received in the department.
Security of credit card information
Credit card transactions sent to Financial Services Cashiers Office for processing:
The processing of all transactions where the card is not present will be done by the Revenue Management Office. Departments MUST ensure that any credit card detail and information sent to the Revenue Management Office is not copied, replicated or stored electronically in any fashion.
The Revenue Management Office will ensure all information is held in a secure place with restricted access.
For information on University Purchase Cards refer to the Purchase Card Policy and Procedure.
Credit card gateway
All departments wishing to use this website must submit an ecommerce application form to the Revenue Management Office, Financial Services Division for each activity they wish to set up to connect to this secure site.
The Revenue Management Office will then determine if the ecommerce site is the most efficient way to receive the transactions. Once this is approved, the proposed web site will be checked by the ITS security officer and an access code for the site allocated. This access code identifies all payments to that particular department and allocates a general ledger code for receipting of the funds.
Departments will construct their own web page for each activity, e.g. an upcoming conference. On this page customers should be able to select various options, e.g. conference registration only or conference registration plus accommodation. Once the customer has selected their requirements, they will click on a link to enable them to make the payment by credit card. This link will direct the customer to the University's secure payment page where the credit card details are entered and the transaction sent to the bank.
When this has been completed the cardholder will be re-routed back to the department's web page where they will be presented with a status page, including a tax invoice / receipt if the transaction is successful. The receipt / invoice shall comply with bank guidelines as set out in the following example: Credit Card Gateway Sample Invoice/Receipt Form
Access to reports which will give a summary of card payments will be made available to departments.
A total settlement figure of all payments processed each day through the payment page will settle to the University's bank account. An automated receipt batch will be created daily crediting the general ledger codes set out on the ecommerce application form for that particular web page. This batch will also debit Departments with admin and bank fees applying to each transaction.
Credit card numbers will not be held in departments for security reasons.
Any refund requests will be passed to the Revenue Management Office to action. Refunds will be processed to the same credit card as the initial transaction.
- Fill out the application form and return to Revenue Management Office.
- The Revenue Management Office will email you an activity key which is for you to develop and test your website.
- When ready to go live contact the cashiers who will then set up a live activity and provide you with the new LIVE activity.
- All that is required to change your test site to LIVE site collecting data is to replace the test activity key with the live activity key and change your URL to point to the live credit card gateway, by removing “_test” from the original URL you were provided for testing purposes.
Revenue Management Office do have the contact details for a PHP designer should you need to contract one, otherwise contact ITS who may be able to provide you with contact details of an ITS consultant that can help you.
An information pack containing sample code for interfacing with the credit card gateway, documentation and sample invoices is available from: http://ecommerce.otago.ac.nz/
For gateway issues contact the Revenue Management Office.
As you are collecting personal information, you need to take steps to secure the information in accordance with the privacy act.
The Revenue Management Office may request information from you regarding a transaction.
If a cardholder should ever dispute a transaction, the University's bank will require us to pass all relevant information to them in the dispute process.
At a minimum please make sure you collect and retain the following:
- Name of person completing form
- Contact details for the above including phone number and address if possible
Contact for further information
For further information, contact:
Revenue Management Accountant
Tel extn 9004