Objectives 

1.      To ensure that strong internal controls are maintained over cash such that the risk of embezzlement by employees and patients/visitors is minimized. 

2.      To ensure that monies collected from patients and through the mail are properly recorded, transmitted with appropriate sign-offs for accountability and deposited. 

3.      To ensure that general ledger cash account balances are accurate and reconciled to bank balances such that cash representations on the balance sheet may be fairly stated. 

4.      To ensure that the organization aggressively manages its cash to maximize a smooth positive cash flow, avoid extremes of idle balances, and avoid cash shortfalls. 

Overview 

As most transactions eventually affect cash, the cash position and cash flow must be constantly and aggressively monitored.  Reasons for cash flow problems must be quickly identified and corrected.  Furthermore, as cash is highly susceptible to embezzlement and is exchanged by patients and employees in the clinic, there must be adequate internal control for record keeping, accountability and security (locked cash boxes for petty cash).  NUIHC’s professional liability insurance coverage covers the employee’s handling of cash; no individual bonding of employees is required. 

Procedures 

                        A.  ash Collection in the Clinic 

1.      Only the Front Desk takes all collections from patients.  These individuals are required to enter such collections into the cash receipts book or lab receipt book and give one copy of the encounter form to the patient.  All cash should be immediately put into the cash drawer at the front desk.  All checks should be endorsed as soon as possible. 

2.      At each clinic’s end, the Finance Manager is responsible for counting the collections.  The Finance Manager should verify the accuracy of their cash and checks to the amount entered in the receipts books. 

3.      The Finance Manager will check the receipt ledger with the stated cash receipts will initial entries and will keep a log of variances.  Consistent discrepancies will be addressed with the Front Desk.

4.      All bank deposits will be made three times weekly.  The Finance Manager will lock all collections.  A copy of the bank’s deposit receipt, the deposit ticket and collection summary will be available for review at all times. 

5.      All collections taken by mail will be endorsed for deposit and logged by the Finance Manager. 

6.      The Finance Manager will post payments to the patient accounts receivable system.  Either the Executive Director or the Finance Manager shall make deposits three times a week. 

                        B.  Bank Reconciliation’s 

1.      Bank statements are to be given to the Finance Manager.  If received in the mail, they are not to be opened by any other personnel; they are to be opened, reviewed and initialed by the Executive Director or Finance Manager. 

2.      Reconciliation of bank account balances (per bank versus general ledger) will be prepared monthly by Finance Manager and approved by the Executive Director.  A comparison will also be made for consistency of collections per the bank statements, general ledger and deposit logs.  Any discrepancies will be investigated immediately; any major problem (e.g., fraud) will be reported immediately to the Executive Director. 

                        C.  Petty Cash 

Purpose-to allow cash purchase of supplies for the clinic when there is not sufficient time to have a check issued or when the amount of the check would be too small to warrant that process. 

1.      The Finance Manager maintains petty cash, in the amount of $500.00. 

2.      All petty cash funds are kept in a locked drawer of file cabinet.  Only the Finance Manager and the Executive Director will have a key to the petty cash box.  Only they will know the location of the keys. 

3.      Disbursements under $100.00 may be made from the petty cash fund.  Exceptions must be in writing and approved by the Executive Director.

4.      The Finance Manager must obtain a receipt or other supporting documentation from each payee.  The receipts, attached to the Petty Cash receipt, are placed in the petty cash box to replace the currency, which has been paid out.  No payments will be made without a receipt. 

5.      Semi-monthly, the petty cash fund will be replenished for expenses paid out as listed in the Petty Cash receipt book.  Reimbursement will be made if 50% or more of the fund has been spent. 

6.      A check is prepared and the expenses are charged to the cost categories. The voucher with receipts attached is filed in the payable file. 

7.      Loans will not be made from petty cash funds.  Checks will not be cashed from petty cash funds.