TREASURERS DIRECTIONS
CASH MANAGEMENT TRANSACTION MANAGEMENT
Section C3.1 : Receipting
STATEMENT OF INTENT
Cash inflows of public money and trust money should be
recorded, secured and banked in a complete, accurate and
efficient manner. This Section provides the minimum
requirements relating to receipting of cash.
MAIN FEATURES
Section 38 of the Financial Management Act requires every Accountable Officer and every
employee of an Agency to comply with the Treasurers Directions.
Receipts
Receipts are inflows of cash assets received by an Agency including those cash
receipts relating to trust money and contributions by Government.
Recording and Banking of Receipts
Cash assets received by an Agency are to be recorded according to their nature or
type in the classes provided by the Standard Classifications and are to be secured and
deposited into an official bank account on a timely basis.
Any receipts for which a Standard Classification code is unclear are to be credited to
the Cash Receipts Clearing Account (CRCA) until an appropriate Standard
Classification code is identified.
An official receipt is to be issued for cash transactions and on request for other
receipts.
Receipting Procedures and Controls
Receipts of cash assets are to be subject to appropriate management, accountability
and control arrangements.
For authoritative instruction and guidance reference, should be made to related
Treasurer's Directions and associated commentary.
Updated : 26 June 2006
Section C3.1 : Transaction Management Receipting
CONTENTS
What are Receipts ?
C3.1.1
Recording and Banking of Receipts
C3.1.2
Receipting Procedures and Controls
C3.1.5
AUTHORITIES
Section 5 and 6 Financial Management Act
REFERENCES
Related Treasurers Directions:
F2.2
Framework Working for Outcomes : Central Holding Authority
A1.3
Accounting Introduction : Standard Classification Codes
A2.6
Accounting Assets : Cash
A5.2
Accounting Income : Territory Income
A5.3
Accounting Income : Agency Income
C2.2
Cash Management Banking : Bank Accounts
Updated : 26 June 2006
Section C3.1 : Transaction Management Receipting
WHAT ARE RECEIPTS ?
C3.1.1
(i)
Receipts are inflows of cash assets received by an Agency including those
cash receipts relating to trust money and contributions by Government.
Receipts of cash assets include cash and cash equivalents such as:
cheques and other negotiable instruments;
credit card transactions;
electronic funds transfer (EFT);
direct credits; and
ledger transfers.
(ii)
Under section 6 of the Financial Management Act, all Agency receipts are to be
paid into the Agencys Operating Account. Agency receipts typically involve
extinguishment of accounts receivable related to amounts owed by debtors, but
will also include:
cash receipts from the sale of goods and services;
appropriation funding;
intra-sector receipts;
specific purpose payments; and
proceeds from the disposal of Agency assets.
(iii)
An Agency may also manage, on behalf of the Government, the receipt of Territory
income (revenue and gains) that it does not control. Section 5 of the Financial
Management Act requires all Territory receipts (as apposed to Agency receipts
and Accountable Officers Trust Account receipts) to be credited to the Central
Holding Authority. Examples of Territory income include:
Australian Government general purpose funding;
Territory taxes and royalties;
statutory fees and charges; and
fines and penalties.
(iv)
Receipts do not include barter transactions or the extinguishment of a debt through
the provision of services or by other non-cash means, as the transaction does not
produce an inflow of cash assets.
(v)
Treasurers Directions Sections A2.6, A5.2, A5.3 and F2.2 provide further
instruction and guidance in relation to cash assets, Agency income, Territory
income and the recording of Territory income in the Central Holding Authority.
Updated : 26 June 2006
Section C3.1 : Transaction Management Receipting
RECORDING AND BANKING OF RECEIPTS
C3.1.2
Agency cash receipts are to be paid into the Agencys Operating Account
and are to be:
recorded according to their nature or type and, as a minimum, are to be
recorded under the classes provided by the Standard Classifications;
and
secured and deposited into an official bank account on a timely basis.
(i)
Cash will be recorded upon receipt. To ensure consistency across Agencies, the
Standard Classifications provide minimum classification requirements for Agency
and Territory receipts. Treasurers Directions Section A1.3 provides instruction
and guidance in relation to the Standard Classification codes.
(ii)
Examples of appropriate security include the use of a safe, lock box or a secure
room with restricted access. Treasurers Directions Section C2.2 provides
instruction and guidance in relation to bank accounts.
C3.1.3
Any receipts for which a Standard Classification code is unclear are to be
credited to the Cash Receipts Clearing Account (CRCA) until an appropriate
Standard Classification code is identified.
(i)
Receipts cannot be accurately recorded in an Agencys accounts unless an
appropriate account classification is known. Holding the remittance in the Cash
Receipts Clearing Account (CRCA) avoids adjustments to income amounts and
highlights the deposit for further investigation. Every effort should be made to
clear remittances held in the CRCA in a timely manner.
C3.1.4
An official receipt is to be issued for cash transactions and on request for
other receipts.
(i)
Official receipts are required for cash transactions and, where requested, for mail
and credit card transactions. An official receipt may take the form of pre-printed
receipt forms, licences, permits, tax invoices, cash register imprints or
computerised printouts.
(ii)
A record of all official receipts should be maintained, detailing at a minimum, the
official receipt number, amount and date. Once prepared, an official receipt should
not be altered. Where a correction to an official receipt is required, the original
receipt will be cancelled (and retained) and a new receipt prepared.
(iii)
Where money is received electronically by direct credit to an Agencys bank
account, the record shown on the bank statement provides evidence of the
transaction and the preparation and issue of an official receipt may not be
required.
Updated : 26 June 2006
Section C3.1 : Transaction Management Receipting
RECEIPTING PROCEDURES AND CONTROLS
C3.1.5
Receipts of cash assets are to be subject to appropriate management,
accountability and control arrangements.
(i)
Agency internal procedures and controls should have regard to the inherent risks
associated with the collection, recording, security and banking of cash receipts.
For example, cash receipting procedures and controls should meet the control
objectives of completeness, validity, accuracy, safeguarding and subsequent
accountability.
(ii)
Specific control strategies for Agency and Territory cash receipts include:
(iii)
adequate monitoring procedures for opening mail and managing and
monitoring the use of cash registers;
internal verification procedures to ensure that all cash receipts have been
completely and accurately classified, recorded and comply with legislative
requirements and accounting standards;
appropriate segregation of duties between handling cash and record keeping;
independent monitoring to ensure cash receipts are banked daily and cash on
hand is kept in a secure place until banked;
periodic independent cash counts to compare cash on hand with the recorded
cash balance;
internal verification to compare the validated deposit slips with daily cash
summaries; and
preparation and independent monitoring of monthly bank reconciliations.
Specific control strategies for the receipt of cheques, money orders, credit card
receipts and other negotiable instruments include procedures to ensure:
appropriate mail procedures that provide adequate security of mail receipts,
including immediate endorsement and recording;
cheques and money orders are crossed and marked Not Negotiable when
received;
post dated cheques are not accepted, unless approved by the Accountable
Officer (or delegate);
credit card receipts are valid and the cardholders signature is checked against
the credit card. In addition, receipts should be authorised where the amount
exceeds a threshold; and
cash change will not be given where the amount tendered on a cheque or
credit card exceeds the amount due to be paid (in these circumstances the
excess may be credited against future charges).
Updated : 26 June 2006
