5.21 Receiving And Depositing Money

5.21.1 Objective

To provide guidelines and procedures for receiving and depositing money. The University of Tennessee Foundation (UTFI) will follow University of Tennessee policies for receiving and depositing money except that UTFI’s Gift & Records Systems employees on each campus will make the bank deposits.

NOTE: This policy does not apply to receiving and depositing gifts. See the Advancement Services Gift Policies & Procedures for the companion policies governing receipting and depositing gifts.

5.21.2 General Policies on Receiving Money

1. Money includes currency and other negotiable documents, such as personal checks, money orders, cashier’s checks, and traveler’s checks, received by a department as a refund, reimbursement, or gift, etc. Credit and debit card transactions are discussed below in this policy. All money received as payments to UTFI must be promptly forwarded to UTFI’s Alumni & Donor Records staff on each campus for deposit or deposited to the credit of the UTFI Account in a bank designated as a UTFI depository. All money must be deposited within three business days of receipt. Expenditures may not be made from money received, and the money may not be retained in a department for its use.
2. Because of the high cost of negotiating foreign checks, UTFI will only accept checks in U.S. dollars drawn on U.S. banks or U.S. branches of foreign banks. The checks must contain ABA encoding (machine-readable codes at the bottom of the check).
3. Departments that receive money should develop written procedures to collect and transmit it to  Alumni & Donor Records staff for deposit or to deposit it into a UTFI depository account.
4. Generally, employees should not serve as custodian for third-party funds (i.e., funds belonging to outside organizations) as part of their official duties.
5. Departments that have established policies for receiving and depositing money that differ from this policy and were approved by the university prior to June 30, 2011, may continue to follow such policies.  If a department wants to deviate from this policy for receiving and depositing money after July 1, 2011, it must obtain the approval of the Chief Financial Officer (CFO).

5.21.3 Recording Money Received

Departments that receive money must record each transaction through the IRIS Online Receipting process.  If the payor is present or if the payment involves currency, IRIS Online Receipting will generate a receipt that should be given to the payor.

5.21.4 Control Guidelines

To help protect UTFI’s assets from theft or misappropriation, departments should follow certain procedures. Some important control procedures in handling money received include the following.

1. Checks Made to UTFI or University. All checks in payment to UTFI should be made payable to “The University of Tennessee Foundation” and not to any UTFI or university official or employees. Checks should be restrictively endorsed immediately upon receipt with UTFI’s official endorsement stamp on the reverse left of the check. The receiving department should be indicated on the endorsement stamp. Third-party checks must be endorsed by the individual cashing the check and then stamped with the endorsement stamp before deposit or transmittal.
2. Separation of Duties. When staffing permits, an employee who does not handle money received should perform a monthly reconciliation. A reconciliation consists of comparing the original receipts to the deposit document printed from UTFI’s accounting system and the official accounting records. Employees who invoice customers or record payments in accounts receivable records should not have access to money received. If departments are unable to separate duties as described, the chief financial officer should be contacted to help find an alternate solution.
3. Safekeeping of Money Received. Department heads should see that official funds are protected until deposited or transmitted to Constituent Management staff, as follows:
   1. Proper safekeeping facilities should be used.
   2. Deposits should never be sent through campus mail.
   3. Safe combinations should be changed whenever security is compromised or knowledgeable employees leave the department.
   4. No more than three responsible employees should have access to funds stored.
   5. Currency and checks should not be left overnight in cash registers, drawers, or other unsecured locations.
   6. If a deposit includes large sums of currency and checks, the department should consider:

1. Requesting security officers to transport the deposit
2. Using night depository services

• Making deposits daily (or more frequently)

5.21.5 Frequency of Transmittals and Deposits

To comply with UTFI policy, university policy and state law, money received should be deposited within three business days of receipt. However, whenever large amounts of money are involved, departments should attempt to make deposits more frequently.

Under present UTFI, university and state regulations, money received by all departments through the close of business on each June 30 (the end of the fiscal year) must be deposited promptly on July 1. The transmittals must be clearly designated “July 1 as of June 30” so that credit for this money is reflected on the records for the proper fiscal year.

5.21.6 Preparing Transmittals to Gift Records

When using Alumni & Donor Records Systems to deposit money, prepare the non-gift transmittal form and deliver to Alumni & Donor Records in a sealed envelope along with checks and currency.

5.21.7 Refund

1. UTFI returns funds to individuals, institutions and companies for a variety of reasons including: overpayments, duplicate payments, payments received in error, cancellations and some deposits. Each department that issues refunds must develop and follow its own policy concerning the amount and allowability of refunds. These refund policies must be reviewed and approved by the CFO. The UTFI Business Office is responsible for entering refunds in IRIS.
2. Each refund must be supported by documentation that includes:
   1. the name of the person, institution or company receiving the refund (original payor)
   2. the mailing address
   3. the reason for the refund
   4. the UTFI receipt number or deposit information of when the money was originally received
   5. the dollar amount of refund
   6. the cost center, fund, WBS element, general ledger account where the refund is to be charged (usually the same cost center, fund, WBS element, general ledger account of the original receipt)
   7. the department head’s approval

5.21.8 Accepting Credit and Debit Cards

Departments are eligible to accept credit and debit cards as an additional method of payment. Departments interested in accepting credit and debit cards must request approval from the CFO.

UTFI is assessed a monthly discount fee on all credit card deposits. Each month UTFI’s depository bank(s) sends detailed departmental merchant statements for payment of the discount fee. UTFI pays the fees and charges each department for the fee applicable to its gross sales. Each department receives a copy of its activity statement to review and confirm. All fees related to the processing of credit and debit cards (e.g., equipment rental, forms, and server use charges) are the responsibility of the user departments. Consideration should be given to these costs to determine whether the advantages of accepting cards warrant the expense.

Note: In performing their official duties, employees are encouraged to confiscate stolen credit cards and may accept any reward offered.

5.21.9 Internet Sales

1. Alumni & Donor Records has implemented the Encompass system to handle both online giving and internet sales. Encompass is fully compliant with federal and state laws concerning online transactions and its use has been approved by the university’s internal e-commerce audit group.  Any UTFI office wishing to engage in internet sales should contact the Senior Director for Information Technology for access to the Encompass system.
2. Additionally, each department using Encompass, departments must develop procedures specific to its Internet enterprise in coordination with the CFO. Written procedures are required to ascertain that funds collected via the Internet are deposited into recognized UTFI depositories in a timely manner.

5.21.10 Credit and Debit Card Deposits

Processing Electronic Transactions. Two types of electronic transactions may be made, through point of sale (POS) terminals or the Internet, both of which rely on the electronic capture of data necessary for processing the transaction. Departments that receive credit and debit deposits should enter deposit information into UTFI’s accounting system. Departments that are unable to enter deposit information must prepare a Report of Departmental Collections (Form T-33) for each deposit and forward to the appropriate office for processing and posting to official UTFI records. Batch release reports generated by the POS terminals or the Internet payment system must be attached to the bank deposit statement (or Form T-33).

1. POS Terminal Transactions. Cardholder and transaction information is swiped or keyed into a POS terminal and electronically submitted to the card processor (bank) for authorization or approval. At the close of each business day, the department reconciles all transactions processed through the POS terminal to the actual sales drafts and transmits the batch of transactions to the card processor (bank) for settlement.
2. Internet Transactions. Cardholder and transaction information is captured via the Internet and transmitted electronically to UTFI’s processor for authorization or approval. Each day at a predetermined time, all approved transactions are submitted to the processor for settlement. Each department or unit will receive a daily batch release report detailing all transactions processed by its Web site. This report must then be reconciled with orders received and processed during the same time period.

Processing Paper Transactions. (Note: This is not the preferred method because many depositories no longer accept paper transactions.) Processing credit and debit card paper transactions is similar to processing checks. The sales vouchers printed at the point of sale should be totaled and a deposit ticket prepared for transmittal to the bank. A Report of Departmental Collections (Form T-33) must be prepared for each deposit and forwarded to the appropriate campus or unit office for processing and posting to official university records.

5.21.11 Credit and Debit Card Refunds and Chargebacks

Refunds must be issued as a credit against the customer’s credit card. The CFO (or designee) will be notified of all chargebacks, i.e., items disputed by the customer, through UTFI’s accounting system.

Updated: June 1, 2021