Cash Handling Training Association of Public Treasurers of

Cash Handling Training Association of Public Treasurers of the US & Canada

Training Benefits for You Today o Enhance your own performance o Entertain and exchange new ideas o Build confidence o Receive recognition o Built on the APT manual for reference

No such thing as “Just a Cashier” o o You are a City ambassador! You must be: n n n friendly courteous honest professional exhibit high levels of integrity

Your pivotal role o o Treat others as you expect to be treated Your Performance Standards n n n produce accurate results perform efficiently and cost effectively perform according to established standards show initiative to excel and contribute establish good public relations create positive impression through a well groomed personal appearance

Training Modules o Money System Background o Currency Identification and Handling o Daily Operations o Security

Our Training Purpose o Learn specific skills and knowledge Instill customer service orientation Increase accountability and reduce errors Increase safety Standardize procedures Implement certification and training Programs o Collect money and collect ideas! o o o

Module One: Background Your Treasury and the Flow of Money

Our U. S. Banking Structure o o o Established by Alexander Hamilton Independent and branch banks Federal Reserve - the banker’s bank MANUAL PAGE: 3

Federal Reserve System o o Federal Reserve Act - 1913 Currency control n o o supply, flow and issuance Federal Reserve Board 12 Districts n n n 12 Federal Reserve banks 25 Branches and 9 Additional Offices 47 Check processing centers

Inside the “Fed” o o o Board of Governors Federal Open Market Committee Federal Advisory Council Federal Reserve Banks Member Banks Credit Policy n n n Margin Requirements Reserve Rate Discount Rate MANUALAPPENDIX A

Moving Money through the Fed o o o Currency flow A move to electronic transactions n expedited funds regulations Reg CC n “Check 21” n cost and efficiencies – “ECA” n retention at first bank of presentment Checks n daily “fed letters” n sort and transfer through ABA numbers

Can You Name the Districts? o o o 1 2 3 4 5 6 o o o 7 8 9 10 11 12

The Federal Reserve Districts o o o 1 2 3 4 5 6 Boston New York Philadelphia Cleveland Richmond Atlanta o o o 7 8 9 10 11 12 Chicago St. Louis Minneapolis Kansas City Dallas San Francisco MANUALAPPENDIX A

• Source: www. federalreserve. gov/

City Treasury Responsibilities o o o o Receive and retain funds Safeguard and disburse funds Invest funds at all times Receipt customers Maintain accurate records Maintain customer relations Understand emergency situations MANUAL PAGE: 3 -4

Inside Your Treasury Consolidated or “Central” Cashiering vs. Decentralized

Sample Legislation from APT US&C o o o Establishing cash handling as a City function Create legal references internally Require certification Require training Establish timely deposit responsibility Establish timely deposit liability MANUAL PAGE: 30

Module Two: Currency Money, money! Checks, checks!

A Close Look at Currency o o o Seven denominations Numeric and alpha value notations One Federal Reserve seal n o o o No longer by District Treasury seal Unique serial number (2 times) Federal Reserve District designation n n Four times on the one dollar bill In the serial number and alpha numeric MANUAL PAGE: 6

Currency Notes Who ? o o o $1 $2 $5 $10 $20 $50 $100 $500 $1, 000 $5, 000 $10, 000

Currency Notes o o o $1 George Washington $2 Thomas Jefferson $5 Abraham Lincoln $10 Alexander Hamilton $20 Andrew Jackson $50 Ulysses S. Grant $100 Benjamin Franklin $500 Mc. Kinley Gone but not $1, 000 Cleveland forgotten. . . $5, 000 Madison $10, 000 Chase

What’s backing it up? o o o o George Washington Thomas Jefferson Abraham Lincoln Alexander Hamilton Andrew Jackson Ulysses S. Grant Ben Franklin o What is the picture?

What’s backing it up? o o o o George Washington Thomas Jefferson Abraham Lincoln Alexander Hamilton Andrew Jackson Ulysses S. Grant Ben Franklin o o o o Great Seal & Pyramid Declaration of Indep. Lincoln Memorial US Treasury Bldg White House US Capitol Bldg Independence Hall

The History of Money o Clubs to cryptography n o o o increasing need for security and procedures First metal coins created about 600 B. C. First paper money was Chinese 400 B. C. First electronic money - ACH - 1950’s Digital internet money - 1990’s PCs as ATMs Patriot Act of 2002

History of US Money o o Used Spanish/French/English until 1775 first issued to finance war n o o o Paul Revere made first plates 1792 Mint Act after Constitution 1793 first coins minted (first one to Martha W. ) 1861 first paper “Demand Notes” (“greenbacks”) o 1793 -1861 1, 600 banks issued 7, 000 varieties of paper money

History of US Money o o 1878 Act created Silver Certificates 1863 -1929 Banks could issue National Bank Notes 1913 Federal Reserve Act creates Federal Reserve Notes Currently: n n 99% Federal Reserve Notes 1% US Notes (red seal) (green seal) (blue seal)

Who are the current players? o US Treasurer n o Anna Escobedo Cabral Secretary of the Treasury n John Snow

New Currency o o o o o Larger, off center portrait Colors added in 2003 Watermark portrait Color shifting ink (lower right) Low-vision features on $20 and $50 New $20 released in November 2003 New $50 and $100 in 2004 and 2005 $5 and $10 redesign under consideration $1 and $2 will not be redesigned

New Currency o Embedded security thread (1990) n n n o left on $20 & $100 right on $50 “US Treasury” Embedded security strip n n n $ 20 glows green $ 50 glows yellow $100 glows red MANUAL APPENDIX A

New Currency o Micro-printing patterns (1990) n n n $ 20 in oval and lower left “USA 20” $ 50 in Grant’s collar and side border $100 in Ben’s coat and lower left

The New Bills • http: //www. treas. gov/usss/ 1. Federal Reserve Note 5. Serial Number 6. Placement 9. Federal Reserve District 12. Fort Worth!!

• Source: Department of the Treasury - United States Secret Service

The New Color of Money - $20 o o o Subtle green, peach and blue colors in background Adds complexity to the notes Enhanced portrait and White House n o o o “ 20” in yellow covers the background Blue Eagle in background, metallic green eagle and shield left of Jackson $20 Watermark and security thread retained Color shift from copper to green dramatized

Currency o o o Cotton-linen blend with red-blue fibers Treasury Seal: n scales for balanced budget n carpenters square for an even (fair) cut Pyramid: n face lighted but (unexplored) west is dark n uncapped because we are not close to finished n eye is divinity (not man alone) n clouds are rolling away - i. e. clearing

Currency Lingo o Annuit Coeptis n o Novus Ordo Seclorum n o “a new order has begun” E Pluribus Unum n o “God has favored our endeavor” “one nation from many people” MDCCLXXVI

Currency o The bald eagle n n never afraid strong and smart to fly above wears no crown shield is unsupported by a king o Olive branch and arrows o wants peace but willing to defend freedom 13 stars for the original 13 colonies n

Coins o Minted in n o Backed by precious metals kept at n o o Philadelphia, Denver, San Francisco and West Point Fort Knox and West Point Depositories Seven types Smooth or ridged edges

When taking cash closely note o o o The The The numeric value on each corner value written out across the bottom Federal Reserve Seal unique serial number in two places four Federal Reserve bank numbers MANUAL PAGE: 6

Counting Money

Counting is 1 - 2 - 3 o 3 Three Ways to Count o 2 Two Counts on Each n o (Double Count) 1 One Total MANUAL PAGE: 06

Three Ways to Count o Hand to Table o Walk Through

Hand to Hand Method o Separate bills n n o o o all bills facing up smallest denomination on top Hold in one hand Transfer bills separately to other hand Look at each bill COUNT AGAIN Get two counts that agree! MANUAL PAGE: 6

Hand to Table Method o Same as hand to hand n o o o pile bills facing up with smallest on top Place funds on table not in customer’s hand Count once into your hand Count twice onto the table or counter

The Walk Through Method o Stack denominations face-up Count with thumb and forefinger Check each bill Count twice for same total o Counting machines o o o MANUAL PAGE: 7

Making Change o o Establish a routine Two methods: n n o o cash register calculation counting from sale to tendered amount Counting back n smallest coin to the largest bill Two counts: n n (1) from the cash drawer (2) to the customer MANUAL PAGE: 8

Customer Transactions o o o Keep $$ in view of customer Complete transaction before securing $$ Verify payment against invoice/bill One customer at a time Always give a receipt Security MANUAL PAGE: 8

General Rules that Count. . . o o o o Money is dirty - wash your hands Count in customer’s presence Establish a routine Double count Numbered receipts Secure the area Create dual control is possible

Strapping o o Count only fifty at one time Double count Color code or value mark One denomination at a time MANUAL PAGE: 9

Currency Straps No. per strap Value MANUAL PAGE: 9

Coin Wrappers No. Coins Value

Mutilated Money o What constitutes mutilation n n torn bills written on - missing parts - bent coins o Ask for a substitute if possible But, it is still legal tender o Separate for return to bank o MANUAL PAGE: 9

Mutilated Money Rules o Will your bank credit you? o If more than 3/5 exists (2 serial numbers) -you receive face value If more than 2/5 exists (40%) -you receive face or 1/2 value If less than 2/5 exists -you receive nothing o o MANUAL PAGE: 9

The Growing Counterfeit Problem o o US bills invite counterfeiting (color and size similarities) Know your bills: - paper - portraits - microprinting - seals - serial numbers - new bills - color shifting ink - watermark Automatic sensing counters “Raised” Notes MANUAL PAGE: 9

If you get a counterfeit bill o o o Keep the bill Delay passer if possible Telephone police or Secret Service Observe the passer Initial and date on white section of bill Surrender the bill to Secret Service or bank

Secret Service Form o Counterfeit Note Report (SSF 1604) n n instructions on completion Secret Service listed in front of phone book description of note information about note

Checks o o o A substitute for cash A “negotiable instrument” when presented “Drawer” issues and signs the check “Drawee” is the bank “Payee” is the party being paid MANUAL PAGE: 11

Checks o Personal Checks n o Company Checks n n o issued for individual’s demand accounts may have a stub or carbon band may have time or dollar amount limits Cashier Checks n n drawn on a bank on its own funds only a bank failure causes void MANUAL PAGE: 11

Checks o Personal Money Orders n n o purchased by an individual from a bank shows drawee bank and dollar amount purchaser fills in other information usually dollar restricted (“not to exceed”) Traveler’s Checks n n signed on face when purchased and counter-signed when used must be signed in cashier’s presence MANUAL PAGE: 12

US Treasury Checks o o o Seal will smudge red with moisture Continuous watermark background pattern Ink fades with water & dissolves with bleach Signature line is micro-printed Ultraviolet shows image in center – recently enhanced to dual fluorescent wave lenghts Never issued with corrections!

Federal Check Standards o o o Minimum and maximum check size Placement of bank name Placement of ABA number Paper weight Exact location of MICR line n o Federal Reserve assigns MICR Not specified for US dollars ($x. xx) n other currencies must be specified MANUAL PAGE: 12

City Check Standards o Department or city payee o Endorsement by department MANUAL PAGE: 13

The Check’s Seven Elements 2758 APT US&C 1229 NW 19 th St Washington, D. C. Pay to the 19 payee payor $$123 $ order of date dollars bank signed Bank Three For 002758 004001004 00008088888 MANUAL PAGE: 12 & APPENDIX C

Check Negotiability o Current date n n no stale dated checks (old) No post dated (future) o Payee should be pre-printed on check Dollar amount must appear the same twice Bank name must appear on bottom left Check must be signed MICR line must appear o City requirements? o o MANUAL PAGE: 14

City Endorsement 1. 5” City of Tin Cup For deposit only * Endorse immediately * I. d. info on front MANUAL PAGE: 13

Endorsement o o Must be signed by both parties if two party check Will you take two-party checks? Who is authorized to accept 2 -party checks? Department or cashier specific stamps

Additional information o T-account standards Driver’s Lic # Credit Card # Cashier Init Other ID or Auth.

Check Fraud Precautions o o o o Matching photo identification Non-local banks Date (accurate, post-dated or stale) Legibility Drawee bank Payable to the City New account caution MANUAL PAGE: 14

Bank Cards - Credit and Debit o o o Plastic money for over 50 million people Reduced fraud Convenience for customers Special training required Expedited Funds Availability Fee payment differs by city MANUAL PAGE: 14

Credit Card Transactions o o o o Take card (or number by phone) Enter information Get signature of customer Record confirmation number Maintain copy Return card to customer Process as a check MANUAL PAGE: 15

Master. Card’s Security Features

Visa’s Security Features

Credit Card Recognition o o o o Examine signature strip for changes Look for ghost numbers and letters Check for identical fonts Look for warping or bubbling Ask for DL and ID Compare signature on DL If suspicious, make notes on customer

Stopping Bank Card Fraud o o o Retain the card until authorization is complete Match signatures with the card signature Check the expiration date for validity Look for alterations Check warning bulletins Watch the customer’s actions n Hurried n overly talkative n takes card from pocket

Module Three: Daily Operations Cash Drawers Revenue Statements

Daily Operations o o o The cashier is the government Control and separation Standard procedures Safeguards Hand to hand method

Receiving and Receipting o o o Procedures Numbered Receipts Double counts Customer service Invoiced versus cash (service) transactions

Establish Procedures for: o o o o Setting up cash drawer Receiving and receipting Overages and Shortages Closing and Balancing Locating Errors Revenue Sheet/Statement Deposits

Standard Deposit Requirements o Each city differs but standards include: n n n daily deposit of funds consolidated deposit or departmental deposits secure, locked storage of all deposits standardized cash receipt forms department deposit forms forwarded to treasury daily simultaneously with deposit to bank MANUAL PAGE: 21

Policy Considerations o Expedited funds o Receipts o Safes and deposits

Cash Drawers o o o Individual Till Assignment is critical !!!! Fiduciary responsibility Coin/currency arrangements Beginning cash “Bait” Security checks MANUAL PAGE: 16

Establishing a Cash Drawer o o o o Pennies Nickels Dimes Quarters $1 bills $5 bills $20 bills TOTAL 100 40 50 80 52 4 5 $ 1. 00 $ 2. 00 $ 5. 00 $ 20. 00 $ 52. 00 $ 20. 00 $100. 00 $200. 00

Establishing a Cash Drawer o Wrappers and Rolls o Marking rolls (cashiers and customers)

Opening a Cash Drawer o o o Verify beginning cash by double counting Check bait money and its location Buy needed change from change fund Arrange your drawer n smaller denominations to the right n bills face up n be consistent Arrange and check other equipment n sign on MANUAL PAGE: 16

Maintaining a Cash Drawer o o o o Always maintain the order and arrangement Restock any depleted inventory Never leave drawer unlocked Always sign off your computer Never share a cash drawer Transfer extra cash to secure location Keep payment documents together Retain daily trash until drawer is balanced MANUAL PAGE: 17

Cash Payments over $10, 000 o Cash payments > $10, 000 Reported to Treasury’s Secret Service o Form # 8300 o n n n Identify of payor Identity of receivor Description of transaction

Over and Short o o o Shortage = unintentional collection error Overage = unintentional collection error Loss = intentional theft or negligence Report immediately Document incident MANUAL PAGE: 18

Closing a Cash Drawer o o o o Document and records per city procedures Balance drawer to receipts Deposit funds to Treasurer Secure remaining cash Report funds received to Treasurer Report funds received to department Double count MANUAL PAGE: 18

Closing a Cash Drawer o If possible, close out of public view o Report overages and shortages immediately o Make a final check of work station

Balancing o o o Add up checks and tally twice Add up credit cards and tally twice Count cash twice Enter in appropriate columns on report Verify beginning cash balance List overages and shortages MANUAL PAGE: 18

Balancing o o o Add currency + coins + checks + CR cards Determine amount from records Compare amounts Daily count sheet Change fund buy

Revenue Sheet/Statement o o o Bank information Matches with deposit slips Breakdown of currency and coins Amount of checks Fund being credited MANUAL PAGE: 20

Revenue Statement Contents o o o Signature of preparer Agency/dept. number Collecting location Breakdown by coin, currency, checks, etc. Total of attached deposit slips Total Amounts

Pesky Errors o o o o Illegibilty Not breaking a strap Round file fall-out Cash stuck in drawer Not verifying tapes Not double counting Not clearing adding machine MANUAL PAGE: 19

Hard to Find Errors o o o Commingled currency Leaving cash drawers open Not finishing a transaction Distractions Adjustments for partial payments MANUAL PAGE: 20

Separation of Duties o Separation of duties helps everyone o A supervisor should n n o verify all drawers prepare deposit slip If you sell inventory at your station n n another individual should reconcile inventory maintain an inventory log

Designing the Work Area o o o o Location Security (doors, cameras, windows, etc. ) Limited Access Vault Access Supervision Personnel Checks Balancing

Armored Car and Night Deposits o Security $$$$ o Float o Non-government money o Costs MANUAL PAGE: 21

Module Four: Security They are in it for the money!

o Preventing o Reacting o Recovering

Preventing a Problem o o o o Lights Action (visibility and activity) Cameras Awareness of cashiers Inconspicuous transport of funds Varied routines Cash policies Inaccessibility MANUAL PAGE: 22

Preventing a Problem o o o Keep a clear counter space Keep unauthorized people out of area Check security devices Maintain only necessary cash balances Use bait money n recorded serial numbers MANUAL PAGE: 23

The Best Protection o Concentrate on the transaction o Separate transactions and customers o Only deal with one customer at a time

Reaction Guidelines o Preservation of life and safety o To Catch a Thief n o (Not stop the crime) Preservation of City Funds MANUAL PAGE: 23

Reaction Steps o o o o Assume there is a weapon Be polite and calm Keep talking No heroics Observe and listen Protect evidence Call for help (911) n after you are safe! o After they are gone MANUAL PAGE: 24

Observing the perpetrator

Recovering from a Robbery o After they leave the building Close the cash drawer Secure the area Call the supervisor Call 911 Speak to no one o Faint o o o MANUAL PAGE: 24

Emergency Procedures o Fire/Bombs/etc. o o Prepare procedures Protect people first Secure the cash o Practice with the Police and Fire o MANUAL PAGE: 24

Summary o o o Write procedures Secure areas with cash Check it twice! Separation of responsibilities Prepare

About your trainer: Linda Patterson, CTP President, Patterson & Associates Linda, who has trained cash handling, collections, and investment courses for the Association of Public Treasurers and Public Treasury Institute for over 20 years, is the President of Patterson & Associates, an investment advisory firm established in Austin, Texas in 1994. 800 -817 -2442 www. patterson. net

o APT US&C n o PTI n APT represents over 1, 000 public treasury and finance officials in local, county and state/provincial governments throughout N. America. The Association provides education, certifications and technical assistance to its membership. Visit www. aptusc. org for information on the 2007 Annual Conference in San Diego, August 11 -15. PTI provides training manuals and coordinates training seminars for public treasury and finance officials. The Institute and APT formed an alliance in 2004 for a wide range of training manuals workshops. Visit www. Public. Treasury. Institute. com for information on booking a seminar in your city, county or region or to purchase the latest treasury manuals on line.