13-2: Recording cash receipts transactions in FINET

Effective: April 1, 2002
Revised: October 31, 2023
Approved by: Van Christensen
References:Utah Code 51-4-1

Purpose

This policy outlines how to record cash receipts transactions in the state financial system, FINET.

Definitions

Cash receipt – Cash, checks, currency, credit card payments, electronic funds transfer (ACH or wire transfer), or any type of electronic payments received by an agency.

CR transaction – The name of the transaction type used in FINET to record cash receipts.

Depository bank account – A bank account approved, opened, and tracked by the Office of State Treasurer where agencies deposit money that is transferred to the main bank account of the state treasurer.

Policy

A – Record cash receipts in FINET as CR transactions

1 – Cash receipt transactions must be recorded in FINET either manually or electronically interfaced using a cash receipts (CR) transaction.

2 – Other FINET transaction types for recording cash receipts require prior approval by the GovOps Division of Finance.

3 – CR transactions are recorded in balance sheet account 0010 (Cash)

3a – Agencies must use a FINET bank code that represents their specific depository bank account.

3b – If an agency needs to record CR transactions into any cash account other than balance sheet account 0010, contact the GovOps Division of Finance for assistance.

B – The CR transaction posting offset must be one of the following:

1 – Revenue: Cash receipts received from taxes, user fees, fines and forfeitures, sales of goods and services, donations, and grants.

2 – Deferred revenue: Cash receipts applicable to a future fiscal year received before goods or services have been provided, before there is an enforceable legal claim, or before all eligibility requirements are met.

2a – The following are examples of deferred revenue:

Cash received in the current fiscal year for a camping reservation that will be used in a future fiscal year.
An agency receives cash that is not available to cover current year expenditures.
Grants or donations received before time requirements are met but after all other eligibility requirements have been met.

3 – Refunds of expenditures: Cash receipts received representing the recovery of an expenditure.

3a – Refunds of expenditures are an exception and not a regular business operation. They should not be used if an agency is collecting cash receipts for services provided to others.

3b – Federal grants that reimburse for services are not refunds of expenditures unless specifically required under the terms of a federal grant.

3c – Examples of refunds of expenditures are:

Refunds for merchandise purchased and returned to the vendor.
Refunds of erroneous payments made by the state, such as a duplicate payment or overpayment to an outside party.
Recoupment of an expenditure made by the state wherein the state acted only as a collecting or disbursing agency for a third party.
Collection by the state from a third party for an expenditure that should have originally been made by the third party. Example: An insurance company reimbursing the state for medical expenses paid by the state on behalf of a policy holder.
Cash receipts received for refunds of expenditures after the close of the fiscal year in which the expenditure was made. This type of transaction must be recorded as free revenue to the appropriate fund in the current fiscal year unless received for federal funds. Agencies should contact the GovOps Division of Finance for assistance.

4 – Collections against receivables: Cash receipts received by the state for outstanding amounts owed to the state. The accounts receivable transaction (RE) must be referenced when processing the CR transaction.

5 – Overpayments: Cash receipts received by the state in excess of the amount owed to the state.

5a – If the overpayment should be refunded to the party who paid the money, then the overpayment should be recorded as a liability until refunded.

5b – If the overpayment will be earned in the next fiscal year end, the overpayment should be recorded as deferred revenue.

C – Contact us for more information

1 – If an agency needs clarification on the proper classification of cash receipts received or if any of this policy conflicts with federal grant requirements, contact the GovOps Division of Finance at financesupport@utah.gov.