Types of Cash Accounts
Cash is typically classified on the GL as either cash-on-hand or cash-on-deposit.
Types of cash-on-hand accounts include, but are not limited to:
Additionally, credit unions may hold other cash-like items on-hand, including:
Cash-on-deposit includes balances on deposit in financial institutions and may include deposit in transit items, such as share drafts, debit cards, money orders, on line banking, wires, and ATMs.
ATM Change Fund
An ATM change fund provides cash for a credit union’s ATMs to process member ATM transactions. The amount of funds in a credit union’s ATM fund can vary based on temporary, seasonal, and projected demands.
Credit unions occasionally assign ATMs teller numbers, and include the funds in the teller change fund GL account. If so, each ATM on the system should have an identifying number to allow for an audit trail of cash differences by individual ATM.
ATMs can hold a substantial amount of cash. Some credit unions contract with outside parties such as armored car services to replenish and service their ATMs. Examiners will review credit union agreements with bonded third parties. The supervisory committee, or other independent personnel, must periodically audit and verify ATM cash reserves and ensure bond specifications are met.
Petty Cash
Petty cash funds are small balance cash funds used for reimbursement of incidental, miscellaneous small expenses incurred by employees (for example, office supplies).
Teller Change Fund
Teller change funds (also known as teller cash drawers) are assigned to tellers and are used to process member transactions. Balances may vary based on approved limits and temporary, seasonal, and projected demands.
Vault Change Fund
Credit unions use the vault change fund to replenish teller change funds. The vault change fund generally represents the largest portion of a credit union’s cash inventory. The amount may fluctuate daily depending on anticipated transaction volume, seasonality, and the credit union's cash replenishment schedule.
Transactions occurring through the vault change fund include receipt of cash shipments, transfers of cash to other tellers, and deposits of excess cash to the credit union’s depository institution.
Money Orders and Traveler’s Checks
For a credit union, money orders and traveler’s checks are generally off-balance-sheet consignment items. Typically, the credit union sells the money orders or traveler’s checks on behalf of the owner. Although money orders and traveler's checks typically are off-balance sheet items, credit union staff should conduct, at minimum, monthly reconciliations.
Other Cash-like Items
Some credit unions sell items such as gift cards and prepaid debit cards, which have cash value. These items should be secured, inventoried, and reconciled to records and GL. Some credit unions also sell items such as postage stamps, theater tickets, and amusement park tickets, which have cash value. These items may not be recorded on the GL or reflected on the statement of financial condition until they are sold. This would occur if a vendor asked a credit union to sell tickets on their behalf.
Because these items have cash value, safeguards should be in place to deter theft, especially if they have not been recorded on the statement of financial condition. Some safeguards include placing the instruments in a secure vault, having dual control over access to the vault, and keeping an inventory of the items.
Last updated on December 18, 2020
