Does your organization struggle in determining “what” policies would mitigate loss when cash collections are decentralized? This post is a continuation of my previous post on internal controls at remote locations. If you just can’t get enough piece of mind (and who doesn’t love that), you might find these other “processes” useful.  And now, the continued list of suggestions:

• Determine staffing during collection times. For receipts over a certain dollar amount, always have at least two employees present (counting/depositing) to help lower this heightened risk factor.
• If receipts are provided to the donor or client: consider using a triplicate form. One copy to the donor/client, one that is included in the deposit report sent to the accounting office , and one to be retained in numerical sequence for accountability over the forms used.
• Maintain a cash receipts log when using numbered receipt forms. The log should include receipt number, date received, name of payor, amount of payment, form of receipt (cash, check, money order, etc.), check number and date (if applicable), and purpose of payment (if known or applicable).
• Posting signs at collection areas informing payors that they should get a receipt showing their transaction.
• When transporting cash receipts from the remote location back to the central office or bank, utilize a courier service if possible or appropriate. Minimally, keep receipts in a locked security bag with a trustworthy employee not involved in the recording or reconciliation process transporting the bag. If there is a large amount of receipts being transported, have two employees be involved for additional safety. Read the rest of this entry »

According to Nanette Downing, the IRS has announced that “another major initiative during the remainder of fiscal year 2010 will be examining charitable organizations’ sources and uses of funds.” On the source side, the IRS is interested in high levels of fundraising income and high levels of unrelated business income. For the use or expendiures side, focus will continue on private inurement and private benefit issues. 

Is your organization vulnerable for this scrutiny? Remember the key terms for establishing tax-exemption…organized and operated. Form 990 is the tool for reporting information annually to the IRS, substantiating the organization’s exempt purpose. Sources and uses…this will be interesting as the IRS moves forward in looking for additional revenue streams.

Is your organization vulnerable to this type of inquiry?  Call me. We can perform assessments to determine the organization’s risk.

For more information on this initiative, see this blog post by Land Trust Alliance.

If your organization utilizes remote locations collecting cash receipts, such as community centers or branches, you probably already know that this is an easy area for things to go wrong. You have likely considered designing and implementing, or have already implemented controls over your cash receipt procedures. These controls can include things such as developing written policies and procedures, implementing adequate separation of duties, ensuring timely deposits, and establishing reconciliation procedures that include accountability and management review. 

One of the most important controls you can implement Read the rest of this entry »