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.
- After depositing the funds: have an employee other than the person making the deposit reconcile the deposit ticket to the validated deposit slip.
- Reconcile the cash received to register tapes or the cash receipts log at the end of each day or employee shift. Match the daily receipts to those posted in the general ledger; the deposit slip and the bank statement.
- Bank reconciliations should be reviewed and approved by a supervisor independent of preparation. This same individual should verify the “book balance” agrees with the general ledger balance.
- Consider performing unannounced (surprise) audits of cash receipts at remote locations.
- Lead by example: show your employees that your policies and procedures are sound and important by always following them yourself and having that expectation of your employees, with clearly defined consequences for skirting them.
The overall goal of these “cash collection” controls is to minimize fraudulent activity and errors before they can occur. Although these particular suggestions may not be appropriate at every organization, you can evaluate and adapt them to be compatible with your own. You should be able to think of a few other ways to protect yourself even further with the in-depth knowledge you have of your particular organization and situation. In fact, please share your own suggestions with the other readers of Mission Accountable by posting a comment on this article. Remember, it is not through any one of these suggestions, but a combination of maintaining integrity of accounting records and a strong control environment, separating duties, and implementing accountability and oversight, physical protections, and strong policies and procedures that will truly help your organization to be as effective and efficient as possible.Categories: Internal Controls
Tags: Internal Controls, segregation of duties