LOUISIANA GFOA 31 ST ANNUAL FALL CONFERENCE. Currency Coin Checks Debit Cards Credit Cards.
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Cash Controls The Best Defense is a
Good Offense
LOUISIANA GFOA
31ST ANNUAL FALL CONFERENCE
Currency
Coin
Checks
Debit Cards
Credit Cards
What is it? Cash is…
Handling and Safeguarding of Cash Accepting Payments Petty Cash Reconciliation Preparing and Posting Deposits to
General Ledger Segregation of Duties Chain of Custody Overages and Shortages
Best Practices for Cash Control
All cash, checks, and payment cards should be kept in a locked/combination vault
or safe, or, in a locked drawer or file cabinet.
Handling and Safeguarding Cash
Access to areas with cash should be limited to specific designated individuals.
Only one designated individual should have complete control and responsibility for a cash drawer.
Cash should, ideally, be deposited within 24 hours of receipt.
Handling and Safeguarding Cashcontinued
Payments can be received in-person, by phone, or by mail.
Payments should be immediately input into an electronic device (cash register, computer) or tracked manually with pre-numbered receipts to ensure that all payments are captured.
Accepting Payments
A receipt should always be given when in-person payments are made.
All mailed check payments should be logged daily.
Checks should be restrictively endorsed immediately.
Employee recording the original transaction should never be allowed to void, adjust, or write-off a customer transaction or balance.
Accepting Paymentscontinued
Departments needing to provide change or reimbursement should request a petty cash fund from General Accounting.
Petty Cash should be counted daily and logged.
When cash becomes depleted, a replenishment check should be requested by the petty cash custodian to Accounts Payable.
No I.O.U.s should be allowed and no co-mingling of personal and organizational cash.
Petty Cash
Before balancing, if applicable, the initial start up change fund should be counted and separated from the cash receipts.
The Cashier should balance their remaining money to their daily receipts, per the total on their electronic devices or the added total of the pre-numbered receipts.
Daily Cash Balancing
Checks should be totaled with a calculator tape attached.
The Cashier should verify all checks have been restrictively endorsed.
Daily receipts and money should be reconciled by a second individual.
Daily Cash Balancingcontinued
Another employee, not the Cashier, should prepare the bank deposit.
Keep copies of checks.
The bank deposit should be verified by a second individual.
Bank deposits should be made daily.
Preparing and Posting Deposits to General Ledger
Deposits are posted to General Ledger by the Accounting Department.
Accounting Department should match a copy of the deposit slip with bank deposit receipts after deposit has been made.
Bank account should be reconciled timely by the Accounting Department.
Preparing and Posting Deposits to General Ledgercontinued
Separates the following responsibilities in a business process: Custody of Assets Record Keeping Authorization Reconciliation
Provides for checks and balances
Most effective control in combating employee fraud
Segregation of Duties
Dual controls should be established to ensure that two employees count the cash, together, and sign deposit logs/deposit slips evidencing agreement in amount.
When cash changes hands, both employees (the individual delivering and the individual receiving) count the cash, together, and sign deposit documentation evidencing agreement in amount.
Chain of Custody
When an overage or shortage is identified, the deposit should be recounted and the overage/shortage should be documented immediately.
An accounting entry should be made to document the difference in the General Ledger.
Overages/shortages should be monitored and, if appropriate, addressed.
Overages and Shortages
Without proper controls, WE RISKLoss of CashTheft of CashBank Statements do not agree with
Accounting RecordsLimited Audit TrailAccusations
Prevention and Detection of Fraud
SOURCE:Columbia University Uhttp://finance.columbia.edu/content/what-fraud, September 24, 2012
Reporting Suspected Fraud
Internal ControlsProtect YouProtect the Organization
Principles of Good Cash Management Include
AuthorizationsReconciliationsVerificationsReconciliationsReviews of Operating PerformanceSecurity of AssetsSegregation of Duties
Summary
Please feel free to contact me if you have any questions.
Karen B. Young, CPA, CIA, CFEInternal Auditor
La. Department of Natural ResourcesEmail: Karen.Young2@la.gov
Phone: 225-342-2583
Thank You
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