Confirming Cash Receipts

Whether you or your clients receive payments from customers via cash or check there are several good controls to keep in mind to ensure all of your money makes it to the bank! Too often we hear "We only go to the bank once a week because we only collect payments in the form of checks." Or another favorite, "Our employees are so trustworthy, we don't create receipts every time cash or checks are received." Yikes!

Take it from us, fraudsters are always the most trusted employee. We want to make sure your employees are safe in their jobs and that your money is safe, too! Here are some tips:

• All cash or checks received should be receipted via numerically sequential receipts (even if a customer declines receipt)
• Endorse checks with bank stamp the moment received
• All cash and checks should be maintained in locked drawer or safe at all times throughout the day
• All funds should be deposited daily (even if "only" checks)
• For a non profit or other organization that receives unexpected funds, ensure there is dual custody over the opening of mail or during fundraising events
• Consider installing surveillance cameras at the front desk and/or other areas where cash is received or processed
• Segregate duties around cash receipt functions. Make sure the person opening the mail/receiving customer payments is NOT the same person who has the ability to record credits on customer accounts or take funds to the bank
• For a non profit or church organization, make sure cash counting volunteers are rotated and that members of count teams are not related

In addition to ongoing controls appropriate to your organization, there are several ways to ensure proper oversight over cash receipts.

• At the end of the day, week or month, ensure the entirety of sequential receipts are accounted for and that all funds received per the receipts can be traced to bank deposits
• Review bank statements to ensure deposits per the bank match deposit amounts (and dates) per the accounting records
• Review customer records to ensure no unauthorized credits or write offs were recorded (which would indicate money was received but diverted)
• Perform analytical review to determine whether cash receipts are "in line" with past performance
• Cash business? Take a look at your bank deposit slip book and ensure that you see amounts for currency and coin at the top of each deposit slip

Do you see discrepancies in your processes and procedures or need help with internal controls? Call Acuity Forensics! (360) 573-5158

Another One Bites the Dust

Sandra Page.....

http://www.yakima-herald.com/stories/2010/6/5/theft-lands-school-bookkeeper-in-prison

Yes. This was one of my cases. One of the more unfortunate ones. A non-profit. A tight-knit community. Money pegged for children.

What is it about taking other people's money? I wonder, now that she sits behind bars, was the thrill of the theft worth the trade-off of telling her child that she wouldn't be home for the next three birthdays...the next three Christmases? Was the money that she frittered away worth the wasted years of her life in prison?

Do you (or your clients) believe fraud can't happen to you?

Think again.

And consider the following:

1. Everyone loved her.
So much so, that when I attempted to interview co-workers and friends, I was vilified ("You are on a witch hunt!" "How dare you?!" "She would NEVER do what you claim she's doing").

2. There wasn't enough money to steal.
Not true! I was able to prove a $240,000 loss. So much money was being stolen, there wasn't enough money to pay the bills on time. But, blaming losses and weak operating results on a bad economy provided the perfect excuse.

3. A CPA Firm was overseeing their monthly financial reports..
Just because you (or your client) have a CPA firm providing tax or financial statement services (think Compilations, Reviews, and AUDITS); their procedures are most likely NOT going to uncover any fraud.

4. Internal Controls Work.
It is a common misconception that a small organization is unable to mitigate fraud risk because of the lack of staff available to provide accounting services. SIMPLY UNTRUE. Unfortunately, however, this misconception often allows fraudsters to perpetrate their crimes for long periods of time. In this case, when controls were placed over cash disbursements (for reasons other than the theft that was later discovered), that particular scheme stopped.

Bottom line: Every single fraud I've investigated involved the one person owners and/or management loved the most. And every single one could have been caught earlier with simple, but effective, controls or monitoring over that person's activities.

If you own, manage, or advise a business then make it your mission to arm yourself with knowledge and pass that knowledge on.

Knowledge is Power.