Presented by Internal Audit Department CASH CONTROLS Presented by Internal Audit Department

GUIDELINES REGARDING CASH CONTROLS CAN BE FOUND IN SECTION VI THE PARISH-SCHOOL CONTROL MANUAL “INCOME AND CASH”

STRONG INTERNAL CONTROLS Reduce Risk Minimize Loss

IDENTIFY ALL SOURCES OF CASH $ $ PARISH / SCHOOL $ $

HOW IS IT RECEIVED BY WALK-IN BY MAIL BY DIRECT DEPOSIT (i.e., CREDIT CARD / ACH / EFT) ON-LINE BY WALK-IN

Ensure Proper Separation of Duties No one person has control over all parts of a transaction

KEY CONTROLS FOR HANDLING MONEY NO ONE SHOULD BE ALONE WITH MONEY THE FEWER PEOPLE WHO HANDLE MONEY THE BETTER THE BOOKKEEPER SHOULD NEVER HANDLE MONEY, AS HE OR SHE POSTS THE BOOKS THE PERSON POSTING A SUBLEDGER DATABASE SHOUD NOT HANDLE MONEY

BANK ACCOUNTS

BANK SIGNATORIES For the school, the pastor, parochial vicar & the principal Never the bookkeeper (nor anyone with access to generate checks)

BANK STATEMENTS The pastor / principal should open the monthly bank statement Review it initially for unusual amounts or transactions & sign/date the statement Then it give to the person who is to reconcile the bank statement

BANK RECONCILIATION Is a key internal control to be done timely Someone other than the bookkeeper should reconcile the bank statement timely (could be parish bookkeeper for school) The pastor / principal should review it, and both the preparer and reviewer should sign and date the first page

ELECTRONIC FUNDS TRANSFERS (EFTs) Must be pre-authorized Should be set up so that bookkeeper initiates the transfer & the pastor / principal releases it Should be supported by a confirmation

PETTY CASH

KEY CONTROLS he or she posts the disbursements The bookkeeper cannot be the fund custodian, as he or she posts the disbursements The fund must be kept as an imprest fund (sum of receipts + cash = fund balance) Only the custodian should have access to the fund Should be reconciled periodically (at least quarterly)

TUITION

KEY CONTROLS: TUITION Use a tuition management database All students must be entered in the database Bill families based on gross billable, input discounts and scholarships separately Ensure all tuition and fees payments are posted to tuition management system, regardless of method (i.e., “institution payment” if paid by cash) Post all scholarships, discounts, assistance, etc. to the tuition management system as credits Reconcile the database payments, scholarships, credits, etc. with the deposits to the bank & the postings to the general ledger (g/l) at least monthly

KEY CONTROLS: TUITION Send statements to the parents Strongly encourage payment through direct-deposit (i.e., through FACTS) Minimize cash payments (i.e., encourage money orders or cashier’s checks) Someone other than the bookkeeper should post the tuition management system Present reconciliation to principal and pastor

MONEY COLLECTED IN THE OFFICE

KEY CONTROLS Person opening the mail should be independent of the accounting function When mail is opened, list checks/cash received on a log Issue receipts for all walk-in payments (cash, check or credit card) and record on the same log (keep receipt book with triplicate copies) Restrictively endorse all checks (i.e., stamp)

KEY CONTROLS Daily, dual-count, complete count sheet and secure the money with deposit slip in a tamper-evident bag At least weekly, deposit the money in the bank Large checks should be deposited sooner Reconcile the count with the receipt book, the log, the deposits to the bank and the postings to the general ledger

DISBURSEMENT PROCESS

KEY CONTROLS Set up a disbursement policy whereby vendors require approval, disbursements require approvals prior to purchase & invoices require approval prior to payment Approver should review budget prior to purchase Policy should be given to staff and organizations (i.e., PTO) so no purchases are made without prior approval

PAYROLL PROCESS

KEY CONTROLS Implement system where employees record their own time worked, Paid Time Off, etc. (i.e., in ADP or with signed timesheets if necessary) Supervisors should approve employees’ time entry records Principal should review and approve pre-payroll register and compare with post-payroll register to ensure reasonable & no changes

Internal controls are important. If you have questions, ask. IN CLOSING Internal controls are important. If you have questions, ask.