1. Presented by Internal Audit Department
CASH CONTROLS
Presented by
Internal Audit Department

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

3. STRONG INTERNAL CONTROLS
Reduce Risk
Minimize Loss

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

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

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

7. 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

8. BANK ACCOUNTS

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

10. 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

11. 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

12. 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

13. PETTY CASH

14. 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)

15. TUITION

16. 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

17. 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

18. MONEY COLLECTED IN THE OFFICE

19. 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)

20. 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

21. DISBURSEMENT PROCESS

22. 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

23. PAYROLL PROCESS

24. 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

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