Which of the following is a necessary control procedure for cash disbursements?
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First, it is imperative that you and your management team take the process of disbursing money, and in this case the vendor set up, extremely seriously. The tone at the top is about integrity and ethical behavior. Policies should be followed, and monitoring and review should be done openly. When I say openly, I mean the people who are authorized to do the work see that there is someone reviewing and checking their work. Show Second, risk assessment. What are the risk regarding a new vendor? For one, the vendor may not be real. I remember a nursing home that purchased 100 new beds. However, no one could ever find those beds. It turned out the AP clerk created a company, sent an invoice, and paid the invoice. Are there vendors with similar names? There have been plenty of instances where the AP clerk creates companies with similar names to get invoices approved and paid. So we know that the vendor data can create risk. This leads to our next assessment, control activity. What policies and procedures could you set up to prevent errors or fraud? You could require W-9 forms from vendors, create a vendor request form to be completed and signed by someone outside of the accounts payable department and reviewed and approved by management, review vendor listings for duplicate vendors, or vendors with similar addresses, and making sure any changes to vendor data are authorized and memorialized. Through all these processes, open communication is essential. Sales, purchasing and other departments should be discussing new vendors, cancelled vendors, and updates to vendor data in meetings and/or with the management team. And finally monitoring. When we know someone is watching, the chances of doing something fraudulently is reduced. Generating reports to review for duplication of vendors, similarities of vendor names, and duplicate or similar vendor addresses is a good step. Reviewing weekly change reports on vendor data is also important. Verifying vendor request forms are set up properly and authorized is another way to monitor. All unusual items discovered in your monitoring of the vendor data should be investigated which will demonstrate to the accounts payable department that you and your management team are watching. Strong internal controls are necessary to prevent mishandling of funds and safeguard assets. They protect both the University and the employees handling the cash. Safeguarding Cash Link
Recording Cash Receipts Link
Reconciliation Link
Segregation of Duties LinkNo one person should be allowed to collect, handle or transport and deposit checks/currency without some additional control feature to ensure that all funds are accounted for. Examples of such controls are as follows:
Gifts/Personal Checks Link
Related SU policy: Gift Acceptance Policy Fees and other Revenues LinkUse an accounts receivable account to process billing and collection for routine revenue activities. If you are unsure if a cash receipt should be recorded as revenue or an offset to an expense, contact General Accounting in the Comptroller’s Office for assistance. Internal controls surrounding this type of activity include: What are the control of cash disbursement?Controlled disbursement is used to regulate the flow of checks through the banking system on a daily basis, usually by mandating once-daily distributions of checks (typically early in the day). This is done in order to meet certain investment or fund management objectives.
What are the three most important controls over cash disbursements?5 Important Internal Controls for Cash Disbursements. Segregate duties. The foundation of a good internal control system is segregation of duties. ... . Review authorized signors. ... . Consider requiring dual signatures. ... . Remember the wire transfers. ... . Reconcile bank accounts in a timely manner.. What are the cash disbursement procedure explain each?A cash disbursement is the outflow of cash paid in exchange for the provision of goods or services. A cash disbursement can also be made to refund a customer, which is recorded as a reduction of sales. Yet another type of cash disbursement is a dividend payment, which is recorded as a reduction in corporate equity.
What are the 4 internal control measures for cash?There are four internal control measures for cash. They are employee background checks, use of written protocols, separation of duties, and securing assets and cash in safe locations.
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