Revenues
Types of Revenues
► Taxes and Fees
► Licenses and Permits
► Sales of vital records
► Fines
► Federal Grants
Revenues
How do we receive them?
► Mail
► Walk-in
► Internet
► Fund Transfers
Revenues
Types of Receipts
► Checks
► Cash (hopefully not in mail)
► Credit cards
► EFT’s
Revenues
Cash and checks are the
most vulnerable assets.
Major controls Risk is
Embezzlement
Revenues
Four Stages
1. Receiving
2. Recording
3. Depositing
4. Reconciling
Receiving
Collecting the $$$
Walk-ins
► Checks
Get ID from customer
Accept checks only for exact amount of payment
Note account number or receipt number on check
Restrictively Endorse Checks
Numeric must agree with written amount
No postdated checks, no foreign checks
Record or log Immediately (voids initialed by supervisor)
Receiving
Walk-ins
► Cash
Large amount – 2 people receive
Count in presence of customer
Record or log immediately
Receiving
Mail
► Checks
Restrictively Endorse Checks
Numeric must agree with written amount
No postdated checks, no foreign checks
Record or log Immediately (voids initialed by supervisor)
Receiving
Electronic Payments
NRS 353.1467
► Payments of $10,000 or more by electronic
transfer of money.
Receiving
Customer receipt
► Multi-part, pre-numbered
► Written in ink or computer generated
► Note form of payment (Cash, Check, Money Order)
► Note purpose of payment
A/R – list account #
Sales – item sold
Permit or license – number on permit or license
► Changes or voids should be approved by supervisor
Receiving
Beware of Voids
Maricopa County employee allegedly embezzles $90K
► Cashier took money from customers paying their water bill
► Credited the customer’s account and printed a receipt for the customer
► Subsequently voided the transaction and pocketed the money
► No effect on customers since their accounts were credited
► An audit found missing receipts totaling $9,000 in one month
► Police found lax security measures in the computer system
Staff could log on under another employee’s cashier number and delete
receipts
Receiving
Void Safeguards
► Computerized Receipts
Require supervisor password to void
Require two employees to enter passwords
► Manual Receipts
Use multi-part pre-numbered receipts
Require supervisor or second employee to sign
Follow-up on any missing receipts
Receiving
Cash Drawer
► Keep locked or monitored
► Lock during breaks
► If possible, do not share with other employees
► Do not commingle with personal funds
► No cashing of personal checks or IOU’s
► Do not use personal funds to reimburse shortages
► Do not keep overages to apply against future shortages
Receiving
Keys to cash drawer
► Keys should be signed out to employee
► Employee is responsible for keys
► Keys should be returned upon termination
► Rekey the lock if keys are lost
Receiving
Balancing cash drawer
► Cash and checks should be counted
► Documented on a count sheet
► Count should be verified by 2nd person
Receiving
Balancing cash drawer
► Total in drawer should be reconciled to:
Items sold – change in inventory
Copies of certificates –
► Number copies made or change in sequential numbering on copy
paper
► Number of copies issued to cashier (if copies made by someone else)
Copies logged as given to cashier
Receiving
Balancing cash drawer (cont’d)
► Cash and checks reconciled to
Licenses or permits issued
► Number printed per computer report (if computerized)
► Number forms used if done manually
► Change in sequential numbering
Accounts Receivable Payments
► Total payments posted to account ledger
Receiving
Secure inventory
► Limit access to items being sold or issued
► Reconcile physical inventory to running inventory total
Beginning inventory less sold or issued = running inventory total
► Pre-numbered forms – track beginning and ending numbers for each
shift and reconcile to issued
► Cashiers should not have free access to items being sold,
unless items are routinely inventoried by someone else
Recording
Recording
► Post to ledgers (A/R, Sales, Fees, etc.)
• Segregate from receiving the $$$
Segregate from depositing the $$$
► If you have access to money
You should not be able to post payments, sales, fees, etc. (Password
controlled)
You should not be able to change balances or entries in the computer or
ledger (Password controlled)
Depositing
Safeguarding funds until deposited
• Lock in safe or cabinet
• Never leave funds unattended
• Restrict access to as few employees as possible
Depositing
Keys to safe or cabinet
• Sign out to employee
• Collect upon termination
• Change combination periodically or after employees leave
• Rekey lock if keys lost
Depositing
Preparing Deposit
► Segregate from receiving and recording
► Prepare in secure area
Locked doors when preparing deposit
Lock up during breaks
► Have 2nd person verify deposit (sign for it)
► Copy of deposit slip to appropriate employee
► Enter on deposit log
Depositing
Preparing Deposit
► NRS 353.250
Every Thursday
$10K or more – end of next working day
Depositing
Transporting
► Armored car
Driver signs for deposit
► Employee
Use 2 employees for large deposits
Reconciling
Reconciliations
(Segregate from receiving and depositing)
► Daily
Funds received to
permits or licenses issued
► Sales,
► Accounts receivable payments posted to ledger
Would have caught Maricopa County cashier
► Each deposit
Deposit slip to funds received
► Checklog
► Computer report
► Summary for all cashiers
Reconciling
Reconciliations
► By deposit or at least monthly
Deposit slip to BSR (CR)
permits or licenses issued
► Sales,
► Accounts receivable payments
► At least Monthly
Review delinquency reports
Physical Inventory
Embezzlement Red Flags
► There is an unusual drop in your
revenues.
► There are unexplained changes
in your accounting records.
(deletions, voids, etc.)
► An employee works late, on the
weekends and refuses to take
vacations. (Especially a state
employee)
► An employee's standard of living
changes to a degree that is
inexplicable based on her salary.
► Receipts are missing.
Embezzlement Red Flags
► Bank deposits delayed. (until
employee replaces money)
► Customers are complaining about
having already paid a bill.
► There are too many increases in
past due accounts receivable.
► Check amounts are altered.
► Bank reconciliations are late.
► The petty cash fund is
disappearing.