Question

what procedures can help protect cash disbursements? (Min 150-200 words)

Answer 1

• Disburse cash/cash equivalents only for valid business purposes upon proper authorization.
• Adhere to the minimum requirements and general procedures for case disbursements.
• Discourage the use of cash floats at completion of administration set-up.
• Use petty cash only for incidental payments.
• Payments for lodging and other travel expenses must be supported by receipts
• Make all disbursements by check or from petty cash. Obtain proper approval for all disbursements and create a permanent record of each disbursement.
• Require all checks to be serially numbered and limit access to checks to employees authorized to write checks.
• Require two signatures on each check over a material amount so that one person cannot withdraw funds from the bank account.
• Arrange duties so that the employee who authorizes payment of a bill does not sign checks. Otherwise, the checks could be written to friends in payment of fictitious invoices.
• Inquire approved documents to support all checks issued.
• Instruct the employee authorizing cash disbursements to make certain that payment is for a legitimate purpose is made out for the exact amount and to the proper party.
• Stamp the supporting documents paid when liabilities are paid and indicate the date and number of the check issued. These procedures lessen the chance of paying the same debt more than once.
• Arrange duties so that those employees who sign checks neither have access to canceled checks nor prepare the bank reconciliation. This policy makes it more difficult for an employee to conceal a theft.
• Have an employee who has no other cash duties prepare the bank reconciliation each month, so that errors and shortages can be discovered quickly.
• Void all checks incorrectly prepared. Mark these checks void and retain them to prevent unauthorized use.