Question

You have been asked by the board of the local hockey club to review its accounting procedures. You have made the following observations in regards to cash collected for annual dues and for weekly entrance ticket sales.

The club's board has given financial management and audit of the financial records responsibility to the finance committee.

This team prepares the budget and approves all major cash disbursements.

No audit has been considered necessary in recent years because the same trusted employee has kept club records and served as treasurer for 15 years.

A volunteer takes the ticket sales at the weekly games. The volunteer team lead gathers the funds and counts them in the club office after each game day. She then places the funds collected and a notation of the amount in the club safe. The next morning, the treasurer opens the safe and recounts the collection. He withholds about $100 to meet cash expenditures during the coming week and deposits the remainder intact.

To facilitate the deposit, attendees who pay by check are asked to enter "Cash" on the payee line. Members are asked to pay their annual dues to the treasurer directly or to a volunteer when they pay for their weekly ticket sales. If they pay by check, they are also asked to enter "Cash" on the payee line.

The volunteer at the gate is asked to attach a note to payments that are for dues instead of gate tickets.

Some members have inquired about having annual dues automatically withdrawn from their bank account or charged to their credit card, but the club has not established procedures that would allow payments other than by cash or check.

Identify at least three deficiencies and recommend improvements in procedures for cash received at weekly games and record keeping for members' annual dues.

Answer 1

Solution:

The accompanying lacks are noted and enhancements are proposed:

1) Audit of Accounts :

Shortcoming :  

It is seen that the obligation regarding money related administration and review of budgetary records have been given to the back advisory group.

Prescribed Improvements :

There ought to be a free Internal Audit board of trustees or Internal Auditor in charge of review of fiscal summaries and detailing specifically to the administration. It is important to have an autonomous mind budget summaries regardless of whether the equivalent believed worker have been keeping records throughout the previous 15 years.

Appropriate interior control and inner check frameworks are basic for smooth and effective running of money related exchanges of an association.

2) Payments made with a money order :

Shortcoming :

Installments made with a money order ought not have Cash entered on the payee line.

Prescribed Improvements :

The installments made with a money order ought to have the name of the club composed on the payee line. On the back of the check, the name of the part, enrollment number and the reason for installment ought to be referenced.

The check ought to be a crossed record payee check. Checks gathered ought to be saved in the bank speedily.

3) Record Keeping :

Shortcoming :

It is seen that the record keeping for ticket stock and ticket deals isn't sufficient and there should be more interior control executed here.

Prescribed Improvements :

I) An appropriate stock for tickets must be kept up that incorporates the quantity of tickets that were at first issued, the quantity of tickets given to the volunteer, number of tickets sold and the parity staying at last.

ii) A legitimate record of ticket deals and accumulations made must be kept up that guarantees that there is sufficient control executed in the money gathering.

4) Deposit of ticket accumulations

Shortcoming :

The strategy of keeping the cash in a locker ought to be evaded.

Prescribed Improvements :

The whole money accumulation should be first checked with the record maintained in control to guarantee that add up to accumulations close by is appropriately reported and this ought to be finished by a man other than the money authority. The sum should then be kept in a bank and any withdrawal and distributions ought to be made from that point.

A cashbook ought to be kept up for any withdrawals produced using the bank demonstrating the money parity and distributions whenever.