Stay on Target With Regular Facility Auditing

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Look for a manual-payment receipt book. Maybe the manager is doing some off-the-book transactions with cash customers. If these steps do not answer the question as to why there is a discrepancy, then ask the manager. He is responsible for accurate bookkeeping and should be able to provide answers. Be careful not to accuse, but pay close attention to body language and mannerisms. It may be that he is not checking units frequently enough, embezzling funds, or just completely incompetent, all of which are a problem. You need to perform these types of audits to ensure you are maximizing your revenue.

Daily Deposits and Petty Cash

Any time you are dealing with cash, your business is susceptible to theft. To reduce that vulnerability, you must monitor your money. Your basic practice should include your manager making a bank deposit every day and obtaining a validated deposit slip. If your office is in a different location from the facility, then have the deposit slip faxed or scanned in daily. Then, double check that amount against the number input into the accounting software.

Implementing this practice into your organization reduces the chances of having an employee "borrow" from the deposits until the next payday. Employees who do go this route sometimes begin taking more than they can pay back. Thus, a fraudulent cycle begins.

Petty cash is another area of exposure. Typically petty cash is used at the site level to purchase various items such as postage, maintenance or office supplies. You should have a clear, written policy of what employees are and are not authorized to purchase with petty cash. Further, I highly recommend you disallow this fund to be used to pay contractors or temporary labor. This opens the door for fraudulent or unnecessary work.

Petty cash should be balanced at the site daily and tracked using a standard receipt tape that is initialed and dated. This practice will allow the manager and the auditor to determine exactly when the petty cash became unbalanced.

You should require all original receipts to be stored in the petty-cash drawer until they are submitted for reimbursement. By not auditing petty cash, you create the same "borrowing" issue that can arise with cash deposits.

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