Reducing Embezzlement Opportunities
Embezzlement and related incidents are frequent problems for YMCAs. While possibly en¬couraged by a down-turning economy, the occurrence of such acts is usually the result of inadequate or poorly designed controls. Several methods and procedures can be implemented to safeguard your assets and to minimize the opportunity and temptation of theft. Some simple controls include:
- Maintain a daily list of all receipts (identify them as cash, check, credit/debit card, etc.).
- Endorse checks and money orders immediately upon receipt.
- Store monies (cash, checks, and credit/debit card receipts) securely until deposited.
- Assign the tasks of opening the mail and making the deposits to different individuals.
- Deposit monies as soon as possible but avoid setting predictive behavioral patterns Disbursements (accounts payable, payroll, and refunds).
- Assign the tasks of authorizing payment and making payment to different individuals.
- Pay by check always, including refunds; require explanation of any gaps in numerical sequence.
- Mark invoices “PAID” when checks are issued to prevent duplicate or fraudulent payments.
- Store checks and signature stamps (if used) in a secure location.
- Require every check to have at least one original signature; use dual signatures for large amounts Petty Cash.
- Establish a set amount for the petty cash fund (if used); do not allow it to be excessive.
- Require receipts, keeping them with the cash until the fund is balanced and the cash is restored.
- Monitor frequently and balance as needed, using someone without disbursal access to the fund Inventory.
- Store goods so that they are safeguarded from loss, shrinkage, pilferage, or theft.
- Inventory significant floating assets and replaceable stock at least annually.
- Reconcile inventory with use and replacement records at least annually.
- Before hiring or moving anyone to a fiscal or financial position, get written consent, then run
- a criminal background check
- a credit report…your use of this information is limited; see http://www.eeoc.gov/facts/qanda.html
- Assign bank statement reconciliation to someone who does not handle cash or make deposits.
- Keep supporting documents for all transactions (including petty cash) for seven years.
- Employ the services of an outside auditor on an annual basis.
Please call us at 800-463-8546 to discuss this or any other risk management safety tip, or visit our web site at www.redwoodsgroup.com to learn more about YMCA risk management issues.