Do you have the proper controls implemented with your cash handling process at your institution?

Cash collection is the highest risk area of internal controls at any institution, especially a facility that has concession sales. Cash has no natural trail and is susceptible to many forms of fraud and theft. In general cash handling can be segregated into three stages:

  • Receiving
  • Depositing
  • Reconciling
Receiving

The receipt of cash at a concession stand is arguably the most sensitive stage of cash handling. Employees are often the largest perpetrator of inconsistencies and cash receipts can be misappropriated in the process. Many controls can be implemented to mitigate the risk at this stage such as cash limits, separate cash registers, unique log-ins for registers, video cameras, and supervisors actively watching the employees take in the cash receipts.

Depositing

Once cash has been collected, moving that cash from the collection site to depositing it in the bank becomes crucial. Ideally, this would be a different individual than those charged with cash collections. Controls to mitigate risk during depositing can be daily register summaries, third party deposit agencies, and segregation of duties between preparation and recording deposits. In addition, pay special attention to any employees that are consistently under on the cash count. If there is a trend, then there is a good chance that there is employee theft.

Reconciling

The final stage to ensure collection was made and properly recorded is reconciliation. If proper controls have been implemented, errors and issues related to cash handling are expected to be caught at this stage. Controls such as daily reconciliations of cash register summaries to bank deposit summaries can be used to ensure controls in prior stages have been performed as designed.

If you are experiencing issues relating to cash collections or suspect controls could be stronger, an independent review of your internal controls can be beneficial. This service can be pivotal in identifying and mitigating risks relating to internal controls.

If you would like help determining if your facility could benefit from an evaluation of controls, please contact Adam Odom at [email protected]om or call 714.672.0022.