Forensics Journal - Stevenson University 2013 | Page 39

STEVENSON UNIVERSITY

avoid issues with bad checks. The preferred technique is the utilization of an after-hours bank drop box. If the local bank does not have
an after-hours drop box, the religious organization should make the
deposits early on the next business day.

CASH RECEIPTS
There are six schemes for cash receipt frauds: skimming, lapping,
write-off of accounts receivable, unauthorized credits, unrecorded
sales, and theft of donated merchandise. The most common of these
schemes is skimming, therefore, internal controls for cash receipts in
religious organization should be focused on those areas vulnerable to
skimming.

• Segregate the authorization, recording, and reconciliation elements
of the cash receipt process

• Use offering envelopes for donations.

As stated earlier, separation of duties is the keystone of the organization’s internal-control structure. It is essential to appoint two or more
unrelated parties to perform the entire cash receipt function. During
the collection process, two source documents are created: a deposit
slip in three parts and a collection report in four parts. These documents are fundamental to the verification of received funds and the
reconciliation process. Optimally, after the deposit, the collection
committee should have three copies of the collection report and two
remaining copies of the deposit slip. The committee should send a
copy of each document to the (A) Treasurer and a copy to the (B)
Board.

Donation envelopes serve two purposes: 1) create a source record
of the donations, and 2) protect the cash until a bank deposit slip is
completed. The envelopes should be kept as source documentation.

A. The Treasurer should enter the cash receipts into the accounting
records. A sub-ledger for individual member’s contributions is to be
recorded for tax purposes.

• Control collections

B. The Board should receive a set of copies for reconciliation purposes. The Board will cross-reference these documents to the
accounting records and the bank statements. A Board member will
reconcile the