Is your cash receipts supervisor stealing? I once worked on a case where this person took over $300,000.
Cash Receipts Supervisor
Many businesses funnel cash receipts to a supervisor who counts the money from each cash drawer and compares the funds to the daily receipts. The purpose of this step is to ensure no front-desk clerks are stealing.
The cash collections supervisor has usually worked a cash drawer in the past. So she knows all about how the receipts enter the system and how they are deposited.
Typical Deposit Cycle
The collections process often works as follows:
- Money is collected at the front cash-collection desks and placed in the cash drawers that are assigned to each individual clerk; receipts are written for each payment
- These clerks tally their collections at the end of each day and reconcile the monies in their cash drawers to the receipts written
- The daily reconciliation for each cash drawer goes to the cash receipts supervisor who recounts the funds received and reconciles collections to the receipts written (performing the same reconciliation as the front desk clerks)
- The cash receipts supervisor creates a deposit slip for all funds collected (if there are seven cash drawers, then the deposit slip represents the total collections for all seven cash drawers)
- The cash receipts supervisor gives the checks and cash and deposit slip to a courier to take to the bank
- The courier receives a bank deposit receipt from the bank
- The courier provides the bank deposit receipt to the cash receipts supervisor (so she can compare the bank deposit receipt with the copy of the deposit slip–to ensure the courier did not steal any funds in transit)
The Cash Receipts Supervisor Steals
So how can the cash receipts supervisor steal funds in the above scenario?
In the case I worked on, the supervisor also reconciled the bank statement. After step 3., but before step 4., she would steal the cash and then lessen the deposit slip accordingly. So, if she took $2,200, the deposit slip would reflect the total daily collections less $2,200.
You’re thinking, “But then the bank account would not reconcile since the computers have recognized the front-desk collections?” You are correct—unless someone monkeys with the bank reconciliation. And that’s exactly what she did. The supervisor adjusted the reconciling items–on the bank reconciliation–to cover up the funds stolen. The scheme worked until the annual audit.
When the auditors tested the outstanding items on the bank reconciliation, they could not tie substantial amounts to the subsequent bank statement. Generally, outstanding reconciling items clear the subsequent month’s bank statement—but large amounts on the year-end bank reconciliation could not be accounted for (because they were fictitious).
When confronted, the clerk confessed to her theft and method.
The weakness was the cash receipts supervisor who had custody of assets (cash) also performed the reconciliation of the related bank account.
Someone not involved in the collection process should reconcile the bank statement.
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