Transcript Document
Practical Aspects of Cash Management (Real life problems) Presented by Mr Cheng Soon Keong, Director 16 Sep 2008 Agenda The Perennial Resource / People Issue Risks in Cash / Cheque Handling Common Cash Management Tools The Perennial Resource / People Issue $1.21 million Sean Lee went missing in October 2005 The Perennial Resource / People Issue Roles and Responsibilities of Treasurer Roles & Responsibilities of Treasurer Is a member of the Board Oversees finances of the organization Responsible for annual budget “Key person” for formulating financial policies and procedures Held responsible with personal liabilities? The Perennial Resource / People Issue Finding the Right Person Sources Board members Support groups like NVPC Interest groups Challenges Time / attention Honorarium? Risks in Cash / Cheque Handling Problems with cheques Forgery Room for “add-ons” “Cash Cheques” Who checked the supporting documents? “ASSUME” Hunting down the signatories? “Boss say pay” Risks in Cash / Cheque Handling Problems with cheques: Space in front Cash Cash Twenty Two Thousand Only 2 2,000.00 Risks in Cash / Cheque Handling Problems with cheques: Forged signature ABC Pte Ltd Two Thousand Only 2,000.00 Other Common Possible “Leakages” Leakages in Revenue / Receipts Forgot to bill Forgot to collect Fundraising cost Leakages through Liabilities Commitment Unauthorised commitment Standard Payment Controls Cannot “Interested Party Transactions” Detect Bulk Purchases Common Cash Management Tools Tools Pros Cons Resource intensive Daily Monitoring Detect errors almost immediately Approval Limits Prevent Supporting Documents Proves Can be duplicated No time to review Bank Reconciliation Detect Errors found out too late Budget Review Board’s Once a year Lack of knowledge unauthorised Small, broken down vendor, commitment payment amount or payment bypass Board’s awareness the validity of the payment/receipt errors usually at month-end scrutiny and clarification enquiries THE END