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Cash Management PresentationGeorgia College and State University
November 13, 2009
Michael Hill, Vice President for Internal Audit, Compliance and Risk Management
• Certified Public Accountant, Certified Fraud Examiner, and Certified Compliance and Ethics Professional.
• Began tenure at Medical College of Georgia – July 1999.• Worked as Director of Internal Audit at Tennessee State
University (Nashville, TN) for seven plus years.• Prior to TSU, I was a State Auditor (Tennessee) for two
years and a State Investigator for the State of Tennessee’s Comptroller’s Office for five and half years.
• 24 + yrs professional auditing/investigative/compliance experience.
9. When the unit performs services or supplies products to an external entity, the BANNER process for entering accounts receivable should be followed. The Cashier’s Office is responsible for generating and mailing invoices.
10. Assist the Cashier’s Office as necessary with collection of receivables.11. Ensure write-offs of uncollectible accounts are properly approved.12. Reconcile revenue accounts at least monthly to ensure that deposited
amounts were correctly posted.13. Maintain proof of reconciliation for identified retention period.
questionnaire here.
****REMINDER****CONTROLS ARE NO GOOD IF ALL WE DO IS PUSH PAPER.
WHY??SOMETHING
ELSE MAY HAPPEN THAT YOU DO NOT WANT!!!!!
CASE SCENARIO #1The department manager, Mr. Jones, is responsible for: reconciling and
preparing the daily deposit; collecting patient payments from the mail;
distributing patient payments to the cashiers for posting; and writing off
patient accounts. Additionally, the cashiers are not required to count
their cash before giving it to Mr. Jones. Ms. Smith, the business
manager, is responsible for verifying the deposit but does not verify that
the amount of cash on the deposit sheet matches the activity report.
What are the internal controls for detecting wrong doing? How is the
department ensuring cash deposited is correct?
CASE SCENARIO RESULTS
An inadequate segregation of duties existed by allowing Mr. Jones to have
complete control over collection, distribution, reconciliation of deposits,
and account write-offs. This inadequate segregation of duties allowed
Mr. Jones to manipulate deposits as well as patient accounts.
Additionally, the absence of compensating control (Ms. Smith’s failure to
verify cash receipted in the system against deposit sheets) further
facilitated the opportunity for fraud/theft.
$40,000+ FRAUD AGAINST INSTITUTION.
CASE SCENARIO #2Higher education institution had $50 petty cash/change fund at
satellite campus. Temporarily raised limit at the beginning of fall
and spring semesters to $500. Reduced fund after two week period
back to original $50 level. The satellite office manager was
responsible for issuing book refunds using the petty cash/change
funds. Submitted vouchers supporting refunds. Vouchers listed
students name and books returned. Main cashier office would
then provide the satellite campus with the amount of funds being
supported with vouchers.
CASE SCENARIO RESULTSDue to no one questioning why the satellite campus was
refunding more money than was being receipted or in the petty
cash/change fund (remember petty cash was reduced back to
$50 after two weeks), or that the inventory was off, or that the
student names on voucher were not enrolled students, this
satellite office manager was able to commit an act of fraud that
lasted approximately 15 months and netted this person an
estimated $78,000. The satellite office manager’s salary was less
than $25,000 per year at the time of this case.
Questions
Contact information:
Medical College of GeorgiaOffice of Institutional Audit and Compliance
1120 15th StreetHS-3135
Augusta, GA 30912
Michael W. Hill, CPA, CFE, CCEPVice President for Internal Audit, Compliance, and Risk Management
Office website: www.mcg.edu/audits
