Detective measures

Suspected theft or misuse of assets

See Business Policy and Procedure Manual Section 8:010 for procedures that should be followed to report the loss of money, securities and property.  A written report is required, and in certain cases a telephone report.  Prompt reporting of losses increases the likelihood of recovering assets and limiting their misuse.

Examples of important reconciliations that should be performed are:

• Reconciling the dollar amount of cash and checks received per original records (not per the receipt vouchers) to the dollar amount actually deposited.
• Reconciling actual payroll expenses to expected payroll expenses.

Reviews by management

• Perform budget to actual expense comparisons and investigate significant differences.
• Routinely spot-check transactions, records, and reconciliations to ensure expectations are met as to timeliness, completeness, segregation of duties, propriety of the transaction, etc.
• Follow up on unexpected results or unusual transactions. They might be indications of theft or fraud. Ask for explanations of unexpected results and ask for reasons for unusual transactions. Question the explanations and reasons if they don’t seem right, ask to see the items that were purchased, etc. (See Suspected Theft or Misuse of Assets section in this Guide.)
• Document your reviews of reports and reconciliations by initialing and dating them and briefly indicating the resolution of any follow-up you performed on unexpected results or unusual transactions.

Reconciliations

Broadly defined, reconciliation is a comparison of different sets of data in order to ensure the accuracy and completeness of transactions. Integral parts of the reconciliation process include identifying and investigating differences, and taking corrective action, when necessary, to resolve differences.

To ensure proper separation of duties, the person who enters or approves transactions or handles cash receipts should not be the person who performs the related reconciliations.

Reconciliations should be performed timely, documented, and approved by management.

Examples of important reconciliations that should be performed are:

• Reconciling the dollar amount of cash and checks received per original records (not per the receipt vouchers) to the dollar amount actually deposited.
• Reconciling actual payroll expenses to expected payroll expenses.