Checklist for cash related audit – Financial Management control



1)   Are responsibilities for collection and deposit preparation functions adequately segregated from those for recording cash receipts and general ledger entries?
2)   Are responsibilities for cash receipts functions adequately segregated from those for cash disbursements?
3)   Are responsibilities for disbursement preparation and disbursement approval functions adequately segregated from those for recording or entering cash disbursements information on the general ledger?

4)   Are responsibilities for the disbursement approval function adequately segregated from those for the disbursement, voucher preparation, and purchasing functions?
5)   Are responsibilities for entries in the cash receipt and disbursement records adequately segregated from those for general ledger entries?
6)   Are responsibilities for preparing and approving bank account reconciliations adequately segregated from those for other cash receipt or disbursement functions?
7)   If EDP is used, is the segregation of duties principle maintained within processing activities?


1)   Do collections procedures provide for the following?
a)   Timely deposits of all receipts?
b)   Controls at each collection location, to assure timely deposit and accurate recording of collections?
(i)   Mail opened by two people or at least segrated?
(ii)   Remittances by mail listed in duplicate at the time the mail is opened?
(a)  Listing prepared by a person other than the one opening the mail?
(b)  One copy of the listing forwarded, with the money, to the cashier?
(c)  Other copy attached as supporting documentation to the accounting transaction?
(d)  A third person periodically comparing the list with the deposit record?
(iii)  Amounts of currency contained in each item of mail verified by a second person?
(iv)  Documents enclosed with currency machine date stamped or dated and initialed by the employee opening the mail?
(v)  A secure area provided for processing and safeguarding incoming cash receipts?
(a)  Access to the secured area restricted to authorized personnel, only?
(b)  The secured area locked, when not occupied?
(vi)  Cash protected by using registers, safes, or locks and kept in areas of limited access?
c)   Timely notice of cash receipts at separate collection locations given to a central accounting department?
(i)   Cash received at branch locations transmitted to the central office or to the State Treasurer through the banking system?
(ii)   Branch personnel restricted to making cash deposits, only?
d)   Daily reported receipts at separate collection locations compared to records of a general accounting department?
e)   Restrictive endorsements placed on incoming checks as soon as received?
f)    “Not sufficient funds” checks delivered to someone independent of those processing and recording cash receipts or reconciling cash/bank statements?
g)   Established procedures for follow-up of “not sufficient” checks?
h)   If checks received are forwarded to be used as posting media to customers’ accounts, controls to ensure checks are returned promptly for deposit?
i)    If payments are made in person, receipts controlled by cash register, prenumbered receipts, or other equivalent means?
j)    Receipts accounted for and balanced to collections records daily?
k)   Prenumbered forms accounted for , including a record of voided forms?
l)    Facilities for protecting undeposited cash receipts?
m)  Adequate records maintained to assure correct handling and final disposition of items held in suspense?
(i)   Suspense accounting eliminated by direct deposit of money to the correct fund, as much as possible?
(ii)   Delay of deposits avoided by making sure fund distribution is immediately determinable?
2)   Do disbursements procedures provide for the following?
a)   Control over warrant, sight draft, or check-signing machines, as to signature plates and usage?
b)   Procedures providing for immediate notification, as applicable, to banks, State Treasurer, and State Controller, when warrant or check signers leave the unit or are otherwise no longer authorized to sign?
c)   Furnishing invoices and supporting documents to the signer prior to signing the warrant or check to help assure funds are disbursed only for authorized purposes; and to help assure laws, rules, and regulations are followed?
d)   Setting reasonable limits on amounts payable by facsimile signature?
e)   Requiring two signatures on warrants or checks over a stated amount?
f)    Maintaining signature plates in the custody of the person whose facsimile signature is on the plate, when the plate is not in use?
g)   Using plates only under the signer’s control and recording of machine reading by the signer or an appropriate designee, to ascertain all signed warrants, sight drafts, or checks are properly accounted for by comparison to document control totals?
h)   Direct delivery to the mail room of signed warrants or checks, making them inaccessible to persons who requested, prepared, or recorded them?
i)    Prohibiting the drawing of warrants or checks to “cash” or “bearer”?
j)    Controls to ensure all payments are made on a timely basis and in accordance with all purchase orders and contracts?
k)   Controls to ensure duplicate payments are not made?
(i)   Are original invoices (no copies) totaling the amount of the disbursement attached to each voucher before payment?
l)    Controls to ensure each cash disburse­ment is properly vouchered and approved by the proper authorities before the disbursement occurs?
3)   Do custody procedures provide for the following?
a)   Maintenance of controls over the supply of unused and voided warrants or checks?
(i)   Are monthly physical inventories taken of blank stock by the custodian and a responsible supervisor?
b)    Proper authorization of bank accounts?
c)     Periodic reviews of and formal reauthorization of depositories?
d)   Controls and physical safeguards surrounding petty cash funds?
e)   Maintenance of adequate fidelity insurance coverage?
f)    Maintenance of separate bank accounts for each fund, or if not adequate, adequate fund control over pooled cash?
4)   Do detail accounting procedures include the following?
a)   Procedures ensuring collections and disbursements are recorded accurately and promptly in the correct fund or account?
b)   Procedures for authorizing and recording inter-bank and inter-fund transfers and providing for proper accounting for those transactions?
5)   Do general ledger procedures provide for the following?
a)   Delivery of bank statements and paid warrants or checks in unopened envelopes directly to the employee preparing the reconciliation?
b)   Procedures for steps essential to an effective reconciliation, particularly considering the following?
(i)   Comparison of warrants, sight drafts, or checks in appropriate detail with disbursement records?
(ii)   Examination of signature and endorsements, at least on a test basis?
(iii)  Accounting for numerical sequence of warrants, sight drafts, or checks used?

(iv)  Comparison of book balances used in reconciliations with balances in general ledger accounts?
(v)  Comparison of deposit amounts and dates with cash receipt entries?
(vi)  Footing of cash books?
c)   Review and approval of all reconciliations and investigation of unusual reconciling items by an official not responsible for receipts and disbursements, including recording evidence of the review and approval, by signing the reconciliation?
d)   Periodic investigation of checks outstanding for a considerable time?