FRAUD DETECTION, INVESTIGATION AND PREVENTION ...

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This is basically the cash that is used to drive the day to day revenueexpenses of the SACCO. Since the Sacco needs supply of office suppliesand materially minimal expenses in terms of amount of cash involved.To prevent fraud in handling of the petty cash, there needs to be a policyin the handling of petty cash addressing; Who is responsible for collecting the petty cash from the bank All the petty cash expenses have to be filled in prescribed formatshowing the nature of expense, the amount needed and needs to beauthorized before being paid out. The authorization of the petty cash expenses needs to be authorizedby somebody with the necessary authority. There needs to be clear segregation of duties; the person making thepayment, the person raising the claim and the person authorizingthe transaction need to be different officials. There needs to be surprise cash counts to make sure no cash hasbeen misappropriated or taken form the petty cash whilst it is notauthorized. Once the petty cash has been issued, the particulars of the expensesneeds to be recorded immediately. No one official needs to have office advances for a durationexceeding one month unless such an official is on an official trip forthe said duration. All expenses clearing one’s advance should be completed within fivedays of resuming duty. The SACCO needs to have a policy on cash handling to addresscash shortages and how they are accounted for.Cash at VaultThis is cash meant for the day to day advances for withdrawals bymembers from the FOSA. This also represents any savings that have beendeposited within the day by the SACCO members and also loanrepayments for the same period.
Since this amount represent an oscillation sometimes depending of theperiod, the SACCO needs to maintain enough cash to meet the needs ofthe SACCO. The following need to be monitored; There needs a clear policy on the management of cash at vault There needs to be a list of signatories, at least 2 who can signcheques to collect this cash from the bank. The persons who can collect the cash from the bank need to beclearly defined. The vault needs at least two officials to open it. Teller cash needs to be confirmed in at the beginning and end of theday and confirmed with the supporting expenses. At the end of day, all tellers need to reconcile their cash beforepresenting the same together with the supporting documents to thesupervisor for counterchecking. There needs to be a strong room where the cash is stored. Installation of CCTV can help curb any fraud. Accounting personnel should have a daily cash-box audit for eachrecipient to ensure that there are no significant shortages orsurpluses. At the end of each day, the Head Cashier should collect the fundsassigned to each recipient and deposit them in the safe or vault.He/she will also be responsible for removing excess cash andproviding cash when recipients ask for it.Bank Accounts Bank Accounts The Board of Directors shall authorize the set of signaturesregistered for issuing checks, and in no case may signatures fromaccounting personnel be accepted. It is required to have joint signatures when issuing checks andwithdrawing funds from a savings account. Always issue checks payable to a specific person or institutions andnever issue a check payable to the bearer.
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