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which might lead to the loss of funds is avoided. There are four areas which provide ample opportunity for the operation of simple controls. They are banking arrangements including payment by cheque, payroll, IT and overseas payment.
Common sense internal controls
Cash at bank and petty cash
Ensure that the trustees are the only people who can authorise the opening or closing of bank accounts. The possibility of unauthorised bank accounts being opened and used to siphon off money has been reduced by the Banking Acts but not eliminated altogether. In some cases individual members of an institute have been known to open bank accounts without the trustees (or provincial council) being aware of it! If they can do it, so can employees
Ensure that all monies received are banked promptly and that no money is used to “feed” petty cash
Ensure that all cheques over a certain amount (say £1,000 maximum) require two signatories. Similarly, the bankers mandate should be drawn up to ensure that all signi cant cheques (say over £10,000) have two signatures, one of whom should be a trustee
Never sign blank cheques
Never sign a cheque without without demanding to see the supporting
documentation to which the payment relates e.g. the invoice, etc.
Keep all cheque books under lock and key and check new cheque books when you receive them to make sure all cheques are there
Encourage people making regular or unsolicited payments into the institute's bank accounts to do so by banker’s order
Similarly, consider whether you could make more payments electronically by BACS, standing order or direct debit
Think about the amount of cash you need to keep on your premises. It can be horrifying to see the amount some institutes retain
Payroll
Remember if you pay someone more that £100 per annum and that person is not working for a company or cannot prove to you that they
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