The Como Park Conservatory Friends of Flowers operates a garden exhibit for the
ID: 2416062 • Letter: T
Question
The Como Park Conservatory Friends of Flowers operates a garden exhibit for the benefit and enjoyment of the community. When the conservatory is open to the public, two clerks who are positioned at the entrance collect a $10 admission fee from each nonmember patron. Members of the Friends of Flowers organization are permitted to enter free of charge upon presentation of their membership cards.
At the end of the day, one of the clerks delivers the proceeds to the treasurer. The treasurer counts the cash in the presence of the clerk and places it in a safe. Each Friday afternoon, the treasurer and one of the clerks deliver all cash held in the safe to the bank and receive an authenticated deposit slip that provides the basis for the weekly entry in the accounting records.
The board of directors of the Como Park Conservatory Friends of Flowers identified a need to improve its internal controls over cash admission fees. The board determined that the cost of installing turnstiles, sales booths, or otherwise altering the physical layout of the museum will greatly exceed any benefits. However, the board agreed that the sale of admission tickets must be an integral part of its improvement efforts.
Write a memo to the partner in charge of the audit, Rose Petals.
Required:
Prepare a business written memo to the partner in charge of the audit, Rose Petals, analyzing the internal controls over cash admission fees. Identify specific weaknesses and recommend improvements that can be made to deal with each weakness you identify.
What are the criteria to this assignment?
1.Memorandum style & format
2.Purpose
3.Discussion of control activities
4.Closing
Can i please get help on this?
Explanation / Answer
Date
To
<insert team members>
School Board
Prepared By
The internal audit team, with roles and responsibilities, includes the following people:
The duration of this internal audit will be for <insert time period> commencing on <insert date>.
It is anticipated that the fieldwork, working papers and drafting of deliverables will be completed by <insert person/team completing this work>.
The location of the internal audit will be performed at <insert location>.
It is predicted that a site visit to <insert location> will be conducted during the course of this review.
<insert>
Contact
Position
Department
Contact No.
The objective of this review is to <insert internal audit objective>.
The scope of this review includes an assessment of <insert text here>. Specifically, this review will include:
Audit deliverables will consist of the following:
It is planned that the above deliverables will be delivered to you by <insert date> for your review and subsequent discussion.
<insert details of areas being reviewed and items you will be seeking from the auditee>.
Date
Task
Contact
Internal Controls Over Cash Receipts
Best Internal Cash Controls
Best internal controls limit the amount of hands that touch the cash. Cash is always counted by two individuals. After cash is counted it should always be placed in a tamper evident bag with the deposit slip and sealed. If possible it should be deposited into the night drop, if not it should be secured in a safe overnight. Startup cash should not be locked in a drawer, it should be placed in a safe (which is bolted to the floor) each night. If startup cash is kept for long periods of time, two individuals from the parish office staff should randomly count the startup cash to determine it agrees with the amount stated on the balance sheet.
Concessions:
1. The startup cash should be listed on the balance sheet and kept in a safe if not deposited.
2. A cash register should be used to record sales. At the end of each event the cash register total sales tape should be balanced to the cash less the startup cash.
3. A form should be filled out by the concession stand workers saying how much cash they are turning in, who counted and who rechecked the total cash. The form should be signed by both individuals counting the cash. This form should be attached to the cash register tape. A deposit ticket should be filled out for the amount of the cash, with the individual who verified the cash initialing the deposit ticket. One part of the deposit ticket should be attached to the form and cash register tape.
4. Cash should always be counted by two or more nonrelated individuals.
5. All funds should be placed in a tamper evident sealed bag with one part of the deposit ticket.
6. The funds should be deposited in night deposit or next day by parish office. If the tamper evident bag with the deposit is not deposited after the event, the bag should be secured overnight in a safe. The parish office staff should not be counting the cash or have access to the funds. The parish office staff can take the sealed bag to the bank.
7. The form, cash register tape, and one part of the deposit ticket should then be attached to the deposit form sent to the Parish Office.
8. The concession inventory should be checked against what was sold to see if income matches sales. This should be done each night, or at a minimum once a week. No one should receive discounted or free concessions.
Gate Fees:
1. The startup cash should be listed on the balance sheet and kept in a safe if not deposited.
Page 2 of 3
2. Tickets should be given to each person entering event when they pay the entrance fee. Different color tickets can be used for different entrance fees.
3. The entrance fees received should be checked to determine that they are in agreement with the number of admissions tickets sold. The beginning and ending numbers on the tickets should be documented on a form along with the cash collected.
4. Same as above concessions numbers 3-7.
Parish Office Cash
When cash is accepted at the parish/school office the following are good internal controls to set into place to help make sure cash is being deposited.
Always give a receipt to the individual paying cash. The receipt should have who paid the cash, the amount, the date, what the payment is for and who accepted the cash.
The person accepting the cash at the office should log the cash into the cash log, noting the date they accepted the cash, the amount, the purpose and their initials. The cash receipt copy should be attached to the log. If the cash is given to someone else to prepare the deposit the person accepting the cash should sign the log.
The cash log should periodically be reconciled to the bank deposit receipts to determine all the cash received at the parish/school is being deposited.
The Mass Stipends books should be reconciled to PDS Ledger Mass Stipend income account to determine they are in agreement.
Cash Payments
We have seen and had a few calls concerning cash payments made to athletic referees, gate workers and concession stand workers.
No one should be paid with cash from gate, concession funds or other cash.
All workers and referees (that aren’t volunteers) should be paid by check from the general checking account or from an imprest account.
A W-9 should be obtained prior to payment for each individual.
A 1099 must be issued for any payments $600 or greater to one individual.
If your parish is not following this, we ask you start immediately.
This is an Archdiocese policy and can be found in the Disbursement policy on page 23 of the Manual. The first line states: Normally, all expenditures should be paid by check. Only in extreme circumstances should cash be used to pay bills and documentation for such expenditures is a must.
Date
To
<insert team members>
School Board
Prepared By
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