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16 Sep 2008 Presented by Mr Cheng Soon Keong, Director Practical Aspects of Cash Management (Real life problems)

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Presentation on theme: "16 Sep 2008 Presented by Mr Cheng Soon Keong, Director Practical Aspects of Cash Management (Real life problems)"— Presentation transcript:

1 16 Sep 2008 Presented by Mr Cheng Soon Keong, Director Practical Aspects of Cash Management (Real life problems)

2 Agenda  The Perennial Resource / People Issue  Risks in Cash / Cheque Handling  Common Cash Management Tools

3 The Perennial Resource / People Issue  $1.21 million  Sean Lee went missing in October 2005

4 The Perennial Resource / People Issue  Roles and Responsibilities of Treasurer Roles & Responsibilities of Treasurer  Is a member of the Board  Oversees finances of the organization  Responsible for annual budget  “Key person” for formulating financial policies and procedures  Held responsible with personal liabilities?

5 The Perennial Resource / People Issue  Finding the Right Person Sources  Board members  Support groups like NVPC  Interest groups Challenges  Time / attention  Honorarium?

6 Risks in Cash / Cheque Handling  Problems with cheques  Forgery  Room for “add-ons”  “Cash Cheques”  Who checked the supporting documents?  “ASSUME”  Hunting down the signatories?  “Boss say pay”

7 Risks in Cash / Cheque Handling  Problems with cheques:  Space in front  Cash Cash Two Thousand Only 2,  Twenty 2  

8 Risks in Cash / Cheque Handling  Problems with cheques:  Forged signature ABC Pte Ltd Two Thousand Only 2, 

9 Other Common Possible “Leakages”  Leakages in Revenue / Receipts  Forgot to bill  Forgot to collect  Fundraising cost  Leakages through Liabilities Commitment  Unauthorised commitment  “Interested Party Transactions”  Bulk Purchases Standard Payment Controls Cannot Detect

10 Common Cash Management Tools ToolsProsCons  Daily Monitoring Detect errors almost immediately  Resource intensive  Approval Limits Prevent unauthorised vendor, commitment or payment  Small, broken down payment amount bypass Board’s awareness  Supporting Documents Proves the validity of the payment/receipt  Can be duplicated  No time to review  Bank Reconciliation Detect errors usually at month-end  Errors found out too late  Budget Review Board’s scrutiny and clarification enquiries  Once a year  Lack of knowledge

11 THE END


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