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Practical Aspects of Cash Management

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Presentation on theme: "Practical Aspects of Cash Management"— Presentation transcript:

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

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 Twenty 2 Cash 2,000.00 Two Thousand Only

8 Risks in Cash / Cheque Handling
Problems with cheques:  Forged signature ABC Pte Ltd 2,000.00 Two Thousand Only

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
Pros Cons 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 Thank You - Q&A -


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