Cash Management System
Section 1Terms of Referencepage 1
Section 2Methodologypage 2
Section 3Executive Summarypage 3
Section 4Backgroundpage 4
Section 5The Accounting Functionpage 5
Section 6Analysis of Current Systempage 6
Section 7Solutions Identifiedpage 8
Section 8Recommendationspage 14
Section 9Review of Implementationpage 15
Section 10Cost Benefit Analysispage 16
Section 11Appendicespage 17
1. TERMS OF REFERENCE
1. Of major importance to all organisations is the handling of cash received on the premises, with particular regard to the concerns of physical security, potential for theft/fraud or misplacement, errors in recording (accidental or deliberate), or other misappropriation.
2. This report has been prepared to review the system in place at School A , a *** Local Education Authority (LEA) school.
3. The report will identify:
1. Weaknesses in the system, the causes of those weaknesses and the evaluation of such weaknesses.
2. Ways of eliminating/reducing the weaknesses identified.
3. Potential improvements to the system which comply with the requirements of *** County Council, the Financial Management Standard in Schools (FMSiS) and the Workforce Reform ‘24 Tasks’ (Section 2, Annex 3 of the School Teachers Pay & Conditions Document 2008)1 and current ‘Best Practice’.
4. Ways in which to implement selected improvements, and the strengths and weaknesses of such implementation.
4. A review of initial outcomes will also be conducted and included in this report.
1Appendix 1-’24 Tasks’ Extract from http://tesfaq.brendenisteaching.com/school/workforce.htm 2. METHODOLOGY
1. Using the Terms of Reference as the focus, the approach has been to investigate weaknesses identified in the Analysis of the Current System (Section 6), using the following methods:
1. Reference to *** County Council’s (*CC) ‘School Finance Handbook’
2. Consultation with *CC Schools’ Finance Team
3. Analysis of *CC ‘step-by-step’ banking guides
4. Evaluation of *CC-issued spreadsheet recording systems
5. Use of internet to research commercial School Private Fund software
6. Consultation with other *CC schools to identify successful internal systems
7. Consultation with Headteacher and the school’s Board of Governors
8. Collaboration and consultation with colleagues to identify, implement and develop realistic solutions
9. Use of internet for research into relevant ‘Best Practice’
10. Consultation with *CC Audit Department regarding proposed solutions meeting audit requirements/recommendations
11. Staff training and information
12. Providing parents, pupils and other stakeholders with adequate and timely instruction and information regarding making payments
3. EXECUTIVE SUMMARY
1. School A’s cash management system complied with *CC’s School Finance Handbook requirements with the significant exception of compliance with Segregation of Duties and the system was therefore open to errors such as loss, mis-recording and absence of recording of receipts as well as the potential threat of fraud.
2. The recording requirements for cash receipts identified in the *CC School Finance Handbook did not enable easy reconciliation of large quantities of receipts, and therefore payments were difficult to track in the event of subsequent queries.
3. This report identifies the weaknesses, investigates potential solutions and opportunities, and makes recommendations for the improvement of the cash management system to minimise errors, allow easy reconciliation, provide a clear audit trail, and reduce the opportunity for and threat of misappropriation of cash received.