Asset by the staff should be in place, you know what are the assets of the organization which can be used by the staff, you know those kind of things can be set. Staff attendance records are also important. Advance is a very sticky subject because every organization has this practice of giving advance, and of course without giving advance one cannot function, you cannot implement programs. So, there should be clear procedure for approval of the advance and follow up outstanding advance. This is where the finance department has a big garage project has the program department because always the program department would like to take money because there is some urgency has come up and the finance department would say that you know first settle the old advance and then there is a confusion. So, the follow up of the outstanding advance and next advance would not be transferred normally if there are advances pending settlement if it is too long then the salary must be attached and other dissimilar reactions must be taken. So, it should be recovered from the salary if nobody is paying heed to settle the advance.

So, let us quickly look at the various controls, we said 10 controls, budgeting we will not look at because yesterday we have already seen it, planning, monitoring and review. So, budgeting, of course, budgetary control, it is not only making the budget, but implementation and monitoring of the budget and even the reviewing, annual review, monitoring quarterly and or monthly. See, accounting records is something that let us look at, up to date means daily, and this is where also many organizations they fail, they do not make entries every day. So, this is a very very important control that if you if you enter the books on a daily basis, even if there are mistakes that could be rectified later on. And the summaries of the accounts to be presented to governing board, treasurer and and all that what she was mentioning is a very important practice. So, that at least you prepare that sort of a summary, of course, audit is very important. If the auditors have given some recommendations that needs to be followed up and you should ask the auditors to give recommendation, sometimes the management letters they are not manditarily issued by the auditor, but the organization can ask for the management letter and then the recommendations need to be sincerely followed up.

Now, this is segregation of duty this is a very important area this affects all areas of internal control. It aims at preventing errors and potential frauds by ensuring that one person is not responsible for the whole transaction this is the whole issue. If there is one person who is responsible the entire transaction then there is bound to be lapsed in the controls. So, there should be various people involved at various processes somebody who places the order somebody who receives the goods somebody authorizes the payment somebody who makes the check and so on and somebody who signs the check. So, as many people involved in a particular transaction would always be healthy. In small organization sometimes you know we say that how who will make the cash verification the cashier accountant and everybody is the same. Sometimes you can take external help you can ask the auditors who come and do cash verification for example or even cashier need not be the need not know the finance he could be an admin service admin study person or a assistant who can hold cash. So, these are then small organization should not be taken as an excuse for not having internal controls you can be creative about it you know this is something I always say that you know whenever we do workshops this is what we come across that people say that we are a small organization we do not have many people how we will be able to install this kind of controls. But one can be creative basically the issue is that there should be more than one person involved in the enter transaction.

So, that is about the accounting records, incoming funds. The program manager who disbursed the salary to himself, security of incoming funds is very important. So, sometimes you know incoming meals, incoming meals might contain some checks. Now, the person who opens the meals in an organization normally the lowest level staff and stamps it. And if there are checks and things like that and if they or payment intimations and all there is a chance that it might get lost. There are small issues, but very important. So, incoming meals should be opened in a secured place in the presence of more than one person. For all cash received receipts must be issued immediately and cash and checks received should always be recorded immediately. And this is very important, senior staff must make regular check to ensure that income records are accurate. So, there should be a periodic check by someone other than the person who maintains it to see that there are income records are properly kept. So, this is about the controls.

Expenditure controls authorization is very important before the amount is paid authorization authorization is a must. Sometimes what happens is just before the audit so much of vouchers come to the chief function to be authorized and chief function takes about a day to sign all the vouchers. So, what does that signify? The payment processes have not been followed during the year or at least verbally followed, but not formally followed. So, the person authorizing expenditures will be different from the one who prepares and signs the checks. So, the person who prepares and signs the checks and the person who authorizes the payment should be different people. But at least the person who maintains the book should not be the person who should be authorizing the payment. So, one can always look at different exceptions.

Purchase controls I think we need not go through it because we have discussed it several times yesterday and today. Just that pre-ordered number pre-numbered order forms are important. So, if you have large number of purchases to be made or regularly if you are doing purchases, orders for more than a specific amount should be done by a formal process of three quotations and invoice should be matched against the original order whether what was what was ordered and what we have received. Quality and quantity of goods received must be checked and entered in a stock register. This also we have discussed today in the case study bank accounts. Bank accounts should be in the name of the organization. Here I think we have in many workshops we have long discussions about transfer of funds to field. When we transfer funds to the to the field sometimes it is transferred to the bank account of the staff. So, that is a practice that needs to be stopped. Funds should not program funds should not hit any staff's personal bank account. The arrangement for signatory should be clearly decided based on practical requirement. This we have also seen about double signature and all that. If finance officer involved in preparation of checks he should not be a signatory. Most of the payments should be made by account paychecks. I think this is very important that we should use the banking channel more and more. Blank checks should never be signed because if you sign a blank check there is a huge lapse in the internal controls. Money receipts should be deposited in the bank as often as practical. This of course we have also discussed about large cash should not be retained in office during weekend and holiday. Sometimes on Friday 50,000 rupees cash withdrawal check will come and then one needs to be careful what will you do during the weekend and security of the cash is important. Reconciliation also we have seen that monthly or quarterly monthly every month. Unused check leaves should be kept in safe custody. Now, this is also another problem that you know we open bank accounts over a period of time. There are many inoperative bank accounts lying all over the place. So, if there are certain bank accounts which are not being used it is better to close those bank accounts rather than keeping them idle.

Now, let us look at some of the cash transactions. Cash of course must be held in a secured place within the organization. Insurance cover must be taken for cash. So, cash in transit and even cash in the premises. If somebody is having cash in transit insurance that is much easier because I know some organizations who lost cash and then because they had insurance they could get the money back from the insurance company. Only one person must be responsible for handling cash. You know there are sometimes people say that you know there will be rotation of people who will handle cash but not two people at the same time. There has to be one person clear trail must be kept and this will be transferred to the even to the next person. The cashier should be that should be different from a from the person dealing with the accounting record. All cash receipts and payments must be recorded in the cash book as soon as possible. Pre number receipts for the for issuing money receipts. First copy issued to the person paying cash. The second copy is written in the organization for accounting records and it should not be perforated. It should be carbon copies because perforation what is the problem. You can write one thing on this and the another amount on the counter file. Large and unusual payments should be authorized by a senior person the limit must be set. Senior staff must make periodical physical verification of cash. So, vehicle computers should be limited who can use it all those things need to be clarified. All items should be registered in the name of the organization. This also we have seen premises must be kept secured with the insurance cover and lock and key and all this. Policy about use of organizational