How school P&Cs can combat fraud
Combating against FRAUD
Whilst most members of P&C Associations volunteer to help their school, unfortunately there is an increase in fraud being committed by those who are not.
With cash at bank being the major asset of P&Cs, the management of funds and ensuring procedures and processes are followed has become very important.
To this end, the most recent version of the P&C Accounting Manual has instruction on how P&Cs are to protect against fraud.
The solution ultimately is about maintaining (and knowing) procedures and controls as set out in the manual.
While conducting audits and having to make comment on how P&Cs follow the guidance of the accounting manual, it is clear that many P&Cs are unaware of the important instructions that significantly reduce the chance of fraud.
The manual states that P&C Associations must manage the risk of theft, fraud, misappropriation and mismanagement of funds by establishing appropriate financial procedures and controls, such as:
- Segregation of duties – more than one person required to complete a task which could result in fraud, for example:
- Cheques are signed by two office holders.
- There should be a separation of duties between the person receiving the money, the person banking the money and the person maintaining the accounting records.
- The Principal’s written authorisation is required to enter into a contract or written agreement.
- Collection and counting of all money must be performed by two independent persons who must sign the supporting documentation, for example the daily takings sheet.
- All banking must be done promptly and cash should be banked on the day of collection or the next working day.
- If money cannot be banked on the day of collection it must not be taken home; rather placed in the school safe or bank night safe.
- Order book used to authorise purchases.
- Before the monthly meeting, another executive committee member is to check and certify the bank reconciliation. They must also sign the bank statement and cashbook when they are performing this check.
- Regular and timely reporting to P&C meetings that explains the financial operations.
- Importance Of The Bank Reconciliation
- Tips for a smooth P&C Audit – Part 1 and Part 2