Internal Control Question

We have a recurring situation at our place of business where checks, some opened, some sealed will be left on the chair or desk of our accounting personnel without any notice or documentation of who dropped them off. It usually winds up being a different business unit who initially received a check, saw it wasn't for their unit, and dropped it off at accounting.  In situations like this, I feel it is necessary to require that a receipt be involved instead of just allowing people to drop things off and walk away. My question is whether interoffice mail of these checks is sufficient (internal controlwise) or whether hand delivery involving a receipt and requiring the recipient to be present should be required. As I explained above, hand delivery is what is presently happening except there is no receipt involved. People are just dropping things off.  Thank you
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John EastonDirectorCommented:
I should note that I am assuming the checks are customer payments by cheque.  If not I have misunderstood the question and the below won't apply!

I don't know how large a company you work for, but personally I do not think a receipt is really necessary.  Ultimately if customers sent the cheques correctly to accounts it would arrive in the post and end up with accounts staff without any real paperwork trail.  Other departments are just correcting this wrong by bringing to accounts.

If you look at it another way, would you want another department holding on to the cheque because no one from accounts was there when they tried to drop it off and therefore couldn't get a receipt?

I presume your accounting system tracks unpaid invoices.  So if the cheque was never received by accounts you would be able to chase the customer and ultimately get another cheque posted, or track down who it was originally sent to.

Perhaps a simpler solution would be to have a designed drop off point, and ask staff to log it - either by attaching their details to the cheque (i.e. on the envelope it came in, or post it note etc) or have a log in book where staff note the details.  Even this however may be overkill.

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Thibault St john Cholmondeley-ffeatherstonehaugh the 2ndCommented:
Completely agree with JEaston except to add that as a customer I would be very disappointed to be asked to send a repeat cheque to the same address where I believe it was mislaid last time. Receiving the cheque in the accounting department is all that is required, you don't need to know how it got there. Unless you receive many such payments to an incorrect department and need to sort out postal issues or a wrong address on the invoice or website..
John EastonDirectorCommented:
@Mike.  I agree with your comment about re-sending it to the same address.  My thoughts were that when you spoke to the customer you would check the address and update it for the future - hopefully with the correct department name!
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dbfromnewjerseyAuthor Commented:
Yes but without a receipt, it seems to me something like the following could happen. And by the way, in this business, multiple departments do business and receive cash, checks, etc. So, just because a business unit drops a check off at the accounting department doesn't mean that was what should have been done with it. The check could very well belong to another business unit but because of lack of identifying information or whatever, the business unit that received the check didn't know what to do with it, so just dropped it off at the accounting department kind of as a default (in their mind).

Customer mails a check to the wrong department number (Department A). Department A doesn't know what to do with the check, so someone from there drops it off at Department B (accounting) when no one is around. For whatever reason, the check goes missing. Down the line, when the customer claims (s)he sent payment in, Department A will say "oh, we dropped that check off at Department B". Department B is then going to say "we never got anything."  

That's one of the reasons why I would think a receipt should be involved or that people shouldn't be allowed to drop of checks unless handing directly to a person instead of just leaving it on a desk or chair.
John EastonDirectorCommented:
That's true, but having a receipt doesn't change the fact that the cheque is still missing.  Unless a lot of cheque seem to be going astray it probably creates more hassle than it saves.  Although my suggestion of having a log would give you some tracking, without being overly cumbersome.

Cash however is a bit different, mainly because staff could pocket cash.  Generally though I wouldn't expect cash to be received in the post.  Therefore you should only have designated staff to handle cash if possible, and receipts should always be given to customers who pay by cash and a counterfoil retained - preferably with unique numbering.

Certainly leaving it on a chair isn't ideal.  But if you create a department In Tray that people could leave things in this would be a significant improvement.
dbfromnewjerseyAuthor Commented:
Thibault St john Cholmondeley-ffeatherstonehaugh the 2ndCommented:
You could give them a rubber stamp with 'from department a' so accounting have a bit of history to go on, they won't try returning it to department a, and if there are many such items it is easier for the department than having to write on each envelope. Any incorrectly received cheque gets stamped by the department before dropping in the accounts pigeon hole.
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