In my experience as a CPA serving local governments for 30 years, there are seven “deadly sins” related to cash collections. If the local government commits one of these sins, it is risking the ultimate penalty. This series of blog posts will describe each of the seven deadly sins of cash collections. If your government is currently sinning, repent and you can be saved.
I have deadly sin #6 and #7 for you below...
Deadly Sin #6 - No Immediate Restrictive Endorsement of Checks.
All locations receiving cash should have restrictive endorsement stamps, and every check should be immediately endorsed to make it non-transferable.
Some people believe that if a check is stolen, it is difficult to be cashed. However, I learned otherwise on a fraud case for a state agency in San Francisco. The agency rents out the bottom floor of their building to retail tenants. The agency’s rental manager stole over $100,000 of rent checks that were made payable to the agency by simply writing a three-letter acronym just after the government's name on the payee line of the checks. She deposited via ATM into the account of a non-profit organization for which she served as volunteer treasurer. She accessed the cash from the non-profit account for her personal use.
Deadly Sin #7 -