Cash Rules Everything Around Me

Posted by Lou Volpe, CPA

This is a common thought running through the minds of many controllers of not-for-profit entities, especially during times when fundraising events are being held.  These fundraising events are used to raise funds that support the organization and their programs and may make up a majority of the organization’s revenue stream.  Revenue from these events may include donations, tickets sales, auctions, concessions, and registration for walks.  Although more and more people are using debit and credit cards, cash still remains a popular form of payment, especially at walks.

In order to ensure that the cash at these events is handled properly, the organization should develop a specific set of cash receipt procedures for fundraising events.  These procedures should be disbursed to not only employees of the organization who are involved in the cash collection process at these events, but also to any volunteers that may be assisting.  Also, a copy of these procedures should be kept in the cash collection box or bag to serve as a reminder.

Procedures that will help to mitigate the risk of improper handling of cash for the majority of fundraising events include the following:

  • Utilize a log to document which employees and/or volunteers were in charge of a cash box or cash bag.
  • Keep a standard amount of start-up currency in each cash box or bag.
  • Require the employee and/or volunteer to sign the log indicating his/her agreement with the start-up amount when checking out the cash.
  • Do not allow commingling of personal money with donations.
  • Never utilize cash collections for last-minute purchases the day of the event.
  • Refrain from making change unless a patron has made a purchase/donation.
  • Each event’s collections should be documented via standardized forms. The forms should be remitted to the organization’s Finance Office, along with the physical cash collections, immediately following the event.
  • Accept checks made out to the organization only. Immediately endorse the checks with a restrictive endorsement payable to the organization.
  • There should never be fewer than two people in the same room or vehicle when the cash is either being counted or transported.
  • Two employees or volunteers should independently count the cash immediately after the event. The two cash counts should be compared to make sure the collections are counted properly.
  • Utilize lockable bank bags to secure cash bag and collections.
  • Consider tracking the average cash receipts per individual per event and investigate anything not meeting your expectation based on the average receipts per event.

Procedures for concession-type events:

  • Consider reconciling inventory to cash receipts.

Procedures for events with ticket income:

  • Use pre-numbered tickets.
  • Document all volunteers who were issued tickets and which numbers.
  • Reconcile tickets sold to cash received.

Procedures for events taking place over several days:

  • Collect funds daily and deposit to Finance Office.

Additional procedures would also include having the Executive Director, Controller, or Director of Events present at all events and having them transport the cash to and from these fundraising events.  As noted above, during the transportation of the cash, there should be no fewer than two individuals in the vehicle and the cash should never be left unattended. When not in use, the cash should be safeguarded and maintained in a safe located at the organization.  Limiting the number of volunteers who have access to the cash box or bag during the events will also to mitigate the risk of mishandling the cash.  During the events, the majority of cash handling should be done by the employees of the organization.

By implementing these cash receipt controls, the organization will help to establish a safe and appropriate method for the handling of cash at fundraising events.

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