Risk and Suggested Mitigation

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Risk

Actual food expenses may be claimed or accounted by accountant at inflated figures.

Suggested Mitigation

If printed cash memo or rubber stamped slip is not available for such expenses, then the plain paper slips should show the place (location, village) and shop’s name by hand or the shop owner’s name. The shop owner himself/ herself should be asked to prepare and sign these. If the shop owner cannot write then the slip can be prepared by the customer, but must still be signed (or thumb impression marked) by the shopkeeper.

Replies (1)

Risk

Signing a blank cheque creates two risks:
1.Possible misuse of the cheque by the other signatory;
2.Abdication of his official responsibility(as an office bearer) by the Finance Trustee.

Suggested Mitigation

Partner may consider adopting a multi-tier signatory approach to deal with the problems arising due to nonavailability of office bearers at the location. Accordingly, signing authority for operational needs up to a certain monetary limit, say Rs.10,000 or Rs.20,000, can be delegated to the accountant or such other person, along with an office bearer such as the Managing Trustee. Cheques above this amount would compulsorily require the signatures of two office bearers.


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