By Joanne Newman on 19th October 2015
Each year I review the systems for a lot of clubs around New Zealand. It’s a privileged position because I get to see what really goes on behind the happy faces and jovial talk over the bar.
Millions of dollars has been stolen from clubs. Most of it could have been prevented had proper accounting and forensic auditing systems been in place. One of my recent audits is a case in point. It is a very big, and by all accounts successful club, doing a wonderful job for members and within its community. It was not doing so well when it came to keeping control of the till.
Here are some of the very basic things I suggest when putting till security procedures in place.
– Always count tills daily and investigate all overs and unders over $20.
– Inform staff of all discrepancies. (Let them know you know.)
– Look for a pattern to the overs and unders. I had a case where the overs and unders were occurring on alternative weeks. One week a staff member would under charge and the next week they would over charge. By swapping various shifts we were able to pinpoint where the till variations were, and more importantly, who was responsible. In another case the club paid the staff fortnightly. On the fortnight that there were no wages the tills were under and on the fortnight of pay the tills were over! This is a classic case of staff borrowing from the till on their short week and repaying on their pay week. When I looked at it this stood out like a lighthouse but sometimes managers are too close to the people involved to see the obvious.
– Have video cameras and have them focused in the right place; the till being an obvious hot spot.
– Never let bar staff reconcile the till balance to the till tape. It’s OK to let staff count money, but it’s certainly not OK to let them reconcile the money.
Till discrepancies may not be due to fraud; it could simply be the staff don’t know how to operate the till. In my audit work I always check to see if the bar staff are up to speed on knowing how to operate the cash register.
If clubs had half decent accounting systems in place I would not be so busy as a forensic auditor, and the insurance companies would not be forever processing claims!
Joanne Newman is New Zealand’s leading authority on club accounting and forensic auditing. She is the managing director of Club Accounting & Investigations Ltd and Smart Business Centre (Tauranga) Ltd.