The Office of the Auditor General recently issued a fraud alert related to skimming, which is a scheme where cash is stolen before it is recorded. There are two types of skimming; revenue skimming and accounts receivable skimming. The most common and the most difficult to detect is revenue skimming. Revenue skimming involves an employee who accepts payment from a customer and never records the transaction and keeps the money.
Revenue skimming can be very difficult to detect but there are some safeguards that can be put into place to help prevent and detect this type of fraud. Such controls include the use of an automated cash receipts system or using pre-numbered and numerically controlled cash receipt forms and then reconciling cash receipts to all cash and checks received. Additionally, there should be adequate segregation of duties between the collecting, recording, reconciling, and depositing of cash receipts. Using these controls will decrease the ability and likelihood of an employee who is dealing directly with customers from skimming within your organization.
Jeffery Patterson, CPA