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CASH - CASH MANAGEMENT BACKGROUND Cash management is the...

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Sheet1 Page 1 CASH MANAGEMENT BACKGROUND: Cash management is the responsibility of the city's Finance Director. This function is located in the Finance Director's office and is performed by an investment clerk under the supervision of the Finance Director. As custodian of the city's investment program, the Finance Director is responsible for: A. Formulating the City's cash management strategy. B. Establishing internal controls over the investment function. C. Authorizing the wire transfer of city funds. D. Contracting with local banks regarding the level of services required for the protection and efficient management of the various city banking accounts. E. Establishing and maintaining an accounting system that will safeguard the city's assets (both cash and non-cash). The city invests it's funds in compliance with the City Charter which restricts the type of investment available for city funds. The Charter stipulates that city funds can only be invested in obligations of the United States Government, time deposits at banks (certificates of deposit or savings accounts). The city's investment portfolio is approximately $100 million on the average. The audit will focus on evaluating and testing the internal controls over the cash management function in the Finance Director's office, and the accounting controls over this function in the city's accounting department. This will include the process by which the amount of daily investable cash is calculated in the accounting department. SCOPE: The scope of the audit for test work will be for the last six months and the last day of the field work for the evaluation of internal control. PLANNING: 1. Prepare and send an entrance letter to the Finance Director and the Chief Accountant. 2. Prepare a planning program and budget for the preliminary survey work.
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Sheet1 Page 2 3. Discuss the audit area with your team leader and obtain approval on the planning stage of the audit.
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