What happens when bookkeeping for an agency or business goes wrong? Well, lots of things, actually. Accounting is the bread-and-butter recording of the financial activities of an entity. Because it is detailed, and it covers all activity, accounting records are not only expected but required for regular reporting, review, auditing and decision-making. So, when bookkeeping, which is the fundamental input activity for accounting ledgers and reports, goes bad, it creates a cascading effect. That was the case for one school district in Tennessee.
Elementary School Numbers
When people think of math in elementary school, they usually associate the concept with kids learning how to read, write and add basic numbers. They don’t expect that the administration of a given elementary school may end up in a very embarrassing audit of missing money. As it turned out, that’s exactly what happened with missing cash deposits at the Catlettsburg Elementary School located in Sevierville, TN, to the tune of about $2,300. While in the big scheme of things, it doesn’t seem like much today, $2,300 missing in cash receipt is a problem, especially when the receipts were also voided after receiving over $3,000. Approximately $694 was processed in personal checks, but the remaining $2,300 was in cash form, a format that can disappear easily in the wrong hands. And that cascading effect we mentioned was the distrust this caused among officials in the school district with the bookkeeper.
A Lack of Transaction Attention and Timing
The monies were received in February, but the checks were not deposited in the school’s bank account until March. In the meantime, while the cash was originally receipted, the transactions were then backed out and never posted again. Fortunately, the money didn’t disappear; the bookkeeper had at least put the actual cash in the school safe and secured it. But because the transactions were not followed up efficiently, they went missing on the accounting books. Ultimately, the cash did make it into the school bank account, some 7 months later.
Remote Bookkeeping Can Help
A problem for many public agencies involves how they do their hiring. In most cases, thanks to labor agreements, their hiring of personnel, even for bookkeeping, is restricted to a civil service process that doesn’t allow for scaling up quickly. Instead, existing staff are overloaded with work, and they frequently start making mistakes.
Fortunately, even agencies can solve workload spikes by contracting with services like Remote Quality Bookeeping. By bringing in additional resources as needed, workload surges can be addressed, especially with bookkeeping input and transaction processing. In the case above, the personal checks could have easily been copied and outsourced to remote bookkeeping for processing while the bookkeeper in person handled the cash transactions during the same time window. It was a matter of adding resources for the job versus piling onto the same person who, under stress, began making mistakes and couldn’t catch up. Audit reports don’t provide these solutions. It takes smart management to step in.