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GLOBAL VISIONS EVENTS AND MARKETING NETWORK, INC.

Document No. ____________________


Subject: POLICIES AND GUIDELINES ON OVERAGES AND SHORTAGES IN
CASHIERING
Department: ALL CONCERNED EMPLOYEES/ CASH CUSTODIANS

I. OBJECTIVES

a. To promulgate policies and guidelines regarding cash overages and


shortages as part of the internal control measures of the Company;
b. To establish responsibilities and accountability in handling physical
amount of cash.
c. To establish on accounting policies and procedures in case cash
overages/ shortages.

II. CASH AUDIT

a) The Internal Auditor shall conduct monthly surprise cash counts in the presence
of the Cash Custodian, Accounting Assistant, the Finance Manager, and a witness
who is a member of said audit team.

b) The surprise cash count shall be documented, and in case of an adverse finding,
the Management, shall be furnished a copy within five (5) days from date of cash
count. In case there are no adverse findings, Cash Count Reports shall be
furnished quarterly.

III. CASH OVERAGES

If upon conduct of surprise cash count by the Internal Audit, and Cash Overage is
discovered, the following shall be done:

a) The Accounting Assistant shall locate the difference between the Cashbook and
the cash count. Meantime, said overage shall be booked as ACCOUNTS PAYABLE.
Entry would be: Debit CASH ON HAND and Credit ACCOUNTS PAYABLE.

b) If after a month, such discrepancy cannot be traced, the amount of overage shall
be booked by the Accounting Assistant as OTHER INCOME. Entry would be: Debit
ACCOUNTS PAYABLE and Credit OTHER INCOME.

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IV. CASH SHORTAGES

Shortages discovered during SURPRISE cash counts being conducted shall be treated
as follows:

a) If the amount is less than P100, the Treasurer/Cashier or back up should


immediately pay for the said shortage;

b) If the involved amount is more than P100 but less thanP500, said shortage
shall be booked as Accounts Receivable against erring officer/staff and MUST
be paid in the next payday nearest to the discovery of the Shortage.

c) When the shortage is more than P500, said shortage shall be booked as
Accounts Receivable against erring officer/staff and MUST be settled in equal
semi monthly deduction from the payroll for a reasonable period, but not to
exceed 12 months.

d) If upon investigation, shortages are being incurred due to willful act of the
person in charge, that is, due to dishonesty, such shall be a ground for
administrative sanction for first offense, as follows:

Amount Involved Penalty

Less than P500 Written Reprimand


P500 to P5, 000 Immediate Preventive Suspension
Over P5, 000 to P10, 000 Termination of Employment

However, if shortages become repetitive, or habitual shortages are being incurred due
to integrity problems, despite the administrative sanctions imposed, and regardless of
the amount involved, said officer/staff shall be terminated from his/her employment.