USE OF PRE-NUMBERED CASH RECEIPTS AT FIELD STATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-01370R000300030006-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 9, 2016
• Document Release Date: September 6, 2000
• Sequence Number: 6
• Publication Date: October 10, 1960
• Content Type: MF

r" I A RD
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1 0 C v T 1960
MEMORANDUM FOR: Deputy Comptroller
SUBJECT : Use of Pre-numbered Cash Receipts Forms at Field
Stations
REFERENCES : (a) Mt Report, 24+ February 1959
25X1 A6a (b) Audit Report, 31 August 1958
(c) Memorandum from Chief, Finance Division,
11 September 1957
1. References propose the use of a pre-numbered cash receipts
system to document receipts of cash into station funds, for use at
field stations. The system provides for creation of an original and
at least two copies of each receipt executed by a cashier. In use,
the original is given to the payer for his retention. The first
carbon copy is attached to the accounting voucher prepared to effect
entry to the books of account. The second carbon copy becomes a
permanent record of the receipt of funds.
2. This system is a refinement to basic cash receipt documents.
In circumstances permitting full application, its value as a cash
control mechanism has been well established through years of use in
commerce and government.
3. The benefits of this system vary from ease in locating book-
keeping errors, to the preclusion of rather elaborate attempts at
manipulation and fraud, dependent upon the degree of physical control
maintained over the forms themselves, both while they are in blank,
and during and after use. A practical degree of control for this
Agency must be determined before the advantages of the system can be
fairly stated.
4+. The classic advantages offered by the system require (1) a
strict centralized control over the production and issuance of the
receipt forms, and (2) internal controls to insure that a receipt is
prepared for each transaction in which cash is paid to a cashier and
that the integrity of the second carbon copy of the receipt be pre-
served through use of a receipt dispensing machine or other device
whereby control and handling of that copy is restricted to persons
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SUBJECT: Use of Pre-numbered Cash Receipts Forms at Field Stations
5. The impracticality of such controls in this Agency's field
stations is obvious in view of the number of our overseas installa-
tions, the varied space and cover conditions under which they operate,
the necessarily thin staffing of overseas administrative sections, the
distances between headquarters and its field stations, and the volume
of record keeping necessary to a centralized issue and control system.
Control and administration of such a system is practical for this
Agency if maintained at the field station level, and we should consider
adoption of the system based only upon those advantages obtainable in a
station-controlled situation.
6. We shalt assume a system to include pre-numbered cash receipt
forms, providing for an original and at least two carbon copies, bound
in such manner that the original and first copies can be torn from the
book leaving the second copy intact. Forms would be procured by local
open-market purchase, or furnished by area supply depots or T8D print-
ing plants. Records of the receipt numbers, and physical control of
the books while in blank, would be retained by a designated officer at
the using station. In such circumstances we could anticipate these
advantages:
a. The second copy of the receipt form would reduce the
possibility of cash overages and other errors due to lose of the
first copy of the receipt, and resultant failure to record the
transaction on the station books*
b. The second copy would provide a source of quick reference
through which bookkeeping errors might be located,
co Persons making refunds or payments to station cashiers
are often unable to retain their receipts indefinitely. The
existence of the second copy of such receipt would afford them
protection against claims arising from bookkeeping errors in re-
cording the original transactions
d. The pre-numbered receipt would reduce risk of possible
theft of funds by the cashier. Under the system prevailing at
many stations, only the original and one copy of an un-numbered
receipt is prepared. In these circumstances, the cashier could,
conceivably, destroy the copy of the receipt, pocket the funds,
and make no entry on the books. No other record of the payment
would exist to disclose the theft. The pre-numbering system in
itself however, does not guarantee that a receipt will be executed
for all cash received. In instances where funds are transmitted
through the station courier system, there would be no certain
check that a receipt was issued unless the person transmitting
funds demanded a receipt.
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SUBJECT: Use of Pre-numbered Cash Receipts Forms at Field Stations
e. The existence of the second carbon copies, in bound
numerical order, Would permit a more thorough and rapid audit
of cash receipts transactions than is now possible:
(1)
Such transactions, as evidenced by the copies of
the receipts, could be quickly traced into the books
of entry, thus proving agreement between the two
records, or disclosing discrepancies. Unreported
cash overages might, for example, be disclosed by
this technique.
(2) An audit inventory of blank, numbered receipts,
held by the designated control officer, together
with checks on the presence and correct numerical
sequence of copies of used receipts, would tighten
control of cash receipts transactions,
f. In some stations no receipt is issued by the cashier for
payments and refunds made to him. As the pre-numbered receipt
adds formality to the financial transaction and ties its recording
directly into the books of account through cross-referencing, the
system should result in more use of receipts and increased protec-
tion for all parties involved, including protection to the cashier
in cases of dispute which might arise in connection with the dis-
position of funds.
7. Although we see no technical objection to the proposed system,
there are problems of administration Which must be considered:
a. In application, the system attaches the element of
accountability to an administrative form and prescribes some degree
of physical control over a form which may well be a shelf stock
item. In some stations, informalities occasioned by the physical
facilities, the division of duties among the personnel stationed
there, and varied other factors may weaken internal control over
the forms themselves.
be The un-numbered cash receipts form presently used at most
field stations, can be used to document both cash payments received
by the station cashier, and to document disbursements made by case
officers and others. The pre-numbered forms could not be used for
other than cash receipts by the cashier. An additional cash receipt
form, and attendant provisions for its procurement and storage, would
be necessitatede
co The pre-numbered system creates a copy of the cash receipt
in addition to those prepared at most stations at present. Volume
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SUBJECT: Use of Pre-numbered Cash Receipts Forms at Field Stations
would not be substantial but provision would have to be made for
the storage and scheduled destruction of these documents*
d. Inherent in the system would be a cross-referencing entry
in the books to the cash receipt number. This creates another item
of detail for entry to the bookso
e. Some stations in remote areas may be unable to obtain pre-
numbered receipts for use in this system. In those cases adjacent
stations or area supply points would be requested to provide forms.
8. Summary
a. The proposed system is a refinement to existing basic cash
control procedures. The controls and devices necessary to retain
all of the classical audit and managerial advantages in the system
are not necessarily practical of application to all the field in-
stallations of this Agencys
be The advantages listed in paragraph 6 are those remaining
in the system as it may be applied on a field controlled basis.
The system may reasonably be expected to improve document control
and to decrease errors in the finance sections of field stations,
and to provide more protection to persons making refunds and pay-
ments into station funds as well as to fund custodians. It will
also permit a more thorough and conclusive audit of cash trans-
actionse
c. The system will create a new form, necessitating provision
for its procurement and storage. One additional cross-referencing
notation to the cash journal will be required.
9. Conclusion
a. Those advantages listed as a, b, c, and f in paragraph 6
are most desirable from the field viewpoint and will accrue in part
or in whole regardless of the degree of control which may be exer-
cised over the receipt forms. The effectiveness and value of this
system would be increased if payors and payees insist upon docu-
menting each transaction with a receipt. In addition, with control
records maintained at field stations over receipt books available,
the advantages listed in paragraph 6d and 6e would be accomplished
at least to a desirable extent*
be The installation of the system can be accomplished by
merely obtaining the pre-numbered receipt forms. The operation of
the system requires no appreciable additional work by the funds
custodian.
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SUBJECT: Use of Pre-numbered Cash Receipts Forms at Field Stations
c. Supply and storage problems will be minimal as the volume
of such forms used annually is light.
We recommend (a) that both the Class A and Class B finance
handbooks be revised to prescribe the use of pro-numbered cash receipts
forms, with optional use at Class B stations as determined by the Chief
of Station or Base, and that controls over the procurement, stocking,
issuance and use of these forms be established to the maximum extent
practical in local circumstances, and (b) that with the issuance of
such revision, all Finance officers and funds custodians be reminded of
regulations which require the issuance of a receipt for all such funds
Chief, Technical Accounting'Staff
n/ Chief, Finance Division
Date
y Comptroller Date
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