Revenue Leakage at the Land Registry
An audit of a land registry office finds that stamp duty collections are recorded in a manual receipt book and later entered into a spreadsheet. Cash is banked weekly. The office has 14 staff, but only two can approve waivers of late-payment penalties. In the past year, 1,200 waivers were granted, of which 900 were approved by one officer. Total stamp duty collected was Tk 95 million against an assessed demand of Tk 120 million. There is no reconciliation between the receipt book and the bank statements. Two receipt books are missing. Citizens complain of unofficial 'speed payments'. The office has no CCTV and the safe key is held by the same officer who approves waivers.
1. Identify the key control weaknesses and classify them by fraud risk.
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Segregation of duties. The officer who approves waivers also holds the safe key, combining authorisation and custody. This is a classic fraud-enabling combination.
Concentration of authority. 900 of 1,200 waivers by one officer suggests either an excessive delegation or a collusive or extractive pattern. Waivers reduce assessed revenue and are a direct leakage channel.
Recording and reconciliation. Manual receipts with no bank reconciliation mean collections can be under-recorded or diverted. The Tk 25 million gap between demand and collection is unexplained and could include both genuine waivers and misappropriation.
Physical security. Missing receipt books and no CCTV create opportunity and destroy audit trails.
Informal payments. 'Speed payments' indicate bribery risk at the citizen interface, often linked to the same discretion over waivers and processing order.
Classify as: high risk - custody/authorisation overlap, missing receipt books, unreconciled cash; medium risk - waiver concentration without review; and governance risk - no independent oversight.
2. Recommend a remedial action plan with sequencing and quick wins.
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Immediate (0–30 days).
- Separate the safe key custody from waiver approval; assign a second custodian.
- Reconcile receipt books to bank statements for the full year and investigate the Tk 25 million gap.
- Suspend the single-officer waiver pattern and require dual approval above a threshold.
- Secure the premises and install CCTV at the cash counter.
Short-term (1–3 months).
- Introduce pre-numbered, serially controlled receipt books with daily reconciliation.
- Publish a waiver register showing applicant, amount, reason, and approver.
- Introduce a queue-management system to reduce 'speed payment' opportunities.
- Rotate staff duties periodically.
Medium-term (3–12 months).
- Digitise receipts and integrate with the bank and land records system, with automated reconciliation.
- Introduce an internal audit function reporting to a committee, not to the office head.
- Establish a complaints and whistleblowing channel with protection.
Sequencing rationale. Physical and reconciliation fixes come first because they stop ongoing loss. System digitisation comes later because it requires procurement and training. The plan should be tracked with monthly metrics: waiver rate, reconciliation exceptions, complaint volume, and average processing time.