The Missing ₹350 and the Unsupported Voucher
You have taken charge of the office of a block education office. The imprest petty cash is ₹5,000, held by a junior assistant. On the 3rd of the month the peon was given ₹1,200 as an advance to buy stationery and cleaning materials. He has submitted bills for ₹790 and says the rest was spent on items for which the shop gave no bill. The cash book shows a balance of ₹1,860, but the cash box contains ₹1,510. There is a voucher for ₹450 for refreshments with no supporting bill, and a ₹200 payment for tea during a meeting, approved orally by the block officer. The cheque book has not been reconciled with the bank passbook for two months; the passbook shows an unexplained debit of ₹1,250. The junior assistant says small differences are normal and asks you to 'adjust' them.
1. Quantify and analyse the discrepancies. What must be verified before any entry is adjusted?
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Compute before you conclude. Cash book balance ₹1,860 minus physical cash ₹1,510 equals ₹350 short. The ₹1,200 advance is not yet a final expense: bills of ₹790 have been submitted, so ₹790 should be posted against the advance, cancelling that portion, and ₹410 remains unaccounted. The ₹450 refreshment voucher is unsupported; it is a valid payment only if the block officer certifies receipt and purpose, otherwise it must be recovered or treated as a temporary advance. The ₹200 tea payment has oral approval; obtain written ratification or recover it. The ₹1,250 bank debit needs the passbook entry, cheque number and bank advice before posting; it may be bank charges, a stale cheque or an unauthorised withdrawal. Do not 'adjust' ₹350 into miscellaneous expenditure. Trace it: recount the cash box with the junior assistant present, check sequential voucher numbers for a missing voucher, and compare the date of the last physical verification.
2. How should the peon's advance and the unsupported payments be settled?
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Treat the advance as a standing advance with a fixed settlement date, not a casual loan. Enter it in an advance register and settle within seven days of purchase. For the ₹410 without bills, obtain a certificate from the peon listing the items and a countersignature from the officer who authorised the purchase; if that is not possible, recover it from the peon in instalments after a fair hearing - do not simply write it off. For the ₹450, ask the junior assistant to produce the restaurant bill or a certificate; if neither exists, the payment is unauthorised and must be recovered from the person who made it, with a note on file. The ₹200 tea expense should be ratified in writing by the block officer or recovered. None of these should be netted against future advances. Explain that a missing bill is not a small difference - it is the control that prevents theft.
3. Recommend control changes to prevent a recurrence.
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Restore the basics: numbered vouchers for every payment, a supporting bill or certified receipt, and the officer's signature before payment, not after. The imprest holder should not be the same person who verifies the cash; arrange a monthly surprise count by the block officer or another officer, signed by both. Maintain a petty cash book with a running balance and close it monthly. Reconcile the bank account within seven days of receiving the statement and keep the reconciliation statement on file. Fix a ₹500 limit for oral approvals, with written ratification the next working day. Separate custody of the cheque book, passbook and cash box if staffing allows. Send the junior assistant for a short accounts refresher. Report the ₹350 and the unsupported payments in writing to the block officer rather than absorbing them; if the ₹1,250 debit is unexplained, ask the bank in writing immediately.