Internal Controls Review

Internal Controls Review

Companies should start by identifying the weaknesses in their financial processes and structures that make fraud easy, such as a lack of internal controls, loopholes in business processes, or the easy availability of check stock on-site.

Management should consider implementing some or all of the following:

• Separation of duties -- so that no one employee has sole control of the entire process.
• Manual controls -- so that fraud can’t slip by as part of an unmonitored process.
• Limited access to accounts and the ability to make payments -- so that staff can’t manipulate systems they’re not supposed to, and so that you’ll know exactly who could have made potentially fraudulent entries or changes.
• Require double signatures -- so checks can’t go out on the fraudsters say-so alone.
• Get daily check reports -- so that frauds can be caught quickly.
• Securely store check stock.

“Everything someone needs to steal money from your company or a client is right there on the check,” Lacerte noted, before adding that, while securing check stock was important, it would be far better to move beyond paper checks entirely. “Paper is one of the biggest problems when it comes to fraud. You have to go paperless.”

Electronic invoicing and payment solutions like Bill.com and others not only eliminate the weak spot of having check stock in the office -- they also offer many opportunities for limiting access, monitoring payment activity, enforcing payment controls and separation of duties.

Source: accountingTODAY

Rene Lacerte, Las Vegas (November 05, 2013)

Is Social Security Exempt from IRS Levy? No!

Is Social Security Exempt from IRS Levy? No!
IRS can take up to 15% of Social Security Disability payments.  
○ The types of Social Security payments that the IRS levies under the Federal Payment Levy Program (FPLP) include:
   • Retirement, Survivors, and Disability Insurance program payments. 
○ The types of Social Security payments that the IRS does not levy under the FPLP include:
   • Children’s benefits; 
   • Supplemental Security Income payments; and 
   • Lump sum death benefits
See IRS Pub 4418

No Levy is allowed to impose Economic Hardship
Though the statutes permit IRS to take away up to 15% of disability payments, the law does not permit IRS to take anything if doing so would impose an economic hardship. “Economic hardship” is defined as the inability to pay basic living expenses. The United States Tax Court has stated that no levy is permitted to impose economic hardship. See Vinatieri v. Comm., 136 T.C. No. 16 (Dec. 21, 2009).