In a staffing scenario, how should duties be separated according to the guidelines?

• A. You prepare the daily deposits, and the new employee should post cash disbursements to the permanent court record.
• B. The two of you should both prepare deposits but the new employee posts disbursements.
• C. You should prepare the daily deposits, and the new employee should post cash disbursements to the permanent court record.
• D. The supervisor should handle all deposits and disbursements.

Answer: (C)

Separation of duties is about dividing responsibilities so that no single person both handles cash and records it, creating a check on the process and an auditable trail. In this setup, one person should focus on preparing daily deposits, while a different person handles posting cash disbursements to the permanent court record. This arrangement reduces the risk of misappropriation or mistakes because the person recording disbursements verifies against what was deposited and keeps the official ledger independent of cash handling.

So, having you prepare the deposits and the new employee post the disbursements aligns with good internal control: custody of cash is separated from the recording of disbursements. It also provides a clear trail for audits. If both duties were done by the same person, or if deposits were posted by the person who also prepared them, there would be less opportunity for error detection and greater potential for manipulation. If the supervisor handled everything, it would concentrate controls in one role and reduce the necessary checks and balances.