The president of a registered charity, the Helping Elderly Low-Income People Foundation (HELP), approaches you for help on a special project to set up the charity's accounting system. HELP is a relatively new organization that is regulated by both the federal and provincial governments. The organization is required to maintain current financial records for the public to scrutinize. In other words, the records must be available to anyone who is interested in reviewing them. It is now the end of the charity's first fiscal year, and HELP has come to you with a shoebox of receipts and bank statements. You notice that the bank statements are still in their envelopes-they have not been opened.

The charity's revenue is mostly from donations. A van driver takes volunteers around the city and they go door to door asking for donations. The volunteers give a donation receipt for amounts over $20. Since volunteering takes a lot of time, the charity has many short-term volunteers and anyone is welcome to be one.

Two car companies generously donated vans to the organization. The van drivers are paid $50 a day, which they take from the donations. Drivers keep a summary of the total donations collected by the volunteers, and at the end of the day the drivers take the money to a bank and deposit it. Drivers also pay for their gas out of the donated funds.

HELP also held a fundraising dance last month. The president said he was disappointed with the project, though, because it did not bring in much money. To keep costs down, the president made the dance tickets by photocopying tickets and cutting them up. He gave them out to volunteers to sell for $25 each. He estimates that he printed 500 tickets, but can only account for about $5,000 (200 tickets @ $25) of revenues turned in by his volunteers.

Instructions

(a) Identify the control weaknesses over cash receipts and payments.

(b) List the improvements in control activities that HELP should consider.