You are asked to join the board of elders of a local church to help with the control activities for the offerings collection made at weekly services. At a meeting of the board, you learn the following:

1. The board of elders has delegated responsibility for the financial management and audit of the financial records to the finance committee. This group prepares the annual budget and approves major payments but is not involved in collections or record keeping. No audit has been done in recent years, because the same trusted employee has kept church records and served as financial secretary for 15 years. The church does not carry any fidelity insurance.

2. The collection at the weekly service is taken by a team of ushers who volunteer to serve for one month. The ushers take the collection plates to a basement office at the back of the church. They hand their plates to the head usher and return to the church service. After all plates have been turned in, the head usher counts the cash collected in them. The head usher then places the cash in the church safe along with a note that includes the amount counted. The safe is unlocked because no one can remember the combination, and after all, it is in a church.

3. The morning after the service, the financial secretary goes to the safe and recounts the collection. The secretary withholds $200 to pay for cash purchases for the week, and deposits the remainder of the collection in the bank. To facilitate the deposit, church members who contribute by cheque are asked to make their cheques payable to "Cash."

4. Each month, the financial secretary reconciles the bank statement and submits a copy of the reconciliation to the board of elders. The reconciliations have rarely revealed any bank errors and have never shown any errors per books.

Instructions

(a) Identify the control weaknesses in the handling of collections.

(b) List the improvements in control activities that should be recommended for (1) the head usher, (2) the ushers, (3) the financial secretary, and (4) the finance committee.