Ace the 2026 CGFM Exam – Turbocharge Your Path to Financial Mastery!

In the context of cash controls, the principle of separation of duties is critical to preventing fraud and errors in financial transactions. Typically, there are four distinct roles involved in this process:

1. **Authorization**: This role involves approving transactions before they occur, ensuring that expenses or cash disbursements are necessary and properly authorized by management.

2. **Custody**: This involves handling and safeguarding cash and other assets. The individual in this role is responsible for physical cash and has access to cash reserves or bank accounts.

3. **Record Keeping**: This role entails maintaining records of cash transactions, which includes bookkeeping and preparing financial reports. This person tracks incoming and outgoing funds.

4. **Reconciliation**: This role involves comparing the cash records with bank statements to ensure accuracy and identify discrepancies. It helps validate that the records match the actual cash available.

Having these four roles distinct and separated helps ensure that no single individual has control over all aspects of cash transactions, which minimizes the risk of theft or mismanagement. Each role serves as a check on the others, providing a system of accountability that is essential for reliable cash management in government operations.