INTERNAL CONTROL ANALYSIS OF CASH RECEIPTS AND DISBURSEMENTS IN TELECOMMUNICATION INFRASTRUCTURE CONTRACTORS: AN EMPIRICAL CASE STUDY OF PT BERKAH KREASI BERSAMA

Abstract

Cash represents the most liquid, convertible, and vulnerable financial asset within any commercial enterprise, necessitating robust internal control mechanisms to safeguard liquid assets, ensure faithful accounting representation, and mitigate fraud risks. This study evaluates the design, operational implementation, and effectiveness of internal control systems governing cash receipts and disbursements at PT Berkah Kreasi Bersama—a telecommunications network infrastructure and cellular tower installation contractor in Medan, North Sumatra. Utilizing a qualitative descriptive case study methodology, primary empirical data were gathered through direct participant observation, comprehensive documentary review of cash and project accounting records (Master Contracts [SPK], Invoices, Purchase Orders [PO], Cash Advance Vouchers [CAV], bank transfer slips, and cash ledgers), and semi-structured in-depth interviews with key operational actors across executive, financial, and operational tiers (Company Director, Finance Manager, and Accounting/Administrative Staff). Evaluative benchmarks were structured around the Committee of Sponsoring Organizations of the Treadway Commission (COSO, 2013) Internal Control-Integrated Framework and analyzed via the Miles, Huberman, and Saldaña interactive qualitative model. Empirical findings reveal that while formal administrative protocols exist—such as client contract executions, milestone billing schedules, and executive expenditure authorizations—the internal control system operates sub-optimally and displays severe structural vulnerabilities. In cash receipts, significant segregation of duties deficiencies persist: a single finance/treasury personnel concurrently executes cash collection, transaction journalizing, and bank deposits. Furthermore, cash receipt logging experiences systemic delays, routinely recorded on an unverified next-day (H+1) basis following transaction confirmation. In cash disbursements, petty cash and operational project advances issued via Cash Advance Vouchers (CAV) frequently lack authentic supporting documents (receipts, merchant invoices, travel vouchers) and suffer prolonged submission lags from field engineers. Most critically, supervisory physical cash counts and independent surprise cash audits are virtually absent, performed only reactively upon executive request. In fiscal year 2024, these systemic control deficiencies culminated in substantial unverified cash discrepancies and register deficits, highlighting elevated operational vulnerability to human error and potential financial misappropriation. In conclusion, internal control at PT Berkah Kreasi Bersama is ineffective under COSO standards. The enterprise must immediately enforce strict functional segregation of duties, mandate real-time computerized cash accounting, institutionalize routine daily cash reconciliations and surprise physical counts, and enforce closed-loop documentary accountability for all project field disbursements.