KAREN E. RUSHING. Investigation of Knight Trail Park Pistol and Rifle Range Cash Handling Activities

Transcription

1 KAREN E. RUSHING Clerk of the Circuit Court and County Comptr oller Investigation of Knight Trail Park Pistol and Rifle Range Cash Handling Activities Investigative Services Karen E. Rushing Clerk of the Circuit Court and County Comptroller Jeanette L. Phillips, CPA, CGFO, CIG Director of Internal Audit and Office of the Inspector General Investigative Team Jody Maxwell, CPA, CIA, CFE, CIGA Senior Internal Auditor May 2014

2 TABLE OF CONTENTS Page Summary and Results 3 Opportunities for Improvement and Management Response 4 Page 2

3 Summary and Results The Clerk of the Circuit Court and County Comptroller s Internal Audit Department and Office of the Inspector General has completed an investigation of the Knight Trail Park, Pistol and Rifle Range cash handling activities. The investigation was planned and conducted in accordance with the Principles and Standards for Offices of Inspector General. The purpose of the investigation was to establish the root cause of a $50.00 discrepancy reported in a deposit dated March 26, 2014, to reconcile the change fund, and to evaluate internal controls. On April 1, 2014, a Senior Accounting Technician, from the Clerk s Finance Department, notified a Parks and Recreation Department Manager that the County s bank account was debited in the amount of $50.00 based on a deposit submitted by Knight Trail Park, Pistol and Rifle Range. The debit indicates that the deposit was short by $ The $ cash deposit was originally from collections received on March 19, 2014, picked-up by the County armored car service, Brinks, on March 28, 2014 and validated by the bank on March 31, The cash received by the County s bank was verified by their vault at $ Based on the results of the investigation and discussions with the responsible employees, we were not able determine the disposition of the missing $ However, we were able to identify opportunities to strengthen the Knights Trail Park Pistol and Rifle Range procedures and controls. Page 3

4 Opportunities for Improvement The investigation disclosed certain policies, procedures, and practices that could be improved. The investigation was neither designed nor intended to be a detailed study of every relevant system, procedure, or transaction. Accordingly, the Opportunities for Improvement presented in this report may not be all-inclusive of areas where improvement may be needed. Observations and recommendations were made in the following areas: A. Safeguarding of Assets B. Validity and Reliability of Data C. Effectiveness and Efficiency of Program Operations A. Safeguarding of Assets Internal controls regarding the safeguarding of assets include policies and procedures that management has implemented to reasonably prevent or promptly detect unauthorized acquisition, use or disposition of resources. Observation 1. During public hours, the key intended to lock the cash register was in the key hole. 2. During public hours, the two safes located on site were unlocked. 3. Employees from the contracted courier service, Brinks, were permitted to access the office, collect the deposit and sign the transaction log without communication or interaction with a county employee. 4. Multiple persons other than the designated custodian of the change fund have regular access to the fund. 5. Cash deposits and the corresponding deposit slips are not prepared and placed in a secure bank bag, daily, as required by Sarasota County, Accounting Policy and Procedure 9.2 Business Center Receipt, Balance, and Deposit of Cash. Recommendation 1. The cash register should remain locked when not in use and the key should be in the possession of the assigned custodian. 2. Both safes should be locked when authorized personnel are not actively retrieving or securing property intended to be stored in the safes. 3. A designated employee should retrieve the deposits from the locked safe, give them to the contracted courier service, Brinks, and confirm the acknowledgment signature on the transaction log. 4. In accordance with the Sarasota County, Accounting Policy and Procedure 9.5, Change Funds, only the designated custodian of the change fund should access the fund. 5. Cash deposits and deposit slips should be prepared daily and secured for pick-up by the County s armored car service. Page 4

5 Management Response 1. Staff has been informed to keep register locked and to have key in the possession of the assigned custodian. Staff notified immediately on May 1, 2014, Reviewed with Staff again onsite May 7, Staff has been informed to lock all safes when not actively retrieving or securing items. Staff notified immediately on May 1, Reviewed with Staff again on site May 7, An employee will be designated to hand the deposit to the courier service and confirm acknowledgement signature. Staff notified immediately on May 1, Reviewed with Staff again onsite May 7, Change funds will only be accessed by the designated custodian. Staff notified immediately on May 1, Reviewed with Staff again onsite May 7, Cash deposits and slips will be prepared daily. Staff notified immediately on May 1, Reviewed with Staff again onsite May 7, B. Validity and Reliability of Data Internal controls regarding validity and reliability of data include policies and procedures that management has implemented to reasonably ensure that valid and reliable data are obtained, maintained and fairly disclosed in reports. These controls help assure management receives valid and reliable information about whether programs are operating properly on an ongoing basis. Observation During the process of reconciling the cash transactions at the close of each business day, additional sales are added, at times, to the Rec-ware system to force balance the transactions for the day. Recommendation Controls should be implemented to prevent force balancing and the cash over/short form should be utilized to document variances noted during the reconciliation of the daily cash transactions. Each customer should be provided a receipt at the time of the transaction. Management Response Forced balancing should not take place and the appropriate documentation should be used. Each customer will be provided a receipt. Documentation will be provided to staff outlining proper procedures. Staff notified immediately on May 1, Reviewed with Staff again onsite May 7, Page 5

6 C. Effectiveness and Efficiency of Program Operations Internal controls regarding effectiveness and efficiency of program operations include policies and procedures that management has implemented to reasonably ensure that a program meets its objectives and that unintended actions do not result. These controls include processes to ensure that all employees possess the knowledge, skills and other competencies needed to perform their individual responsibilities. Observation Training transcripts did not support that three of the department s employees who regularly process cash had attended Cash Management Training. However, the record did reflect that the Supervisor and Manager were trained. Recommendation Management should assure that all employees handling cash obtain Cash Management Training. Management Response After searching records it was found that these three employees did not receive Cash Management Training (although others in our department had). Office of Financial Management (OFM) has been contacted and training is being scheduled. Page 6