Division of Police FY09 Expenditures. County of Henrico

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1 Internal Audit Report on Division of Police FY09 Expenditures County of Henrico Proud of our progress; Excited about our future Internal Audit Report #211 March 24, 2010 HENRICO COUNTY INTERNAL AUDIT EAST PARHAM ROAD P.O. BOX 90775, RICHMOND, VIRGINIA

2 Internal Audit Division of Police FY09 Expenditures 1 Summary Scheduled Audit 4 Audit Objectives Identified Internal Controls are Sufficient related to two Objectives and Need Improvement related to two Objectives. Exception Oriented 2 Issues Management developed action plans to address all risks identified 2 1

3 Contents Introduction and Background Scope, Objectives and Methodology Conclusion on Audit Objectives Issues and Management Action Plans Closing and Report Distribution 3 Introduction Auditor III Joyce Aikor-Richardson performed Audit work Used professional auditing standards Scheduled Audit All exceptions given to Agency Reported control design issues and significant test exceptions only Work for same Government we Audit 4 2

4 Background The Division of Police: Responds to citizen complaints Provides patrol coverage Enforces traffic laws Investigates criminal activity Investigates animal complaints Operates citizen police academies Conducts crime analysis Provides emergency communications for the County 5 Background cont d 3

5 Background cont d Initiatives & Programs: Joint programs with Henrico County Public Schools, help students develop into upstanding, law-abiding citizens Joint programs with the Commonwealth s Attorney to identify career criminals and seek revocation of suspended jail time through the judicial system 7 Background cont d Initiatives & Programs: Joint effort With Human Resources - Sworn officers are able to complete the criteria for advancement opportunities within a minimum of nine years Operation Lion Share - partnership with Food Lion stores in Eastern Henrico provides timely crime prevention tips and information 8 4

6 Scope FY09 Operating $6,704,703 Capital $4,550,861 Personnel $58,758,905 EXCLUSIONS We did not test system controls for the Division s Expend system which is used to electronically route expenditures for approval. We did not test expenditures for specific compliance with grant provisions. We did not perform detail testing of overtime as overtime will be covered in another FY10 audit. 9 Source of Funds Capital Funds, $928,791 Grants, $1,445,320 $170,088 forfeiture General Funds, $67,463,

7 Budget VS Actual FY09 $60,000, $50,000, $40,000, $30,000, $20,000, Budget Actual $10,000, $- Personnel Operating Capital 11 Internal Controls Objectives: Reliability and integrity of information Compliance with policies, procedures, laws and regulations Safeguarding of Assets Effectiveness and efficiency of operations 12 6

8 Internal Controls General Limitations of any Controls: Errors and irregularities may go undetected Inherent limitations in any control structure Limitations include resource constraints, legislative restrictions, etc. Projection to future subject to risk of change in effectiveness Compliance may deteriorate 13 Audit Objectives Determine that Internal Controls exist and are operating effectively: 1. To ensure reimbursements to Agency Head are properly supported and authorized. 2. To ensure personnel expenditures and leave are recorded in compliance with Personnel Rules and Regulations and proper accountability is established. 14 7

9 Audit Objectives cont d Determine that Internal Controls exist and are operating effectively (continued): 3.To ensure non-personnel expenditures are properly procured, classified, supported with documentation, and accountability is established. 4.To ensure fixed assets are properly recorded and accountability is adequate. 15 Audit Methodology Identify and evaluate control procedures Randomly sample recorded FY09 transactions and trace to supporting documents Review documentation for compliance with applicable policies and regulations and for adherence to control procedures 16 8

10 Conclusions on Audit Objectives Determine that Internal Controls exist and are operating effectively: 1. To ensure reimbursements to Agency Head are properly supported and authorized. Related controls were determined to be Sufficient. 2. To ensure non-personnel expenditures are properly procured, classified, supported with documentation, and accountability is established. Controls related to non-personnel expenditures paid by Direct-Pay Invoices, Purchase Orders, and Inter- Departmental Transfers were Sufficient. However, controls over timely settlement of Travel Need Improvement. (See Issue 1) Insufficient-Immediate Attention Improvement Needed Sufficient 17 Conclusions on Audit Objectives cont d Determine that Internal Controls exist and are operating effectively (continued): 3. To ensure personnel expenditures and leave are recorded in compliance with Personnel Rules and Regulations and proper accountability is established. While no issues were found with regard to recorded expenditures, controls Need Improvement with respect to ensuring leave is recorded accurately. (See Issue 2- Other Observation) 4. To ensure fixed assets are properly recorded and accountability is adequate. Related controls were determined to be Sufficient. Insufficient-Immediate Attention Improvement Needed Sufficient 18 9

11 Issues 1. Settle Travel Timely Upon Return Other Observation 2. Review Leave and Overtime Entries 19 Issue 1 Settle Travel Timely Upon Return 20 10

12 Criteria Issue 1 Henrico County Travel policy The traveler is responsible for properly accounting for and reconciling such funds and for filing a completed T-1, T-2, and T-3 and Travel Justification Addendum (if necessary) with the Accounting Division of the Department of Finance within 14 calendar days from the trip return date, in compliance with these Policies and Procedures. 21 Condition Issue 1 We found 3 of 13 (23%) travel expenditures that were settled more than 14 days after return from travel in our test of travel transactions for the Agency head and his deputies. Additionally, we found 17 of 80 (21%) sampled travel expenditures that were settled more than 14 days after return from travel for the remainder of the Division's employee population. We also saw a report from the Division of Finance covering the first several months of fiscal 2009 denoting departments with travel settled more than 45 days from return. This report indicated that the Division of Police had 15 travelers during the period covered that had settled travel ranging from 22 to 96 days late

13 Issue 1 Cause Due the schedules of the Division of Police staff, they have greater difficulty stopping by the office to complete the necessary forms within the stated timeframe. Effect Untimely settlement of travel results in non- compliance with County travel policy and, where applicable, potential delay in the return of advanced County funds that were not spent. 23 Recommendation Issue 1 Controller should work with Division leadership to develop procedures to ensure compliance with County travel policy regarding settlement in 14 days of return or work with Division of Finance to determine if a different timeframe should be granted to Police

14 Issue 1 Management Action Plan Division Reporting Procedure RP was updated to require Division employees turn in travel receipts to Fiscal Records within 7 days of return date. On the 8 th day, the Account Clerk III will notify the Controller if receipts have not been received. The Controller will notify the employee to turn in receipts by and copy the Deputy Chief. Action Plan Owner: Controller Planned Completion Date: April 1, Other Observation The following slide includes a point of emphasis for management given that new systems and processes have already been implemented and address some of the cause of the issue

15 Issue 2 Review Leave and Overtime Entries We sampled 1 FY09 pay period processed in the legacy MAPS system (B10 - October to November 2008) and tested timecards for all Division i i staff. During that t time, manual timecards were submitted and keyed into the MAPS system for payroll processing. We found several instances where leave was not accurately keyed from the manual timecards into the MAPS system. In addition, we found one error regarding overtime recorded but not keyed into MAPS for payment. Recommendation Implementation of the new Oracle system appears to have addressed a significant part of the cause of this issue as individuals now key their own time directly in the system. However, the Division should reinforce the need for supervisors to appropriately review time and leave entries in the Oracle system and ensure compliance with "Personnel Rules and Regulations" section 16.2.G and 16.2.I regarding corrections of omitted time. 27 Issue 2 Management Action Plan The sentence Pursuant to Henrico County Rules and Regulations Section 16.2.G, supervisors are responsible for making sure they review and approve timecards for employees that report to them. will be added to an the Fiscal Records Unit sends to all Division supervisors the week before timecards must be approved. Action Plan Owner: Controller Planned Completion Date: March 26,

16 Closing Appreciated cooperation Follow up on open Action Plans will be performed as completion dates are reached 29 Document Distribution Audit Committee (Mr. Donati, Mrs. O Bannon Bannon, County Manager) Board of Supervisors, Non-Audit Committee Chief of Police Internal Audit Staff 30 15

17 Audit Contact Information Vaughan Crawley, Director Phone: , 4292 FAX Joyce Aikor-Richardson, Auditor III Phone: , FAX