Internal Audit Follow-Up Report

Transcription

1 Internal Audit Follow-Up Report Revenue Accounting TxDOT Internal Audit Division

2 Objective Assess the status of corrective actions for high risk Management Action Plans (MAPs) previously communicated in Revenue Accounting audit report issued August Summary Results Testing consisted of an evaluation of 4 MAPs to determine if corrective actions were implemented as agreed. MAP Status Comments 4 Closed Corrective actions have been completed. Scope This engagement covered limited activities within the Financial Management Division (FIN), Support Service Division (SSD), Travel Information Division (TRV), and Bryan, San Antonio, and Waco Districts. The fieldwork included 1) review of district and division procedures and 2) observation and assessment of mail and revenue handling for the payment transfer and vault logs for February and March 2016 and monthly reconciliations for January and February The engagement was performed by Tim Owen and Jill Emery (Engagement Lead). The engagement was conducted during the period from February 22, 2016 to May 10, Methodology The methodology used to complete the objective of this engagement includes: Verified the existence of the Revenue Handling/Robbery Awareness training course in the Enterprise Learning Management System Reviewed the notification sent to all revenue handling staff to complete the annually required training Reviewed the following for FIN, SSD, and TRV Divisions and the Bryan, San Antonio and Waco Districts: o Mail handling procedures or policies for revenue receipts and dual verification of deposit o Dual signatures on payment signature transfer logs o Dual signatures on vault logs when checks were kept overnight before deposit o Revenue logs used to record checks received by the districts and divisions and verified content, use, and inclusion of dual signatures Completed interviews of personnel conducting mail handling, revenue logging, and revenue deposit tasks Background This report is prepared for the Texas Transportation Commission and for the Administration and Management of TxDOT. The report presents the results of the Revenue Accounting MAP Follow-Up engagement which was conducted as part of the Fiscal Year 2016 Audit Plan. August

3 Districts and divisions often collect payments (usually via mail) of certain small revenue items (i.e., cash or checks) and follow certain procedures to safeguard and record the funds received in a timely manner. Transactions are recorded in the Revenue Logging System (RLS) upon receipt, and the corresponding deposits are to be made within 3 business days of receipt. FIN reconciles deposits with the RLS to ensure receipts have been properly deposited and recorded. We conducted this follow-up engagement in accordance with Generally Accepted Government Auditing Standards and in conformance with the International Standards for the Professional Practice of Internal Auditing. Those standards require that we plan and perform the engagement to obtain sufficient, appropriate evidence to provide a reasonable basis for our conclusions based on our engagement objective. Recommendations to mitigate risks identified were previously provided to management during the original engagement to assist in the formulation of the management action plans referenced in this report. The Internal Audit Division uses the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control Integrated Framework version August

4 Detailed MAP Follow-Up Status MAP Status: Closed Corrective actions have been completed. MAP Owner: Casey Rowe, Revenue Accounting Manager, Financial Management Division MAP 1.1: The Financial Management Division (FIN) has reviewed the related findings, and we agree that FIN will provide a required annual course covering Revenue Accounting Policies to all Division and District personnel who handle revenue. FIN is currently working with HR to develop the revenue handling course and expect to have it completed for Fiscal Year 2015 Original Completion Date: April 15, 2015 Actual Completion Date: July 2015 MAP 1.2: The Financial Management Division (FIN) agrees to strengthen controls over mail handling and items held in the vault by having both mail handlers sign the payment transfer signature log created in the Revenue Logging System (RLS). FIN will also create a vault log to be signed by two people for items going into and out of the vault Actual Completion Date: December 2014 MAP Owners: Kenneth Black, Minor Equipment Services Supervisor, Support Service Division Debbie Follien, Travel Publications Section Business Manager, Travel Information Division MAP 1.3: The Travel and Support Services Divisions agree to strengthen their divisions controls over revenue handling including: Updating desktop procedures as determined beneficial Requiring dual control (2 persons) to open mail Requiring logging into Revenue Logging System (RLS) and signing/dating the printed FIN log posting by the logger and the mail handler(s) Requiring the non-logging mail handler to carry the revenue item to the closest Finance Division (FIN) drop box unless items are held overnight Printing, signing, placing, and retaining RLS reports for any financial items held overnight to show evidence of a listing of items in a secured cabinet Other practices, such as modification of correspondence to notify that payments should be sent to the TxDOT P.O. Box Monthly reconciliation of the RLS to the general ledger Actual Completion Date: December 2014 August

5 MAP Owners: Elizabeth Hogeda-Romo, Business Services Coordinator, San Antonio District Cassidy Bruce, Business Services Coordinator, Waco District Susan Neumann, Business Services Coordinator, Bryan District MAP 1.4: The Districts including, San Antonio (SAT), Waco (WAC) and Bryan (BRY) concur with the recommendations to provide annual reviews, improve documentation, and to engage the Financial Management Division (FIN) when considering the adoption of operational procedures. The districts have taken immediate steps to address and cover deficiencies noted in the audit findings including: Mail operations will be handled with dual control Separation of duties for personnel assigned to log receipts against depositors Implementation of a paper log system showing evidence of dual control and separation of duties Monthly reconciliation to the Revenue Logging System to the general ledger Use of a vault log to enhanced vault controls and ensure that financial instruments held overnight are secured Development of desk-top procedures to provide users with written policies and procedures including but not limited to the Finance Division, Revenue Accounting Manual, Chapters 1-4. Periodical reviews/briefings with staff on policy changes and other pertinent updates Actual Completion Dates: October 2014 SAT December 2014 WAC May BRY Closing Comments The results of this MAP Follow-Up engagement were discussed with the Financial Management, Travel Information, and Support Services Divisions, and the Bryan, San Antonio, and Waco Districts on August 4, The Internal Audit team appreciates the cooperation and assistance received from the Financial Management, Support Services, and Travel Divisions; and the Bryan, San Antonio, and Waco Districts during this engagement. August