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Audit Report 2014-11 Parks and Recreation - Immokalee Community Park - Cash Review
InternalAuditDepartment AuditReport2014-11 ParksandRecreationDepartment ImmokaleeCommunityPark CashReview DwightE.Brock ClerkoftheCircuitCourt 3299TamiamiTrailEast Suite#402 Naples,FL34112-5746 www.collierclerk.com Issued:June18,2014 1 Preparedby:MeganGaillard,SeniorInternalAuditor ReportDistribution:BoardofCountyCommissioners LeoOchs,Jr.,CountyManager MarkIsackson,Director,CorporateFinancial&ManagementServices SteveCarnell,PublicServicesAdministrator BarryWilliams,Director,ParksandRecreation IlonkaWashburn,OperationsManager,ParksandRecreation AnnieAlvarez,RegionalManager,ParksandRecreation JeffKlatzkow,CountyAttorney Cc:DwightE.Brock,ClerkoftheCircuitCourt CrystalK.Kinzel,DirectorofFinance&Accounting JamesD.Molenaar,InternalAuditManager TABLEOFCONTENTS SUMMARY..................................................................................................................................2 OBJECTIVES...............................................................................................................................2 SCOPE..........................................................................................................................................2 BACKGROUND..........................................................................................................................3 OBSERVATIONS,RECOMMENDATIONS,&MANAGEMENTRESPONSES...................4 OTHEROBSERVATIONS,RECOMMENDATIONS,&MANAGEMENTRESPONSES.....5 CONCLUSION.............................................................................................................................7 ADDITIONALMANAGEMENTCOMMENTS........................................................................7 Thefilesanddraftversionsofauditreportsremainconfidentialandprotectedfrompublicrecordsrequests duringanactiveauditunder Nicolaiv.Baldwin(Aug.28,1998DCAofFL,5 th District)andFlorida Statute119.0713.Work-paperssupportingtheobservationsnotedwithinthisreportwillbecomepublic recordandwillbemadeavailableuponrequestoncethefinalauditreporthasbeenissued. 2 TheDraftAuditReportwasinitiallyreviewedwiththeParksandRecreationDepartmentonJune3,2014andwas releasedtotheDepartmentformanagementresponseonJune4,2014.CountyManagementprovidedCounty ManagementResponsesonJune13,2014. Summary Thefollowingauditobservationsforchangedrawerfundsweregeneratedduringthereview: 1.CertificateandRequestofImprestFundformshavenotbeenupdatedandprovidedtoClerk’sFinanceas changeshaveoccurred. 2.AnnualConfirmationshavenotbeenreturnedtoClerk’sFinancebytheduedateandhavenotbeen returnedonayearlybasis. Thefollowingotherauditobservationsforchangedrawerfundsweregeneratedduringthereview: 1.Depositslipsandinformationhavenotbeenproperlydisposed. 2.Sensitiveinformation(i.e.employeerecordsandremunerations/advices)havenotbeenproperly distributed. ImprestfundpoliciesandproceduresneedtobefollowedtoprovidetheClerk’sFinanceDepartmentwithaccurate informationforyear-endreporting,toprovidetheexternalauditorsreliableinformation,andtosafeguardthe County’simprestfunds. FloridaStatuteandParksandRecreationPoliciesandProceduresforchangedrawersandcashhandling(partial review)havenotalwaysbeenadheredtobyParksandRecreationstaff.Staffshouldbeproperlytrainedtoensure theyunderstandpoliciesandbeheldaccountableforcompliance. Objectives InternalAuditperformedanauditoftheImmokaleeCommunityParkchangedrawerandapartialreviewofrelated cashhandlingprocesses.Theobjectivesoftheauditweretodetermine1)whetherthecashfundsexist,2)whether internalcontrolsoverthecashfundsareadequate,3)whetherimprestfunddataisreliable,and4)whether custodiansareincompliancewithCountypoliciesandprocedures. Scope Thereviewconsistedof,butwasnotlimitedto,thefollowingtasks: ReviewofFloridaStatuteChapter219CountyPublicMoney,HandlingbyStateandCounty; ReviewoftheClerk’sFinanceDepartment’sAccountingProceduresManual(includingpoliciesand procedures); ReviewofParksandRecreationPoliciesandProceduresManual; ReviewofthemostrecentCertificateandRequestofImprestFundupdateforms; ReviewoftheannualconfirmationssubmittedbyParksandRecreationstaff; ReviewofCLASSPointofSalereports; ComparisonofthemostrecentinformationprovidedbyClerk’sFinancetotheinformationgatheredduring fieldwork; Completionofunannouncedcashcountsofthechangedrawer(ImprestFund)onAugust23,2011, March13,2013,andMay27,2014;and Interviewsofcustodianandsub-custodians:inquiringaboutandobservingtheproceduresusedtoaccount forandsafeguardtheirrespectivefunds. 3 Background Imprestfundpoliciesandproceduresdefinetheauthorizedusesoffundsprovidingthestructureforhow departmentsestablish,modify,spend,replenish,safeguard,anddiscontinuetheuseofthefundsinaccordancewith FloridaStatute.TheClerkhasestablishedauthoritativeguidelinesforthesafeguardingofcountyresourcesinthe Clerk’sFinanceAccountingProceduresManualeffectiveOctober1,2008. ChangedrawerfundsareusedtomakechangewheremoneyiscollectedduringtransactionsofCountybusiness. TheImmokaleeCommunityParkservestheImmokaleeCommunityandprovidesprogramsforchildren.The locationcollectspaymentsforafterschoolprograms,beachparkingstickers,beachlaunchstickers,parkrentals, parkpavilionandlocationrentals,etc.Thelocationacceptscash,checks,andcreditcards.ImmokaleeCommunity Parkamenitiesincludebaseball/softballfield,basketballcourts,picnicarea,playground,restroomfacilities,tennis court,racquetballcourt,picnicshelter,andindoorroomsforprograms. 4 Observations 1)CertificateandRequestofImprestFundformshavenotbeenupdatedandprovidedto Clerk’sFinanceaschangeshaveoccurred. ChangeDrawerPolicyItem4indicates“Onlythecustodianand/orthesub-custodianshouldhaveaccesstothe funds.”ChangeDrawerPolicyItem5requiresanewCertificateandRequestofImprestFundformtobecompleted andsubmittedeachtimethereisachangetothecustodianand/orsub-custodian,director,orphysicallocation. OnAugust23,2011,thecustodianlistedhadtransferredtoadifferentCountydepartment.Threesub-custodians werelistedwhonolongerwereemployeesoftheCounty.Threeemployeeshadaccesstothechangedrawerandthe safethatwerenotlistedontheformsasauthorizedusers.Therewereeightemployeeswhoworkedascashiersat thelocationandwerenotlistedontheforms. OnMarch13,2013,thecustodianandsub-custodianinformation/authorizeduserswerenotuptodate.The custodianlistedwasnotaccurate.Oneemployeehadaccesstothechangedrawerandwasnotlistedontheformsas anauthorizeduser. OnMay27,2014,allinformationwasvalidatedbyInternalAuditandnoexceptionswerenoted.Itappearsthe ImmokaleeCommunityParkisproperlyupdatingformsaschangesoccur. Ascustodians,sub-custodians,andcashierschange,itisimportanttoupdatetheCertificateandRequestofImprest Fundformandensurethatonlyauthorizedusershaveaccesstotheimprestfund. Recommendations: TheDepartment’sAdministrationshouldtakecaretoensureupdatedformsareapprovedbytheDepartment DirectorandprovidedtoClerk’sFinanceinatimelymanner. TheDepartmentshouldcontinuetocomplywithpoliciesandprocedures.Authorizationsshouldbeimmediately updatedforchangesinauthorizedusers,withappropriatetrainingonpoliciesandprocedures. Uponcustodianchanges,anofficialcountofthechangedrawerfundsshouldbecompletedanddocumented, approvedbytheterminatingcustodian,thenewcustodian,andthesupervisor. CountyManagementResponse : “TheParksandRecreationDepartmentconcursthatImprestFundsFormshavenotbeenupdatedandsubmitted timely.TheDepartmentappreciatestheacknowledgementthatperformanceinthisareahasimprovedovertime. TheDepartmentwillredoubleeffortstocompleteandsubmitformsinatimelymanneraschangesoccur.” 2)AnnualConfirmationshavenotbeenreturnedtoClerk’sFinancebytheduedateand havenotbeenreturnedonayearlybasis. ChangeDrawerProceduresItem7indicatesthecustodianorsub-custodianisresponsibleforreturningtheverified AnnualConfirmationtoClerk’sFinance,includingallupdates,bytheAnnualConfirmation’sspecifiedduedateon ayearlybasis. ThechangedrawerAnnualConfirmationshavenotbeenreturnedtoClerk’sFinancebytheduedateandhavenot beenreturnedonayearlybasis.AnAnnualConfirmationformwasnotreceivedbyClerk’sFinanceforFY2008, FY2009,orFY2010.TheFY2011,FY2012,andFY2013AnnualConfirmationswerereceivedbyClerk’s Financeaftertheduedate. TheFY2012AnnualConfirmationwasnotproperlyapprovedbytheParksandRecreationDirector.Annual ConfirmationsshouldbeproperlyreviewedandapprovedbythedirectorpriortobeingreturnedtoClerk’sFinance toensuretheaccuracyoftheinformationsubmitted. 5 IftheAnnualConfirmationform,includingallupdates,isnotcompletedandreturnedbythedeadlineprovided, fundsmaynotbeproperlyrecorded. Recommendations: TheDepartmentshouldreturntheAnnualConfirmations,includingallupdates,bytheduedate. WhenCertificateandRequestofImprestFundformsarecompleted,theinformationprovidedshouldbe accurate. ThedirectorshouldproperlyreviewandapproveAnnualConfirmations. CountyManagementResponse : “TheParksandRecreationDepartmentconcursthatAnnualConfirmationshavenotbeensubmittedorhavenot beensubmittedcompleteandtimely.TheDepartmentwillredoubleeffortstocompleteandsubmitformsbythe deadlineeachyear.” OtherObservations 1)Depositslipsandinformationhavenotbeenproperlydisposed. OnAugust,23,2011,thesafecontaineddepositbooksfrompriorFifthThirdbankaccountthathadbeenclosed. ThedepositslipswerenotproperlyreturnedtoClerk’sFinancefordisposalwhentheprioraccountwasclosed. OnMarch13,2013,anendorsementstampforapriorbankaccountwasinthesafe.Whenbankaccountsare closed,allbankitemssuchasendorsementstampsanddepositslipsshouldbeprovidedtoClerk’sFinancefor properdisposal. Custodiansshouldproperlydisposeofformerbankinginformationanddepositslipsatthetimetheaccountcloses topreventconfusionandtosecurebankaccountinformation.Unusedprioraccountdepositslipsshouldbeproperly disposedtoavoiddisclosureofsensitiveinformation. Recommendation: Allbankaccountinformationshouldbeproperlysecuredand/ordisposed. CountyManagementResponse : “TheParksandRecreationDepartmentconcursthatoutdateddepositslipsandendorsementstampswerenot returnedtoClerk’sFinancepromptlyin2011and2013.TheDepartmenthasconfirmedwithInternalAuditthat thisissuewasnotobservedatthislocationduringthefollowupinMay2014,norhasitbeenobservedduring recentmanagementsitevisits.TheDepartmentwillcontinuetotrainemployeesontheproperandprompt dispositionofbankinginformationandwillmonitorforcomplianceduringroutinesitevisits.” 2)Sensitiveinformation(i.e.employeerecordsandremunerations/advices)havenotbeen properlydistributed. OnMarch13,2013,depositremunerations/adviceswereinthesafeforaformerCountyemployeeandforcurrent employees.Theremunerationswerenotprovidedtotheemployeepriortoemployeetermination.Current employee’sremunerationshadbeeninthesafeforweeks.AnenvelopemarkedconfidentialfromBCCHuman ResourcesforaformerCountyemployeewasinthesafe.Confidentialpersonnelinformationshouldbedistributed toemployeestimelyorintheeventtheemployeeleavesCountyemployment,theinformationshouldbereturnedto BCCHumanResourcesfordistribution. Locationsupervisorsand/ormanagersshouldensuretimelydistributionofpayrollinformationand/orpersonnel information.Sensitiveinformationshouldnotbemaintainedatalocationonceemployeesnolongerworkforthe 6 County.Bymaintainingtheinformation,theCountyisexposedtopotentialpayrollfraudand/ordistributionof confidentialinformation. Recommendations: Payrollrecords,information,remunerations/advices,andpersonnelinformationshouldbedistributedto employeesinatimelymanner. Uponemployeetermination,anydocumentationforanemployeeshouldbereturnedtoBCCHumanResources fordistribution. CountyManagementResponse : “TheParksandRecreationDepartmentconcursthatremunerationsandemployeecommunicationswereleftinthe safein2013.TheDepartmenthasconfirmedwithInternalAuditthatthisissuewasnotobservedatthislocation duringthefollowupinMay2014,norhasitbeenobservedduringrecentmanagementsitevisits.Remunerations arenowdistributedelectronically,therebyvirtuallyeliminatingthepossibilityofsuchacircumstancere-occurring. TheDepartmentwillcontinuetotrainemployeesontheproperandpromptdispositionoflikedocumentsandwill monitorforcomplianceduringroutinesitevisits.” 7 Conclusion ImprestfundpoliciesandproceduresneedtobefollowedtoprovidetheFinanceDepartmentwithaccurate informationforyear-endreporting,toprovidetheexternalauditorsreliableinformation,andtosafeguardthe County’simprestfunds.Thechangedrawerfundpoliciesandproceduresforimprestfundshavenotalwaysbeen adheredtobyParksandRecreationstaff. FloridaStatuteandParksandRecreationPoliciesandProceduresforchangedrawersandcashhandling(partial review)havenotalwaysbeenadheredtobyParksandRecreationstaff.Staffshouldbeproperlytrainedtoensure theyunderstandpoliciesandbeheldaccountableforcompliance. TheParksandRecreationFollow-UpReviewinFY2014indicatestherecontinuetobeareasofconcernand exposuretorisk.TheDepartmenthasimprovedincontrollingcashhandling;however,additionaltrainingand monitoringarenecessary.TheDepartmentshouldensurethepropercontrols,policies,andproceduresareinplace tolimitriskanderror. Auditsdonotrelievemanagementoftheirresponsibilities.ItistheresponsibilityofCountyManagementto understandandimplementtheproperproceduralcontrolsinordertoreduceandlimittheriskoffraud,error,and misappropriationofCountyassets.InternalAuditmayrecommendimprovementsinauditreports,butultimatelyit isthedutyanddecisionofCountyManagementtoformulateprocessesandcontrolsthatensurecompliancewith FederalRegulations,FloridaStatutes,CountyOrdinance,andCountyPolicies. AdditionalRecommendations: Thedirectororanindependentemployee(notacustodian,sub-custodian,orcashierofthefund)shouldperform periodiccashcountsofthedepartment’simprestfundsonanon-routinebasistoensurethatthecustodian,sub- custodians,and/orcashiersarecomplyingwiththeCounty’spoliciesandproceduresandadequate documentationexistsforauditpurposes. Additionally,InternalAuditwillcontinuetoperformunannouncedcashcounts. Trainingshouldcontinuetobeprovidedtoallcustodians,sub-custodians,andcashierstoensurethey understandthepolicies,procedures,andformsgoverningthechangedrawer. AdditionalCountyManagementComments: “TheParksandRecreationDepartmentappreciatestheopportunitytoimprovecontrolsthroughtheauditprocess. TheDepartmentwillcontinuetoupdatePoliciesandProceduresasnecessarytoimprovecontrols,trainemployees onPoliciesandProcedures,andmonitorforcompliance.” InternalAuditComments : InternalAuditwouldliketoacknowledgethecooperationandassistancefromCountystaffforaddressingand implementingadditionalcontrolsbasedonInternalAuditrecommendations.Theassistanceandresponsesprovided bytheParksandRecreationDepartmentgreatlyassistedintheauditprocess.