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134 IA
���tiIER COu ivlsk
n f. Internal Audit Department
Op oeS.
THE C1RC
Audit Report 2013-1
Parks and Recreation Department
Freedom Park
Cash Review
January 2013
Dwight E. Brock
Clerk of the Circuit Court
3299 Tamiami Trail East
Suite#402
Naples, FL 34112-5746
www.collierclerk.com
Prepared Y ared b : Meg an Gaillard,Internal Auditor 13 A
Report Distribution: Board of County Commissioners
Leo Ochs,Jr., County Manager
Mark Isackson, Director,Corporate Financial&Management Services
Steve Carnell, Interim Administrator
Barry Williams, Director of Parks and Recreation
Ilonka Washburn, Operations Manager,Parks and Recreation
Nancy Olson,Regional Manager,Parks and Recreation
Jack Sullivan, Senior Park Ranger,Parks and Recreation
Jeff Klatzkow, County Attorney
Cc: Dwight E. Brock,Clerk of the Circuit Court
Crystal K. Kinzel, Director of Finance&Accounting
TABLE OF CONTENTS
Background 2
Summary 2
Objectives 3
Scope 3
Observations, Recommendation, and Management Response 4
Conclusion 13
Additional Management Comments 13
'The file, arui draft of audit report, reHua u ecirafiLkiliia! and pr leeted from public record, ieque,t, during an
actiNe audit under 1 icolca z. hrilr(t irt ! trr t 2S. /99`, i)C.1 I7r1!r rctt and Horida Statute 1 i 9,01 l 3. A\oiL
paper, ,upportin,T the ob,erk ation, noted \t"ithin thi, report no public record and can he made upon reque,t
once the final audit report ha, been k ued.
1
'
I 1 3 A
The draft Audit Report 2013-1 was provided to the Department for management response on February 1,2013.
Barry Williams, Parks and Recreation Director, provided all management responses on February 15, 2013.
Barry Williams, Parks and Recreation Director, provided all revised management responses (noted in blue) on
March 12,2013.
BACKGROUND
The Finance Director requested that Internal Audit perform an audit of the County's Imprest Funds, to include change
drawer funds. The request was based on concerns that the custodian and/or sub-custodian may not be following the
County's policies and procedures for operations of these funds. A follow-up audit was completed to determine if
original audit findings were corrected.
,
,
Imprest fund policies and procedures define the authorized uses of funds providing the structure for how departments
establish, modify, spend, replenish, safeguard, and discontinue the use of the funds in accordance with Florida Statute.
The Clerk has established authoritative guidelines for the safeguarding of county resources in the Finance Accounting
Procedures Manual effective October 1,2008.
Change drawer funds are used to make change where money is collected during transactions of County business.
SUMMARY
The following audit observations for change drawer funds were generated during the review:
1. Funds were split for multiple locations without authorization.
2. Funds have not been properly secured or safeguarded.
3. Manual keys have been used to override automated cash register controls compromising the integrity of the
transaction.
4. Manual cash registers have been used to circumvent using the CLASS Point of Sale system.
5. Receipts have not been properly issued.
6. Checks have not been properly endorsed.
7. The change drawer did not balance to the authorized fund amount.
8. A sub-custodian does not appear to have been trained for credit card transactions.
9. There are an inordinate number of"Item Not Found"transactions.
10. The No Sale transaction is not being properly used.
11. Deposits have not been made in accordance with Parks and Recreation Policy AF0004.
12. Lack of Audit Trail
13. Certificate and Request of Imprest Fund forms have not been updated and provided to Finance as changes have
occurred.
1 14. Annual Confirmations have not been returned to Finance by the due date and have not been returned on a yearly
1
! basis.
;
Imprest fund policies and procedures need to be followed to provide the Finance Department with accurate information
for year-end reporting, to provide the external auditors reliable information, and to safeguard the County's imprest
funds.
Florida Statute and Parks and Recreation Policies and Procedures for change drawers and cash handling(partial review)
have not always been adhered to by Parks and Recreation staff. Staff should be properly trained to ensure they
understand policies and be held accountable for compliance.
2
OBJECTIVES
Internal Audit performed an audit of the Freedom Park change drawer and a partial review of related cash handling
processes. The objective of the audit was to determine 1) whether the cash funds exist, 2) whether internal controls over
the cash fund is adequate, 3) whether imprest fund data is reliable, and 4) whether custodians are in compliance with
county policies and procedures as they relate to the audited processes.
SCOPE
The audit review consisted of validating the custodians and imprest funds, including but not limited to the following
tasks:
• Review of Florida Statute Chapter 219 County Public Money,Handling by State and County;
• Review of the Finance Department's Accounting Procedures Manual(including policies and procedures);
• Board of County Commissioner's (BCC)Insurance Policy Coverage;
• Review of Parks and Recreation Policies and Procedures Manual(November 2011 and April 2012 updated);
• Review the most recent Certificate and Request of Imprest Fund update forms;
• Review the most recent annual confirmation prior to Fiscal Year (FY) 2011 and the returned FY 2012 annual
confirmation form;
• Comparison of the most recent updates to the annual confirmations;
• Comparison of the most recent information provided by Finance to the information gathered during field work;
• Completion of unannounced cash counts of the change drawer(Imprest Fund) on September 10, 2011, and a follow
up unannounced cash count on December 6,2012; and
• Interview custodian and sub-custodian: inquiring about and observing the procedures used to account for and
safeguard their respective funds.
3
OBSERVATIONS 13 A
1) Funds were split for multiple locations without authorization.
Change Drawer Policy Item 6 states funds should not be separated into multiple change drawers.
Finance issued the initial check for Freedom Park's change drawer on October 28, 2009. Finance questioned P&R about
the outstanding check. Parks and Recreation (P&R) staff never cashed the check. P&R staff said the check was not
cashed because the check was "stale." P&R staff said the funds had been `borrowed' from Exhibit Hall, requested the
check be voided, and requested a new check be issued to replenish the borrowed funds. The check was voided by
Finance on August 5, 2010.
A new check was issued on September 30, 2010 to establish the Freedom Park change drawer. Finance questioned P&R
about the outstanding check. On July 11, 2011, P&R staff said the check had been inadvertently torn up and the check
needed voided. No check has been cashed to establish the Freedom Park change drawer.
P&R staff explained Freedom Park had a change drawer in operation. The funds were borrowed from Exhibit Hall.
Finance's records showed Exhibit Hall was authorized to have $200, which is what was confirmed by P&R. P&R staff
was unsure who provided the additional funds to Exhibit Hall or what fund had been reduced to provide the funds.
On August 30, 2011, Internal Audit completed unannounced cash counts for the entire North Collier Regional Park
(NCRP) facility. The pool concessions fund was split to provide additional funds to multiple change drawers, including
$100 to Freedom Park. P&R staff said they would complete updated forms and provide them to Finance. The forms
were provided on October 4, 2011.
Funds should not be split or provided to other locations without the appropriate documentation. Splitting funds may
cause funds to be improperly recorded and may cause the appearance of theft when unannounced cash counts are
completed.
Recommendations:
• P&R staff should not split funds or allow other locations to"borrow"funds.
• When changes occur to a fund,the appropriate documentation should be submitted to Finance.
Parks and Recreation Management Response:
Existing staff and resources were used to provide support to the facility. Initially, funds from another imprest
fund were used to establish a change drawer for the facility, and were continued to be accounted for by the
original location. When it was determined through the unannounced cash count for NCRP that this was
inconsistent with policies and procedures, staff established a cash drawer October 2011 for the Freedom Park
location and updated the imprest form to reflect the funds at Freedom Park. Staff was retrained on cash
handling procedures in the fall of 2011 and receives additional training annually. Imprest Fund custodians have
been trained on providing changes as they occur.The Parks and Recreation Department has hired an operations
staff member who monitors the imprest funds for changes and provides a quarterly review to ensure no changes
have occurred. In the event that changes have occurred, these changes are reported to the Finance Department
immediately. For example, seasonal employees who leave employment are removed as cashiers upon their
discharge from employment.
Internal Audit Response:
The initial funds from NCRP Exhibit Hall were accounted for by Exhibit Hall, but were not assigned to Exhibit
Hall. Exhibit Hall had no records documenting the source of funds. In this instance the original source of funds
was NCRP Pool Concessions. NCRP Pool Concessions was not accounting for the funds that had been provided
to Exhibit Hall. Funds should be accounted for by the original location they are assigned to and not reassigned
without completing the appropriate documentation.Funds should be continually monitored.
Inactive employees should be removed from the cashier list.
4
i
1 13A
2) Funds have not been properly secured or safeguarded.
Florida Statute 219.02(2) states "It is the duty of each officer to keep safely all the public money collected by him or
her.Each officer shall exercise all possible care for the protection of the public money in that officer's custody."
Parks and Recreation Policy AF0018 states "Cash and/or checks must be kept in a secure manner to insure that the
Parks and Recreation Departments revenues are safe from pilferage." Additionally the policy states "All monies
received at any facility within the Parks and Recreation system must immediately be secured."
Change Drawer Procedures Item 5 states the fund must be in a secure place (i.e. locked safe or cash register) only
accessible to the authorized custodians.
On September 10, 2011, the sub-custodian said change is left in the cash register unlocked overnight. During daily
operations the cash register is left slightly ajar when assisting customers. Leaving the cash register drawer ajar or
unlocked allows business to be transacted without being recorded through the register compromising the audit trail.
On September 10, 2011, Internal Audit observed manual handwritten receipts being issued, circumventing the cash
register record. Rather than daily operation transactions being transacted through the cash register,funds were placed in
an unsecured bank bag (without a lock) then the bank bag was placed in the office instead of daily cash collections
being secured in the locked cash register or locked safe. Cash registers have not been properly used to document
transactions.Weak internal controls and manual systems provide greater opportunity for theft.
On September 10, 2011, two donations jars were observed at the location sitting on a table in the middle of the room
amongst merchandise for sale. The donation jars were for P&R scholarships and the Freedom Memorial project. The
sub-custodian said the Freedom Memorial donation jar would be collected monthly by a member of the Freedom Task
Force and was left out the rest of the time. Donation jars were not properly safeguarded. Leaving donation jars in the
middle of the facility leaves the funds in the jar susceptible to theft.
1 The BCC Insurance Policy states loss of money (exceeding the deductible) from loss or theft from a locked safe, cash
register, or cash drawer is covered. This indicates if the cash register is unlocked or the safe is not properly locked, the
insurance policy may not cover the loss. The deductible is paid from taxpayer funds. When employees do not properly
secure funds,they may expose the county and/or taxpayers to additional costs and losses.
i
Internal Audit completed a subsequent unannounced cash count on December 6, 2012, the safe and cash register were
properly locked. Donations jars were not present at the location. The sub-custodian said donation jars were removed
from the location approximately 1-2 weeks prior to December 6,2012 and after Internal Audit's initial cash count over a
year prior.
All county funds should be properly secured in locked safes or cash registers to prevent theft and as required by the
insurance policy to cover claims.
Recommendations:
• Custodians and sub-custodians should properly secure county funds.
• When donations are accepted or collected,the location should secure the county funds the same as when collecting
revenue from merchandise sales.The CLASS system is capable of recording and tracking donations.
Parks and Recreation Management Response:
Re-training was provided to all staff who handle cash on cash handling procedures fall 2011.Issues identified in
September 2011 have been addressed and are resolved. Staff will continue to provide annual updated cash
handling training to all employees who handle cash. Donation jars were removed to eliminate opportunity for
theft.
1
5
34
3) Manual keys have been used to override automated cash register controls compromising the
integrity of the transaction.
On September 10, 2011, the sub-custodian said the manual key was left in the manual cash register when assisting
customers and for convenience.The manual key is being used to open the cash register as needed for putting the starting
bank in the change drawer, making change for patrons, and removing the starting bank/deposit at the end of the shift.
When the manual key is used to override the automated cash register controls, it compromises the integrity of the
transaction and does not create an audit trail.
On December 6, 2012, the sub-custodian was using the CLASS POS cash register. The manual cash register had been
removed from the location.There was no manual key observed in the cash register.The manual key was observed in the
top part of the safe.The sub-custodian said all sub-custodians have access to the top part of the safe, which contains the
manual key. In this instance the removal of the key did not reduce the risk of circumvention because all custodians/sub-
custodians with access to the safe have access to the manual key.
The use of a manual key overrides the cash registers automatic controls, compromises the integrity of the transaction,
and increases the opportunity for unrecorded transactions and/or theft.
Recommendation:
• Manual keys should be properly secured and only used by supervisors under special circumstances(i.e. if the
CLASS system fails,the no-sale feature would be unavailable and money would need to be removed from the cash
register).
Parks and Recreation Management Response:
Staff was re-trained on cash handling procedures in the fall 2011 and receives training annually.The manual key
was removed from the cash register and placed in a locked location accessible only by supervisory staff.
4) Manual cash registers have been used to circumvent using the CLASS Point of Sale system.
On September 10, 2011, the sub-custodian was using a manual cash register instead of the CLASS Point of Sale (POS)
system. The sub-custodian said he had not been trained for CLASS and did not know how to use the system. The sub-
custodian was unable to provide a report for the day's total activity and said he balanced cash collected with receipts
rather than to a daily report. Using manual cash registers rather than using the CLASS POS system compromises the
integrity of the transaction and the system's records.
On December 6, 2012, the sub-custodian said the CLASS POS system was not used to record donations, but was used
for all other merchandise sale transactions.
When locations have the CLASS POS system, all transactions should be completed in the CLASS POS system. Manual
cash registers should only be used as a back-up if the CLASS POS system is not working. The use of a manual cash
register when the CLASS POS system is available circumvents the computer system. All cashiers should be properly
trained to ensure an understanding of the CLASS POS system and should be required to use the system when it is
available.Without proper use of the computer systems available,records may be inconsistent or unavailable.
Recommendations:
• Cashiers should be trained to use manual cash registers and CLASS POS.
• Locations with the CLASS POS system should use the CLASS POS system.
6
Parks and Recreation Management Response: 1 3 A
The sub-custodian was reassigned to the Freedom Park location and has subsequently been trained in the
CLASS software. The practice of receiving cash donations for the department's STAR fund has been
discontinued.All parks staff will be properly trained on CLASS software as cashiers prior to their assignment to
cashier duties.
5) Receipts have not been properly issued.
Florida Statute 219.02(1) states "It shall be the duty of each officer to issue a receipt for each collection of public money
made by him or her,a copy of which receipt shall be retained by the officer."
On September 10, 2011, when the unannounced cash count was completed, a receipt was not in the cash register or the
deposit bag for a$50.00 check for a non-resident beach pass. The sub-custodian said he issues receipts for merchandise
sales,but not beach passes, which is a violation of Florida Statute and County Policy.
When receipts are not issued to customers, the potential for fraud and/or theft exist. Without proper documentation and
receipts, a proper post-audit trail does not exist.
Recommendations:
• Custodians or sub-custodians should comply with all requirements of Florida Statute.
• Receipts should be issued to customers for all transactions.
Parks and Recreation Management Response:
Staff was retrained on cash handling procedures in the fall 2011 to among other things, address this specific
issue. Stickers are placed on near POS registers viewable to the public encouraging customers to call a central
number if they are not issued a receipt.
6) Checks have not been properly endorsed.
County Process for check intake and preventing NSF's require cashiers to ensure the following criteria have been met:
checks received in person to have the person's name and address, a driver's license number and state written on the
check, and verification for accuracy of information. Once the criteria are met, the cashier initials the check, endorses the
check, and completes a transaction in the point of sale system.
On September 10, 2011, a check for the sale of a beach pass was not initialed or endorsed by the employee. A 2nd check
was received for donations and had not been initialed/endorsed.
On December 6, 2012, no checks were observed at the location.
Checks that have not followed the check intake process may have insufficient information to provide the check to the
State Attorney's Office if accounts have insufficient funds. Lack of proper procedures and accounting may cause the
county to lose revenue and/or the inability to pursue funds due.
Recommendation:
• Custodians or sub-custodians should comply with county policies.
Parks and Recreation Management Response:
Staff was retrained on cash handling procedures in the fall of 2011 and receives training annually. This training
included proper endorsement of checks received.
7
7) The change drawer did not balance to the authorized fund amount. 1 3 A
On September 10,2011,the change drawer exceeded the authorized fund and collection totals.
While it may seem that the County benefits from change drawer fund overages, it can just as easily lead to change
drawer fund shortages. Custodians and sub-custodians must exercise care for change drawer funds to prevent overages
and shortages.
Recommendation:
• If an overage or shortage occurs, the amount needs to be recorded at the time of deposit in the over/under account.
There should be an explanation for what occurred causing the overage/shortage.
Parks and Recreation Management Response:
Staff was retrained on cash handling procedures in the fall 2011 and receives training annually. This training
includes proper balancing of change fund. Operations staff provides routine unannounced monitoring visits to
verify change fund balances meet authorized amounts. Supervisors are provided immediate results of these
monitoring visits and corrective actions are taken.
8) A sub-custodian does not appear to have been trained for credit card transactions.
On December 6, 2012, the sub-custodian said they were unsure if they could provide cash back when a customer used a
credit card.The sub-custodian said they were not familiar with all credit card transactions requirements or processes.
All cashiers should be trained for the credit card transactions to ensure compliance with PCI requirements and County
policies and procedures. Violations can result in non-payment by the credit card companies and result in lost revenues.
Recommendation:
• Cashiers should be trained for PCI compliance and credit card policies and procedures.
Parks and Recreation Management Response:
The credit card device does not allow for cash back transactions. Staff will be retrained on credit card
transactions through annual cash handling trainings.
9) There are an inordinate number of"Item Not Found" transactions.
During review of the CLASS Report for "Item Not Found" transactions, from September 10, 2011 through
December 13, 2012 for Freedom Park, there were 524 "Item Not Found" transactions of 3,844 total transactions
(approximately 14% of all transactions for the location).
The Information Technologies (IT) Department said the CLASS POS system treats "Item Not Found" transactions as a
merchandise item from inventory. "Item Not Found"transaction entries do not have a prompt for the employee to enter
the merchandise item being sold.The prompt only allows the cashier to type in the price of the item.
It appears there are no records in CLASS for the "Item Not Found" transactions. By not recording the item sold from
merchandise inventory, totals may be inaccurate and there may be the lack of a post-audit trail. Without proper
documentation for merchandise sales, inventory costs may be over or under stated.
8
Recommendations:
13A
• The Department should create an item button in the POS system for items being sold at the location.
• A mechanism should be implemented to track all "Item Not Found"transactions.
• An audit should be completed for inventory.
• The Department should create an internal policy that provides procedures for Item Not Found transactions.
Parks and Recreation Management Response:
The Department completes an inventory of all items unsold and reports to Finance annually at FY year end. The
relatively high number of "item not found" transactions were the result of a number of factors including
problems with the manufacturer's scan code within the item label and the labels themselves (no scan bar on
them). Items without scans have now been assigned a number and a drop down button under "the item search
button to reduce the need to use"item not found"designation.The department will introduce handheld scanners
associated with the CLASS system that allows purchased items to be scanned as well as sold items to address
inventory control issues identified.
Internal Audit Response:
The Parks and Recreation Management Response does not implement or mention a method for tracking "item
not found" transactions. Reducing the need for "item not found" transactions does not eliminate the need to
track "item not found" transactions when they occur. Once an item is identified as not in the POS system, an
item button should be added for each item or a tracking mechanism to balance inventory.
The Parks and Recreation Management Response does not address the creation of an internal policy that
provides procedures for Item Not Found transactions and inventory reconciliation.
10) The No Sale transaction is not being properly used.
On December 6, 2012, an unannounced cash count was completed by Internal Audit. The sub-custodian had opened the
location for operations prior to the cash count, so the sub-custodian used the no sale transaction to open the change
drawer for the cash count. The sub-custodian typed the description "opening" when the no sale prompt required a
description. The description entered by the sub-custodian was inaccurate since they had been open for business prior to
the unannounced cash count and already completed a transaction prior to the auditor's arrival.
It appears the no sale transaction was not used when the sub-custodian opened. It does not appear the sub-custodian is
properly using the no sale transaction.
The no sale transaction should be used and accurate descriptions should be entered. Without accurate descriptions, the
audit trail is unreliable.
Recommendation:
• The Department should provide cashiers training for no sale transactions.
Parks and Recreation Management Response:
This issue will be addressed through ongoing cash handling training. Operations staff is providing spot
monitoring visits with custodians, sub-custodians, and cashiers to determine proper cash handling techniques.
Staff reviews"No Sale" reports weekly and follow up on any issues deemed inconsistent.
11) Deposits have not been made in accordance with Parks and Recreation Policy AF0004.
Parks and Recreation Policy AF0004 (January 2011-in effect at the time of the initial review) stated all deposits
exceeding $50.00 must be deposited into the bank during business hours within 48 hours. Parks and Recreation Policy
9
. 3 A
AF0004 (November 2011) was updated stating all deposits must be deposited in the bank within 24 hours. County staff
did not always comply with the policy.
On September 10, 2011, the sub-custodian said deposits are only made 1 time per week, which is a violation of P&R
policy AF0004. The Freedom Park location has made deposits in"block deposits."A block deposit is when the location
completes multiple deposits on the same day.
Parks and Recreation Policy AF0004 (April 2012-in effect at the time of the follow-up review) was updated stating all
deposits exceeding $100.00 must be deposited into the bank during business hours within two business days and
brought directly to the bank.
On December 6, 2012, the sub-custodian stated deposits are made daily. The bank records indicate deposits have not
been made in accordance with policy. While the individual deposits do not exceed $100, the total amount of revenue at
the location exceeded $100. Block deposits and deposits not completed in accordance with policy are internal control
weaknesses and leave funds susceptible to theft.
Recommendation:
• Deposits should be made according to policy.
Parks and Recreation Management Response:
Park rangers are collecting deposits daily at the Freedom Park location thereby ensuring daily deposits.
12) Lack of Audit Trail
Florida Statute 219.04 requires each officer to keep a cash book(CLASS daily total reports or manual cash register total
print-outs) wherein shall be entered daily, all receipts and disbursements of public money by item or by summary of
itemized entries. The cash book shall be balanced and show the amount of money on hand.
P&R staff has not maintained records for donation transactions in the CLASS POS system and have not issued receipts
for donations received.
As a result of P&R staff circumventing the CLASS POS system through the use of manual keys, manual cash registers,
handwritten receipts,not maintaining documentation, and item not found transactions,there is the lack of an audit trail.
Without records for cash on hand, the location is susceptible to theft and loss of revenue. Without proper
documentation, the County's insurance policy may not pay insurance claims.
Recommendations:
• The Department should comply with Florida Statute.
• The Department should create an internal policy that provides procedures addressing donations.
• If the Department collects donations, the donations should be recorded in the computer system and the donee should
be provided a receipt.
Parks and Recreation Management Response:
Staff was retrained on cash handling procedures fall 2011 and receives training annually.In these trainings,staff
was directed to account for all transactions thru the CLASS POS. Manual cash registers have been discontinued
at Freedom Park.The use of the manual keys is restricted to supervisory staff. Operations management staff will
continue to make periodic reviews to ensure the integrity of this directive.
10
13) Certificate and Request of Imprest Fund forms have not been updated and provi d o A
9 P P P
Finance as changes have occurred.
Change Drawer Policy Item 4 states "Only the custodian and/or the sub-custodian should have access to the funds."
Change Drawer Policy Item 5 requires a new Certificate and Request of Imprest Fund form to be completed and
submitted each time there is a change to the custodian and/or sub-custodian,director, or physical location.
On September 10, 2011, the sub-custodian said 3-4 volunteers have access to the fund and fill in for the cashier when
they are not at the main building. The sub-custodian explained the cashier is typically a park ranger and park rangers
frequently have to complete rounds of the location. When the park ranger completes rounds,the volunteer fills in for the
employee completing sales and making change for customers. No volunteers were listed on the forms. The annual
confirmation for FY 2011 included an updated Certificate and Request of Imprest Funds form to update changes. The
form did not list all employees/volunteers with access to the change drawer.
On December 6, 2012, the sub-custodian said volunteers no longer have access to the funds and only county employees
are authorized to access the fund. When reviewing CLASS reports for merchandise sales, it was noted that 3 county
employees have filled in at Freedom Park during FY 2012 and were not listed on the forms.The annual confirmation for
FY 2012 confirmed all information on file as accurate. The form did not list all employees with access to the change
drawer.
As custodians and sub-custodians change, it is important to update the Certificate and Request of Imprest Fund Form
and ensure that only authorized custodians and sub-custodians have access to the imprest fund.
Recommendations:
• Certificate and Request of Imprest Fund forms should be updated to comply with policy.
• The policies and procedures should be followed. Authorizations should be immediately updated for changes in
custodians and sub-custodians, with appropriate training on policies and procedures.
• Upon custodian changes, an official count of the change drawer funds should be completed and documented,
approved by the terminating custodian,the new custodian,and the supervisor.
• The Department should create an internal policy that provides procedures addressing potential situations (i.e.
volunteers) and changes to the cash processes.
• The County should determine if volunteers are allowed to have access to county funds and complete business
transactions on behalf of the county.
Parks and Recreation Management Response:
Imprest Fund custodians have been trained on providing changes as they occur and the Parks and Recreation
Department has hired an operations staff member who monitors the imprest funds for changes and provides a
quarterly review to ensure no changes have occurred and/or if changes have occurred, these changes are
reported to Finance immediately. Parks staff will update SOP to address completing official count of imprest
fund upon change of custodian of the fund.
14) Annual Confirmations have not been returned to Finance by the due date and have not
been returned on a yearly basis.
Change Drawer Procedures Item 7 states the custodian or sub-custodian is responsible for returning the verified Annual
Confirmation to Finance, including all updates, by the Annual Confirmation's specified due date on a yearly basis.
The change drawer annual confirmations have not been returned by the due date and have not been returned on a yearly
basis. An annual confirmation form was not received by Finance for FY 2010. The FY 2011 and FY 2012 annual
confirmations were received by Finance after the due date.
11
1 3 A
If the Annual Confirmation form, including all updates, is not complete and returned by the deadline provided, funds
may not be properly recorded.
Recommendations:
• Custodians or sub-custodians should return the Annual Confirmations, including all updates,by the due date.
• When Certificate and Request of Imprest Fund forms are completed,the information provided should be accurate.
Parks and Recreation Management Response:
Parks and Recreation staff has engaged in dialogue with Finance staff about the imprest form and its use. These
discussions have led to delays in returning the forms for 2012. In the future, these forms will be provided to
Finance by the required due date each year and updated as changes occur.
12
13A
CONCLUSION
Imprest fund policies and procedures need to be followed to provide the Finance Department with accurate information
for year-end reporting, to provide the external auditors reliable information, and to safeguard the County's imprest
funds. The Change Drawer Fund Policies and Procedures for imprest funds have not always been adhered to by the
custodians and/or sub-custodians. The custodian for the imprest fund should update the Certificate and Receipt of
Imprest Fund forms and keep the documentation current.
Florida Statute and Parks and Recreation Policies and Procedures for change drawers and cash handling(partial review)
have not always been adhered to by Parks and Recreation staff. Staff should be properly trained to ensure they
understand policies and be held accountable for compliance.
Audits do not relieve management of their responsibilities. It is the responsibility of management to understand and
implement the proper processes and procedural controls to comply with the imprest fund policies and procedures. The
Clerk's Office may suggest recommendations in audit reports, but it is the decision of management to formulate and
implement controls for operations.
Additional Recommendations:
• The director or an independent employee (not a custodian or sub-custodian of the fund) should perform periodic
cash counts of the department's imprest funds on a non-routine basis to ensure that the custodian and/or sub-
custodians are complying with the County's change drawer fund policies and procedures and that adequate
documentation exists for audit purposes.
• Additionally,Internal Audit will continue to perform unannounced cash counts.
• Training should be provided to all custodians and sub-custodians to ensure they understand the policies,procedures,
and forms governing change drawer and petty cash funds.
• Additional training should be provided to all custodians, sub-custodians, and cashiers to ensure they understand how
to print CLASS reports and operate the POS system.
Additional Parks and Recreation Management Comments:
The department has made substantial operational changes to our cash handling procedures, most of which more
than a year ago. Operations staff have been conducting unannounced monitoring visits on custodian, sub-
custodian, and cashiers reviewing and training knowledge of existing policies to ensure compliance. Annual
training of cash handling practices will be provided in monthly supervisors' meetings and CLASS monthly
trainings.
Additional Internal Audit Comments:
Unannounced audits of cash began in FY 2011. We appreciate corrective measures taken by the department to
remedy audit findings since that time. Internal Audit acknowledges the cooperation and assistance from Parks
and Recreation staff.
13
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n Internal Audit Department
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NE C[K
Audit Report 2013-1
Parks and Recreation Department
Freedom Park
Cash Review
January 2013
Dwight E. Brock
Clerk of the Circuit Court
3299 Tamiami Trail East
Suite #402
Naples, FL 34112-5746
www.collierclerk.com
13A
Prepared by: Megan Gaillard,Internal Auditor
Report Distribution: Board of County Commissioners
Leo Ochs,Jr., County Manager
Mark Isackson,Director,Corporate Financial &Management Services
Steve Camel!, Interim Administrator
Barry Williams, Director of Parks and Recreation
Ilonka Washburn,Operations Manager, Parks and Recreation
Nancy Olson,Regional Manager,Parks and Recreation
Jack Sullivan, Senior Park Ranger,Parks and Recreation
Jeff Klatzkow,County Attorney
Cc: Dwight E. Brock,Clerk of the Circuit Court
Crystal K. Kinzel,Director of Finance&Accounting
TABLE OF CONTENTS
Background 2
Summary 2
Objectives 3
Scope 3
Observations, Recommendation, and Management Response 4
Conclusion 13
Additional Management Comments 13
1
1 hr itic�� anc, ;nidit rCplmt• r,inIin prtitt2rtCd trim 1niL lic rCcOid.5 do!rm ai
LiCtIv ,I!Idit un(1s2r u �rur i 13�ir' fit !1u -ti 1`,%1,)N 11(_l (11 (� 1)11+„fti ;_tlid 1:101'i di SLunit I P-107I
ln till' Oh?SCiV Iti ollti i tC( \\ 1i'I?lat are' public I'ccorlf and can Inc, =.nada a ' upon rciqu,-.1
uncc ilk' final audit report ha, bccn k ncd.
1
to,
The draft Audit Report 2013-1 was provided to the Department for management response on Febr r , 3.
Barry Williams, Parks and Recreation Director, provided all management responses on February 15, 2013.
Barry Williams, Parks and Recreation Director, provided all revised management responses (noted in blue) on
March 12,2013.
BACKGROUND
The Finance Director requested that Internal Audit perform an audit of the County's Imprest Funds, to include change
drawer funds. The request was based on concerns that the custodian and/or sub-custodian may not be following the
County's policies and procedures for operations of these funds. A follow-up audit was completed to determine if
original audit findings were corrected.
Imprest fund policies and procedures define the authorized uses of funds providing the structure for how departments
establish, modify, spend, replenish, safeguard, and discontinue the use of the funds in accordance with Florida Statute.
The Clerk has established authoritative guidelines for the safeguarding of county resources in the Finance Accounting
Procedures Manual effective October 1,2008.
Change drawer funds are used to make change where money is collected during transactions of County business.
SUMMARY
The following audit observations for change drawer funds were generated during the review:
1. Funds were split for multiple locations without authorization.
2. Funds have not been properly secured or safeguarded.
3. Manual keys have been used to override automated cash register controls compromising the integrity of the
transaction.
4. Manual cash registers have been used to circumvent using the CLASS Point of Sale system.
5. Receipts have not been properly issued.
6. Checks have not been properly endorsed.
7. The change drawer did not balance to the authorized fund amount.
8. A sub-custodian does not appear to have been trained for credit card transactions.
9. There are an inordinate number of"Item Not Found"transactions.
10. The No Sale transaction is not being properly used.
11. Deposits have not been made in accordance with Parks and Recreation Policy AF0004.
12. Lack of Audit Trail
13. Certificate and Request of Imprest Fund forms have not been updated and provided to Finance as changes have
occurred.
14. Annual Confirmations have not been returned to Finance by the due date and have not been returned on a yearly
basis.
Imprest fund policies and procedures need to be followed to provide the Finance Department with accurate information
for year-end reporting, to provide the external auditors reliable information, and to safeguard the County's imprest
funds.
Florida Statute and Parks and Recreation Policies and Procedures for change drawers and cash handling(partial review)
have not always been adhered to by Parks and Recreation staff. Staff should be properly trained to ensure they
understand policies and be held accountable for compliance.
2
OBJECTIVES 1 3 A
Internal Audit performed an audit of the Freedom Park change drawer and a partial review of related cash handling
processes. The objective of the audit was to determine 1) whether the cash funds exist, 2) whether internal controls over
the cash fund is adequate, 3) whether imprest fund data is reliable, and 4) whether custodians are in compliance with
county policies and procedures as they relate to the audited processes.
SCOPE
The audit review consisted of validating the custodians and imprest funds, including but not limited to the following
tasks:
• Review of Florida Statute Chapter 219 County Public Money,Handling by State and County;
• Review of the Finance Department's Accounting Procedures Manual(including policies and procedures);
• Board of County Commissioner's (BCC)Insurance Policy Coverage;
• Review of Parks and Recreation Policies and Procedures Manual (November 2011 and April 2012 updated);
• Review the most recent Certificate and Request of Imprest Fund update forms;
• Review the most recent annual confirmation prior to Fiscal Year (FY) 2011 and the returned FY 2012 annual
confirmation form;
• Comparison of the most recent updates to the annual confirmations;
• Comparison of the most recent information provided by Finance to the information gathered during field work;
• Completion of unannounced cash counts of the change drawer(Imprest Fund) on September 10, 2011, and a follow
up unannounced cash count on December 6, 2012;and
• Interview custodian and sub-custodian: inquiring about and observing the procedures used to account for and
safeguard their respective funds.
3
OBSERVATIONS 13 A
1) Funds were split for multiple locations without authorization.
Change Drawer Policy Item 6 states funds should not be separated into multiple change drawers.
Finance issued the initial check for Freedom Park's change drawer on October 28, 2009.Finance questioned P&R about
the outstanding check. Parks and Recreation (P&R) staff never cashed the check. P&R staff said the check was not
cashed because the check was "stale." P&R staff said the funds had been `borrowed' from Exhibit Hall, requested the
check be voided, and requested a new check be issued to replenish the borrowed funds. The check was voided by
Finance on August 5,2010.
A new check was issued on September 30, 2010 to establish the Freedom Park change drawer. Finance questioned P&R
about the outstanding check. On July 11, 2011, P&R staff said the check had been inadvertently torn up and the check
needed voided.No check has been cashed to establish the Freedom Park change drawer.
P&R staff explained Freedom Park had a change drawer in operation. The funds were borrowed from Exhibit Hall.
Finance's records showed Exhibit Hall was authorized to have $200, which is what was confirmed by P&R. P&R staff
was unsure who provided the additional funds to Exhibit Hall or what fund had been reduced to provide the funds.
On August 30, 2011, Internal Audit completed unannounced cash counts for the entire North Collier Regional Park
(NCRP) facility. The pool concessions fund was split to provide additional funds to multiple change drawers, including
$100 to Freedom Park. P&R staff said they would complete updated forms and provide them to Finance. The forms
were provided on October 4,2011.
Funds should not be split or provided to other locations without the appropriate documentation. Splitting funds may
cause funds to be improperly recorded and may cause the appearance of theft when unannounced cash counts are
completed.
Recommendations:
• P&R staff should not split funds or allow other locations to"borrow"funds.
• When changes occur to a fund,the appropriate documentation should be submitted to Finance.
Parks and Recreation Management Response:
Existing staff and resources were used to provide support to the facility. Initially, funds from another imprest
fund were used to establish a change drawer for the facility, and were continued to be accounted for by the
original location. When it was determined through the unannounced cash count for NCRP that this was
inconsistent with policies and procedures, staff established a cash drawer October 2011 for the Freedom Park
location and updated the imprest form to reflect the funds at Freedom Park. Staff was retrained on cash
handling procedures in the fall of 2011 and receives additional training annually. Imprest Fund custodians have
been trained on providing changes as they occur.The Parks and Recreation Department has hired an operations
staff member who monitors the imprest funds for changes and provides a quarterly review to ensure no changes
have occurred. In the event that changes have occurred, these changes are reported to the Finance Department
immediately. For example, seasonal employees who leave employment are removed as cashiers upon their
discharge from employment.
Internal Audit Response:
The initial funds from NCRP Exhibit Hall were accounted for by Exhibit Hall, but were not assigned to Exhibit
Hall. Exhibit Hall had no records documenting the source of funds. In this instance the original source of funds
was NCRP Pool Concessions. NCRP Pool Concessions was not accounting for the funds that had been provided
to Exhibit Hall. Funds should be accounted for by the original location they are assigned to and not reassigned
without completing the appropriate documentation.Funds should be continually monitored.
Inactive employees should be removed from the cashier list.
4
2) Funds have not been properly secured or safeguarded. 1 3 A
Florida Statute 219.02(2) states "It is the duty of each officer to keep safely all the public money collected by him or
her.Each officer shall exercise all possible care for the protection of the public money in that officer's custody."
Parks and Recreation Policy AF0018 states "Cash and/or checks must be kept in a secure manner to insure that the
Parks and Recreation Departments revenues are safe from pilferage." Additionally the policy states "All monies
received at any facility within the Parks and Recreation system must immediately be secured."
Change Drawer Procedures Item 5 states the fund must be in a secure place (i.e. locked safe or cash register) only
accessible to the authorized custodians.
On September 10, 2011, the sub-custodian said change is left in the cash register unlocked overnight. During daily
operations the cash register is left slightly ajar when assisting customers. Leaving the cash register drawer ajar or
unlocked allows business to be transacted without being recorded through the register compromising the audit trail.
On September 10, 2011, Internal Audit observed manual handwritten receipts being issued, circumventing the cash
register record. Rather than daily operation transactions being transacted through the cash register,funds were placed in
an unsecured bank bag (without a lock) then the bank bag was placed in the office instead of daily cash collections
being secured in the locked cash register or locked safe. Cash registers have not been properly used to document
transactions.Weak internal controls and manual systems provide greater opportunity for theft.
On September 10, 2011, two donations jars were observed at the location sitting on a table in the middle of the room
amongst merchandise for sale. The donation jars were for P&R scholarships and the Freedom Memorial project. The
sub-custodian said the Freedom Memorial donation jar would be collected monthly by a member of the Freedom Task
Force and was left out the rest of the time. Donation jars were not properly safeguarded. Leaving donation jars in the
middle of the facility leaves the funds in the jar susceptible to theft.
The BCC Insurance Policy states loss of money (exceeding the deductible) from loss or theft from a locked safe, cash
register, or cash drawer is covered. This indicates if the cash register is unlocked or the safe is not properly locked, the
insurance policy may not cover the loss. The deductible is paid from taxpayer funds. When employees do not properly
secure funds,they may expose the county and/or taxpayers to additional costs and losses.
Internal Audit completed a subsequent unannounced cash count on December 6, 2012, the safe and cash register were
properly locked. Donations jars were not present at the location. The sub-custodian said donation jars were removed
from the location approximately 1-2 weeks prior to December 6, 2012 and after Internal Audit's initial cash count over a
year prior.
All county funds should be properly secured in locked safes or cash registers to prevent theft and as required by the
insurance policy to cover claims.
Recommendations:
• Custodians and sub-custodians should properly secure county funds.
• When donations are accepted or collected, the location should secure the county funds the same as when collecting
revenue from merchandise sales.The CLASS system is capable of recording and tracking donations.
Parks and Recreation Management Response:
Re-training was provided to all staff who handle cash on cash handling procedures fall 2011. Issues identified in
September 2011 have been addressed and are resolved. Staff will continue to provide annual updated cash
handling training to all employees who handle cash. Donation jars were removed to eliminate opportunity for
theft.
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3) Manual keys have been used to override automated cash register controls compromising the
integrity of the transaction.
On September 10, 2011, the sub-custodian said the manual key was left in the manual cash register when assisting
customers and for convenience.The manual key is being used to open the cash register as needed for putting the starting
bank in the change drawer, making change for patrons, and removing the starting bank/deposit at the end of the shift.
When the manual key is used to override the automated cash register controls, it compromises the integrity of the
transaction and does not create an audit trail.
On December 6, 2012, the sub-custodian was using the CLASS POS cash register. The manual cash register had been
removed from the location. There was no manual key observed in the cash register.The manual key was observed in the
top part of the safe. The sub-custodian said all sub-custodians have access to the top part of the safe, which contains the
manual key. In this instance the removal of the key did not reduce the risk of circumvention because all custodians/sub-
custodians with access to the safe have access to the manual key.
The use of a manual key overrides the cash registers automatic controls, compromises the integrity of the transaction,
and increases the opportunity for unrecorded transactions and/or theft.
Recommendation:
• Manual keys should be properly secured and only used by supervisors under special circumstances (i.e. if the
CLASS system fails,the no-sale feature would be unavailable and money would need to be removed from the cash
register).
Parks and Recreation Management Response:
Staff was re-trained on cash handling procedures in the fall 2011 and receives training annually.The manual key
was removed from the cash register and placed in a locked location accessible only by supervisory staff.
4) Manual cash registers have been used to circumvent using the CLASS Point of Sale system.
On September 10, 2011, the sub-custodian was using a manual cash register instead of the CLASS Point of Sale (POS)
system. The sub-custodian said he had not been trained for CLASS and did not know how to use the system. The sub-
custodian was unable to provide a report for the day's total activity and said he balanced cash collected with receipts
rather than to a daily report. Using manual cash registers rather than using the CLASS POS system compromises the
integrity of the transaction and the system's records.
On December 6, 2012, the sub-custodian said the CLASS POS system was not used to record donations, but was used
for all other merchandise sale transactions.
When locations have the CLASS POS system, all transactions should be completed in the CLASS POS system. Manual
cash registers should only be used as a back-up if the CLASS POS system is not working. The use of a manual cash
register when the CLASS POS system is available circumvents the computer system. All cashiers should be properly
trained to ensure an understanding of the CLASS POS system and should be required to use the system when it is
available.Without proper use of the computer systems available,records may be inconsistent or unavailable.
Recommendations:
• Cashiers should be trained to use manual cash registers and CLASS POS.
• Locations with the CLASS POS system should use the CLASS POS system.
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Parks and Recreation Management Response: 13 A
The sub-custodian was reassigned to the Freedom Park location and has subsequently been trained in the
CLASS software. The practice of receiving cash donations for the department's STAR fund has been
discontinued.All parks staff will be properly trained on CLASS software as cashiers prior to their assignment to
cashier duties.
5) Receipts have not been properly issued.
Florida Statute 219.02(1) states"It shall be the duty of each officer to issue a receipt for each collection of public money
made by him or her,a copy of which receipt shall be retained by the officer."
On September 10, 2011, when the unannounced cash count was completed, a receipt was not in the cash register or the
deposit bag for a$50.00 check for a non-resident beach pass. The sub-custodian said he issues receipts for merchandise
sales,but not beach passes, which is a violation of Florida Statute and County Policy.
When receipts are not issued to customers, the potential for fraud and/or theft exist. Without proper documentation and
receipts, a proper post-audit trail does not exist.
Recommendations:
• Custodians or sub-custodians should comply with all requirements of Florida Statute.
• Receipts should be issued to customers for all transactions.
Parks and Recreation Management Response:
Staff was retrained on cash handling procedures in the fall 2011 to among other things, address this specific
issue. Stickers are placed on near POS registers viewable to the public encouraging customers to call a central
number if they are not issued a receipt.
6) Checks have not been properly endorsed.
County Process for check intake and preventing NSF's require cashiers to ensure the following criteria have been met:
checks received in person to have the person's name and address, a driver's license number and state written on the
check, and verification for accuracy of information. Once the criteria are met,the cashier initials the check, endorses the
check, and completes a transaction in the point of sale system.
On September 10, 2011, a check for the sale of a beach pass was not initialed or endorsed by the employee. A 2nd check
was received for donations and had not been initialed/endorsed.
On December 6, 2012, no checks were observed at the location.
Checks that have not followed the check intake process may have insufficient information to provide the check to the
State Attorney's Office if accounts have insufficient funds. Lack of proper procedures and accounting may cause the
county to lose revenue and/or the inability to pursue funds due.
Recommendation:
• Custodians or sub-custodians should comply with county policies.
Parks and Recreation Management Response:
Staff was retrained on cash handling procedures in the fall of 2011 and receives training annually. This training
included proper endorsement of checks received.
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7) The change drawer did not balance to the authorized fund amount. 13 A
On September 10,2011,the change drawer exceeded the authorized fund and collection totals.
While it may seem that the County benefits from change drawer fund overages, it can just as easily lead to change
drawer fund shortages. Custodians and sub-custodians must exercise care for change drawer funds to prevent overages
and shortages.
Recommendation:
• If an overage or shortage occurs, the amount needs to be recorded at the time of deposit in the over/under account.
There should be an explanation for what occurred causing the overage/shortage.
Parks and Recreation Management Response:
Staff was retrained on cash handling procedures in the fall 2011 and receives training annually. This training
includes proper balancing of change fund. Operations staff provides routine unannounced monitoring visits to
verify change fund balances meet authorized amounts. Supervisors are provided immediate results of these
monitoring visits and corrective actions are taken.
8) A sub-custodian does not appear to have been trained for credit card transactions.
On December 6, 2012, the sub-custodian said they were unsure if they could provide cash back when a customer used a
credit card.The sub-custodian said they were not familiar with all credit card transactions requirements or processes.
All cashiers should be trained for the credit card transactions to ensure compliance with PCI requirements and County
policies and procedures. Violations can result in non-payment by the credit card companies and result in lost revenues.
Recommendation:
• Cashiers should be trained for PCI compliance and credit card policies and procedures.
Parks and Recreation Management Response:
The credit card device does not allow for cash back transactions. Staff will be retrained on credit card
transactions through annual cash handling trainings.
9) There are an inordinate number of"Item Not Found" transactions.
During review of the CLASS Report for "Item Not Found" transactions, from September 10, 2011 through
December 13, 2012 for Freedom Park, there were 524 "Item Not Found" transactions of 3,844 total transactions
(approximately 14% of all transactions for the location).
The Information Technologies (IT) Department said the CLASS POS system treats "Item Not Found" transactions as a
merchandise item from inventory. "Item Not Found" transaction entries do not have a prompt for the employee to enter
the merchandise item being sold. The prompt only allows the cashier to type in the price of the item.
It appears there are no records in CLASS for the "Item Not Found" transactions. By not recording the item sold from
merchandise inventory, totals may be inaccurate and there may be the lack of a post-audit trail. Without proper
documentation for merchandise sales, inventory costs may be over or under stated.
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Recommendations:
• The Department should create an item button in the POS system for items being sold at the location.
• A mechanism should be implemented to track all "Item Not Found"transactions.
• An audit should be completed for inventory.
• The Department should create an internal policy that provides procedures for Item Not Found transactions.
Parks and Recreation Management Response:
The Department completes an inventory of all items unsold and reports to Finance annually at FY year end. The
relatively high number of "item not found" transactions were the result of a number of factors including
problems with the manufacturer's scan code within the item label and the labels themselves (no scan bar on
them). Items without scans have now been assigned a number and a drop down button under "the item search
button to reduce the need to use"item not found"designation.The department will introduce handheld scanners
associated with the CLASS system that allows purchased items to be scanned as well as sold items to address
inventory control issues identified.
Internal Audit Response:
The Parks and Recreation Management Response does not implement or mention a method for tracking "item
not found" transactions. Reducing the need for "item not found" transactions does not eliminate the need to
track "item not found" transactions when they occur. Once an item is identified as not in the POS system, an
item button should be added for each item or a tracking mechanism to balance inventory.
The Parks and Recreation Management Response does not address the creation of an internal policy that
provides procedures for Item Not Found transactions and inventory reconciliation.
10) The No Sale transaction is not being properly used.
On December 6, 2012, an unannounced cash count was completed by Internal Audit. The sub-custodian had opened the
location for operations prior to the cash count, so the sub-custodian used the no sale transaction to open the change
drawer for the cash count. The sub-custodian typed the description "opening" when the no sale prompt required a
description. The description entered by the sub-custodian was inaccurate since they had been open for business prior to
the unannounced cash count and already completed a transaction prior to the auditor's arrival.
It appears the no sale transaction was not used when the sub-custodian opened. It does not appear the sub-custodian is
properly using the no sale transaction.
The no sale transaction should be used and accurate descriptions should be entered. Without accurate descriptions, the
audit trail is unreliable.
Recommendation:
• The Department should provide cashiers training for no sale transactions.
Parks and Recreation Management Response:
This issue will be addressed through ongoing cash handling training. Operations staff is providing spot
monitoring visits with custodians, sub-custodians, and cashiers to determine proper cash handling techniques.
Staff reviews"No Sale" reports weekly and follow up on any issues deemed inconsistent.
11) Deposits have not been made in accordance with Parks and Recreation Policy AF0004.
Parks and Recreation Policy AF0004 (January 2011-in effect at the time of the initial review) stated all deposits
exceeding $50.00 must be deposited into the bank during business hours within 48 hours. Parks and Recreation Policy
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AF0004 (November 2011) was updated stating all deposits must be deposited in the bank within 24 hours. County staff
did not always comply with the policy.
On September 10, 2011, the sub-custodian said deposits are only made 1 time per week, which is a violation of P&R
policy AF0004. The Freedom Park location has made deposits in "block deposits."A block deposit is when the location
completes multiple deposits on the same day.
Parks and Recreation Policy AF0004 (April 2012-in effect at the time of the follow-up review) was updated stating all
deposits exceeding $100.00 must be deposited into the bank during business hours within two business days and
brought directly to the bank.
On December 6, 2012, the sub-custodian stated deposits are made daily. The bank records indicate deposits have not
been made in accordance with policy. While the individual deposits do not exceed $100, the total amount of revenue at
the location exceeded $100. Block deposits and deposits not completed in accordance with policy are internal control
weaknesses and leave funds susceptible to theft.
Recommendation:
• Deposits should be made according to policy.
Parks and Recreation Management Response:
Park rangers are collecting deposits daily at the Freedom Park location thereby ensuring daily deposits.
12) Lack of Audit Trail
Florida Statute 219.04 requires each officer to keep a cash book(CLASS daily total reports or manual cash register total
print-outs) wherein shall be entered daily, all receipts and disbursements of public money by item or by summary of
itemized entries. The cash book shall be balanced and show the amount of money on hand.
P&R staff has not maintained records for donation transactions in the CLASS POS system and have not issued receipts
for donations received.
As a result of P&R staff circumventing the CLASS POS system through the use of manual keys, manual cash registers,
handwritten receipts, not maintaining documentation, and item not found transactions, there is the lack of an audit trail.
Without records for cash on hand, the location is susceptible to theft and loss of revenue. Without proper
documentation,the County's insurance policy may not pay insurance claims.
Recommendations:
• The Department should comply with Florida Statute.
• The Department should create an internal policy that provides procedures addressing donations.
• If the Department collects donations,the donations should be recorded in the computer system and the donee should
be provided a receipt.
Parks and Recreation Management Response:
Staff was retrained on cash handling procedures fall 2011 and receives training annually.In these trainings,staff
was directed to account for all transactions thru the CLASS POS. Manual cash registers have been discontinued
at Freedom Park.The use of the manual keys is restricted to supervisory staff.Operations management staff will
continue to make periodic reviews to ensure the integrity of this directive.
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13) Certificate and Request of Imprest Fund forms have not been updated and prove ed4o
Finance as changes have occurred.
Change Drawer Policy Item 4 states "Only the custodian and/or the sub-custodian should have access to the funds."
Change Drawer Policy Item 5 requires a new Certificate and Request of Imprest Fund form to be completed and
submitted each time there is a change to the custodian and/or sub-custodian,director,or physical location.
On September 10, 2011, the sub-custodian said 3-4 volunteers have access to the fund and fill in for the cashier when
they are not at the main building. The sub-custodian explained the cashier is typically a park ranger and park rangers
frequently have to complete rounds of the location. When the park ranger completes rounds,the volunteer fills in for the
employee completing sales and making change for customers. No volunteers were listed on the forms. The annual
confirmation for FY 2011 included an updated Certificate and Request of Imprest Funds form to update changes. The
form did not list all employees/volunteers with access to the change drawer.
On December 6, 2012, the sub-custodian said volunteers no longer have access to the funds and only county employees
are authorized to access the fund. When reviewing CLASS reports for merchandise sales, it was noted that 3 county
employees have filled in at Freedom Park during FY 2012 and were not listed on the forms.The annual confirmation for
FY 2012 confirmed all information on file as accurate. The form did not list all employees with access to the change
drawer.
As custodians and sub-custodians change, it is important to update the Certificate and Request of Imprest Fund Form
and ensure that only authorized custodians and sub-custodians have access to the imprest fund.
Recommendations:
• Certificate and Request of Imprest Fund forms should be updated to comply with policy.
• The policies and procedures should be followed. Authorizations should be immediately updated for changes in
custodians and sub-custodians, with appropriate training on policies and procedures.
• Upon custodian changes, an official count of the change drawer funds should be completed and documented,
approved by the terminating custodian,the new custodian, and the supervisor.
• The Department should create an internal policy that provides procedures addressing potential situations (i.e.
volunteers)and changes to the cash processes.
• The County should determine if volunteers are allowed to have access to county funds and complete business
transactions on behalf of the county.
Parks and Recreation Management Response:
Imprest Fund custodians have been trained on providing changes as they occur and the Parks and Recreation
Department has hired an operations staff member who monitors the imprest funds for changes and provides a
quarterly review to ensure no changes have occurred and/or if changes have occurred, these changes are
reported to Finance immediately. Parks staff will update SOP to address completing official count of imprest
fund upon change of custodian of the fund.
14) Annual Confirmations have not been returned to Finance by the due date and have not
been returned on a yearly basis.
Change Drawer Procedures Item 7 states the custodian or sub-custodian is responsible for returning the verified Annual
Confirmation to Finance,including all updates,by the Annual Confirmation's specified due date on a yearly basis.
The change drawer annual confirmations have not been returned by the due date and have not been returned on a yearly
basis. An annual confirmation form was not received by Finance for FY 2010. The FY 2011 and FY 2012 annual
confirmations were received by Finance after the due date.
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If the Annual Confirmation form, including all updates, is not complete and returned by the deadline rov d, fu>td�
g P P Y P
may not be properly recorded.
Recommendations:
• Custodians or sub-custodians should return the Annual Confirmations, including all updates,by the due date.
• When Certificate and Request of Imprest Fund forms are completed,the information provided should be accurate.
Parks and Recreation Management Response:
Parks and Recreation staff has engaged in dialogue with Finance staff about the imprest form and its use. These
discussions have led to delays in returning the forms for 2012. In the future, these forms will be provided to
Finance by the required due date each year and updated as changes occur.
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CONCLUSION i 3 A
Imprest fund policies and procedures need to be followed to provide the Finance Department with accurate information
for year-end reporting, to provide the external auditors reliable information, and to safeguard the County's imprest
funds. The Change Drawer Fund Policies and Procedures for imprest funds have not always been adhered to by the
custodians and/or sub-custodians. The custodian for the imprest fund should update the Certificate and Receipt of
Imprest Fund forms and keep the documentation current.
Florida Statute and Parks and Recreation Policies and Procedures for change drawers and cash handling (partial review)
have not always been adhered to by Parks and Recreation staff. Staff should be properly trained to ensure they
understand policies and be held accountable for compliance.
Audits do not relieve management of their responsibilities. It is the responsibility of management to understand and
implement the proper processes and procedural controls to comply with the imprest fund policies and procedures. The
Clerk's Office may suggest recommendations in audit reports, but it is the decision of management to formulate and
implement controls for operations.
Additional Recommendations:
• The director or an independent employee (not a custodian or sub-custodian of the fund) should perform periodic
cash counts of the department's imprest funds on a non-routine basis to ensure that the custodian and/or sub-
custodians are complying with the County's change drawer fund policies and procedures and that adequate
documentation exists for audit purposes.
• Additionally, Internal Audit will continue to perform unannounced cash counts.
• Training should be provided to all custodians and sub-custodians to ensure they understand the policies, procedures,
and forms governing change drawer and petty cash funds.
• Additional training should be provided to all custodians, sub-custodians, and cashiers to ensure they understand how
to print CLASS reports and operate the POS system.
Additional Parks and Recreation Management Comments:
The department has made substantial operational changes to our cash handling procedures,most of which more
than a year ago. Operations staff have been conducting unannounced monitoring visits on custodian, sub-
custodian, and cashiers reviewing and training knowledge of existing policies to ensure compliance. Annual
training of cash handling practices will be provided in monthly supervisors' meetings and CLASS monthly
trainings.
Additional Internal Audit Comments:
Unannounced audits of cash began in FY 2011. We appreciate corrective measures taken by the department to
remedy audit findings since that time. Internal Audit acknowledges the cooperation and assistance from Parks
and Recreation staff.
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