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HomeMy WebLinkAboutFollow-up Sheriff's Office reportsReport# 04/05 - 1 (Dated August 9, 2004) Follow-up on Sheriff’s Office Recommendations Presented to the Deschutes County Audit Committee by the Internal Audit Program David Givans, CPA – County Internal Auditor Report# 04/05 - 1 Dated August 9, 2004 Deschutes Count y, Oregon Report# 04/05 - 1 (Dated August 9, 2004) {This page left blank} Report# 04/05 - 1 (Dated August 9, 2004) To: Audit Co mmittee CC: Mike Daly, Tom DeWolf From: David Givans, Count y Internal Auditor Subject: Fo llow-up on Sheriff’s Office audits (Reports #2003-2 thru 2003-6) Date: August 9, 2004 This fo llow-up report covers the five reports covering the internal controls wit hin the Sheriff’s Office as covered in Internal Audit Reports 2003-2 through 2003-6. A fo llow-up was not performed for the workcenter portion of the Inmate Services report. That program was discont inued since issuance of the report. Informat ion contained in this report is fro m interviews with Sheriff’s Office personnel including, Captain Tim Edwards, Captain Ruth Jenkin and Business Manager, James Ross as well as other supporting staff. The recommendat ions regarding the youth diversio n accounts were fo llowed-up with Monique McCleary, Business Manager for Juvenile Communit y Just ice Depart ment. Juvenile took over this program in 03/04. Deschutes Count y, Oregon Internal Audit Program David Givans, CPA County Internal Auditor Deschutes County- Administrative Services 1300 NW Wall Street, Suite 200 Bend, OR 97701 Phone: 541-330-4674 Fax: 541-385-3202 davidg@co.deschutes.or.us Report# 04/05 - 1 (Dated August 9, 2004) {This page left blank} Report# 04/05 - 1 (Dated August 9, 2004) Follow -up on Sheriff’s Office Recommendations TABLE OF CONTENTS: 1. INTRODUCTION 1.1. Background…………………………………………………………………………. 1 1.2. Object ives & Scope ……………………………………………………………...… 1 1.3. Methodology ……………………………………………………………………….. 1 2. OVERVIEW of FOLLOW-UP RESULTS ……………………………………….. 2 3. Results - Civil 3.1. Reco mmendat ions – not implemented …………………………………………….. 3 3.2. Reco mmendat ions – partially implemented ………………………………..……… 3 4. Results - Inmate 4.1. Reco mmendat ions – not implemented …………………………………………... 3-4 4.2. Reco mmendat ions – partially implemented ……………………………………..… 4 5. Results - Evidence 5.1. Reco mmendat ions – partially implemented ……………………………………….. 5 6. Results - C.O.D.E. 6.1. Reco mmendat ions – not implemented …………………………………………….. 5 7. Results - Youth Diversion …………………………………………………………. 5 8. Recommendations Implemented – All Areas 8.1. Civil …………………………………………………………………………….….. 6 8.2. Inmate …………………………………………………………………………..…6-7 8.3. Evidence ……………………………………………………………………….….7-9 8.4. C.O.D.E. ……………………………………………………………………...… 9-10 8.5. Youth Diversio n …………………………………………………………….… 10-11 Report# 04/05 - 1 (Dated August 9, 2004) {THIS PAGE LEFT BLANK} Report# 04/05 - 1 (Dated August 9, 2003) 1 1. INTRODUCTION 1.1 BACKGROUND Audit Authorit y: The Deschutes County Audit Committee has suggested that follow-ups occur within nine mo nths of the reports. The Audit Co mmittee’s would like to make sure depart ments satisfactorily address recommendat ions. Purpose: The purpose of this report is to detail the actions in response to internal audit reports. 1.2 OBJECTIVES and SCOPE Object ives: The object ive was to follow-up on recommendat ions ident ified in the five audit reports performed for the Sheriff’s Office. Scope: The fo llow-up included all pert inent recommendat ions made in the five reports (#2003-2 through 2003-6). A follow-up was not performed for the workcenter portion of the Inmate Services report. That program has been discont inued since issuance of the report. 1.3 METHODOLOGY The fo llow-up included interviews with Sheriff’s Office personnel including, Captain Tim Edwards (Civil, Evidence, and C.O.D.E.), Captain Ruth Jenkin (Inmate Services) and Business Manager, James Ross as well as other supporting staff. Monique McCleary, Business Manager for Juvenile Co mmunit y Justice responded to the youth diversio n recommendat ions. In cases where the recommendations had not been implemented, these were noted and the explanat ion. The fo llow-up is, by nature, subject ive. In determining the status of recommendat ions that were fo llowed up, we relied on assertions provided by Count y staff and did not attempt to independently verify those assertions. Since no audit work was performed, Government Auditing Standards issued by the Comptroller General of the United States were not fo llo wed. Report# 04/05 - 1 (Dated August 9, 2003) 2 2. Overview of Results We fo llowed up on 47 recommendations made in the five areas reported on for the Sheriff’s Office. Recommendat ions are for the most being implemented (79%) or are in the process of being implemented (13%). Most of the non-implemented responses were due to cost issues or the Sheriff's Office believes there are satisfactory controls in place at the current time. From the responses provided, it appears additional fo llow-up is not required. AREA Implemented Partially Implemented Not Implemented TOTAL CIVIL 6 1 1 8 INMATE SERVICES 9 4 2 15 EVIDENCE 13 1 14 CODE 5 1 6 YOUTH DIVERSION 4 - - 4 TOTAL 37 6 4 47 79%13%9%100% Recommendation Count Status of Recommendations - Sheriff's Office Reports Implementation responses by area 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% CIVIL INMATE SERVICES EVIDENCE CODE YOUTH DIVERSION Area % o f r e s p o n s e s p r o v i d e d Not Implemented Partially Implemented Implemented Report# 04/05 - 1 (Dated August 9, 2003) 3 3. RESULTS – CIVIL 3.1 RECOMMENDATIONS - NOT IMPLEMENTED 1. Each emplo yee collecting fees should be responsible for their own monies unt il the mo nies are counted for deposit and reconciled to the day’s act ivit y. This might be assisted with the use of a register and associated controls. There were a number of options for implementation discussed wit h management and staff. Management may consider, at some po int, centralizing fee co llect ions. Implementation comment: The Sheriff’s Office has determined not to implement these reco mmendat ions due to workload and cost requirements. 3.2 RECOMMENDATIONS - PARTIALLY IMPLEMENTED 1. Staff should document in writ ing all account ing policies and procedures. The procedures should emphasize the areas of monitoring, supervision and segregat ion of duties. These po licies and procedures should be available to emplo yees and should be in sufficient detail so each emplo yee knows which procedures they are to perform. Implementation comment: Staff have started draft ing policies and procedures 4. RESULTS – INMATE SERVICES 4.1 RECOMMENDATIONS - NOT IMPLEMENTED 1. Management should consider utilizing “posit ive pay” bank services to provide addit ional securit y to the inmate trust checking accounts. “Posit ive pay” is a service provided by banks where information is submitted to the bank to only allow specific checks to clear. The County is current ly implementing this wit h its major bank accounts. This might require some improvements in the current Jail informat ion systems. “Posit ive pay” will st ill not control this specific type of theft. Implementation comment: Reco mmendat ion was not implemented due to concerns regarding bank requirements for informat ion. The bank covered losses fro m these transactions. Discussio ns wit h Finance staff on the banking services now available indicates there is insufficient activit y o f this type to warrant the addit ional banking fees. 2. Management should review options for collecting on amounts owed by inmates for supplies and medical costs. Appropriate legal documents may need to be signed by the inmate to aid in this collection. Report# 04/05 - 1 (Dated August 9, 2003) 4 Implementation comment: Reco mmendat ion was not implemented pending review of resources required to develop co llect ion program and staffing time required. 4.2 RECOMMENDATIONS - PARTIALLY IMPLEMENTED 1. Jail o ffice staff should routinely reconcile inmate trust balances to the balances in the checking account. All non-inmate trust monies received (commissio ns, other inco me, etc.) and any excess should be deposited with Count y Finance. Implementation comment: Staff is trying to reconcile outstanding checks and that is delaying their implementation of reconciliat ion. 2. Staff should develop a system for submitt ing outstanding checks to the State in a timely manner. This should be done at least annually in accordance with the State deadline. Implementation comment: Staff have been working on informat ion required to be submitted with monies. Since the number of checks exceeds a thousand checks, it has been requiring a significant amount of staff t ime to complete. 3. The Sheriff’s Office should work with the Court clerks to ident ify how to respond to requirements on certain bail receipts. Since this is a responsibilit y o f the courts, if the Sheriff’s Office accepts qualifying bail mo nies, it will need to gather relevant informat ion for this reporting. Accordingly, appropriate staff training will need to occur on these reporting standards and forms improved to collect the information. The Sheriff’s Office should also consider appropriate charges for services it provides. Implementation comment: Staff have been working with the Courts but these transactions are infrequent. 4. Management should evaluate the current accounting systems to determine if it can provide an ongo ing balance and bank reconciliat ion funct ion. If the cost of adding this functionalit y is prohibit ive, an updated computerized account ing system might be an acceptable cho ice. Implementation comment: Staff have been unable to complete the steps necessary to move to the new system. Though the system is available, they must first clear resolve the numerous open and outstanding checks before the transit ion information. The checks have been ident ified but have not been cleared. This will take a significant amount of effort, which they do not have t ime. They are therefore maintaining account ing informat ion on the two systems. Report# 04/05 - 1 (Dated August 9, 2003) 5 5. RESULTS – EVIDENCE 5.1 RECOMMENDATIONS - PARTIALLY IMPLEMENTED 1. Addit io nal procedures are required for safeguarding techno logical items. Audio tapes and computer disks have locking tabs so they cannot be recorded over. In addit ion, they can be placed into sealed envelopes. Computer hardware can be safeguarded by securing access panels and power ports with evidence tape. As techno logical items are received, evidence room staff may need to revisit the adequacy o f procedures to properly safeguard each item fro m theft, mishandling, or tampering. Implementation comment: The Sheriff’s Office has implemented a bar code system to log and track all evidence. Evidence room staff have developed a policy for digital evidence that has not yet been approved. 6. RESULTS – C.O.D.E. C.O.D.E. will have its own external auditor pursuant to ORS 294.900 “Councils o f Government”. The Sheriff’s Office intends to have these reco mmendat ions reviewed with this auditor. 6.1 RECOMMENDATIONS - NOT IMPLEMENTED 1. Reco mmended that County Finance notify the Code safe custodian via e-mail when a check is issued fro m CODE invest igat ive funds. The CODE safe custodian can verify when the monies are received. Variances should be fo llowed up by County Finance and/or the County Internal Auditor. Alternatively, an audit of these transfers can occur annually to match investigative funds paid out by the County to those received by CODE. Implementation comment: This has not been occurring. Discussed with James Ross some options for implementation including that he could be e-mailed by the CODE secretary on receipt of mo nies and he could verify the amounts to the finance act ivit y shown for the account. He could also periodically review safe deposits against finance expenditures. These options would provide reasonable oversight and retain it within the Sheriff’s Office. 7. RESULTS – YOUTH DIVERSION PROGRAM (Currently handled by Juvenile Community Justice Department) {All reco mmendations have been implemented} Report# 04/05 - 1 (Dated August 9, 2003) 6 8. RECOMMENDATIONS IMPLEMENTED – ALL REPORTS 8.1 CIVIL - RECOMMENDATIONS IMPLEMENTED 1. Staff should restrict ively endorse all negotiable instruments as received. 2. An aged accounts receivable report should be developed for the internal accounting system. Emplo yees should be act ively fo llowing up on these outstanding accounts receivable balances. The write-off of o ld and uncollect ible accounts receivable should be supervised. 3. Safeguards should be implemented in the internal accounting so ftware to prevent emplo yees from adjust ing inputs without supervision. In addition, supervisors should not authorize their own entry adjust ments. Some restrict ions have been put in place for zeroing out receipts. It is important that original documentation on any vo ided or overridden transact ions be retained. All vo ided transact ions should be supervised during or subsequent to emplo yee action. 4. The technician rarely prepares a receipt for the purchaser at the complet ion of Sheriff sales. The technician should provide a written manual receipt (pre-numbered) from a duplicate receipt book to verify mo nies received by the Sheriff’s Office on these sales. This provides a method for monitoring sales receipts within the Sheriff’s Office. 5. If the Sheriff’s Office obtains a separate checking account for Sheriff sales, it is recommended that an emplo yee who does not issue checks or handle cash be the one to prepare the monthly bank reconciliat ion. The bank statement, prior to reconciliat ion, should be reviewed by a supervisor for unusual items and handed over to the emplo yee for reconciliat ion. The completed bank reconciliat ion should be reviewed by the supervisor and filed. 6. Emplo yees responsible for processing disbursement requests (related to Sheriff sales) should routinely verify the presented information to the original source documentation and make a note of this in the file. This should be done for check requests above a certain amount, as determined by management, or any other check requests as determined. The documents retained from the disbursement request should be init ialed by the emplo yee processing the request for mathemat ical accuracy and should be cancelled on payment. 8.2 INMATE SERVICES - RECOMMENDATIONS IMPLEMENTED 1. Staff should document in writ ing all account ing policies and procedures. The procedures should emphasize the areas of monitoring, supervision and segregat ion of duties. These po licies and procedures should be available to all emplo yees and should detail the responsibilit ies of each emplo yee. Report# 04/05 - 1 (Dated August 9, 2003) 7 2. The Sheriff’s Office should arrange to direct ly receive the bank statements and associated support documents for all accounts it manages. These can be provided direct ly to the Captain supervising the Jail and Work Center. 3. It is advisable for a supervising emplo yee, who does not handle cash or have accounting dut ies, to receive the bank statements. The bank statement should be reviewed for unusual items and handed over to the office assistant for reconciliat ion. After the reconciliat ion is co mpleted, it should be returned to the supervisor for review (init ialed) and filed. 4. Two emplo yees should open mail, log monies and create receipts for monies received. Both emplo yees should init ial the log and the total fro m the log should be reconciled to the prepared bank deposit. Adequate receipts should be maintained. Receipts should be mailed or given to the inmate for all monies received. 5. Staff should restrict ively endorse all negotiable instruments as received. An appropriate endorsement stamp should be available at each location. 6. Checks should not be signature stamped if signers are available. Access to the signature stamp should be restricted to a custodian(s) who is responsible for its use. Signers should init ial o ff on the supporting documents. Bail checks should always be physically signed since they are issued weekly. 7. All check stock should be accounted for in logs. The logs should indicate the check numbers for all stock on hand and by location. The logs should further ident ify check numbers that have been used or have been voided. All vo ided checks should be recorded in a separate log, defaced and kept in a file. Subsequent discussions with personnel indicate they have implemented check stock logs for all checking accounts. 8. Inmate cash received should be properly wit nessed and the receipts filed wit h the bank deposits or with the inmate files. These receipts should be monitored for compliance. 9. Unpaid balances should be invest igated and the inmates paid their trust balances. Staff should periodically review accounts for released inmates with posit ive inmate trust balances. The Jail has init iated a system in which the checkout of an inmate will not occur without the payment of their trust balance. The Jail has also implemented a report to review these outstanding balances. 8.3 EVIDENCE - RECOMMENDATIONS IMPLEMENTED 1. Management should consider utilizing confident ialit y agreements with outside labs providing service to their department. Report# 04/05 - 1 (Dated August 9, 2003) 8 2. Evidence room staff should properly re-seal any unsealed bags. This should be done by the two technicians immediately. Both technicians should init ial the seal for these bags. Staff should consider testing tamperproof bags prior to use to make sure they are durable. Officers may want to consider permanent ly heat-sealing evidence bags. 3. Evidence room staff should check-in items at remote storage and offsite locations to make sure items are secured properly, properly ident ified and packaged, and are as described by the officer. Officers should prepare separate “property in custody” reports for items placed in remote storage areas. An addit ional data terminal is needed by staff to accept and monitor remote storage evidence. The remote storage facilit y could also use addit ional shelves and hooks for bikes to keep the area organized. 4. Hazardous chemicals should be immediately moved to an appropriate hazardous materials storage facilit y. 5. Personal items should not be kept in the bio hazard refrigerators. The refrigerators should be alarmed for changes in temperature and mo nitored 24/7. 6. Management should consider ho lding cash evidence in a bank account for safekeeping and to earn interest. Management should work with the District Attorney to authorize deposit of monies when not considered necessary for evident iary purposes. It is reco mmended there be addit ional controls over cash received and released. Evidence room staff should make sure reports from their system are available to mo nitor the status of all mo nies in evidence as well as all mo nies recent ly deposited or released (by type). If possible, the composit ion of evidence monies should be indicated before it is sealed in the evidence envelo pe. Cash evidence should be released only wit h appropriate written authorizat ion. Appropriate written releases would include subpoenas, court documents and/or supervisor approvals. Evidence room staff should notify Count y Finance when mo ney, in excess of a thresho ld, is released and is expected to be deposited (most forfeitures). These cash handling procedures should be documented. 7. All original “property in custody” evidence reports should be conso lidated in the main filing system. Management may want to implement this recommendat ion over time and consider having staff make changes as they are doing other evidence room work. 8. Firearms should be held in the vault at all t imes. If items are likely to be released soon, they could be ident ified with a flag or special colored tag. Staff should develop a plan to make more efficient use of their vault space through better shelving and consider addit ional space. Remote storage security should probably be increased Report# 04/05 - 1 (Dated August 9, 2003) 9 if it continues to be used for holding firearms. 9. Regardless of source, returned evidence placed in the evidence room should be properly prepared. If the evidence has been opened, the District Attorney’s Office and/or the court staff should re-package the evidence in sealed bags for return. Officers transporting goods to and fro m the District Attorney, a court or lab should receive an appropriate itemized receipt and make sure the returned evidence complies wit h procedures. Evidence receipts should be given to evidence room staff. Evidence room staff should mo nitor evidence in custody of the courts, District Attorney’s Office, or outside labs for potential fo llow-up. The District Attorney’s Office and courts should have an assigned person who takes custody of evidence and makes sure it is appropriately safeguarded. 10. Officers should receive formal training, on an annual basis, on the proper handling and preparation of evidence submitted to the evidence room. Evidence room staff should provide their expectations for prepared evidence. Written procedures for evidence and the evidence room should be periodically reviewed. 11. The transfer of cash should occur after written authorizat ion from an appropriate supervisor. There should be so me monitoring process for tracking these mo nies through deposit with Count y Finance. 12. Evidence room staff should update location information for evidence as it is mo ved. These entries should be made to the computer system and to the property in custody sheet as soon as possible. Staff might want to consider using a “mo ve receipt” they can use to update records. Records should be updated to include all sale and disposit ion informat ion. Implementation comment: The Sheriff’s Office is in the process of bar coding all inventory items. This should provide a higher degree of control over inventory items and tracking their mo vement. 13. Management should consider implement ing addit ional controls over vault access. Addit io nal controls might include motion act ivated surveillance camera, separate mot ion detector alarm, separate access log with stated reason for entry, having two staff present at all t imes, and/or PIN access tracking. 8.4 C.O.D.E. - RECOMMENDATIONS IMPLEMENTED 1. Reco mmended that the safe custodian and a witness reconcile mo nthly the accounting informat ion with the amount of invest igative funds on hand. This verification should be evidenced by two counters and evidenced with their signatures on an appropriate receipt. The receipt should be retained in an appropriate file. Report# 04/05 - 1 (Dated August 9, 2003) 10 Internal audit or the CODE coordinator should conduct surprise counts. Implementation comment: This is only occurring quarterly. 2. Reco mmended that management implement a routine (quarterly) review of the accounting for invest igat ive funds. The secretary should be responsible for recording activit y and organizing receipts. The safe custodian can st ill review receipts other than his own. 3. Reco mmended management monitor compliance with the documentation and witnessing requirements for these receipts. 4. Reco mmended officers routinely verify that receipts for expenditures plus investigat ive funds on hand total the authorized amount. Transaction receipts should be submitted monthly. This will improve the accountabilit y for invest igat ive funds and reduce the likelihood of misappropriat ion. 5. It is reco mmended that CODE consider replacing its accounting so ftware (Quicken) with a business accounting so ftware like QuickBooks (basic). The accounting software should support transfer of the current accounting information. The accounting so ftware should offer the required functionalit y and reporting. The accounting so ftware should be properly setup to obtain relevant reports. Law enforcement emplo yees using the software should receive adequate training on its use. Some of the routine account ing problems being posted in the Quicken accounting system have been reso lved wit h some training on the software. Implementation comment: Use of Quicken continues as the CODE secretary seems comfortable with its use and there have not been further issues on account ing for monies. 8.5 YOUTH DIVERSION - RECOMMENDATIONS IMPLEMENTED 1. Reco mmended received monies be deposited intact (as received) and in a timely manner (daily). Controls should be implemented to assure all mo nies received are deposited. Programs should fo llow County po licy with regard to collect ion and deposit of monies. 2. Reco mmended the Department implement controls to monitor and supervise these programs. Departments should obtain approval from the Board of County Commissio ners on all bank services. Implementation comment: The County adopted policy P-2003-106 “Opening bank accounts for Deschutes County”. This policy requires Finance to obtain a resolut ion fro m the Board of Report# 04/05 - 1 (Dated August 9, 2003) 11 Commissio ners on any new bank accounts. 3. Reco mmended program staff obtain proper approval for all expenditures. Support should be referenced to the expenditure made. 4. Reco mmended the budget include resources and expenditures for these grant programs. The department should analyze and review the account ing for receipts and disbursements to budgetary expectations.