HomeMy WebLinkAboutEvidence room
Deschutes Count y,
SHERIFF’S OFFICE -
EVIDENCE ROOM -
Evaluation of Internal Controls
Over Cash and Other Assets
Presented to the
Deschutes County Audit Committee
by the
Internal Audit Program
David Givans, CPA – County Internal Auditor
Report# 2003-4 Dated March 31, 2003 (Issued June 10, 2003)
Deschutes Count y,
Oregon
Report #2003-4 (Dated March 31, 2003)
SHERIFF’S OFFICE - EVIDENCE ROOM
Evaluation of Internal Controls
Over Cash and Other Assets
TABLE OF CONTENTS:
EXECUTIVE SUMMARY …………………………………………………………………1-2
INTRODUCTION & BACKGROUND …………………………………………………….2-3
OBJECTIVES, SCOPE, AND METHODS ……………………………………………...…3-4
AUDIT RESULTS …………………………………………………………………………5-11
RESPONSE FROM MANAGEMENT ……………………………………………………...12
Report#2003-4 (Dated March 31, 203) Page 1
EXECUTIVE SUMMARY
Purpose
As requested by Count y management and Sheriff (and as approved by Deschutes County’s
Audit Co mmittee), an evaluat ion was conducted of the internal controls for cash, checking
and other assets at the Sheriff’s Office. This report covers the evidence room and reflects a
review of internal controls over evidence that included cash, firearms, and controlled
substances. The purpose of the noted findings is to assist management and staff in improving
its internal control system.
Results in brief
The evaluation indicated a positive control environment. Staff were very acco mmodating and
have already implemented some suggested changes. Observations indicated evidence room
staff are very control conscious and take their duties very seriously.
These findings are provided to assist management in improving its systems of internal control.
Audit findings result from incidents of non-co mpliance with stated procedures and/or
departures from prudent operation. The findings are, by nature, subject ive. The observation
did not review a sufficient number of items to project the findings over the ent ire populat ion.
The fo llowing findings are presented for management’s considerat ion.
The findings and an excerpt of the associated recommendation for the evidence room include:
· Tamperproof evidence bags are coming unsealed (limited incidents noted)
Evidence room staff should properly re-seal any unsealed bags.
· Remote storage evidence is logged-in wit hout inspection by evidence room staff
Evidence room staff should check-in items at remote storage and offsite locations to
make sure items are secured properly, properly identified and packaged, and are as
described by the officer.
· Hazardous chemicals should not be temporarily stored in remote storage facilit y
Hazardous chemicals should be immediately moved to an appropriate hazardous
materials storage facility.
· Bio-hazardous materials are not properly safeguarded
Personal items should not be kept in the bio-hazard refrigerators. The refrigerators
should be alarmed for changes in temperature and monitored 24/7.
· Cash evidence received is not deposited into bank
Management should consider holding cash in a bank account for safekeeping and to
earn interest.
· Older “property in custody” reports are not maintained in a central location.
All original “property in custody” reports should be consolidated.
· An outside lab responsible for processing evidence has not signed a confidentialit y
agreement (limited incidents noted)
Management should consider utilizing confidentiality agreements with outside labs
providing service to their department.
Report#2003-4 (Dated March 31, 203) Page 2
· Firearms are not always kept in the vault for extra securit y
Firearms should be held in the vault at all times.
· Evidence returned by courts is not properly prepared for receipt by evidence room staff
(limited incidents noted)
Evidence placed in the evidence room should be properly prepared.
· Some evidence is not being properly prepared (limited incidents noted)
Officers should receive formal training, on an annual basis, on the proper handling
and preparation of evidence submitted to the evidence room.
· Audio tapes, computer disks, and co mputer hardware are not sufficient ly safeguarded
Additional procedures are required for safeguarding technological items.
· Transfer of cash occurs without sufficient monitoring (limited incidents noted)
The transfer of cash should occur after written authorization from an appropriate
supervisor.
· Location of evidence is not updated (limited incidents noted)
Evidence room staff should update location information for evidence as it is moved.
· Evidence room vault lacks addit ional safeguards
Management should consider implementing additional controls over vault access.
Response from management
Management concurs with the observed findings and associated recommendations. Their
responses included so me clarificat ion and discussion on implementation.
INTRODUCTION
Audit Authorit y:
The audit of the evidence room at the Sheriff’s Office was conducted pursuant to the direct ion
of County management and the Sheriff. Deschutes County Audit Co mmittee authorized the
audit by the by its approval o f the County’s internal audit workplan for fiscal year 2002/2003.
Introduction:
This audit was init iated in response to the County’s desire to review the internal controls over
its cash handling. The Sheriff’s Office is the first department scheduled for this type of audit.
The reports for the Sheriff’s Office are expected to be the first in a series of reports covering
County depart ments and their handling of cash. This report also includes Sheriff’s Office
management responses to these recommendations.
County government is responsible for using public assets and public funds in a prudent and
responsible manner. County managers in turn are responsible for developing and maintaining
procedures to protect public assets and promote efficient and effect ive services. These
procedures and the environment promoted by management are called internal controls.
Management is ult imately responsible for implement ing appropriate internal control systems.
Report#2003-4 (Dated March 31, 203) Page 3
An effect ive system o f internal controls:
· Safeguards assets fro m waste, fraud and inefficient use
· Promotes accuracy and reliabilit y in the account ing records
· Encourages and measures co mpliance wit h established practices
· Evaluates the efficiency of operations
Effect ive internal controls minimize the potential for errors and/or irregularit ies to occur. If
they do occur, effect ive internal controls detect such errors and/or irregularit ies in a t imely
manner during the normal course of business. For cash processes, effect ive internal controls
include:
1. Segregation of cash handling from record keeping duties.
2. Centralizat ion of cash receiving and account ing for all receipt of cash and checks by
utilizing pre-numbered invo ices.
3. Depositing cash on a timely basis.
4. Recording expenditures, in a timely manner, supported by original receipts and the
proper approval authorit y.
5. Preparation of monthly bank reconciliat ion by an emplo yee not responsible for issuing
checks or having custody of cash. Review of such bank reconciliat ion by an
appropriate supervisor.
6. Document ing internal control procedures and conducting rando m reviews of deposit,
reconciliat ions, and other documentation to determine procedures are being fo llowed.
7. Reviewing revenues and expenditures to budget and/or expectation for reasonableness.
8. Promoting an attitude and environment that perpetuates effect ive internal controls.
Honest emplo yees deserve to work in an organizat ion that implements an effect ive internal
control system. Effective controls can prove innocence in the event errors and/or
irregularit ies do occur.
OBJECTIVES, SCOPE and METHODS
Audit objectives:
The object ives of the audit were:
1. To evaluate the Sheriff’s Office internal controls and procedures for cash, checking
accounts and other assets.
2. To evaluate compliance wit h Federal or State regulations and requirements.
If exist ing procedures were not documented in writing, the interview process ident ified the
procedures and practices.
Audit procedures addressed key internal control issues. Opportunit ies for increased efficiency
were identified. Suggestions for improving internal control included procedures and
improvements to deal wit h remote storage evidence.
Report#2003-4 (Dated March 31, 203) Page 4
Scope:
This report focuses on the evidence room operations. Procedures for handling evidence were
reviewed. Theft prone items such as cash, firearms and controlled substances were given
addit ional attention. Procedures focused on evaluating the internal control system as a who le
and not with specific compliance. Procedures for disposal o f evidence were not reviewed.
Petty cash funds were not reviewed since exist ing County po lices should be sufficient and no
problems have been noted.
Methods:
The audit involved gaining an understanding o f the control environment as described by
management and staff during interviews. Relevant evidence was obtained through
observat ion and interviews. This evaluat ion is, by nature, subjective.
Effect ive internal control provides reasonable assurance of achieving the fo llowing
object ives:
1. Effect iveness and efficiency of operations.
2. Reliabilit y of reporting information
3. Compliance with applicable laws and regulat ions.
Audit procedures included:
· Interviews with appropriate personnel
· Walk-throughs with actual transact ions to see how these systems were being
performed
· Review of similar audit reports performed by other jurisdict ions
· Review of industry standards where applicable
· Participation in internal inspect ion of evidence room
Internal control consists of five interrelated components:
· Control environment
· Risk assessment
· Control activit ies
· Informat ion and co mmunicat ion, and
· Monitoring
The audit was conducted in accordance with Government Auditing Standards issued by the
Comptroller General of the United States.
In accordance with Oregon Revised Statute - Chapter 192.501(22) & (23), certain privileged
and/or confident ial information has not been presented in this report. This informat ion has
been shared with management. This informat ion, by the nature of its content, could disclose
vulnerabilit ies and/or reveal securit y measures at public facilit ies.
Report#2003-4 (Dated March 31, 203) Page 5
AUDIT RESULTS
Emplo yees of the Sheriff’s Office take their duties seriously. The high securit y invo lved in
the Sheriff’s facilit ies (especially evidence) results in a high level of safeguarding of assets.
Management and staff appear diligent in their efforts to develop an environment supporting
internal controls. Evidence room staff were open and professio nal and had a positive attitude
towards making improvements in the control system.
These findings are intended to assist management in evaluat ing its systems of internal control.
These reco mmendat ions and findings do not replace efforts to design an effective system of
internal control. The audit, by its nature, cannot discover all possible weaknesses. As such,
management should be vigilant for other improvements that can be made.
Audit findings result from incidents of non-co mpliance with stated procedures and/or
departures from prudent operation. The findings are, by nature, subject ive. The purpose of
these findings is to ident ify procedural recommendations. The observation did not review a
sufficient number of items to project the findings over the ent ire populat ion.
BACKGROUND FOR EVIDENCE
The evidence room was audited because o f theft prone items such as cash, firearms and
controlled substances stored there. The audit focused on the controls that assure the
safeguarding of evidence. The evidence room is responsible for more than 13,000 items.
Evidence room staff maintain a property management system that ensures accuracy and
completeness of records. The chain of custody for evidence is strictly maintained fro m
receipt to disposal. This is crit ical for the successful conviction o f criminals. Audit
procedures included developing an understanding of evidence room procedures, determining
whether procedures are being fo llowed, locating evidence, and establishing that evidence is
properly safeguarded. Currently, there are two dedicated staff wit h so le access to the
evidence room. Immediate supervisio n comes from the Detective Captain.
In addit ion to the planned audit procedures, an inspection was carried out with the Detective
Captain. The internal inspection included an expanded testing of specific items to determine
whether evidence was properly prepared and received, properly secured and init ialed, and
located as indicated. Since the inspection was made joint ly, the Detective Captain has already
internally reported many of the findings included herein.
Report#2003-4 (Dated March 31, 203) Page 6
The fo llowing findings are presented for management’s considerat ion.
FINDINGS
Tamperproof evidence bags are coming unsealed
Some tamperproof evidence bags had co me ent irely unsealed or were coming unsealed.
Some of these bags contained controlled substance evidence. It was presumed, by the
presence of init ials, that these bags had originally been sealed.
The use of tamperproof evidence bags is one of the primary methods for securing and
safeguarding evidence. Properly ut ilized they can indicate if tampering has occurred, safely
secure items, and assure that the chain o f custody has been maintained.
The loss of the seal could indicate evidence tampering or loss of evidence. Addit ionally, an
open bag could expose the staff and facilit y to potent ially harmful substances.
It appears that some of the purchased tamperproof bags do not have the longevit y required for
some of these cases. The occurrence of unsealed bags was limited to certain time periods
perhaps indicat ing a bad batch of bags or the effects of aging.
Evidence room staff should properly re-seal any unsealed bags. This should be done by the
two technicians immediately. The seal for these bags should be init ialed by both technicians.
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.
Remote storage evidence is logged-in without inspection by evidence room staff
Officers prepare evidence reports, which include it ems to be stored in the evidence room and
remote storage. Evidence room staff accept the reports without observing the items of
evidence to be located in remote storage.
Evidence room staff should only take custody of it ems, which can be checked against an
evidence sheet. They have a responsibilit y to confirm the evidence is properly prepared for
custody and can be appropriately safeguarded in remote storage.
Receiving evidence without observat ion is not appropriate. Staff take responsibilit y for all
evidence under their care.
Due to the distance between the evidence room and remote storage, evidence room staff
cannot immediately check the items of evidence dropped off at remote storage. Staff are
placing undue trust in the officers submitt ing the evidence.
Evidence room staff should check-in items at remote storage and offsite locations to make
sure items are secured properly, properly identified 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 io nal 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.
Report#2003-4 (Dated March 31, 203) Page 7
Hazardous chemicals should not be temporarily stored in remote storage facility
Officers temporarily placed so me chemical evidence in the receiving area for remote evidence
storage.
A separate hazardous material storage facilit y is available for chemical evidence.
Temporary storage of these chemicals wit hout appropriate safeguards could place the facilit y
and/or evidence at risk.
Hazardous chemicals should be immediately moved to an appropriate hazardous materials
storage facilit y.
Bio-hazardous materials are not properly safeguarded
The evidence room utilizes several refrigerators to ho ld frozen and refrigerated bio-hazardous
evidence. Staff use the refrigerators to hold personal food items. These refrigerators are not
alarmed for a decrease in temperature.
Bio-hazard evidence should be properly refrigerated and monitored.
It is unacceptable to expose evidence in the refrigerators to possible equipment malfunct ion or
to issues from storing personal items there.
Evidence room staff have kept their personal items in the refrigerators as a matter of
convenience.
Personal items should not be kept in the bio-hazard refrigerators. The refrigerators should be
alarmed for changes in temperature and monitored 24/7.
Cash evidence received is not deposited into bank
Cash evidence is handled like other evidence and is not removed fro m its sealed evidence bag.
The Department of the Treasury’s - Guidelines for Seized and Forfeited Property (July 2001)
indicates cash not needed for evident iary purposes should be prompt ly deposited into an
interest-bearing account to properly safeguard these monies. All cash should be counted by
two officers. Evidence of counting should be evident by inspect ion of the tamperproof
evidence bag.
Holding cash can increase the potential for theft and improprieties. The Sheriff’s Office
might also bear a financial risk for interest not earned on held cash.
Management should consider ho lding cash 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.
Report#2003-4 (Dated March 31, 203) Page 8
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 monitor the status of
all mo nies in evidence as well as all mo nies recent ly deposited or released (by t ype). If
possible, the composit ion of evidence monies should be indicated before it is sealed in the
evidence envelope.
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 money, in excess of a thresho ld, is
released and is expected to be deposited (most forfeitures). These cash handling procedures
should be documented.
Older “property in custody” reports are not maintained in a central location.
The inspect ion of older items of evidence (pre 1999) indicated the original “property in
custody” reports were located with the item of evidence and not chronologically in the main
filing system. The information for all items o f evidence is accessible in the co mputer system.
“Property in custody” reports are the original chain of custody documents and include all
relevant informat ion received fro m the officer and used to hold the evidence. This original
documentation is kept chronologically in the main filing system. This documentation
contains original signatures and init ials. A copy of the property in custody form is usually
kept with the item o f evidence.
When the co mputer systems are down, the property in custody reports are a secondary
resource to locate evidence. Without the reports, it would be difficult to locate specific items.
All original “property in custody” reports should be consolidated in the main filing system.
Management may want to implement this recommendat ion over time and consider having
staff make changes as they are do ing other evidence room work.
An outside lab responsible for processing evidence has not signed a confidentiality
agreement
The Sheriff’s Office does not have confident ialit y agreements with outside labs (non-law
enforcement).
A confidentialit y agreement can help ident ify procedures for handling evidence and restrict
the use of the underlying informat ion.
A confidentialit y agreement restricts the sharing of informat ion. It also reduces the
likelihood of any leaks of confident ial informat ion to the media or outside parties.
Confident ialit y agreements have not been used due to the good working relat ionship between
the Sheriff’s Office and non-law enforcement labs. No problems have been noted.
Management should consider utilizing confident ialit y agreements with outside labs providing
service to their department.
Report#2003-4 (Dated March 31, 203) Page 9
Firearms are not always kept in the vault for extra security
Evidence room staff mo ve so me firearms out of the vault in anticipat ion of release. In
addit ion, firearms are so met imes held in the remote storage area.
Firearms are typically safeguarded in a vault for extra protection.
Having firearms outside the securit y o f the vault could make them harder to locate and less
safe.
Firearms pulled fro m the vault were expected to be picked up in the near future. The
firearms ident ified in remote storage represented a sizable collection o f firearms taken on a
specific case. The space in the vault room is insufficient to reasonably ho ld this amount of
evidence.
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 co lored 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 securit y should probably be increased if it continues to be used for holding
firearms.
Evidence returned by courts is not properly prepared for receipt by evidence room staff
Items of evidence received back fro m the courts were not prepared up to the required
evidence room standards. Evidence room staff do not routinely mo nitor or fo llow-up on
evidence taken to the courts or District Attorney’s Office.
All evidence placed in the evidence room needs to be sufficient ly sealed in order to maintain
the chain o f custody. The evidence room staff should continue to track all items o f evidence
unt il they are released, destroyed or sold.
When items of evidence are received back from the courts, District Attorney’s Office or lab in
a state not equivalent to the way it was originally received, it can raise quest ions as to chain of
custody and/or completeness of the evidence.
Evidence room staff have litt le control over how the evidence is returned to them. It may not
be feasible to enforce evidence room procedures on non-Count y emplo yees.
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 co mplies with 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.
Report#2003-4 (Dated March 31, 203) Page 10
Some evidence is not being properly prepared
Improperly prepared items of evidence were observed. These are commo nly held for officer
fo llo w-up. A few situat ions were noted in which the evidence was not properly sealed, lacked
sufficient init ials or dating, or was located in mult iple evidence bags.
Comprehensive written policies and procedures for evidence room procedures and evidence
preparation can assist in training officers and replacement emplo yees.
Lack of sufficient written procedures can lead to inappropriate and inconsistent treatment of
evidence. This potentially places the chain o f custody, the securit y of the evidence, and
evidence room staff at risk.
Management has drafted evidence room procedures. At the time of the observation, the
procedures were not yet in place.
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.
Audio tapes, computer disks, and computer hardware are not sufficiently safeguarded.
During the inspect ion, audio tapes, computer disks and computer hardware were being held
“as is” without sufficient tamper proofing.
Evidence received should be sufficient ly safeguarded to eliminate tampering. Addit io nal
measures are needed for techno logical items.
The lack o f appropriate safeguard measures for techno logy places risk the securit y of those
items of evidence at risk.
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 addition, 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.
Transfer of cash occurs without sufficient monitoring
Evidence room staff indicates that found monies are turned over to records staff for deposit.
These transfers do not appear to be monitored.
Cash require a high level o f securit y and supervision. All mo nies should be tracked and
appropriate authorit y received for their release or transfer.
Wit hout appropriate controls and oversight, cash could be misappropriated.
Report#2003-4 (Dated March 31, 203) Page 11
Evidence room staff do not have written accounting procedures for the transfer of cash. They
have recent ly been adding case numbers to found items to track these within their system.
The transfer of cash should occur after written authorizat ion from an appropriate supervisor.
There should be so me monitoring process for tracking these monies through deposit with
County Finance.
Location of evidence is not properly updated
Several items were observed wit h incorrect location codes either on the computer system or
on the “property in custody” sheet. In one case, an item had been so ld at auction.
It is important each item making up evidence for a case is locatable by the information in the
computer or in the paperwork. This informat ion should be updated through ultimate
disposit ion.
Wit hout proper location informat ion, items of evidence can be very difficult to find. Items of
evidence items co me in packages large and small and so me are commingled in larger bins.
The location problems observed were mostly typographical errors. However, some were due
to a reorganizat ion of evidence within the evidence room.
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 “move receipt” they can use to update records.
Records should be updated to include all sale and disposit ion informat ion.
Evidence room vault lacks additional safeguards
Evidence room staff have unrestricted access to the vault. It is impossible to know who has
been in the vault and for what reason. In review of property room standards (as promulgated
by the International Association for Property & Evidence), addit ional securit y measures were
ident ified.
A separate vault area is only more effect ive if it has a higher level of securit y that the rest of
the facilit y.
Lack of sufficient controls over vault items could lead to their theft or compromise.
Management should consider implement ing addit ional controls over vault access. Addit ional
controls might include motion act ivated surveillance camera, separate motion detector alarm,
separate access log with stated reason for entry, having two staff present at all t imes, and/or
PIN access tracking.
Report#2003-4 (Dated March 31, 203) Page 12
RESPONSE FROM MANAGEMENT
See comments provided at end of report provided by the Sheriff’s Office
Report#2003-4 (Dated March 31, 203) Page 1