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Home My WebLink About1819-3 Follow-up Solid Waste - Controls over revenue (Final 11-26-18)Follow-up Solid Waste–Controls over revenues #1819-3 November 2018 March 2018 Follow-up Report Solid Waste–Controls over revenues (Internal audit report #16/17-6 issued January 2018) To request this information in an alternate format, please call (541) 330-4674 or send email to David.Givans@Deschutes.org Deschutes County, Oregon David Givans, CPA, CIA, CGMA County Internal Auditor 1300 NW Wall St Bend, OR 97703 Audit committee: Daryl Parrish, Chair - Public member John Barnett - Public member Tom Linhares - Public member Lindsey Lombard – Public member Wayne Yeatman - Public member Anthony DeBone, County Commissioner Nancy Blankenship, County Clerk Dan Despotopulos, Fair & Expo Director Follow-up Solid Waste–Controls over revenues #1819-3 November 2018 March 2018 TABLE OF CONTENTS: 1. INTRODUCTION 1.1. Background on Audit …………..……………………………………………………………. 1 1.2. Objectives and Scope ………………….……………………………..……………………… 1 1.3. Methodology …………………………………….……………………………………………. 1-2 2. FOLLOW-UP RESULTS ……………………….…………………………………................… 2 3. APPENDIX – Updated workplan for Report #16/17-6 (Status as of November 2018) ....…………………………………………………….... 3-7 Follow-up Solid Waste–Controls over revenues #1819-3 November 2018 March 2018 Page 1 1. Introduction 1.1 BACKGROUND ON AUDIT Audit Authority: The Deschutes County Audit Committee has suggested that follow-ups occur from nine months to one year after the original report issuance. The Audit Committee’s would like to make sure departments satisfactorily address recommendations. 1.2 OBJECTIVES and SCOPE Objectives: The objective was to follow-up on the outstanding audit recommendations. Scope: The follow-up included eighteen (18) recommendations from the internal audit report on the Solid Waste–Controls over revenues (#16/17-6 issued January 2018). The follow-up reflects the status as of November 2018. The original internal audit report should be referenced for the full text of recommendations and discussion. 1.3 METHODOLOGY The follow-up report was developed from information provided by Timm Schimke, Director of Solid Waste. In cases where recommendations have not been implemented, comments were sought for the reasons why and the timing for addressing these. The follow-up is, by nature, subjective. In determining the status of recommendations that were followed up, we relied on assertions provided by those involved and did not attempt to independently verify those assertions. The updates received are included in Appendix I. Follow-up Solid Waste–Controls over revenues #1819-3 November 2018 March 2018 Page 2 Since no substantive audit work was performed, Government Auditing Standards issued by the Comptroller General of the United States were not followed. 2. FOLLOW-UP RESULTS Figure I - How were recommendations implemented? The follow-up included eighteen (18) recommendations agreed to by management. Management in substance agreed with all recommendations. Figure I provides an overview of the implementation status of the recommendations. The details of the updated workplan are provided in Appendix I. With this follow-up, seventy two percent (72%) of the recommendations have been completed. County Solid Waste should be commended for addressing a significant portion of these recommendations with this first follow-up. They have established expectations for completing the balance of the recommendations by September 2019. Completed, 72% Underway, 28% Follow-up Solid Waste–Controls over revenues #1819-3 November 2018 March 2018 Page 3 3. APPENDIX UPDATED WORKPLAN FOR REPORT #16/17-6 (Status as of November 2018) #16/17-6 Work plan update Rec # Recommendations Completed Underway Planned Estimated or Actual Date of Completion Updated Follow-up comments 1 It is recommended for written procedures to be continually updated and address their changing account and control environment: identify specific controls; and identify supervision and monitoring. X Feb-19 New management analyst is tracking procedures and notes for development of updated policies and procedures. 2 It is recommended that Solid Waste management team periodically assess changes in their operating environment as a potential risk to their established controls and consider whether additional or different controls are required. X Ongoing Committed to revisiting with changes to work hours, addition of new personnel, and implementation of SW Master Plan. 3 It is recommended the Solid Waste department make efforts to sustain segregation of duties regardless of staffing changes. X Addressed through hiring of new management analyst. 4 It is recommended for someone separate from the person making the deposit consistently validate the amount of the deposit and that it agrees to the bank, departmental records and County records (Munis). X Addressed through hiring of new management analyst. Follow-up Solid Waste–Controls over revenues #1819-3 November 2018 March 2018 Page 4 #16/17-6 Work plan update Rec # Recommendations Completed Underway Planned Estimated or Actual Date of Completion Updated Follow-up comments 5 It is recommended that efforts be made to make deposits intact from site attendants to the bank, but if it is necessity to revisit a bagged deposit: two staff would observe the opening and recount; initial off on the recount and any changes; and document new to tamperproof bag tag used for the deposit. X 6 It is recommended that all staff utilizing tamperproof bags have a lot for the deposits by tamperproof bag tag number. X 7 It is recommended the Solid Waste department complete the implementation of its cost accounting system to capture all revenues and expenditures to the extent it will facilitate the needs of the department and the control efforts. X Sep-19 Implementation is about 40% complete with additional refinements expected. 8 It is recommended for management to periodically reconcile/compare the County Finance and internal accounting systems. X Feb-19 Working towards this as soon as cost accounting system is further along. Follow-up Solid Waste–Controls over revenues #1819-3 November 2018 March 2018 Page 5 #16/17-6 Work plan update Rec # Recommendations Completed Underway Planned Estimated or Actual Date of Completion Updated Follow-up comments 9 It is recommended for the small-attended site to use a pre-numbered bound receipt book. Such a receipt book should be available receipting when power outages occur in any of the sites. X 10 It is recommended for appropriate staff to be educated on systems and controls over their duties. X We currently have a training program and will focus more on why certain controls/procedures are in place. 11 It is recommended that management identity their needs for cost accounting information from the cost accounting system. X Sep-19 We have provided some expectations and will coordinate with cost accounting implementation. 12 It is recommended for management to periodically walk through their controls and procedures to assure their systems are operating as intended. X Doing as changes are made. Follow-up Solid Waste–Controls over revenues #1819-3 November 2018 March 2018 Page 6 #16/17-6 Work plan update Rec # Recommendations Completed Underway Planned Estimated or Actual Date of Completion Updated Follow-up comments 14 It is recommended for the department to explore facility improvements as well as options for newer credit card machines for the improvement in connectivity weighing the cost with Finance and the County's bank processing options. X Department has invested in live/connected credit card machines that has addressed this issue. 15 It is recommended for Solid Waste to administer annual franchise renewal letters consistent with County Code 13.24.160 and to receive the Franchisee's acknowledgment and obligation to abide by and adhere to DCCC 13.24, as amended X New franchise letters were developed to address this. 16 It is recommended the franchise application be updated to include legal language for the Franchisee's acknowledgement and obligation to abide by and adhere to DCC 13.24, as amended. X New franchise letters were developed to address this. Follow-up Solid Waste–Controls over revenues #1819-3 November 2018 March 2018 Page 7 #16/17-6 Work plan update Rec # Recommendations Completed Underway Planned Estimated or Actual Date of Completion Updated Follow-up comments 17 It is recommended for the department to periodically audit/review the franchise reported franchise fees for completeness. X Performing reviews as annual information is received. 18 It is recommended for the department to review and follow-up on any differences in fees submitted. X Performing reviews as annual information is received. 19 It is recommended for the County to consider whether the franchise fee rate percentage is at an appropriate level as the department considers implementation of its master plan for the County. X Apr-19 This may be a policy consideration when we are farther along in the development of the SW Master Plan. {End of Report}