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Home My WebLink AboutJustice court recommendations follow-upReport# 03/04 - 7 (Dated March 18, 2004) Follow-up on Justice Court Recommendations (Moss Adams management letters issued 10/10/2002 and 10/10/2003) Presented to the Deschutes County Audit Committee by the Internal Audit Program David Givans, CPA – County Internal Auditor Report# 03/04 - 7 Dated March 18, 2004 Deschutes Count y, Oregon Report# 03/04 - 7 (Dated March 18, 2004) {THIS PAGE LEFT BLANK} Report# 03/04 - 7 (Dated March 18, 2004) To: Audit Co mmittee CC: Mike Daly, Tom DeWolf From: David Givans, Count y Internal Auditor Subject: Fo llow-up on the Just ice Court Recommendations (issued by Moss Adams) (Report #03/04-7) Date: March 18, 2004 This fo llow-up report is on the Justice Court recommendat ions prepared by Moss Adams LLP and issued October 10, 2002 and their fo llow-up letter dated October 10, 2003. These management letters have been included at the end of this report for reference Informat ion contained in this reports is primarily from interviews with Caro l Garibay, court coordinator for the Justice Court. The Justice Court’s response to this fo llow-up is included in this report.. Deschutes Count y, Oregon Internal Audit Program David Givans, CPA County Internal Auditor Deschutes County-Administration building 1130 NW Harriman Bend, OR 97701 Phone: 541-330-4674 Fax: 541-388-4752 davidg@co.deschutes.or.us Report# 03/04 - 7 (Dated March 18, 2004) {THIS PAGE LEFT BLANK} Report# 03/04-7 (Dated March 18, 2004) Follow -up on Justice Court Recommendations (Moss Adams management letters issued 10/10/2002 and 10/10/2003) TABLE OF CONTENTS: 1. INTRODUCTION 1.1. Background …………………………………………………………………............ 1 1.2. Object ives and scope …….…………………………………………………............ 1 1.3. Methodology …………………………………………………………………….. 1-2 2. RESULTS 2.1. Reco mmendat ions – not implemented …………………………………………... 2-3 2.2. Reco mmendat ions – implemented ………………………………………………. 3-4 3. JUSTICE COURT RESPONSE ............................................................................... 5 4. MANAGEMENT LETTERS – Moss Adams LLP 4.1. Issued October 10, 2002 - Original reco mmendations............................................ 6-9 4.2. Issued October 10, 2003 - Follow-up on recommendat ions ............................. 10-11 Report# 03/04 - 7 (Dated March 18, 2004) - Page 1 - Follow -up on Justice Court Recommendations (Moss Adams management letter issued 10/10/2002 and 10/10/2003) Report# 03/04-7 (Dated March 18, 2004) 1. INTRODUCTION 1.1 BACKGROUND Audit authorit y: This fo llow-up of Just ice Court recommendat ions prepared by Moss Adams LLP and issued October 10, 2002 and subsequent fo llow-up management letter dated October 10, 2003 was pursuant to the direction of the Count y’s Audit Committee. The Deschutes Count y Audit Committee requested the fo llow-up during its January 29, 2003 meet ing with Moss Adams. The Audit Co mmittee wanted to makes sure these recommendat ions were reso lved appropriately. Purpose: The purpose of this report is to detail the Just ice Courts actions in response to Moss Adams recommendat ions. The management letters: Each year the County undergoes an audit of its financial statements. At the complet ion of the audit, the auditor provides a management letter including pertinent recommendat ions. During the fiscal year ending June 30, 2002 audit, there were three written recommendations relat ing to the Justice Court. During the fiscal year ending June 30, 2003, the auditors had no new recommendat ions and had fo llowed up on the prior year recommendat ions. They noted one recommendat ion was not resolved. 1.2 OBJECTIVES and SCOPE Object ives: The object ive was to follow-up on recommendat ions ident ified in the management letters. Scope: The fo llow-up included all reco mmendat ions identified within the management letter dated October 10, 2003. 1.3 METHODOLOGY The fo llow-up included interviews with Justice Court coordinator, Carol Garibay. The status and addit ional co mments were from discussions with the Just ice Court. In cases where the recommendat ion had not been implemented, procedures were developed with Just ice Court staff to address the recommendat ion. This follow-up is, by nature, subject ive. Report# 03/04 - 7 (Dated March 18, 2004) - Page 2 - In determining the status of recommendat ion that were fo llowed-up, we relied on assertions provided by the Just ice Court and did not attempt to independent ly verify those assert ions. Since no audit work was performed, Government Auditing Standards issued by the Comptroller General of the United States were not fo llo wed. 2. RESULTS We fo llowed up on seven recommendations ident ified in the most recent management letter (dated October 10, 2003). Four of these recommendat ions had been discussed verbally wit h the Justice Court and were not included in the original management letter (dated October 10, 2002). There were two recommendat ions ident ified that have not been implemented. See discussio n below for addit ional discussio n on implement ing recommendations. The Justice Court staff have been very responsive to suggestions and in implement ing recommendat ions. 2.1 RECOMMENDATIONS – NOT IMPLEMENTED 1. Reco mmended an individual independent of the Justice Court should periodically review the court coordinator’s work through review of adjust ments and should reconcile the “payment report” to the actual deposits made. Internal Audit - Discussion and Recommendation: The Just ice Court has not implemented this change. The provided reco mmendat ion was not one the judge could easily acco mplish nor could other departments step in and provide this routine supervisio n. Through discussio n with the Just ice Court, it is recommended that the court coordinator arrange for the County’s Informat ion Techno logy Department to make some software improvements. These improvements would provide for a monthly report of all overrides/edits made by the court coordinator. This report would be provided to the Justice Court judge for review. The court coordinator should provide the judge with support for all overrides. The judge should review the support and evidence this by his init ials on the report. Implementing the above procedures should significant ly address Moss Adams’ concerns by providing oversight to possible adjustments made by the court coordinator. It would not be appropriate for the internal audit program to provide this ongo ing supervisio n as indicated by Moss Adams. 2. Reco mmended that the court coordinator not have a cash drawer and not receive cash. Report# 03/04 - 7 (Dated March 18, 2004) - Page 3 - Internal Audit - Discussion and Recommendation: This was discussed verbally wit h the Just ice Court and dismissed fro m the final written management letter by Moss Adams since there was limited staffing at the Just ice Court. The court coordinator continues to receive cash since she is responsible for cash collection during night court as well as filling-in when they are short on staff. The Just ice Court is currently considering the need for an addit ional staff posit ion. It is reco mmended that they strongly consider this, if it will make it possible to remove the cash handling duties of the court coordinator. Unt il then, the court coordinator should limit her receipt and handling of cash. 2.2 RECOMMENDATIONS - IMPLEMENTED 1. Reco mmended that someone independent of the cash receipts cycle be given responsibilit y to sign checks and remove authorit y for the court coordinator to sign checks. Implementation: The Judge is the primary signature on this account. In situations where the judge is unavailable, there are two backup signers wit hin the Finance Department. Signing authority has been remo ved fro m the court coordinator. 2. Reco mmended that two staff open the mail together, init ial log, and compare the totals to the daily bank deposit. Implementation: Just ice Court has substant ially co mplied wit h this recommendation. The court coordinator randomly verifies that receipts performed by staff are credited to the appropriate case and in the right amount. All receipts greater than $250 are reviewed. 3. Reco mmended an individual independent of the cash receipts cycle review the bank reconciliat ion. Implementation: The Just ice Court judge is now responsible for reviewing the internal bank reconciliat ion they perform for their account and evidences this review wit h his init ials. In addit ion, the Finance depart ment does mo nthly bank reconciliat ions for this account. 4. Reco mmended that supporting documentation be provided for checks issued and the documentation should be init ialed by the Judge. Report# 03/04 - 7 (Dated March 18, 2004) - Page 4 - Implementation: The Just ice Court is providing support during check issuance and the Judge is init ialing off on the check issuance report that accompanies the checks. The judge is aware that init ialing off on the documentation indicates a review of the underlying support for reasonableness. 5. Reco mmended the bank statements be sent to an individual independent of the cash receipts cycle and review the returned items for reasonableness. Implementation: As noted above, Finance prepares monthly bank reconciliat ion and independently receives bank statements direct ly fro m the bank. Report# 03/04 - 7 (Dated March 18, 2004) - Page 5 - 3. JUSTICE COURT RESPONSE Report# 03/04 - 7 (Dated March 18, 2004) - Page 6 - 4. MANAGEMENT LETTERS – MOSS ADDAMS LLP 4.1 October 10, 2002 – Original recommendations Report# 03/04 - 7 (Dated March 18, 2004) - Page 7 - Report# 03/04 - 7 (Dated March 18, 2004) - Page 8 - Report# 03/04 - 7 (Dated March 18, 2004) - Page 9 - Report# 03/04 - 7 (Dated March 18, 2004) - Page 10 - 4.1 October 10, 2003 – Follow-up on recommendations Report# 03/04 - 7 (Dated March 18, 2004) - Page 11 -