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HomeMy WebLinkAboutFollow-up of Risk Management Cash handlingFollow-up report on Risk Management - Cash handling #12/13-4 November 2012 FOLLOW-UP REPORT Risk Management - Cash handling (Internal audit report #11/12-3 issued December 7, 2011) 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 Deschutes County Internal Auditor 1300 NW Wall St PO Box 6005 Bend, OR 97708-6005 (541) 330-4674 David.Givans@deschutes.og Audit committee: Gayle McConnell, Chair - Public member Chris Earnest - Public member Jean Pedelty - Public member Greg Quesnel - Public member Michael Shadrach - Public member Jennifer Welander - Public member Anthony DeBone, County Commissioner Dan Despotopulos, Fair & Expo Director Scot Langton, County Assessor Follow-up report on Risk Management - Cash handling #12/13-4 November 2012 TABLE OF CONTENTS: 1. INTRODUCTION 1.1. Background ………………………………………...………………................................... 1 1.2. Objectives & Scope ……………………………………..………………………….…….… 1 1.3. Methodology ……………………………………………………..…………………….……. 1 2. FOLLOW-UP RESULTS ……………….…...………………………….............................. 2 3. APPENDIX I – Internal Audit Recommendations - Updated Workplan for Report #11/12-3 (Status updated as of November 2012) ………….………................ 3-6 Follow-up report on Risk Management - Cash handling #12/13-4 November 2012 Page 1 1. Introduction 1.1 BACKGROUND 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 fifteen (15) recommendations from the internal audit on Risk Management - Cash handling (December 2011) (#11/12-3) (issued December 7, 2011). The follow-up reflects the status as of November 2012. 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 Judy Sumners, Claims Coordinator. 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 Risk Management Department should be acknowledged for their work in addressing these recommendations. Since no substantive audit work was performed, Government Auditing Standards issued by the Comptroller General of the United States were not followed. DESCHUTES COUNTY INTERNAL AUDIT REPORT DESCHUTES COUNTY INTERNAL AUDIT REPORT DESCHUTES COUNTY INTERNAL AUDIT REPORT Follow-up report on Risk Management - Cash handling #12/13-4 November 2012 Page 2 2. Follow -up Results Figure I - How were recommenda- tions implemented? The follow-up fifteen (15) outstanding recommendations. Management agreed with all of the recommendations. Figure I provides an overview of the implementation status of the recommendations. The details of the updated workplans are provided in Appendix I. With this follow-up, 10 recommendations (67%) have been noted as completed. Thirty-three percent (33%) of the accepted recommendations are still in process with near term completion dates. Follow-up report on Risk Management - Cash handling #12/13-4 November 2012 Page 3 3. Appendix Appendix I –Updated Workplan for Report #11/12-3 (Status as of November 2012) Rec# Recommendation Description Agreement Status Updated Department Comments Estimated Date 1a It is recommended the department develop a process to supervise transactions in the various collection systems and address the other weaknesses noted above. This should include: • comparing deposit records to Finance records to ensure that all monies logged or receipted are deposited (with Finance); Agree Completed Deposit records are maintained in a folder by the department secretary and include the receipt from Finance. Affected staff will verify deposits are made for individual transactions. 1b • identify expected receipts and reconcile to deposits on a periodic basis. This would include timing of receipts for prepaid services, gift certificates, customer billings and receivable collections; Agree Completed Completed In process An Excel folder in the shared drive has been set up in which each staff member records anticipated receivables. This allows access to see what monies are expected and the source. Some workers’ compensation overpayments may not be anticipated, and those will not be included in this tracking system. Prepaid services for SkidCar classes are currently tracked on an Excel spreadsheet. The sale and redemption of gift certificates are recorded on a separate Excel spreadsheet, but are also be reflected in the paid column on the SkidCar spreadsheet. Copies of customer billings are kept in notebook, with a diary date on staff’s Outlook calendar if follow-up is necessary. At the start of calendar year 2013 an annual Excel spreadsheet will be set up for the recordkeeping of SkidCar classes and receipts. Each attendee name will be listed on a separate row. Staff can see at a glance what the payment status is for each customer. Customer billings and payments will be recorded on this spreadsheet. 1/1/2013 1c • indicating where receipts go that are not deposited. Communicating with those responsible for overseeing those deposits the receipts being handed over. Agree Completed The department secretary handles all incoming monies. In the case of receipts not belonging to the department, she tracks the receipt and disposition of those monies on an Excel spreadsheet. 1d • identify accounting for outstanding receivables and handling of billings; Agree Completed See above Follow-up report on Risk Management - Cash handling #12/13-4 November 2012 Page 4 Rec# Recommendation Description Agreement Status Updated Department Comments Estimated Date 1e • depositing monies should be segregated from those responsible for accounting, billing, and monitoring insurance and program fees; Agree Completed The department secretary is responsible for depositing all monies. If she is not available, staff not involved in the transaction will deposit the monies and gives copies of the transaction to affected staff. 1f • Policies should be developed for the write-off of non-paid services or services comped which include a secondary approval process. Agree In process During a staff meeting discussion it was determined that staff would make requests, in writing, to the department head for permission to write-off non-paid or comped services. Permission by department head will be granted in writing. This procedure will be documented in the Risk Management Manual in the public folder. 2/15/2013 2 Receipting of monies should be centralized (preferably by the department secretary) and a receipt provided to the customer (unless the monies were received by mail). A log would probably suffice of receipts received by mail and information retained with deposit prepared for Finance. Agree Completed Monies are typically received and receipted by the department secretary. She maintains a log of all receipts and she attaches the deposit slip from Finance to each record. Staff will perform regular checks to ensure deposits have been received by Finance. 3a It is recommended for the skid car instructor to receive a receipt book and endorsement stamp, so that all checks received can be properly endorsed and all monies receipted.It is recommended the department consider having the skid car instructor deposit monies at the bank within 24 hours as that will be more convenient for the instructor. A deposit book would be required and a deposit form would need to be sent to Finance. A copy of the receipts provided can be attached to the roster for the class and used to reconcile. Agree In process A receipt book and endorsement stamp were obtained from Finance to allow the SkidCar instructor the ability to deposit SkidCar receipts at the bank. The suggestion has been met with some resistance. Our instructor has alternately suggested that we start collecting monies prior to the classes. This is not a viable solution because it requires extra time and effort on the part of staff to track receipts, make phone calls for late payments, and cancel classes if payment is not received. In other words, a scheduling nightmare. The ability to pay at the time of the class is a tremendous benefit to customers and staff alike. The SkidCar program provides an invaluable service to our community, and the instructor frequently goes over and above the call of duty. The importance of timely deposits has been discussed with him and he has made strides to get receipts to the department sooner. I suggest we take into consideration the unique situation involved with the collection of SkidCar receipts, including the fact that many classes are held in the evenings and on weekends. I feel a compromise can be reached that will satisfy all parties. Staff will continue to work with the Follow-up report on Risk Management - Cash handling #12/13-4 November 2012 Page 5 Rec# Recommendation Description Agreement Status Updated Department Comments Estimated Date instructor to help him get receipts to us as soon as possible. 3b It is recommended for the department to consider allowing cash be collected since those monies will be the sole responsibility of the instructor until dropped off at the bank. Agree Completed This recommendation has been discussed with the SkidCar instructor. His preference is to not handle cash, but he will accept it if there is no other form of payment available. 3c It is recommended for the department to consider accepting credit cards for skid car fees if it can be accomplished in a cost effective manner. Agree Completed This has been discussed with the revenue accounting supervisor in Finance. SkidCar receipts are a relatively low revenue source and because there are fees associated with credit card accounts, it was determined it would not be cost effective for the department to accept credit card payments at this time. 4 It is recommended for the department to investigate and implement an accounting solution that will meet their needs. It might be possible given their limited activity to develop a more comprehensive spreadsheet for these purposes. Agree In process Staff is unclear about the type of accounting system that is recommended. We have discussed with the department head the possibility of purchasing accounting software, and we all agree that the expenditure is not warranted at this time. An Excel spreadsheet should satisfy the needs of this department and we are agreeable to formatting suggestions from the internal auditor. 1/31/2013 5 It is recommended for them to create an inventory of the current non-issued gift certificates and work the gift certificate issuance into their accounting for daily receipts. It is recommended for the gift certificates placed in custody of staff be logged out and non-issued gift certificates locked up when not in use. Agree Completed The department secretary has implemented an Excel spreadsheet that shows all non-used gift certificates and she tracks the sale and redemption. She keeps the gift certificates in a secure location. 6 It is recommended for Risk Management to review their fee rate for skid car training to more properly reflect costs being incurred as well as potential costs for replacement of capital equipment. Agree Completed SkidCar rates were increased from $70 per person to $90, beginning 07/01/12. 7 It is recommended for Risk Management to complete documentation of their accounting policies and procedures. The procedures should emphasize the areas of revenue and deposit handling, monitoring, supervision and segregation of duties. These policies and Agree In process The policies and procedures information will be incorporated into the Risk Management Manual, which is accessible in the public folder. 2/15/2013 Follow-up report on Risk Management - Cash handling #12/13-4 November 2012 Page 6 Rec# Recommendation Description Agreement Status Updated Department Comments Estimated Date procedures should be available to all employees and should detail the responsibilities of each employee. 8 It is recommended for the department to consider eliminating the petty cash fund. If use continues, it is recommended for staff to review policy F-8 for handling of the funds and the use of “Petty Cash Reimbursement Forms”. Agree Completed The petty cash fund has been eliminated. {END OF REPORT}