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Chapter 2 <br /> Status of Recommendations <br /> Segregation of Duties <br /> Condition and Cause <br /> One employee had complete control over the cash handling process. The same employee had <br /> full administrative computer access to record/adjust transactions in the public utility billing system <br /> (PUBS) and the general ledger (GL), reconciled bank statements, and made daily bank deposits. <br /> Effect of the Condition <br /> The lack of segregation of duties made adjustments difficult to detect. <br /> Recommendation 1 <br /> "We recommend that Department of Water Supply management separate incompatible duties. <br /> One individual should not be in charge of all of these cash handling elements: physical custody <br /> of cash, depositing cash, recording/adjusting transactions in the system, and reconciling the bank <br /> statements. If duties cannot be sufficiently segregated, mitigating controls, such as removing <br /> administrator computer access rights to the cash receipting system and/or a lower level of detailed <br /> supervisory review, could be implemented." <br /> Department Action <br /> To meet this recommendation, in 2017, DWS reassigned duties to segregate incompatible duties <br /> over: <br /> • Physical custody of cash <br /> • Receipting cash transactions <br /> • Reconciling cash receipts <br /> • Reconciling monthly bank statements <br /> • Recording/adjusting transactions in the systems <br /> • Making daily bank deposits <br /> • Investigating variances <br /> Audit Activity <br /> To verify status, we observed cash receipting, reconciliation, and safeguarding practices and <br /> found no exceptions. We found various staff performed different functions to ensure adequate <br /> segregation of duties for those responsible for handling cash (i.e., cashiers/customer service <br /> representatives, supervisors, clerks, accountants, and management). <br /> Status: Implemented <br /> Status of Recommendations 1 8 <br />