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Conclusion There are inherent risks associated with the implementation of the cash handling processes. If no internal controls exist, or if they exist but are not enforced, the risks related to the process increase, thereby increasing the risk exposure to the County. On a national level, employee misappropriation of cash is the most common type of fraud. According to the Association of Certified Fraud Examiners (ACFE) 2022 Report to the Nations on Occupational Fraud, organizations lose an estimated five percent of revenues to fraud each year.' (Attachment 1) "The most common employee occupational frauds of misappropriation of cash include: check tampering, revenue skimming, fraudulent disbursements by fake invoicing, payroll schemes, and billing scams.112 To improve government accountability, the Office of the County Auditor identified opportunities to further strengthen internal controls over cash handling. Internal controls are broadly defined as a process affected by management. They are designed to provide reasonable assurance on the effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. Internal controls can help achieve performance targets and prevent loss of resources. By identifying gaps in policies and procedures, DWS can identify where effective controls need to be placed, where to provide sufficient detail for new and existing procedures, and clarify unclear procedures so that they are easier to follow. To meet our recommendations, DWS should disseminate updated policies and procedures to clarify: • Deleting receipts • Making change for payment overages • Providing ongoing training when policies and procedures have been updated In closing, to improve government accountability and ensure audit recommendations are implemented or resolved, we will continue to monitor the department's pending status using our remediation tracking tool. We commend the Department of Water Supply's cooperation and its commitment to improving internal controls over cash handling. 1 Association of Certified Fraud Examiners (ACFE). "Occupational Fraud 2022:A Report to the Nations." https://acfepublic.s3.us-west-2.amazonaws.com/2022+Report+to+the+Nations.pdf. Date Accessed: 1 Aug. 2022. z Wolters Kluwer. "Guarding Against Internal Frauds Committed by Employees. https://www.wolterskluwer.com/en/expert-insights/guarding-against-internal-frauds-committed-by-employees. Date Accessed: 1 Aug. 2022. Fraud,Waste,and Abuse 1 16