COM 0109.001 2016-2018 - Laserfiche WebLink

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and safeguarded. Our audit evaluated internal controls of the Department of Public Works Highway Maintenance Division inventory management system. We found these internal controls are generally inadequate and do not align to best practice to prevent, detect, or deter fraud, waste, and abuse. (Figure 5) As a result, errors and discrepancies may go undetected by employees performing their normal assigned inventory duties. Summary of Internal Controls by Baseyard Baseyard Segregation of Duties Independent Review and Monitoring Written Policies and Procedures Physical Safeguarding of Assets Highway Administration Yes Inadequate Inadequate Inadequate South Hilo Road Yes Inadequate Inadequate Inadequate Hamakua Road Yes Inadequate Inadequate Inadequate N. and S. Kohala Road Yes Inadequate Inadequate Inadequate Kona Road Yes Inadequate Inadequate Inadequate Ka`u Road Yes Inadequate Inadequate Inadequate Puna Road Yes Inadequate Inadequate Inadequate Figure 5 As of June 30, 2015, the Department of Public Works Highway Maintenance Division total recorded inventory was $18 million. This included a combination of fixed and controlled assets and an additional $1.5 million in materials, tools, and supplies (MTS) inventory. The Division reported 993 assets costing less than $1,000 and deemed sensitive, portable, and prone to theft. Of this amount, we identified 414 assets in our audit scope. We judgmentally selected controlled assets and MTS for our review. Of these items, 322, or 78 percent of controlled assets under $1,000, were properly recorded, tagged, accounted for, safeguarded and generally followed County policies and guidelines. Audit testing included the following risk areas where no exceptions were found: o Segregation of Duties. Adequate separation of incompatible duties exists between the record -keeper, (clerk/accountant/highway support technician) and those involved with operations (chief/overseer), users (equipment operator/laborer), and asset custody (department head) over the inventory management system. o Acquisition by Transfer. One item transferred within the County was verified and adequately safeguarded. o Herbicide reconciliation log. Prompt and proper recording of purchases, uses, and reconciliation demonstrated by adequate supervisory review, mitigated the risk that all herbicide was improperly accounted for. DPW Highway Maintenance Division Inventory Management: Audit Results 110