COM 0109.001 2016-2018 - Laserfiche WebLink

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Safeguarding is inadequate Safeguarding of assets is an integral component of internal controls used to help management achieve desired results through effective stewardship of public resources. A lack of safeguarding controls tends to deteriorate over time. When safeguarding of assets and physical controls are designed and implemented appropriately, agencies are most likely to identify and correct systematic problems on a timely basis. On-going safeguarding of assets can occur in the course of daily operations including physical controls, prevention and prompt detection, comparisons, observations, and other routine actions for safeguarding inventory. The Government Accountability Office (GAO) establishes best practice for general inventory controls. These best practices include safeguarding assets from physical deterioration, theft, loss, or mismanagement. Safeguarding of assets is a Inventory should be adequately secured and safeguarded L � key internal control and its primary objective is to ensure physical controls over assets and provide reasonable assurances as to the safeguarding of assets against loss from unauthorized use or disposition. Generally, safeguarding of assets includes: • Prevention and prompt detection of unauthorized acquisition, use, or disposition of assets • Physical controls to secure and safeguard vulnerable assets • Periodically count and compare assets to control records To achieve an adequate level of internal control over safeguarding of assets, one of the most important and effective physical control over assets is to secure the warehouse. Examples of this security include constructing a fence around the warehouse, locking the gate, and allowing only authorized personnel into the ware house/baseyard. The Division has some safeguards in place. For instance, the chief changed the locks of some storerooms and gates. Furthermore, overseers and supervisors regularly monitor various items loaded onto County -owned trucks at the beginning of the workday and returning to the baseyard at the end of the shift, immediately they will know if items are missing or damaged. While limited people have keys to gain access to locked doors, cabinets, gates, fences, and the warehouse, we observed the Division could not demonstrate adequate safeguarding such as continuous or periodic tracking of items prone to theft. Management has not established or performed any compensating controls to help mitigate this risk. As a result, it would be impossible to hold any one person accountable if equipment or inventory were missing, lost, stolen, or damaged. We also found that the Division does not have adequate safeguarding procedures after working hours and call -outs. While the Division locks their storerooms, warehouses, and main gate and has a designated key custodian, we identified at the following: • two baseyards did not lock their main gate during off -hours; • no alarm systems have been installed at six baseyards DPW Highway Maintenance Division Inventory Management: Audit Results 119