2016-01 Performance Audit Report: Cash Handling at County of Hawai'i's Department of Parks and Recreation

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• Timely deposit of receipts. In Hilo, there are no written procedures that address timely deposits, or even how to perform a deposit. Two of the eight deposits tested (25%), were deposited two days after the revenue was receipted. As discussed below, Kona's procedures are insufficient and not followed. Policies and procedures should require that all funds be deposited within 24 hours of receipt. • Timely reconciliation to applicable ledgers. Existing procedures do not address timely reconciliation of revenue to the general ledger. Policies and procedures should require that reconciliations performed timely to ensure proper adjustments are made in the correct period. • Checks endorsed immediately. Kona's procedures require restrictive endorsement of checks at the end of day. Hilo's policies do not address restrictive endorsement of checks. Policies and procedures should require check endorsement immediately upon receipt. • Fraud reporting procedures. Existing procedures do not address fraud reporting. Policies and procedures should require a fraud reporting process to aid in the detection and prevention of fraud. By providing fraud reporting procedures, everyone within the organization will be aware of the fraud risk policy including types of fraud and the consequences associated with them. Those who are planning to commit fraud will know that management is watching and may be deterred by this. Honest employees who are not tempted to commit fraud will also be made aware of possible signs of fraud or theft and how to report any concerns. Policies were insufficient and not consistently followed We also identified policies and procedures that were not sufficiently detailed and not followed: • Timely deposit of receipts. In Kona, end of day procedures state that the deposit is taken to the bank during banking hours or a night deposit. Procedures should be updated to the current practice of using a courier and require that all funds be deposited within 24 hours of receipt. Physical security procedures. Kona's end of day procedures requires locking up cash. The cash is locked in a desk drawer and the permits are locked in a separate file cabinet. The procedures should be clarified to ensure cash is secured at all times, not only at the end of the day. Hilo's procedures state: "(c)lip payment to our permit copy, place in purple folder, and lock in drawer." The Clerk puts both the payments and the permits in the same unlocked drawer. The procedures should require that the payments and permits be locked and adequately secured in separate drawers. Permit numbers being consecutive and pre -numbered, including voids. Current policy at both Hilo and Kona requires the completion of a facility use permit and require permit numbers to be consecutive including voids. However, neither policy Cash Handling for Facility Use Permits: Audit Results 111