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

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If transactions are adequately reviewed and monitored, procedures are improved and followed; then individual errors and potential risk should decrease. Deposits were not always made or posted timely Of the 16 transactions tested at the Kona Permit Office, we identified five transactions that were not deposited and posted timely. Deposits ranged from two to three business days from the time the payment was made to the time the courier picked up the revenue. We also identified an additional ten transactions that were posted to the accounting system between three and nine business days after the revenue was received. The Hilo office deposited all funds within 24 hours of receipt except for two instances. The Clerk completed permits and collected checks on one day, but the deposits were not recorded until the next day and not deposited with Treasury for two days. Deposits should be made as often as possible, preferably daily. Failing to make timely deposits increases the risk of errors, loss, or theft of funds. In addition, by not making frequent deposits, the County may miss interest that could be earned if the deposits were made in a timely fashion. Whenever possible, recording check and cash receipts to the general ledger should occur the same day as the deposit. This reduces the risk of lost or stolen cash receipts and incorrect recording. Pre -numbered facility use permits were not used Of the 131 transactions we reviewed at the Hilo Office, we identified 90 instances of missing permit numbers. Instead of using the pre -numbered facility use permits provided by the Department of Finance, the Clerk uses a computer template to assign permit numbers and complete permit information. The permit numbers were logged as a range of numbers instead of being listed separately. Since the permit numbers were manually assigned, there was an error in documenting the correct permit numbers on the log. Therefore, the permit numbers were not consecutive and we could not determine if all money received was deposited. At the Kona Office, the Clerk also uses a computer template to assign permit numbers. We did not identify any issues of sequentially. However, since the permit numbers are assigned by the Clerk, we cannot determine if duplicate permit numbers were used and the deposit was complete. Sequential permit numbers are essential to ensure that all payments are documented and revenue collected. By using pre -numbered permits, and reviewing the sequentially of these permits, receipts cannot be easily duplicated or voided. An independent person should review the deposit reconciliation by matching up permits (receipts) to records and check/cash composition to deposit totals, as well as ensuring the integrity of permit numbers. Cash Handling for Facility Use Permits: Audit Results 116