2017-02 Performance Audit Report: Cash Handling at County of Hawai'i's Department of Water Supply

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... since internal control is a dynamic process that has to be adapted continually to the risks and changes an entity faces, monitoring of the internal control system is essential in helping internal control remain aligned with changing objectives, environment, laws, resources, and risks. Internal control monitoring assesses the quality of performance over time and promptly resolves the findings of audits and other reviews. Corrective actions are a necessary complement to control activities in order to achieve objectives... 16.05 Management performs ongoing monitoring of the design and operating effectiveness of the internal control system as part of the normal course of operations. Ongoing monitoring includes regular management and supervisory activities, comparisons, reconciliations, and other routine actions. Ongoing monitoring may include automated tools, which can increase objectivity and efficiency by electronically compiling evaluations of controls and transactions.' • Written Policies and Procedures. The Government Finance Officers Association (GFOA) establishes best practices including written policies and procedures that are reviewed on an annual basis. The GAO also recommends establishing written policies to document internal controls and responsibilities. The development of written departmental policies and procedures are an effective way to maintain a strong system of internal controls. Policies and procedures should clearly delineate the control activities performed throughout various business processes. These procedures should be detailed steps of departmental processes and should map out the course of action, so that persons not familiar with the process can follow them to perform the duties when necessary. This will aid in the orientation of new employees, help ensure business continuity in the event of turnover, and help ensure compliance with applicable laws and regulations. Unclear, outdated, or a lack of written policies and procedures could potentially result in: • misunderstanding or guiding employees in the wrong direction; • policies and procedures are inconsistently applied; • employees are unable to get a clear answer as to how or why something is done, leading to inefficiencies and frustrations among staff and management; • duplicated work; and/or • process and procedures are never improved. 5 Dodaro, Gene L., "United States Government Accountability Office, Standards for Internal Control in the Federal Government".GAO.gov. https://www.gao.gov/assets/670/665712.pdf (accessed June 30, 2016), pg: 64-65. DWS Cash Receipts Background 16