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Management's Comments <br />DEPARTMENT OF WATER SUPPL) <br />345 KEKUANAiD'A STREET, SUITE 20 <br />TELEPHONE (808) 961-8050 <br />August 17, 2017 <br />Ms. Bonnie S. Nims, CLAP <br />Legislative Auditor <br />Office of the Legislative Auditor <br />County of Hawai` i <br />1266 Kamehameha Avenue, Suite A-8 <br />Hilo, HI 96720 <br />' COUNTY OF HAWAII <br />H I LO, HAWA I`I 96720 <br />FAX (808) 961-8657 <br />Dear Ms. Nims: <br />Subject: Comments on Legislative Auditor Report, "Cash Handling at County of Ilawai`i <br />Department of `'Vater Supply," Dated August xx, 2017 <br />The Department of Water Supply (DWS) agrees that internal controls can be improved and changes <br />are being made according to the Legislative Auditor's recommendations. <br />The following are changes that the DWS has made or will make to address the Legislative Auditor's <br />findings: <br />1. Incompatible duties are not adequately segregated. <br />To segregate incompatible duties, DWS has shifted these responsibilities, effective July 2017: <br />■ Monthly Bank reconciliations have been assigned to the Assistant Waterworks Controller. <br />• Daily delivery of deposits to the bank has been assigned to an Accountant outside of the <br />cash receipting process. <br />2. Independent monitoring is insufficient. <br />To implement monitoring and oversight, DWS: <br />■ Has implemented monthly reconciliations of adjustments in PUBS to authorized <br />debit/credit memos effective January 2017 by an Accountant outside of the cash receipting <br />process. DWS created a report to capture all adjustments processed by the billing system <br />for the month. Transactions on the report are matched against approval documentation to <br />make sure there are no unauthorized adjustments. All adjustments are required to be <br />supported by an approved memo. <br />■ Has implemented monthly reconciliations of PUBS cash receipts Journals to bank deposits <br />by an Accountant outside of the cash receipting process. DWS is utilizing a report from <br />PUBS to capture all the cash receipts Journals processed for the month. Cash receipts <br />Journals in the PUBS report are matched against the bank deposits to ensure all payment <br />collections were deposited and posted. <br />.. 'water, Our Afost ftecious I�source ... Ka Wai-A Kane .. . <br />The Department of Water Supply is an Equal Opportunity provider and employer. <br />DWS Cash Receipts Management's Response 118 <br />