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

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procedures manual. Thanks to advances in technology, even more effective methods are now also available for this purpose. An appropriate level of management to emphasize their importance and authority should promulgate accounting policies and procedures. The documentation of accounting policies and procedures should be evaluated annually and updated periodically, no less than once every three years, according to a predetermined schedule. Changes in policies and procedures that occur between these periodic reviews should be updated in the documentation promptly as they occur. A specific employee should be assigned the duty of overseeing this process. Management is responsible for ensuring that this duty is performed consistently. The documentation of accounting policies and procedures should be readily available to all employees who need it. It should delineate the authority and responsibility of all employees, especially the authority to authorize transactions and the responsibility for the safekeeping of assets and records. Likewise, the documentation of accounting policies and procedures should indicate which employees are to perform which procedures. Procedures should be described as they are actually intended to be performed rather than in some idealized form. Also, the documentation of accounting policies and procedures should explain the design and purpose of control related procedures to increase employee understanding of and support for controls. Government Finance Officers Association (GFOA) recommends governments establish a revenue control and management policy and review it on an annual basis. This policy should be customized for the size and resources of the government: The following factors should be considered in developing a general revenue control and management policy: Internal controls - Management should establish controls, and ensure they are documented and followed. All aspects of cash receipting and accounts receivables should be subject to proper internal controls including: • Segregation of duties such as initiation and authorization of transactions, execution of transactions (receipting and disbursement), recording transactions, reconcilement, and maintaining custody. • Daily processing and timely deposit of receipts. Ideally, all funds should be deposited within 24 hours of receipt. • Timely reconciliation to applicable ledgers. • Physical security procedures. This is especially important for funds not deposited day of receipt. • Fraud reporting procedures. DWS Cash Receipts Audit Criteria 122