2018-01 Performance Audit Report: Cash Handling at County of Hawai'i's Mass Transit Agency

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• Several boxes were filled with various unreconciled trip sheets for August, September, and October 2017. We could not determine if this money had been deposited. Based on these results, and the internal controls noted below, we could not determine if all the cash paid by the bus riders was included in our cash count. We were unable to determine if money had been lost or misappropriated. After our surprise cash count, with the assistance of the Department of Finance, the cash was deposited. During our subsequent follow up, only one to two days of cash was stored in the safe. We noted certain issues that we communicated directly to Mass Transit's management. We appreciate their commitment to resolving these matters. Cash was not physically secured Safeguarding of assets is an integral component of internal controls to provide effective stewardship of public resources. When safeguarding of assets and physical controls are designed and implemented appropriately, departments and agencies are more likely to identify and correct systematic problems on a timely basis. The United States Government Accountability Office (GAO), Standards for Internal Control in the Federal Government ("Green Book") states that management should design an internal control structure to include physical controls to secure and safeguard vulnerable assets such as cash. In addition, the Government Finance Officers Association (GFOA) establishes best practices for general revenue controls. These best practices include physical security procedures, especially for funds that are not deposited the same day they are receipted. We identified several safeguarding of assets weaknesses at both the Mass Transit Administrative Office and the Baseyard: Mass Transit Administrative Office: Manual receipts are printed and pre -numbered in- house using a Word document. This increases the risk that receipts could be duplicated and cash misappropriated. In addition, we observed these receipts were sitting on the front counter and easily accessible to the public. Receipts should be pre - numbered, pre-printed, and secured. • Bus tickets and taxi coupons are left in an opened box behind the counter. Bus tickets are Mass Transit Cash Handling Audit Results 19