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

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• There is no independent review of taxicab reimbursements. When a taxicab submits their daily passenger log for reimbursement, the Clerk verifies that the coupon is valid and calculates the total to be paid to the taxicab owner. These totals should be independently verified for accuracy. • Voids are not independently reviewed. While the County Transportation Specialist does approve and review voids, the same Specialist also processes cash receipts and completes voids. • There is no independent reconciliation of revenue to the general ledger. Without reconciling the treasury receipts to the general ledger revenue account, Mass Transit cannot determine if all money that was deposited, was recorded. • Outstanding accounts receivable balances from bus tickets, bus passes, and taxi coupons purchased with a purchase order are not independently reviewed to ensure accounts are paid and current. • Cash over/shorts and cash/check composition are not consistently recorded on the treasury receipt. Without specifying this information, management cannot, and has not, monitored to ensure the integrity of the deposit. • Surprise cash counts are not performed. Cash counts are an important part of internal control procedures and encourage honesty and discourage misappropriation. Cash counts should be conducted on a surprise basis by someone independent of the cash operation. Monitoring is an integral component of internal controls; unmonitored controls tend to deteriorate over time. When monitoring is designed and implemented appropriately, organizations are more likely to identify and correct problems on a timely basis. Ongoing monitoring can occur in the course of daily operations including regular management and supervisory activities such as comparisons, reconciliations, and other routine activities. There should always be another level of review and approval performed by a knowledgeable person independent of the cash handling process. A thorough review of the processes will help with accuracy, completeness, and timeliness. The reviewer should be someone who is knowledgeable in daily operations, has the authority to make decisions, someone who does not perform the process, and document evidence of review by a signature or initials and date. Taxi Coupons, Bus Tickets & Passes are sold using purchase orders Mass Transit sells taxi coupons, bus tickets, and bus passes using purchase orders to third party vendors such as KTA, schools, hotels, and non-profit organizations ("vendors"). We found: • No formal contract was established between the County of Hawaii and these vendors. While Mass Transit did have both verbal and written agreements with the vendors, Hawaii County Charter Section 13-13 requires that all contracts with private Mass Transit Cash Handling Audit Results 113