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

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receipts and prepare the bank deposit. While this position was filled in 2016, only one person was assigned to count cash. As of April 2018, two employees count bus fare cash receipts to minimize risk. We observed that most of these internal controls were not fully implemented or enforced. As mentioned above, examples of the internal control weaknesses included cash left unattended and the safe door left ajar, key blind spots to the security cameras, untimely deposits, and cash not properly reconciled. Furthermore, as described in more detail below, policies and procedures were inadequate, not followed, or enforced. Based upon these facts and our observations, it is our conclusion that Mass Transit management did not make cash handling internal controls a priority. As a result, even with the assistance of Finance, control procedures have not been adequately designed or implemented and deficiencies have not been adequately addressed. The current bus cash handling system is ineffective The current bus fare receipting system is not effective at safeguarding cash, recording ridership, and ensuring that the full fare is collected. As described above, we identified some safeguarding weaknesses including overflowing or a lack of locking fare boxes. We also observed the following: During both our surprise cash count and our December 2017 receipt testing, we observed that the bus trip sheets were not accurate. We consistently calculated differences between the expected revenue based on the recorded ridership counts in comparison to the actual revenue that was received by Mass Transit. Generally, more money was deposited than the expected revenue, indicating that not all riders had been recorded. Without reliable ridership counts, management may not be able to adequately budget, monitor revenue, and make well- informed decisions. • Riders may not pay the full bus fare. We observed fare boxes with ripped dollars, tokens, foreign currency, and bus ticket stubs. o Mass Transit keeps a box of bills that were ripped by passengers to avoid paying the full fare. While performing our count, we were able to match some of these ripped dollars using the serial number. Subsequently, the Department of Finance was able to match up and deposit approximately $300 of these bills. o Passengers use the perforated stub at the top of the bus tickets sheets. (Figure 7) Example of perforated bus ticket stub Mti�rn M.n � a iuron,na ho..aeruNwaca 4- r Mn��w•tl+�.� 0N-AoYNCISLE NON—a M. REV-. eEE 11111•pll wsaw _ HON�roaaoaaie NORaeEFuuoRg�El RE F�CQW Source: Copies of bus tickets provided by Mass Transit Figure 7 Mass Transit Cash Handling Audit Results 119