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

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• Bills are folded several times to fit into the bus's fare boxes. Not only can the bus drivers not determine if the full fare was paid, it also takes Mass Transit staff a lengthy time to unfold the bills for deposit. Without an effective cash handling system, management cannot make informed decisions, monitor revenue and ridership, and ensure that cash is complete and fares are paid in full. Written policies and procedures are incomplete, insufficiently detailed, and not consistently followed or enforced The Government Finance Officers Association (GFOA) establishes best practices including documenting accounting policies and procedures. The GAO's Green Book also recommends establishing written policies to document internal controls and responsibilities. The development of written departmental policies and procedures are an effective way to maintain a strong system of internal controls. Best practices recommend that management evaluate written policies and procedures annually and update periodically. They should also be sufficiently detailed to: • delineate the authority and responsibility of all employees, especially the authority to authorize transactions and the responsibility for the safekeeping of assets and records; • indicate which employees are to perform which procedures; • describe the procedure as they are actually intended to be performed rather than in some idealized form; and • explain the design and purpose of control related procedures to increase employee understanding of and support for controls .3 At the County of Hawaii, each department and agency is responsible for creating and maintaining their own policies and procedures by using the Department of Finance's Accounting Manual as a basis for establishing an adequate system of internal controls. Mass Transit did not establish written policies and procedures until September, 2016 and updated in November, 2016. These procedures only address the Mass Transit Administrative Office; there are no written policies for bus fares received at the Baseyard. Furthermore, these policies are not sufficiently detailed to conform to best practices. We compared the November 2016 Mass Transit's cash handling policies and procedures, as well as current practices, to expected control procedures and found several deficiencies. (Table 2) s Government Finance Officers Association, Best Practices, Documenting Accounting Policies and Procedures http://www.gfoa.org/policies-and-procedures-documentation Mass Transit Cash Handling Audit Results 120