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

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procedures should require that a different person be responsible for recording, collecting, authorizing, reconciling, and depositing functions. 3. Physical security procedures. Current procedures do address securing the cash boxes at the Administrative Office. There are no written policies and procedures for the bus fare revenue collected at the Baseyard. In addition, the security over coupons, tickets, and passes are not addressed. These items are the equivalent to cash and should follow the same security and processes. Policies and procedures should require that all cash and cash equivalents be adequately secured. 4. Timely deposit of receipts. The Administrative Office does have policies that require deposits to be made within two business days. There are no written policies and procedures for the bus fare revenue collected at the Baseyard. We found frequent instances where deposits were not made timely at both the Administrative Office and the Baseyard, with some deposited up to six months after receipt. Policies and procedures should require that all funds be deposited within two working days as required by County policy, but best practices recommends 24 hours. 5. Checks endorsed immediately. Policies do not address restrictive endorsement of checks. Currently, Mass Transit does not restrictively endorse checks until the end of the day. Policies and procedures should require check endorsement immediately upon receipt. 6. Timely reconciliation of cash receipts to applicable ledgers. Existing procedures do not address timely reconciliation of cash receipts to the deposits or revenue accounts. Policies and procedures should require that reconciliations are performed timely to ensure that the deposits were properly posted and any adjustments are made in the correct period. 7. Receipts are consecutive and pre -numbered (including voids). Existing procedures address the manual receipting processes including who is assigned to print the receipts. There is no written procedure to issue receipts sequentially or review for consecutiveness. However, since these receipts are a Word document and the employee assigned to print the receipts assigns the number and handles cash, there is an increased risk that the receipt numbers could be altered and cash misappropriated. We found several instances of duplicate, triplicate, and missing receipt numbers. Sequential receipts are necessary to ensure that all payments are documented and revenue collected is intact. By using pre -numbered receipts and reviewing sequentially, receipts cannot be easily duplicated or voided. 8. Taxi coupons, bus tickets, and bus passes are consecutive and pre -numbered. Taxi coupons and bus passes are pre -numbered — bus tickets are not. Current policy does not mention consecutiveness and there no procedure in place to: (1) issue pre - numbered coupons, tickets, and passes sequentially or (2) to review and reconcile the consecutiveness and completeness of these items. We found numerous gaps in both taxi coupons and bus passes that could not be located. These items are the equivalent to cash and should follow the same security and processes. Mass Transit Cash Handling Audit Results 122