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

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9. Account for cash as it is received (Timely recognition of revenue). Current policy at the Administrative Office requires deposits to be made within two business days. The Administrative Office deposits cash receipts at the Treasury Division, which requires a treasury receipt to accompany the deposit. At the Baseyard, deposits are made with Bank of Hawaii, hence a treasury receipt is not required at the time of deposit. Our testing of Administrative Office receipts found an average of two days, and up to four days, between the receipt date and the date the deposit was received by the Treasury Division. At the Baseyard, we found an average of six working days (with a high of eight days) between when the deposit date and when it was recorded on the treasury receipt. Procedures should require accounting for cash upon receipt to eliminate the risk of errors or theft. 10. Reconciliation of total checks and cash and over/shorts. Current procedures do not require the notation of cash and check composition or cash over/shorts on the treasury receipt, preventing the Treasury Division and Mass Transit management from verifying the integrity of the deposit. Furthermore, there is no policy or procedure to independently reconcile the cash and check composition and cash over/shorts. Procedures should require the notation of both cash and check composition and cash over/shorts on the treasury receipt and an independent reconciliation of the composition to the cash receipts to ensure the integrity of the deposit and so that cash receipt transactions can be easily identified, traced, and corrected. 11. Fraud reporting procedures. Existing procedures do not address fraud reporting. Policies and procedures should require a fraud reporting process to aid in the detection and prevention of fraud. By providing fraud -reporting procedures, all County employees will be made aware of the types and signs of theft or fraud, the consequences associated with it, and how to report it. Those who are planning to commit fraud will know that management is watching and may be deterred by this. Honest employees who are not tempted to commit fraud will also be made aware of possible signs of fraud or theft and how to report any concerns. By identifying gaps in policies and procedures, management can identify where effective controls need to be placed, where to provide sufficient detail for new and existing procedures and to clarify unclear procedures so that they are easier to follow. Once these procedures have been officially established and approved, all Mass Transit employees and contracted bus drivers should be trained in correct cash handling and ridership count procedures. Mass Transit Cash Handling Audit Results 123