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

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7.2 We further recommend Mass Transit management require payment at the time of sale unless an official contract has been established and approved. If and when a contract is executed, terms should be complied with and enforced (e.g., discounts, interest rates, timely payment, reassignment of non -transferable coupons). Response: The MTA has temporarily halted the acceptance of purchase orders and sales to non -individuals and is working with both the Office of the Corporation Counsel and the Department of Finance to ensure compliance. Also, the audit report states that "One vendor brings Mass Transit a check when they require tax! coupons. The vendor then sends a Fax requesting the amount of Coupons needed and the amount is deducted from the balance gfthe payment received At least once, the balance was negative with the vendor owing the County more money than the paid. " However, when the vendor came to the MTA office to pick up their coupons, they brought a check for payment at that time to exchange for the coupons so at no time did they owe the County more money. 7.3 We further recommend Mass Transit management implement a process to ensure collection of all outstanding accounts receivable balances. Response: The MTA staff reviews the balances of all vendors on a weekly basis. To put things in perspective, the average total monthly accounts receivable for sales on account for the past five months is approximately $11,000, with a high of $21,000. 8. Update and enforce policies and procedures 8.1 We recommend Mass Transit management establish, clarify, and enforce internal controls in County policies and procedures to ensure consistency throughout the department and with industry best practices including but not limited to: o Timely independent review and monitoring procedures ❑ Guidance and clarification on individual job duties to ensure adequate segregation of duties exists o Physical security procedures o Timely deposit of receipts ❑ Endorsing checks immediately upon receipt o Consecutiveness of pre -numbered receipts, paratransit coupons, taxi coupons, bus passes, and bus tickets (once pre -numbered) o Timely recognition of revenue o Cash and check composition reconciliation o Recording and reconciliation of cash over/shorts o Fraud reporting guidance Response: Although the MTA acknowledges that its internal controls could be improved, it has already begun to revise the procedures followed by its staff as explained in the responses to the other similar recommendations. The MTA will continue to assess its current policies and make the necessary changes. Mass Transit Agency — Cash Handling Management's Response Page 5 Mass Transit Cash Receipts Management's Response 134