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

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Audit Objectives The Office of the Legislative Auditor's fiscal year 2017-2018 annual audit plan included a performance audit of the County of Hawai`i's Mass Transit cash handling and receipting process. The objective of the audit was to evaluate if cash handling internal controls at Mass Transit are adequate and effective to ensure that revenue is properly controlled and deposits are timely and accurate. Audit Scope and Methodology To accomplish our objectives, we: • Developed an understanding of the policies, procedures, processes, and document flows; • Compared Mass Transit's cash handling procedures, practices, and performance measures to recommended industry best practices; • Assessed compliance with Mass Transit's cash handling policies and procedures, County of Hawai'i Code, County of Hawai'i Charter, and Hawai'i Revised Statues; • Conducted a surprise cash count of bus fare revenue at the Baseyard; • Analyzed cash receipts by comparing calculated expected revenue based on ridership to actual reported revenue; • Examined purchase requisitions, purchase orders, and payments for bus tickets, bus passes, and taxi coupons sold to vendors; • Analyzed cash receipts by comparing revenue source data (manual cash receipts, bus trip sheets) to the deposit and revenue posting; • Corroborated information through interviews with appropriate personnel, reviewed documentation and performed testing of documentation and controls; and • Reviewed additional documentation as needed (e.g., daily bus trip sheets, manual cash receipts, treasury receipts, bank courier receipts, revenue reports). We conducted this audit from September 2017 through March 2018. During the course of our audit, we assessed internal controls relevant to the audit objective. This included a review of applicable policies and procedures, cash handling standards, and interviews with knowledgeable staff. We also conducted a surprise cash count of bus fares and reviewed cash receipts and bus fares from December 2017. Taxi licenses and license renewals were not specifically included in our audit scope due to the low dollar volume and the receipting procedures follow the basic process as other manual receipts. We did not rely on computer generated data. We conducted this performance audit in accordance with general accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, Mass Transit Cash Handling Audit Objective, Scope & Methodology 12