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HomeMy WebLinkAboutCOM 1170.001 2016-2018PIPSMTG ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA Ww1 70 LEGISLATIVE AUDITOR COUNTY CLERK COUNTY OF HAWAIIReportNo. 2018-01) 1!!i e dt('s?1 lReportNo. 2018-02 Report Period: September 30, 2018 =a' i -. 1 ,`R: 36 Comment No. 1 Update the cash handling system Comment Initial Management Response Actions This Reporting Period Actions Completed Prior to Expected Report Period Completion _ 1.1 We recommend Mass Transit The MTA is currently assessing scope of Bus specifications submitted Bus specifications will include TBA management equip each County proposed on-board technologies that could included updated electronic fare updated electronic fare boxes. bus and van with an updated be implemented(as a scalable, modular boxes. Original bid sent out this electronic fare box to collect approach),to effectively address fare quarter with no response. Revised passenger fares and track revenue collection,passenger statistics,i.e. bid being created estimated by ridership. total ridership by route while being mindful end of October. of the financial constraints facing the entire County. 1.2 We further recommend Mass The MTA is exploring all viable options Contining to use exsisting stock Using exsisting stock inventory. Dec. 2018 Transit pre-number bus tickets. As regarding this recommendation and the inventory.Once exsisting ticket Once exsisting ticket stock is mentioned in recommendations cost effectiveness of each option. stock is depleted, new ticket stock depleted,new ticket stock will be 3.1 and 5.2 respectively,these will be utilizes.Specifications for designed and ordered. tickets should be adequately the bid to purchase new ticket secured and monitored for stock is being prepared which consecutiveness and implements a design with pre- completeness. numbered bus tickets. Comm. No. `V1 c>• ` SU Mrrt,P 67. BIZalDQ CAR12.' -.iR A, M!As5 112t\N15r Ref. To: PIP Y'CG A MT1\t 're Ref. dote 1 «I l ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 1.3 We further recommend Mass The MTA is currently reviewing current Transit remove or alter the practice,and identifying feasible options to Preparing specifications for the IFB Bus tickets are no longer sold by Dec.2018 perforated stub at the top of the minimize this issue. The MTA is also to purchase new ticket stock outside vendors such as KTA bus ticket sheets to ensure addressing this issue of minimizing the which implements a design with Superstore and are now sold passengers pay the full fare.acceptance of non-valid payment with the pre-numbered bus tickets. directly by MTA or at the contracted bus companies. Mooheau Bus Terminal.The perforated stub at the top of the bus ticket sheets are removed by staff before sheets are given to customers. Once exsisting ticket stock is depleted, new ticket stock will be designed and ordered. ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 Comment No. 2 Cash handling internal controls should be a priority Comment Initial Management Response Actions This Reporting Period Actions Completed Prior to Expected Report Period Completion 2.1 We recommend Mass Transit Although the MTA agrees that Standard Operating Procedure Fare Collection and Sept.2018 management prioritize cash improvements are needed to strengthen its manual still being written.To be Sorting/Counting Procedures are Dec.2018 handling internal controls. internal controls over the handling of cash, submitted to Finance,Human being implemented. Management should be the management of MTA has implemented Resources,and Corporation Counsel responsible for an effective various improvements in the past year and for review,edits and approval.Standard Operating Procedures internal control system and a half because it understands the SOP) is being developed to internal controls increase the importance of this issue. The Legislative address duties and responsiblities. likelihood that the organization Auditor's report indicates that "Mass Additional staff requirements are will achieve their objectives.Transit received funding for an additional also being addressed. position to count bus fare cash receipts and prepare the bank deposit. While this position wasfilled in 2016, only one person was assigned to count cash." MTA received funding for this position on July 1, 2016 and this position was filled on November 1,2016. Later,the MTA began to require the presence of two staff members as the cash was counted and prepared for deposit and then effective February 7,2018,the MTA now requires two employees to participate in the counting and recounting of the cash. ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 Comment No.3 Safeguard Assets Comment Initial Management Response Actions This Reporting Period Actions Completed Prior to Expected Report Period Completion3.1 We recommend Mass Transit The audit report states that"some county- Request submitted to Public Prior to the audit report,measures Sept.2018 management ensure physical owned vans do not have locking fare boxes. works during second quarter.to were implemented that resolved Dec.2018 security over manual receipts, When there is nofare box, a manila date,waiting on the installation the issue of locked fare boxes in cash,and cash equivalents(e.g., envelope or plastic bag is used." All vans of the additional 2 cameras in county-owned vans as well as bus tickets, bus passes,taxi have locked cash boxes that have been the Mechanic tool room where vehicles rented from other coupons). redesigned to include a slot to allow for the evening fare boxes are secured in vendors. insertion of payment. The MTA has already a locked safe.established adequate securityupgrades and On May 24,2018,2 video cameras enhancements to address this issue, were installed in the MTA Finance including secured rooms,video camera,and room vault. limited access. The mechanic bay area that leads to the mechanic tool room is equipped with video cameras.A work order has been submitted to install additional 2 cameras in the Mechanic tool room where evening fare boxes are secured in a locked safe. The tool room is also locked at night. To be included in the SOP. ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 3.2 We further recommend Mass The MTA has taken the necessary steps to on April 2,2018 the Accounting Ongoing Transit management ensure ensure that cash deposits are made within Working with HR to aquire Clerk position#00-3356 was filled deposits are made timely,both for the two business day requirement and additional finance staff. With (position was vacant since August contracted bus services and cash implemented changes to facilitate the tentative start date of October 2017)--strengthing the assurance received by Mass Transit. Ideally, timely delivery of funds from the contracted 2018 that fare box monies are deposited deposits should be made within bus service companies. timely. 24 hours,but at least within two business days. To be included in the SOP. ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 Comment No.3 Safeguard Assets Actions r'CompletedCommentInitialManagementResponseActionsThisReportingPeriodp Prior to Expected Report Period Completion 3.4 We further recommend Mass The MTA is reviewing and updating all No additional actions Since audit,MTA has relocated to Ongoing Transit management change lock existing procedures,to ensure compliance required/taken at this time.new building equipped with lock& or safe combinations once an with this and that similar recommendations combinations.Any changes to employee who has access leaves are fully addressed. personel moving forward will be the organization or is reassigned addressed with policy-changing of to another position.locks and combinations. To be included in the SOP. 3.7 We further recommend Mass Although the MTA acknowledges that No additional actions Fare Collection and Ongoing Transit staff empty fare boxes improvements are needed regarding the required/taken at this time. Sorting/Counting Procedures have frequently to ensure the frequency of the emptying of fare boxes, Procedures implemented remain been implemented that include the automatic locking mechanism the audit report's statement that"when requirement that a miniumum ofapplicable. works. the Account Clerk is unavailable or absent two(2)staff are present at all from work,no one empties the bus's fare times in the fare box collection boxes,sometime forseveral days" does not phase and Sorting/Counting phase provide a correct portrayal of the situation. Prior to the audit reporting, alternate staffing had been implemented in the absence of the Account Clerk position#00-04125 to ensure fare boxes of county- owned vehicles arriving at the MTA base during regular business hours 7:45 am to 4:30 pm)are emptied/changed out timely. In addition,in May 2018,evening fare box collections by staff was implemented. To be included in the SOP. ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 Comment No.3 Safeguard Assets Comment Initial Management Response Actions This Reporting Period Actions Completed Prior to Expected Report Period Completion 3.7 To the extent possible,other MTA staff cont'd members have always supported the Account Clerk when she is unable to empty the fare boxes. Additional changes have been made and alternative options are being considered to further the MTA's efforts. ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 Comment No.4 Segregate incompatible duties Comment Initial Management Response Actions This Reporting Period Actions Completed Prior to Expected Report Period Completion 4.1 We recommend that Mass Transit The audit report cites specific concerns with management separate the duties of the County Transportation New procedures to follow the Ongoing discussion for policies Ongoing incompatible duties. One Specialist(Specialist). The report states that closing of the MTA Satelitte being considered. individual should not be in charge the Specialist"maintain the master Word office and staff relocation to Mitigating controls have been of all of the cash handling documentfor some in-house receipts" but MTA base yard that is estimated implemented. elements: physical custody of this is limited to receipts used by the by December 2018 To be included in the SOP. cash,depositing cash, independent contractor that sells MTA recording/adjusting transactions tickets and passes for which the cash in the system,and reconciling the receipts are maintained by the contractor revenue accounts. If duties on a daily basis. The report states that the cannot be sufficiently segregated, Specialist"performs over-the-counter mitigating controls,such as sales" but this is only done as a last resort if independent monitoring could be no other staff is available to service the implemented. customer,which is due to the relatively small staff size of the MTA. The report states that the Specialist"reviews end-of- day cash receipts and reconciles to the treasury receipt" but her role is primarily as a secondary reviewer because the initial review and reconciling of receipts at the end of the day is the responsibility of the Account Clerk. If the MTA finds that it is short-staffed on a particular day,the Specialist may be the initial reviewer but there is always a secondary reviewer as a mitigating control. ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 Comment No. 5 Implement monitoring and oversight Comment Initial Management Response Actions This Reporting Period Actions Completed Prior to Expected Report Period Completion 5.1 We recommend Mass Transit The MTA has begun to review and revise its management perform ongoing existing practices and implement New procedures to follow the monitoring of their internal improvements based on need and viability. closing of the MTA Satelitte control system as part of the office and staff relocation to normal course of operations. MTA base yard that is estimated Internal controls and Ongoing monitoring incudes regular management and by December 2018 monitoring procedures are Ongoing supervisory activities,daily being used.These procedures reconciliation of cash receipts,and pertain to the MTA Satellite other routine actions. Office, Daily reconciliation is always verified by a secondary reviewer as the mitigating control.To be included in SOP. 5.2 We further recommend Mass Certain points above are already being Internal controls ann Transit Management specifically addressed by the MTA including monitoring New procedures to follow the monitoring procedures are Ongoing implement ongoing monitoring over/shorts and the trip sheets and others closing of the MTA Satelitte being used.These procedures procedures of the cash handling are being considered by the MTA in relation office and staff relocation to pertain to both the MTA process including both to the feasibility of implementation. MTA base yard that is estimated Satellite Office and MTA Base comparisons and reconciliations. by December 2018 yard. Since audit, procedures For example,someone have been implemented to independent of the cash handling ensure daily reconciliations areprocessshouldreviewand/or No changes this quarter for the always verified by a secondaryreconcile: internal controls and monitoring reviewer as a mitigating procedures at the MTA Base control.To be included in SOP. yard. ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 Comment No.5 Implement monitoring and oversight Comment Initial Management Response Actions This Reporting Period Actions Completed Prior to Expected Report Period Completion 5.3 We further recommend Mass With the hiring of the Account Clerk in Procedures have been Transit management and staff 2016,procedures were developed regarding No additional actions implemented to address Ongoing monitor cash bags for patterns the monitoring of the trip sheets and required/taken at this time.discrepancies to respective and inconsistencies(e.g.,repeated over/shorts. Although improvements were vendors or persons responsible over/shorts,inaccurate and needed regarding the adherence to these for the cash so that correctiveincompletetripsheets,cash bags procedures,the MTA has implemented actions can be taken. In thewithnotripsheets,cash bags with revised and stronger procedures. trip sheets and no cash,invalid near future,weekly reports to ticket stubs). If Mass Transit the administrator will include discovers unexpected patterns any discrepancies for that and/or inconsistencies,they week.To be included in the should follow up with the SOP. respective bus driver or person responsible for the cash. 5.4 We further recommend Mass The MTA will include additional analytical Calculation of ridership x fare= Ongoing Transit management conduct procedures and financial analysis in its New accounting templates have revenue are currently done. In analytical procedures and financial review procedures. been developed and are being the near future these relationship analysis to monitor tested to streamline the calculations will be included in controls,revenue,and budget reporting process. weekly reports to theexpectations. One example of an administrator.To be includedanalyticalprocedureiscomparing in the SOP.ridership counts to revenue ridership x fare=revenue). ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018 Comment No.6 Control manual cash receipts Comment Initial Management Response Actions This Reporting Period Actions Completed Prior to Expected Report Period Completion 6.1 We recommend Mass transit staff The MTA has begun to research the cost of use official pre-numbered and pre- pre-numbered and pre-printed receipts. Specifications and reciept printed receipts. If Mass Transit template redesign in process due The use of custom reciepts, Oct. 2018 wants to continue the practice of to tenative closure of MTA with consecutive numbering Dec. 2018 printing in-house receipts,this file satellite office. on pre-printed on carbonless should be maintained by someone paper is being researched. The outside the cash handling system. specifications for the custom As mentioned in recommendation reciepts will go to 5.2,these receipts should be monitored for consecutiveness the purchasing department for submittal for the vendor and completeness. bidding process. by 8/15/18. Use of custom reciepts to be included in the SOP. ACTIVITY ON RECOMMENDATIONS FOR CASH HANDLING AT MTA LEGISLATIVE AUDITOR Report No. 2018-01) Report No. 2018-02 Report Period: September 30, 2018