HomeMy WebLinkAbout25.05.13 Real Property Tax-West Hawaii Civic Center1
What is a surprise cash count?
A surprise cash count is an unannounced inspection of cash on
hand, typically conducted to verify that the amount of physical
cash matches the recorded amounts in the accounting records. It
is used as a control measure to:
• Deter theft or fraud by keeping staff aware that their cash
handling may be checked at any time
• Ensure proper cash handling procedures are being followed
• Identify discrepancies early so they can be investigated and
corrected
What is the purpose of a surprise cash count?
The purpose of a surprise cash count is to uphold and reinforce principles of
transparency, accountability, and fiscal responsibility.
This activity is conducted quarterly at random locations and supports
the County’s commitment to responsible financial management by
ensuring public funds are handled carefully and in line with
established rules. Through this work, the Office of the County Auditor
(OCA) aims to strengthen community trust in the County’s financial
operations.
What is internal control?
The policies, procedures, and systems used to safeguard assets
(e.g., prevent theft or misuse), ensure accurate and reliable
reporting, promote compliance with laws, rules, and internal
policies, and support efficient and effective operations.
The Government Accountability Office Green Book provides a
framework for designing, implementing, and operating effective
internal control. It is built on 5 components and 17 principles that
support accountability, transparency, and the achievement of
organizational goals.
1. Control Environment. Sets the foundation with leadership ethics and clearly assigns
responsibilities.
2. Risk Assessment. Identifies and analyzes risks to achieving objectives.
3. Control Activities. Policies and procedures that help mitigate risks.
4. Information and Communication. Ensures that quality information flows both internally
and externally to support informed decision-making.
5. Monitoring. Involves regular evaluations to verify controls are functioning and to address
deficiencies.
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What OCA did.
On May 13, 2025, the OCA conducted a surprise cash count of the Real
Property Tax (RPT) Division at the West Hawai’i Civic Center, located at
75-5044 Ane Keaohokalole Highway, Kailua-Kona, HI
OCA procedures included:
• Site visit and verification of supporting documentation
• Reviewed Cash Handling Procedures Handling of Cash and Check
Payments
• Assessed compliance with Finance Memorandum 24-04, dated June 12, 2024, requiring
cash deposits and treasury receipts within two working days
• Interviewed staff to assess their understanding of and compliance with applicable County
policies and procedures
What OCA found.
RPT demonstrates strong cash handling and reconciliation
practices, including:
• Daily transaction reconciliation with independent
verification, ensuring accuracy and accountability
• Use of a secure drop-off lockbox outside the office for
convenient fund deposits
• Regular bank deposits via courier to manage cash securely and efficiently
• Assigning cash tills to specific individuals daily supports organized cash management
Observations and opportunities for improvement.
• We observed that only the supervisor has access to the key box and safe, which increases
the employee’s risk exposure. To reduce this risk, consider implementing dual control so
that access and accountability is shared.
• We observed an immaterial cash over/short between two registers, which may indicate
errors in handling or recording transactions. To reduce this risk and maintain accuracy,
regularly monitor and promptly address any cash discrepancies.
• We observed manual receipt booklets were left unsecured, which increases the risk of
loss or misuse. To reduce this risk, safeguard manual receipts booklets when not in use.
We commend RPT for its internal controls over cash handling. Although these observations are
not part of an audit, we offer them proactively to support process improvements and help reduce
the need for future audits.
Control Environment