TITLE
Recommendation to receive and file the Towing Operations Cash Handling Procedures Follow-Up Audit; and request City Management to review the recommendations, develop strategies for implementation and update the City Council and City Auditor in six months and in one year from the date of receipt and filing of this report.
DISCUSSION
In October 2009, our Office issued a report on the audit of Cash Handling Procedures at the Towing Operations (a division of the Fleet Services Bureau of the Department of Public Works). The report discussed the deficiency in computer controls and the lack of segregation of duties that created a high risk of potential fraud or misappropriation of funds without detection.
Due to the high volume of cash transactions at Towing, almost $5.3 million in fiscal year 2010, and the severity of the control weaknesses identified, we performed a follow-up audit to determine if control and process corrections had been implemented. Our follow-up audit covered the period of October 1, 2009, through September 30, 2010.
We conducted this performance audit in accordance with Generally Accepted Government Auditing Standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective.
According to the October 2009 report, there was a prevalent lack of separation of duties as an excessive number of employees with access to cash also had the ability to edit or delete records within the Tow Administrator's software system without secondary authorization. In addition, management was not using edit reports to review the data for irregularities.
During our follow-up audit, we found that Management has made some process and system changes to tighten controlso However, significant control weakn...
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