HomeMy WebLinkAbout2122-11 Adult P&P - Cash Handling report (Final 5-10-22)Adult Parole and Probation – Cash handling report #2122-11 May 2022
Adult Parole and Probation –
Cash Handling
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Deschutes County,
Oregon
The Office of County Internal Audit
David Givans, CPA, CIA – County Internal Auditor
Aaron Kay – Performance Auditor
internal.audit@deschutescounty.gov
Audit committee:
Daryl Parrish, Chair - Public Member
Jodi Burch – Public Member
Tom Linhares - Public Member
Scott Reich - Public Member
Summer Sears – Public Member
Stan Turel - Public Member
Patti Adair, County Commissioner
Charles Fadeley, Justice of the Peace
Lee Randall, Facilities Director
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Adult Parole and Probation – Cash handling report #2122-11 May 2022
TABLE OF
CONTENTS:
HIGHLIGHTS
1. BACKGROUND ON ADULT PAROLE AND PROBATION
1.1. Background on the Audit .……………………………….……….………….…………… 1
1.2. Background on the Division …………………………………………………………….. 1
2. FINDINGS and OBSERVATIONS
2.1. Observations ……....………………………..………………………………………….….. 2-3
3. MANAGEMENT RESPONSE
3.1. Adult Parole and Probation Division ..…………………..……………..……….. 3-4
A. APPENDIX A: OBJECTIVES, SCOPE, AND METHODOLOGY
i. Objectives and Scope ...……………….……..………….…………….…………………… 4
ii. Methodology …………………………………….………….…………………………..……… 5
Adult Parole and Probation – Cash handling report #2122-11 May 2022
HIGHLIGHTS
Why this audit was
performed:
A periodic review of
internal controls over
cash handling of receipts.
What was
recommended:
Recommendations
include:
• eliminating petty cash
monies
Adult Parole and Probation – Cash Handling
The focus of the review was on internal control over handling of infrequent client payments
and other receipts.
What was found
Overall, the Adult Parole and Probation division performed well in providing fiscal controls
over receipts. The division has extensive procedures that are documented and periodically
updated. Due to recent Legislative action repealing the collection of probation supervision
fees, the division handles limited client payments and other receipts.
The division may be able to eliminate two separate petty cash funds. The County has
moved away from petty cash by issuing procurement cards and providing faster processing
times for County payments.
Deschutes County Internal Audit
Adult Parole and Probation – Cash handling report #2122-11 May 2022
Page 1
1.1 BACKGROUND ON THE AUDIT
1.
Introduction
Audit Authority:
The Deschutes County Audit Committee authorized the review of cash handling practices of Adult
Parole and Probation in the Internal Audit Program Work Plan for 2022-2023. Internal audits of
cash handling are routinely performed for identified County departments. Audit objectives, scope,
and methodology can be found in Appendix A.
1.2 BACKGROUND ON ADULT PAROLE AND PROBATION
Graph I
Composition of
Adult Parole and
Probation
Revenues (FY22
Budget)
Adult Parole and Probation is a division of the Community Justice Department. The division operates
the Community Corrections program, including supervision and services for persons on felony and
specified misdemeanor probations, parole and post-prison supervision, and transitional leave from
prison. Services include community service crew and community based volunteer service, cognitive
behavioral programming and electronic monitoring of supervised persons. The Community Safety
and Restoration program is also operated by Adult Parole and Probation. It includes monitoring and
supervision of persons on misdemeanor probation and contractual management of pretrial
electronic monitoring services. Probation supervision fees were repealed in the 2021 Legislative
Session.
Adult Parole and Probation – Cash handling report #2122-11 May 2022
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2.
Findings and
Observations
The audit included limited procedures to understand the systems of internal control around
revenues. No significant deficiencies were found in this audit. A significant deficiency is defined as
an internal control deficiency that could adversely affect the entity’s ability to initiate, record,
process, and report financial data consistent with the assertions of management in the financial
statements. The findings noted were primarily compliance and efficiency matters.
Audit findings result from incidents of non-compliance with stated procedures and/or departures
from prudent operation. The findings are, by nature, subjective. The audit disclosed certain
policies, procedures and practices that could be improved. The audit was neither designed nor
intended to be a detailed study of every relevant system, procedure or transaction. Accordingly, the
opportunities for improvement presented in the report may not be all-inclusive of areas where
improvement may be needed and does not replace efforts needed to design an effective system of
internal control.
2.1 OBSERVATION
Adult Parole and
Probation don’t
frequently receive
client payments.
Overall, the Adult Parole and Probation division performed well in providing fiscal controls over
infrequent collected revenues. The following observation is noted to help further improve the
procedures put into place.
Petty cash funds duplicate existing County payment options.
Adult Parole and Probation has two funds of petty cash being utilized for small purchases:
• A traditional fund of $150 approved through resolution. It is used minimally, with only one
expenditure receipt pending and no reimbursements in the last year; and
• Another fund of $452.50 for providing clients’ money orders to purchase DMV identification
cards. Money orders are requested only 10 times per year on average. Finance assisted in the
Adult Parole and Probation – Cash handling report #2122-11 May 2022
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establishment of this petty cash fund to address the specific needs of the division, but it did not
follow the normal process.
The County has moved away from petty cash by issuing procurement cards and providing faster
processing times for County payments. Procurement cards provide greater efficiencies and improve
financial controls over petty cash funds. The County has a weekly check processing cycle to ensure
payments are consistently issued.
Sufficient controls over the petty cash funds were in place, however petty cash monies increase the
probability of errors and are a target for theft/fraud. Internal processes should be regularly
evaluated as business needs change.
It is recommended Adult Parole and Probation eliminate their petty cash monies.
3. Management response
Adult Parole
and Probation
Division
Deevy
Holcomb,
Community
Justice Director
Thank you for your recent internal audit of the Parole & Probation’s Cash Handling policies and
practices.
We appreciate the work, agree with the findings, and accept your sole recommendation associated
Adult Parole and Probation – Cash handling report #2122-11 May 2022
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with Observation 2.1 that the division’s petty cash funds duplicate County payment options. Specifically
you recommend that Adult Parole and Probation eliminate our petty cash monies.
Staff and I have analyzed and do not see significant drawbacks to eliminating our petty cash fund, the
only one being a possible weeklong wait for clients needing a DMV identification card in order for a
check to be processed. The protections that are afforded through use of purchase card or check
processing outweigh this drawback.
I will direct staff to close out and eliminate use of petty cash funds in accordance with Finance
requirements for such an activity, no later than June 30, 2022. I will update you when that is completed.
i. OBJECTIVES and SCOPE
Appendix A:
Objective,
Scope, and
Methodology
“Audit
objectives” define
the goals of the
audit.
Objectives included:
1) Review of internal controls for cash handling as outlined in County Finance policy for cash handling
(F-11). Identify areas for improvement. Additionally, review management of any change, petty cash,
checking accounts, and billings, as applicable.
2) Be aware of any issues with compliance with federal and state regulations and requirements, as may
be applicable.
Scope and timing:
The audit took place in April 2022. Included in review of cash handling of the Adult Parole and
Probation division are accounting funds primarily handled in Fund 355. The division employs petty
cash, but does not use change funds or a checking account. The focus of the review was on internal
control over handling of third party client payments. The scope of the audit did not include all
aspects of internal controls employed.
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ii. METHODOLOGY
“Audit procedures
are created to
address the audit
objectives”
Audit procedures included:
• Interviewing staff related to cash handling, receipting, and billing procedures (staff reviewed
and answered the County’s cash handling checklist provided in the Cash Handling Practices
Policy F-11),
• Reviewing written procedures and documents provided,
• Reviewing and analyzing receipt transaction data for the identified funds,
• Reviewing and analyzing revenue data for the identified funds, and
• Reviewing petty cash monies on hand in accordance with Petty Cash Policy F-8.
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 that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
(2018 Revision of Government Auditing Standards, issued by the Comptroller General of the United States.)
The County Internal Auditor was created by the Deschutes County Code as an independent office
conducting performance audits to provide information and recommendations for improvement.
Adult Parole and Probation – Cash handling report #2122-11 May 2022
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{End of Report}
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