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Home My WebLink About1980.AuditReport.CashFunds � , � � � � ► � �� ,�� & �.�� CERTIFIED PUBLIC ACCOUNTANTS 2703 THEMIS STREET -�,� �,��, �� 6�1'70� ROSERTJ.EARLEY,C.RA. NOVe(1�IbeI'� �3� �7�� TELEPMONE JOHN R..IAN6a6N.C.P.A. (914)394-284E T6RRV R.�<OLCY,C.P.A. OARY O.sTANLHV.C.r.A. Mr. W. G. Lawley City Hall Cape Girardeau, Missouri 63701 Dear Mr. Lawley: At your request, we have conducted a special review of the cash funds in the office of City Collector. The purpose of our review was twofold: First, to determine the propriety of the transactions involving the Collector's cash funds; and second, to ascertain that all cash receipts and petty cash disbursements affecting the Collector 's funds were recorded on the books of the City. We gave particular attention to the incidence of IOUs and their subsequent disposition (our comments relative to the internal control ramifications of IOUs follow in a later paragraphl . Our review covered the period June 17, 1980 through November 6, 1980 lfrom the date on which we last counted and balanced the Collector 's funds in conjunction with our audit of the 1979-80 fiscal year, through the date of your request , at which time we again counted the fundsl . Our review procedure included the following steps: I . We counted and balanced all cash funds in the Collector 's office on November 6, 1980, and traced the day's deposit in transit to the duplicate bank deposit slip for November 7, 1980. The total imprest balance of the funds was $ I ,000.00. There was no cash over or short for November 6. 2. We examined all cash items included in the fund balances at November 6, and discerned no impropriety therein. (There were no IOUs outstanding at that date) . 3. We summarized all daily balancing sheets for the period June 17 — November 6, 1980, and reconciled the totals to the recorded receipts in the City's books. 4. We traced receipt totals to the bank statements for the months of June, July, August, September, and October, and to the duplicate deposit slips for November. " w Mr. W. G. Lawley Page 2 5. We scheduled all balancing sheets which disclosed the existance of IOUs in the imprest fund balance. The appearance and disposition of IOUs is summarized as follows: IOU Increase IOUs Date (Decrease) Outstanding Jun. 18 $ 15.00 $ 15.00 Jun. 20 20.00 35.00 Jun. 27 ( 35.00) -0- Jul . I 5.00 5.00 Jul . 2 5.00 10.00 Jul . II 25.00 35.00 Jul . 14 30.00 65.00 Jul . 15 ( 65.00) -0- Jul . 16 10.00 10.00 Jul . 28 20.00 30.00 Jul . 29 ( 30.00) -0- Aug. II 20.00 20.00 Aug. 12 5.00 25.00 Aug. 13 l 25.00) -0- Aug. 14 25.00 25.00 Aug. 15 ( 25.001 -0- Aug. 19 5.00 5.00 Aug. 20 5.00 10.00 Aug. 22 ( 10.00) -0- Aug. 25 10.00 10.00 Aug. 28 ( 10.00) -0- Sep. 2 35.00 35.00 Sep. 3 ( 35.00) -0- Sep. 4 35.00 35.00 Sep. 5 l 25.00) 10.00 Sep. 10 20.00 30.00 Sep. 12 ( 20.00) 10.00 Sep. 15 ( 10.00) -0- Sep. 25 30.00 30.00 Sep. 29 ( 30.00) -0- Sep. 30 35.00 35.00 Oct . I ( 30.00) 5.00 Oct. 2 10.00 15.00 Oct. 3 ( 15.001 -0- Oct. 6 7.60 7.60 Oct. 7 10.00 17.60 Oct. 9 2.40 20.00 Oct . 15 ( 20.00) -0- Oct. 20 10.00 10.00 Oct. 21 ( 10.00) -0- Oct . 22 20.00 20.00 Oct. 24 ( 20.00) -0- Nov. 4 10.00 10.00 Nov. 5 ( 10.00) -0- Total IOUs For Period $ 425.00 Total Dispositions ( 425.001 Balance November 6, 1980 $ -0- Mr. W. G. Lawley Page 3 6. On those days when outstanding IOUs were cleared, we examined all individual receipt copies, and footed the copies by category ( tax receipts, licenses, trash receipts, etc. ) . We then traced all totals to the recorded receipts as shown on the daily balancing sheets to ascertain that no IOUs were covered by city receipts. 7. We scheduled all petty cash vouchers for the period and reviewed them for propriety. We de�ected no improper vouchers which might have suggested that IOUs were being covered by bogus expense claims. 8. We interviewed two city employees whose concern about the City's cash handling procedures had been made known to us. Although both employees expressed strong reservations about the advisability of permiting IOUs in City funds (reservations with which we concur) , neither indicated knowledge of cash shortages or fraudulent conduct in connection therewith. Conclusions Our special review, which was limited in scope as described above, indicated no impropriety in the collection or recording of receipts through the Clty Collector 's office, no " lapping" of collections, no untimely deposits, no improper petty cash reimbursements, and no fraudulence or malfeasance on the part of any employee of the City Collector. However, to permit city employees to run IOUs through the City's cash funds is contrary to sound internal control , and we endorse your recent directive to terminate the practice in City offices. In addition, we wish to emphasize the importance of the sole—responsibility, sole—control concept. Each employee in the Collector 's office is given the responsibility of maintaining her own cash drawer with an imprest balance. Sole responsibility demands sole control . Therefore, each employee should be charged with the custody and daily balancing of her drawer. Periodic surprise counts should be conducted by the City Collector to determine the correctness of each drawer 's balance, but in no event should the drawer custodian be denied the opport�unity of counting and balancing her cash at the close of the day's business (or at its commencement , if she desires) . Finally, we would add that no system of internal control can ever be so rigid and comprehensive (consistent with an acceptable cost—to—benefit ratio) that it will replace honest and conscientious employees. Those employees who have voiced their concern about a weakness in the City's internal control system are to be commended, and all employees should be encouraged to advise their supervisors whenever questionable practices surface. Mr. W. G. Lawley Page 4 In this way, the City's administrators can take prompt corrective action to assure the safeguarding of our community's assets. Very truly yours, ROBERT J. EARLEY & COMPANY � � � � . ��--1 L . Deck, CPA TLD:ab