The report examined cash handling, payroll, credit cards, local funds and the status of recommendations from previous annual audits. Two new problem areas were found: inadequate policies or internal controls over Voyager fuel cards, and inadequate internal controls over cash handling in prison mailrooms.
The Voyager cards were intended to allow fueling of DOC vehicles, and were limited to purchasing regular unleaded or diesel fuel, up to six car washes annually, and emergency purchases of oil, wiper blades or vehicle lights. As of May 2009, the DOC had issued 1,152 fuel cards – 852 assigned to fleet vehicles, 279 assigned to prisons or offices and 21 to individuals. Only 785 of the cards were used during the audit period.
Fuel card purchases are supposed to be reviewed by a regional office. However, in practice the State Auditor found that supporting documents were not reviewed and fuel card activity was not tracked. Some reviewers did not understand what purchases were allowed, and card users did not consistently obtain receipts. Receipts and bills were not reconciled. Reviewers failed to ask for justifications for “emergency” purchases, and the number of car washes was not tracked.
Auditors reviewed 120 questionable transactions totaling $3,712.77 where supporting documents and/or mileage logs were missing. Seventy of the purchases were for disallowed items such as unauthorized types of fuel or nonemergency oil changes.
Eighteen could not be determined to have been for DOC business. The total amount of the disallowable purchases was $2,900.84, or about 8% of the total fuel card bill of $36,406.93 during the audit period.
The State Auditor recommended that the DOC establish and enforce policies to prevent the misuse of fuel cards, train card users on allowable use and documentation requirements, refuse to pay fuel bills without supporting documentation, and regularly eliminate fuel cards that are not being used. The DOC agreed to those suggestions.
Auditors also discovered inadequate controls over cash handling in prison mailrooms after reviewing procedures at the Washington Correctional Center for Women (WCCW), McNeil Island Correctional Center (MICC), Monroe Correctional Center and Airway Heights Correctional Center (AHCC), all of which used the same receipting system to log cash received in mailrooms.
At all of the reviewed facilities, mail could be opened with only one person present, money orders were left unsecured on a table before being logged, no signature was required when money orders were transferred to the business office, and the receipting system allowed permanent record deletions that left no audit trail.
At WCCW and MICC, a common logon was used although individual logons were possible, and checks and money orders returned to the sender were not logged at all. Bank deposits and money order logs were not reconciled at WCCW. At AHCC, a single employee picked up mail from the post office and money orders with attached receipts were left in an unsecured bin in the mailroom awaiting transfer to the business office.
The State Auditor recommended requiring two people to be present when mail is picked up or opened, reporting money orders and other payments immediately, and establishing a cash-receipting and tracking system that records all transactions and does not allow permanent record deletions. The DOC responded that it did not have resources to replace the current cash-tracking system, but would assign individual logons and passwords and improve controls for opening mail.
Previous audits had revealed inadequate internal controls over local funds, including misappropriation of money from the MICC Offender Welfare and Betterment Fund in 2008. [See: PLN, Oct. 2008, p.45]. Auditors found that the theft at MICC had been adequately prosecuted and some control weaknesses addressed. However, other control weaknesses remained, as there was still inadequate segregation of duties in the MICC Trust Accounting System that could result in misappropriation of funds.
Source: Washington State Auditor’s Office Accountability Audit Report, Department of Corrections, Report No. 1002601
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