Performance Audit: Cash Handling at Hawaii County Department of Parks and Recreation

by Bonnie S. Nims, Hawaii County Auditor Report 2016-01, June 30, 2016 (excerpts)

…In accordance with Hawaii County Charter Section 3-18(d)(2), attached is the Office of the Legislative Auditor's report of our audit of cash handling of facility use permits at the Department of Parks and Recreation (P&R) Administration. The purpose of the audit was to determine whether P&R implemented internal controls over facility use permits to prevent, detect, and deter fraudulent transactions. We evaluated if these internal controls followed best practices. In addition, we determined if P&R's facility -use permits cash receipts were deposited timely and intact.

The County's P&R facility use permits cash handling process lacks significant internal controls including adequate segregation of incompatible duties, independent review and monitoring, complete and accurate written policies and procedures, and adequate safeguarding of cash receipts. Due to these internal control weaknesses, as well as individual errors in the processing of transactions, our audit could not determine if all cash received was deposited…. (cover letter)

…Since the Clerk was the only person processing cash receipts including assigning a permit number, charging a fee, recording the permit information in the daily deposit record and depositing the funds, many errors were not detected…. (p14)

… while reviewing transactions at Kona, we identified blocks of business days where daily deposits were not logged (four days in June, three days in July, three days in August, and four days in September 2015). Facilities in Kona are typically fully rented, especially during the summer months. In our opinion, based on the routine frequencies of daily deposits during these four months of peak usage, it is unusual that there were multiple days where no deposit or revenue was recorded. Due to the lack of monitoring and adherence to policies and procedures, we cannot determine if these breaks in revenue are correct or accurate. … (p15)

…Neither Hilo or Kona record cash overages or shortages. Hilo uses an envelope stored in the cash drawer to keep the overages. If cash was short at closing, the Clerk uses this money to balance the deposit. Kona's Clerk stated that they do not have any overages or shortages. Any significant balance in this account is an indication to management that cash is not handled carefully enough. Never having any overages or shortages is also a red flag. … (p17)

read … Entire Audit Report 

WHT: Audit finds sloppy cash handling at Parks and Rec  -- “It’s not known how much money might not have found its way into the county coffers that should have been deposited there. ‘That’s part of the problem,’ Legislative Auditor Bonnie Nims said Wednesday. ‘There’s no way to know.’”