Unannounced TAO audit of OMV finds no cash discrepancies

Pago Pago, AMERICAN SAMOA — ASG’s Territorial Audit Office (TAO) has “provided recommendations, as appropriate, that if implemented could improve and/or strengthen the accountability and the handling of funds and cash receipts” at Public Safety Department’s Records Division and the Office of Motor Vehicles (OMV).

This is according to TAO’s findings, following a ‘Follow-up and Unannounced Cash Count’ on June 27 and June 28 this year with a final report submitted late last month to Gov. Lemanu P.S. Mauga.

“Controls existed over cash handling,” the report said as a conclusion of the audit; however, TAO recommended “opportunities for improving controls” in four areas that were identified during the unannounced cash count.

SEGREGATION OF DUTIES

One of the identified areas is the “lack of segregation of duties” with TAO claiming that cashiers at the OMV issue receipts and are involved with preparing deposits.

 TAO recalled the provision of the ASG Cash Receipts Policy Manual, which states, “the person who collects cash and issues receipts should not be responsible for reconciling daily receipts or preparing the deposit.”

TAO said that management is responsible to ensure compliance with the requirements of the ASG Cash Receipts Policy Manual. “Failure to do so increases the opportunity for errors, abuse, misuse and theft to occur,” the report said.

It also notes that this deficiency cited in previous year’s observation remains unresolved.

TRANSMITTAL LETTERS

TAO noted that two transmittal letters — copies held at the OMV — dated June 23 and June 24 this year were not signed-off by the preparer of deposits. Although there was no discrepancy noted, all prepared Transmittal Letters should be signed off immediately after preparation of deposits and before submission to the person approving the deposit, according to TAO.

CASH HANDLING

“There is no written cash handling policy to provide guidance regarding cash handling procedures,” TAO said and noted this unresolved deficiency observed in the previous year’s review.

 “Therefore there are inadequate policies and no detailed procedures providing guidance to employees as how to handle and including cash receipting, segregation of duties, preparation of deposits, safeguarding of assets and so on,” the report said.

TAO points out that accuracy is most important in cash handling needs and varies according to the department’s needs and these procedures create a framework to work together to create adequate and reasonable cash controls that protect public funds.

RECEIPTS & DEPOSITS

TAO identified from review of cut-off procedures that cash receipts at the Records Division are not submitted to Treasury Department’s Revenue division on time. And some receipts are submitted late and were held in the office for a week. However, TAO found no discrepancy during the reviewing and that all funds were all banked intact and reconciled to the transmittal letter deposit form.

TAO points out that late deposits of collection to Treasury Revenue Section are contrary to the ASG Cash Receipts Policy Manual and increase the vulnerability of collections to irregularities.

PHYSICAL CONTROL

“From observations, there is no secured locked device made available for the purpose of safeguarding cash during normal working and after hours at the Records Division, a small metal cash box is used for safekeeping,” TAO found.

Additionally, the unused receipt books on hand have already been label numerically and are locked inside office cabinets.

TAO noted provisions of ASG Cash Receipts Policy Manual, which states that “during the day, all cash collections will be kept in locked drawers, cash boxes or cash registers. If a safe is available, all cash kept overnight will be placed in the safe.”

DPS “shall consider acquiring electronic cash registers for daily collections. Cash must be physically protected and also improved security and accountability through the use of locked cash drawers, electronic cash registers, safes or vaults,” said TAO noting that this deficiency cited in prior year’s observation was not resolved and is noted again.

DPS RESPONSE

TAO’s report submitted to the governor included responses from OMV and Records Division.

OMV explained in its response letter that the cashier has to count with the OMV manager the daily receipts and cash from 8a.m. to 12p.m. and again from 1p.m to 3p.m to verify cash and receipts. Additionally, the supervisors do the accounts for the deposit and type the transmitter letter.

“No cashier prepares any deposit,” OMV explained and noted that transmittal letters are signed off by the OMV manager and revenue representative.

On the issue of “deposits”, OMV said that it’s “always on time... except for June that we were short staffed and we had to take it in the following day.”

TAO was also informed that OMV has a “Vault in the REAL ID room with cipher lock and no one can enter only the OMV manager and supervisor. Book receipts and transmittal letters are now kept inside the vault.”

The Records Division shared with TAO its responses, saying — among other things — that their cashiers collect cash and issue receipts. And reconciliation of daily receipts and preparing daily deposits is done by the Records Office manager, who is not in any way or any point in time, involved as a cashier.

“Since the day of the audit, our office has been making deposits to Treasury Revenue on a daily basis as recommended,” Records Office explained in its response letter.

“In a rare event that our office is unable to make the deposit on a particular day, we notify the Treasury Revenue manager via writing to grant approval that we lock up the deposit in a safe place until the next day for deposit. We make sure the deposit is not delayed any more than one-day,” the letter said.

And the Records Division will request cash registers as recommended for daily collections.