HIGHLIGHTS OF GILES COUNTY AUDIT ENDED 30 JUNE 2010
OFFICE OF THE FINANCIAL DIRECTOR
FINDING 10.01 SOME AMBULANCE SERVICE COLLECTIONS WERE NOT DEPOSITED WITHIN THREE DAYS OF RECEIPT.
In some instances, collections at the Ambulance Service were not deposited with the County Trustee within three days of receipt. Section 5-8-207, Tennessee Code Annotated, requires county officials to deposit public funds within three days of receiving the funds. This deficiency can be attributed to a lack of management oversight. The delay in depositing the collections increases the risk of fraud and misappropriation..
RECOMMENDATION: Officials should ensure that all collections at the Ambulance Service are deposited with the County Trustee within three days of receipt as required by state statute.
FINDING 10.02 A COMPUTER AND TIRES WERE REPORTED STOLEN FROM THE EMERGENCY MANAGEMENT OFFICE
(Internal Control – Significant Deficiency Under Government Auding Satandards)
The thief of a laptop computer and tires from the Giles County Emergency Management Office was reported to the state Comptroller’s Office on January 12, 2010. The computer and the tires were valued at $1,200 and $300, respectively. A police report has been filed with the County Sheriff’s Department, and the matter is under investigation.
OFFICE OF CLERK AND MASTER
FINDING 10.03 THE OFFICE HAD DEFICIENCIES IN COMPUTER SYSTEM BACKUP PROCEDURES (Noncompliance Under Government Auditing Standards)
System backups were not regularly stored off site. Section 10-7-121, Tennessee Code Annotated, provides that records required to be retained by any government official may be maintained on a computer or removable storage media as long as certain standards are met. One of these standards requires that all data generated and stored within the computer system should be copied to storage media daily, and media more than one week old should be stored at an off-site location. This deficiency is the result of management’s failure to implement adequate disaster recovery planning procedures. In the event of a disaster, all backup data could be destroyed, resulting in costly delays in generating and recording information accounted for through the automated process. The office began taking backups off site in July 2010. Proper system backup procedures are now in place.
OTHER FINDING AND RECOMMENDATION
FINDING 10-04 DUTIES WERE NOT SEGREGATED ADEQUATELY IN THE OFFICES OF CLERK AND MASTER AND REGISTER (Internal Control- Significant Deficiency Under Government Auditing Standards)
Duties were not segregated adequately among the officials and employees in the Office of Clerk and Master and Register. The officials and employees responsible for maintaining accounting records were also involved in receipting, depositing, and/or disbursing funds. Accounting standards provide that internal controls be designed to provide reasonable assurance of the reliability in financial reporting and of the effectiveness and efficiency in operations. This lack of segregation of duties is the result of management’s decision s based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transactions. Also, this deficiency is the result of management’s failure to correct the finding noted in the prior-year audit report.
RECOMMENDATION: The clerk and master and register should segregate duties to the extent possible using available resources.
MANAGEMENT’S RESPONSE – REGISTER: The cost of hiring enough employees to segregate each step involved is not feasible for the Tegister’s Office. We now have only two employees in the office. The budget will not allow us to increase our staff to comply with this recommendation.
AUDITOR’S COMMENT: We have not recommended hiring additional employees. We realize that due to limited resources and personnel, management may not be able to fully segregate duties among employees. However, duties should be segregated to the extent possible.
FINDING 10.01 SOME AMBULANCE SERVICE COLLECTIONS WERE NOT DEPOSITED WITHIN THREE DAYS OF RECEIPT.
In some instances, collections at the Ambulance Service were not deposited with the County Trustee within three days of receipt. Section 5-8-207, Tennessee Code Annotated, requires county officials to deposit public funds within three days of receiving the funds. This deficiency can be attributed to a lack of management oversight. The delay in depositing the collections increases the risk of fraud and misappropriation..
RECOMMENDATION: Officials should ensure that all collections at the Ambulance Service are deposited with the County Trustee within three days of receipt as required by state statute.
FINDING 10.02 A COMPUTER AND TIRES WERE REPORTED STOLEN FROM THE EMERGENCY MANAGEMENT OFFICE
(Internal Control – Significant Deficiency Under Government Auding Satandards)
The thief of a laptop computer and tires from the Giles County Emergency Management Office was reported to the state Comptroller’s Office on January 12, 2010. The computer and the tires were valued at $1,200 and $300, respectively. A police report has been filed with the County Sheriff’s Department, and the matter is under investigation.
OFFICE OF CLERK AND MASTER
FINDING 10.03 THE OFFICE HAD DEFICIENCIES IN COMPUTER SYSTEM BACKUP PROCEDURES (Noncompliance Under Government Auditing Standards)
System backups were not regularly stored off site. Section 10-7-121, Tennessee Code Annotated, provides that records required to be retained by any government official may be maintained on a computer or removable storage media as long as certain standards are met. One of these standards requires that all data generated and stored within the computer system should be copied to storage media daily, and media more than one week old should be stored at an off-site location. This deficiency is the result of management’s failure to implement adequate disaster recovery planning procedures. In the event of a disaster, all backup data could be destroyed, resulting in costly delays in generating and recording information accounted for through the automated process. The office began taking backups off site in July 2010. Proper system backup procedures are now in place.
OTHER FINDING AND RECOMMENDATION
FINDING 10-04 DUTIES WERE NOT SEGREGATED ADEQUATELY IN THE OFFICES OF CLERK AND MASTER AND REGISTER (Internal Control- Significant Deficiency Under Government Auditing Standards)
Duties were not segregated adequately among the officials and employees in the Office of Clerk and Master and Register. The officials and employees responsible for maintaining accounting records were also involved in receipting, depositing, and/or disbursing funds. Accounting standards provide that internal controls be designed to provide reasonable assurance of the reliability in financial reporting and of the effectiveness and efficiency in operations. This lack of segregation of duties is the result of management’s decision s based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transactions. Also, this deficiency is the result of management’s failure to correct the finding noted in the prior-year audit report.
RECOMMENDATION: The clerk and master and register should segregate duties to the extent possible using available resources.
MANAGEMENT’S RESPONSE – REGISTER: The cost of hiring enough employees to segregate each step involved is not feasible for the Tegister’s Office. We now have only two employees in the office. The budget will not allow us to increase our staff to comply with this recommendation.
AUDITOR’S COMMENT: We have not recommended hiring additional employees. We realize that due to limited resources and personnel, management may not be able to fully segregate duties among employees. However, duties should be segregated to the extent possible.
posted by Allen Barrett | 10:32 AM
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