Sample_Audit_Package.pdf

Audit Summary, Findings and Recommendations – Example

R5 PDB&A / November 2018

DEEP WOODS NATIONAL FOREST

2018 AUDIT SUMMARY, FINDINGS AND RECOMMENDATIONS

ABC AUDITING COMPANY

SUNSHINE RANGER DISTRICT

May 27, 2018 – May 26, 2019

The Sunshine Ranger District has a high volume of visitors and recreationalists. Overall the district’s collection program appears to be functioning well given their relatively large collections program.

Generally collection officers performed their duties with competency and maintained fairly complete records, but due to personnel turnover there is room for improvement.

There are four collection officers on the district, two of which sell annual and daily NWFP to vendors.

The vendor sales are out of their property inventory yet the collections are entered into POSS by the other two collection officers under their profiles. This process leads to problematic audits in that total collections by collection officer did not match their accountable property. POSS was not designed to work in this fashion and it puts undue responsibility on the “receiving” collection officer. It is recommended that each collection officer enter their collections in POSS under their own profile when selling accountable property. If this is not done then, at the very least, the “selling” collection officers need to transfer the sold property to the collection officers entering it into POSS.

The collection officer registers in TIM are attached to the collection officers’ permit. The Unit Collection Officer batches all permits and retains the bills for collection. Therefore the individual collection officer’s collections are combined by product plan onto a single bill for collection which is retained by the Unit Collection Officer.

Robert Gibson: Support Services Specialist

• For almost a year Robert served as both the Unit Collection Officer and Property Custodian.

During his audit period he processed 72 transfer documents (AD-107 and AD-112) with many involving multiple types of property.

• Robert had overages in almost of all of his accounts with two exceptions: he was short 56 daily NWFP’s and 4 firewood tags.

• Special forest product blue tags had to be reconciled manually using the collection officer register. Robert was over in tags and short in collections.

• Robert is one of the collection officers who sells NWFP’s to vendors. He sells from his inventory, with the other two collection officers entering collections into POSS under their profiles.

• The collection officer was off by quite a bit in NWFP so the auditor tried reconciling them for the district as a whole. Overages and shortages for annual NWFP almost reconciled with an overall district surplus of 4 passes.

• Since both Robert and Lindsey functioned as property custodians it is reasonable to assume the overage of 28 and the shortage of 20 senior passes, respectively, offset leaving an overall surplus of 8 passes.

Audit Summary, Findings and Recommendations – Example

R5 PDB&A / November 2018

Lindsey Griffith: Unit Collection Officer and Property Custodian

• Lindsey maintains two sets of records and property inventories in order to separate her roles.

• Unit Collection Officer accounts reconciled with the exception of being over 5 annual NWPFs.

Property Custodian was short 30 annual NWFPs. Therefore, combined she reconciled as Unit Collection Officer and was short 25 passes as Property Custodian. Robert had an overage of 28 annual NWFPs, this basically covers Lindsey’s shortage.

• Lindsey was short 20 senior passes in her Property Custodian inventory which is covered by Robert’s overage of 28 passes. Lindsey missed transferring 50 daily NWFP’s between her two roles. By factoring in the missed transfer her NWFP daily passes reconciled in both roles.

• Lindsey is one of the collection officers who sells NWFP’s to vendors. She sells out of both roles with her other collection officers entering the collections into POSS under their profiles. This leads to audit inconsistencies for all collection officers involved.

Andrew Potter: Administrative Support Clerk

• Andrew maintains accurate and well documented records.

• After manually adding in property sold by other collection officers, which he entered in POSS, this accounted for the excess collections and his accounts reconciled.

Smokey D. Bear: Information Receptionist

• Smokey is a new collection officer and is doing very well in his new role.

• Smokey’s records were well organized and easy to audit.

• Due to the high volume of visitors that come into this district the front desk gets very busy and

Smokey was not depositing his collections each week, sometimes going without making a deposit for several weeks.

• Smokey was also storing his collection officer folder in his safe.

Tina Abernathy Tina Abernathy Auditor, ABC Auditing Company

USDA Forest Service FS-6500-0279 (v11-2014)

Collection Officer Audit Check List for POSS Sites (Ref: FSM 6530; FSH 6514 and FSH 6509.11k-30)

Note: Collection Officer Auditors must have access to “reports only” report from the Point of Sale System (POSS) Central Office.

Collection Officer Name: _Smokey D. Bear, Information Receptionist_

Unit Name & Location: __Sunshine Ranger District___________________

Date of Current Previous Review: __May 25, 2017__________________ Date: ___May 26, 2018________

Reviewer’s Name: _Tina Abernathy, ABC Auditing Company__

Part 1: Collection Officer (CO) and Unit Collection Officer (UCO) Review

Required Reports from POSS Central Office

• By CO by Item – Located under Sales tab

• Cash Deposit Report – Located under Financial tab

• Over/Short Report – Located under Financial tab

• Transaction Report – Located under Settlement tab

Type of Collection Activities Authorized X Federal Recreation Fees (Campground) Donations Forest Product Permit (FS-2400-1) X Minerals Material Permit Sales Map Sales Christmas Tree Tag X Recreation Passes Other, (Such as Jury Duty & Bill Pay), specify: Jury Duty Imprest Change Making Fund

Yes No N/A Review Items Collection Officer Designation in Order (Review Collection Officer File)

X 1. Does the collection officer (CO) have a signed designation of authority? For each “No” answer, record a note at the end of this section and discuss with supervisor.

X 2. Was the designation signed by the appropriate management official? Per FSM 6533.3, Line Officer for employees and hosted participants; WO Directors, RF, or FS for volunteers.

X 3. Was the CO properly designated before performing collections duties?

Date CO authority was granted: __________

X 4. Has the CO received collection officer training? Is training documented in CO folder?

Remind the CO about the training available in AgLearn.

Date latest training was received:___________ Number of training hours: _____

X 5. For a final review, are termination actions being completed, including plans to:

___ Complete a form FS 6500-247, Revocation of Collection Officer Designation, Collection duties will cease on: _____________ (MM/DD/YY) ___ Transfer safe and or cash box keys to the line officer or designee, or arrange to change the safe combination.

___ Schedule a transfer of undeposited remittance and records to another CO. Ensure form FS-6500-0275, cash transfer form is used to transfer undeposited remittances to another CO.

___ Complete and submit a form FS-6500-214, Financial Information Security Request Form to remove access to CO-related financial systems (i.e. POSS and FTRS)

Yes No N/A Review Item ~ Adequate Safekeeping Facilities ~

X 6. Has management provided each CO with adequate safekeeping facilities for the amount of funds collected during a normal business day or week? Both short-term and overnight facilities must be adequate. Short-term: A locking drawer, locking cash box or equivalent. Drawers in system furniture (locking or not) are not adequate facilities. Overnight safekeeping facilities:

Fireproof safe or safe-type cabinet with bar and combination lock that is out of sight of the general public.

X 7. Does the CO keep the key or combination to the safekeeping facility (ies) under strict personal control i.e. not written in the file or shared by multiple employees?

X 8. Has a copy of the key or combination to short-term and overnight safekeeping facilities been given to the administrative head of the unit for emergency access?

X 9. Are collection files retained in a secured location separate from remittances?

X 10. Was the safe combination changed within the last year or when use of the drawer changed to the current user?

X 11. If the CO is designated to receive donation collections, does the CO have the only key to this box? And is the key stored in a safe or secure drawer?

X 12. Does the CO ensure that government funds are not comingled with other officials funds, semi-official funds (e.g., Interpretive Association receipts), or personal funds?

X 13. Was the safe combination changed within the last year or when use of the drawer changed to the current user?

Operating Procedures X 14. Retrieve cash deposit report and verify when last deposit was made. Was cash deposit made within last week, especially on Thursday?

X 15. Count the cash and checks on hand. Reconcile POSS Till Summary reports since the CO’s last cash deposit to cash and checks on-hand. Allow collection officer to explain differences if any.

___Did total in hand reconcile to POSS by tender type and the form FS-6500-0075, Collection Officer Register?

___Were cash and checks stored in adequate safekeeping facilities, short-term and overnight?

X 16. Are the CO’s records or folder complete? Records are complete when they contain at least the following items:

___ Form FS-6500-248, Designation of Collection Officer, or letter of designation ___ Collection Officer Desk Guide for POSS Locations ___ Copy of most recent collection officer review checklist form (if applicable) ___ Copies of form FS-6500-0275, Cash Transfer ___ Copy of form FS-6500-0075, Collection Officer Register ___ None of the checks on hand is older than 14 days and have “Settled” status on the Transaction Report? Checks that are more than 14 days old and completely processed should be shredded.

X 17. Does the Cash Deposit report show that the CO consistently transferred remittances or deposited collections when collections reach $5,000 and at least weekly regardless of amount accumulated?

X 18. Are the form FS-6500-275 correctly signed by both the collection officer and unit collection officer? Cash may be transferred to the unit collection officer or designee for the purchase of money order/cashier’s check for weekly deposit.

X 19. Is there evidence that the CO reviews the POSS unidentified reports and aged billing reports on ASC B&F web site?

Yes

No

N/A

Review Item

~ Additional Operating Procedures by Type of Collection Authorized ~ X 20. Campground Fee collections.

___ Does the unit have a collection officer verification check program in place? If no, discuss with supervisor at the end of audit.

___ Are unopened fee envelopes transferred and signed between COs on form AD-107?

___ Are the unopened fee envelopes stored in adequate safekeeping facilities and does only one CO have access to them?

___ When the fee envelopes are opened, are the contents counted by two people and do both sign a form verifying the amount?

___ If double locking fee boxes are used, are they securely stored in the office prior to the time when the contents are accessed and counted?

X 21. Donation collections. Are donations properly recorded in POSS? (Review donations in Transaction Report to ensure donations are recorded timely).

X 22. Forest Product Permits (FS-2400-1) or Christmas tree tag sales.

___Has the CO retained a copy of National Resource Manager -Timber Information Management System (NRM-TIM) collections register worksheet and bill for each permit sold?

___ Reconciliation between NRM-TIM system and POSS is critical to meet Agency financial reconciliation and audit requirements; as well as other standards. Are permit sales reconciled weekly between NRM-TIM and POSS?

X 23. Minerals Material Permit Sales.

___ Does the amount of contracts/permits for sale of mineral material match total minerals material permit sales on the Sales by CO by Item Report?

X 24. Map sales. (FSM 7149.11e).

___ Are maps under appropriate safekeeping? Maps should be treated as accountable property and stored in a secure area, i.e. where the CO has exclusive access.

___ Benefiting unit program funds must be charged for the cost of maps used for administrative purposes. If possible, review form FS-6500-261 – Internal/Admin Map Use to ensure unit personnel pay for internal, administrative map use. Is there evidence of internal map use? Did the CO submit the internal map use to the forest budget officer for an adjustment _____ (check if applicable) or process purchase card transactions in POSS ____?

___ Is physical inventory conducted annually and documented on form FS-6500-269 – Accountable Property Reconciliation Form?

X 25. Recreation Passes and Permits (i.e., numbered window decals), Manual FS-2400-1 Permits, Forest Product Load Tickets, and Christmas Tree Tags.

___ Are accountable documents stored under appropriate safekeeping? Safekeeping requirements match the requirements for cash.

___ Does the CO properly use the required forms including forms AD-107, Report of Transfer or Other Disposition or Construction of Property, and AD-112, Report of Unserviceable, Lost or Damaged Property, to document the receipt, transfer or destruction of passes?

____ Is physical inventory conducted annually and documented on form FS-6500-269 – Accountable Property Reconciliation Form?

X 26. Imprest Fund Cashier.

___ Is the designation as an imprest fund cashier documented on form AD-211 and signed by a Forest Supervisor or Regional Forester?

___ Is the allocation of imprest funds to sub-cashiers documented in the CO folder?

___ Are quarterly verifications documented in the CO folder on form AD-358?

___ Is the annual cashier audit documented in the CO folder on form AD-359?

X 27. Other – Such as Jury Duty Fees, Employee Overpayments, and Vendor

Overpayment. Are these collections supported by a bill for collection and documentation supporting the amount – shorthand code/job code/WBS, budget object code and vendor name?

~ Other Internal Controls ~ N/A 28. Does the CO file show that a line officer or budget officer approved each of the CO’s requests to cancel bill for collection? Enter N/A if the CO does not have FTRS access.

N/A 29. Does the CO file include an explanation of their items on the Over/Short Report? If not, allow the collection officer to explain.

N/A 30. Does the collection officer purchase their own weekly money orders/cashier checks for scanning into POSS? If yes, recommend to unit to purchase a consolidated cashier’s check or money order for all receipts by the unit collection officer.

No 31. Does the supervisor know of other internal controls that management should implement to reduce the risk of fraud?

Recommendations to resolve Review Items with “No” answers

Review

Item

#3 CO had their CO binder in their safe. CO will start storing folder in Locked file cabinet.

#14 CO has been holding onto their collections for weeks at a time. CO was Unaware of the liability risk associated with not making their weekly Deposits. CO stated they will be sure comply in the future.

#17 See above recommendation for #14.

Part 2: Certification of Understanding Regarding Supervisor’s Responsibilities. Initial items 1 thru 8 to confirm these responsibilities:

Collection Officer Name: _Smokey D. Bear___________ Unit Name: Sunshine Ranger District

I understand the responsibilities associated with supervising collection officers, I:

SDB__ 1. Acknowledge that the collection officer(s) that I supervise have been thoroughly trained on collection activities and responsibilities.

SDB __ 2. Know the responsibilities for safekeeping and timely deposit of funds, and monitoring deposits in transit; such as cash for money order purchase.

SDB __ 3. Understand the short-term and overnight storage requirements to safeguard government funds.

If exception was noted in part 1 above, I will provide adequate facilities by _________ (date). I understand that I can be held personally liable if inadequate facilities contributed to a physical loss of government funds.

SDB __ 5. Will immediately report suspected loss or theft of collections to my line officer (or staff officer) and the unit Administrative Officer (or equivalent); and ask line officer to suspend the collection officer’s collection duties pending further investigation.

SDB __ 6. Will immediately notify LEI, police authorities and the nearest office of the Federal Bureau of Investigation (FBI) in the case of an obvious robbery.

SDB _ 7. Understand that this collection officer’s next review is required by ________ (month & year).

SDB _ 8. Will notify the Administrative Officer (or comparable administrative head of the units) prior to a collection officer leaving the unit so that a final review can be performed and the delegated authority properly cancelled.

James Taylor___________________ _May 26, 2019_______________ Signature of Supervisor Date of Signature James Taylor Support Service Specialist Supervisor Name Supervisor Title

Part 3: Reviewer Certification

Collection Officer Name: ______________________Unit Name: ____________

Check one of the following statements:

____ The answers to all review items in Part 1 were “Yes”. On the basis of the review, the collection officer meets all requirements in accordance with established policies and procedures.

____ The answers to most review items in Part 1 were “Yes” with a few “No”. Except as noted in Part 1 above, the collection officer meets the requirements defined in agency policies and procedures.

___________________, ________________ (name and title) will follow-up within ______ days/months as to the implementation of recommendations with the CO and their supervisor or line officer.

____ The answers to most review items in Part 1 was “No” or this is a review before termination of designation. On the basis of the review, the collection officer does not meet most of the requirements in accordance with policies and procedures. I recommend suspending collection designation until the recommendations described above are implemented. ________________, _____________ (name and title) will follow-up within ______ days as to the implementation of recommendations with the CO and their supervisor.

Signature of Reviewer Date of Reviewer Signature

Title of Reviewer

Collection Officer Signature, if present for review

Collection Officer Reconciliation Form – Example

R5 PDB&A/November 2018

COLLECTION OFFICER AUDIT RECONCILIATION FORM

COLLECTION OFFICER NAME:

Smokey D. Bear

LOCATION:

Sunshine Ranger District

AUDIT PERIOD COVERED: AUDIT DATE: 5/28/2019

From: 5/27/2018 To: 5/27/2019

TYPE OF COLLECTION:

Interagency Annual

Interagency Senior

NWFP Annual NWFP Day

VALUE OF AUDIT ITEM: 80.00 10.00 30.00/27.00 5.00/4.50

INVENTORY VERIFICATION

Beginning Inventory: 8 34 341 373

PLUS:

Quantity Transferred In (AD-107): 150 193 1230 1845

MINUS:

Quantity Transferred Out (AD-107, enter as minus): -120 -112 -342 -184 Quantity Voided, Lost, etc. (AD-112): 0 0 -1 0

SUBTOTAL (Quantity Available): 38 115 1228 2040

MINUS:

Quantity Sold (Enter as minus): -37 -87 -280 -793 Vendor Quantity Sold (Enter as minus): 0 0 -898 -1222

EQUALS (Should be Quantity on Hand): 0 0 0 0 Physical Inventory Count: 1 28 50 25

Difference (+ or -): 1 28 50 25 Quantity Transferred Out (AD-107, enter as minus): 0 0 0 0

COLLECTIONS:

Value of Quantity Sold (Full/Price): 2,960.00 870.00 8,400.00 3,965.00

Value of Vendor Quantity Sold (Discount/Price): 0.00 0.00 24,246.00 5,499.00

TOTAL VALUE OF QUANTITIES SOLD: 2,960.00 870.00 32,646.00 9,464.00

POSS Deposits/Sales: 2,960.00 870.00 32,646.00 9,464.00 Collections on Hand: 0.00 0.00 0.00 0.00

TOTAL COLLECTIONS: 2,960.00 870.00 32,646.00 9,464.00

Difference (+ or -) Between Value and Collections: 0.00 0.00 0.00 0.00

COLLECTION OFFICER AUDITED: AUDITOR:

Name: Smokey D. Bear______ Name: Tina Abernathy_______ Phone/Office: (555) 555-1111________

Signature: Smokey D. Bear Signature: Tina Abernathy_

Date: 5/28/2019___________ Date: 5/28/2019____________

Accountable Property Inventory – Example

R5 PDB&A / November 2018

Accountable Property Inventory

Collection Officer Name & Title: Smokey D. Bear, Information Receptionist

Date of Audit: 5/26/2018

Value Item Total Serial Numbers

80.00 Interagency Annual 1 000001 - 000002

10.00 Interagency Senior 28 000001 - 000027

30.00 NWFP Annual 50 000001 - 000049

5.00 NWFP Day 25 000001 - 000024

USDA Forest Service FS-6500-248 (09/2011)

DESIGNATION OF COLLECTION OFFICER

(REFERENCE: FSH 6509.14)

A Designating Officer must complete this form and a copy must be in the Collection Officer’s file

Name of Employee: Smokey D. Bear

You are hereby designated as a Collection Officer of the United States, effective on the date shown below and continuing until further notice.

Effective Date: January 7, 2015

Ranger District/Location (i.e., Big Bear/R5): Sunshine Ranger District

Authority to Collect the following amounts (check the appropriate boxes below):

Federal Recreation Fees

Non-Timber Forest Products Permit Sales (e.g.

fuel wood, Christmas trees, plants, fungi, fruit and nuts)

Minerals Material Permit Sales Recreation Passes (e.g. Interagency ATB passes)

Map Sales Imprest Fund Sub-Cashier, class D, Change making fund ( ) Donations Other (specify: Jury Duty)

ACKNOWLEDGEMENT

I certify that I have been adequately trained on the proper handling and safeguarding of government funds in my possession, and understand that I am responsible for any loss or shortage of such funds. However, I may be relieved of any liability if the loss occurred without fault or negligence on my part, and while I was properly acting in the discharge of my official duties.

1/7/2015

Signature of Employee Designated Collection Officer Date

Authorizing Signature of Designating Officer:

Name of Designating Officer (print): Thomas Thornton

Title of Designating Officer: Forest Supervisor

Date of Authorization: 1/7/2015