Essex County Sheriff Richard Cutting
The Essex County Sheriff’s Department recently received several suggestions to help streamline financial processes from the New York State Comptroller’s Office.
Comptroller Thomas DiNapoli released the results of a financial audit of the department last week, stating that there were several areas where separation of duties was required.
“It is not good to have some of the things that they found in the audit, but there was nothing in the report that was major,” Essex County Manager Dan Palmer said. “There are some things that we need to do differently and we will.”
The main issue reported by the comptroller was the need for more oversight with monies taken in by the department.
“We found the civil clerk performed virtually all financial duties without sufficient oversight or other mitigating controls,” the report states. We also found that bail and civil office cash receipts were not properly accounted for, secured, and deposited in a timely manner ... We also found that bank reconciliations were not prepared properly or timely ... Lastly, the Department’s computer system allowed for the ability to modify and delete financial transactions, creating the opportunity for the manipulation and concealment of transactions.”
The report continued to say that an effective system requires the separation of duties, “so that no single individual controls most or all phases of a transaction and so that the work of one individual is verified by that of another in the course of their regular duties.
“For example, the same person should not collect cash, record cash receipts, disburse checks, and prepare bank reconciliations,” the report continued. “When an optimal segregation of duties is not practical, it is important that Department officials implement other mitigating controls, such as increased supervisory oversight and reviews.”
Sheriff Richard Cutting said that he, along with Palmer and County Treasurer Michael Diskin, had already implemented changes to align the department with the comptroller.
“We have to create some separation,” Cutting said. “We have been revising all of our procedures and have trained more people on how to balance the checkbook.”
Palmer and Cutting said that they are also making sure that monies collected would be deposited into accounts daily.
“When we took in money, we had a safe where it would be kept until we went to make a deposit,” Cutting said. “They want us to make deposits every single day. There was no missing money or bails that had not come in, we just need to be more timely with our deposits.”
In the end, the Comptroller’s Office made nine recommendations, including: the Sheriff and department officials should ensure that cash receipts are maintained and disbursements are made in accordance with the money-handling policy; officials should segregate cash receipts and disbursement duties; that duplicate, press-numbered receipts are issued in sequence for all bail payments that are received at the jail and all civil office payments that are received in person at the civil office; ensure that bail and civil office cash receipts that are collected are physically safeguarded; the Sheriff should maintain control of his signature stamp; assign someone independent of the cash receipts and disbursement functions to perform accurate and timely monthly bank reconciliations; maintain a cash control register containing a list of deposits and disbursements and a running total of cash on deposit; attempt to identify the source of an unidentified balance in the civil office bank account; and ensure that the computerized financial system is updated to prevent the modification and deletion of financial transactions and to provide for adequate audit trail reports.
In his written response to the Comptroller, Palmer said that they would work with their resources on the recommendations.
“The numerous and varied situations whereby our personnel handle money along with the limited number of people in certain offices often create situations where unique protocols must be created to ensure both an complete audit trail and accurate handling of these funds,” he stated. “The review reflected the result that all monies handled: bail, fine, civil collections, service fees, inmate monies, and so on were all appropriately held and turned over to their rightful end status. Despite this, we do have some procedural issues that your audit uncovered and we have developed a plan to address these issues.”