Recommendations to Improve Cash Handling in the Department of Finance

Executive Summary

The Inspector General’s Office (IGO) recently conducted an investigation (file #10-1704) into allegations of theft of funds at a Department of Revenue (DOR) collection facility. During the course of the investigation, the IGO discovered poor cash management practices that leave the City susceptible to asset loss. In particular, the IGO found that DOR had insufficient internal controls and did not properly separate the duties of cash collection and cash reconciliation at its City Hall payment site.

This report provides a brief summary of cash management practices that the IGO encountered in the now-concluded investigation and offers the following recommendations on possible ways to strengthen internal controls related to PSR cashier money handling, now overseen by the Department of Finance:

1. Payment Service Representatives (PSRs) should be prohibited from accessing their collection reports during cash bank reconciliation;
2. Computer restrictions should be created that require supervisor permission to provide change for over-tendered checks;
3. Supervisors should be required to verify PSRs’ cash amounts at the beginning and end of each day; and
4. PSRs should be assigned different cash banks each day rather than use the same bank on consecutive days.
5. In addition to strengthening internal controls, the IGO also recommends that all video surveillance cameras at PSR work stations undergo regular, periodic, certified and documented inspection to ensure that they are functional.