Audits discover problems with city’s handling of cash

Erin Neff

Thursday, May 27, 1999 | 10:01 a.m.

Several internal audits released Wednesday suggest the city of Las Vegas does not have proper control of cash-handling functions and petty cash supplies.

Four of the five audits, which will be considered next Tuesday by the Audit Oversight Committee, were conducted by city staff over the past two months. The fifth report is a follow-up to an audit of the city's office supplies contracts conducted earlier this year.

In a cash receipts audit, dated May 20, acting city auditor Philip Cheng said bank statements and accounting records are difficult to trace at the 26 sites visited by his staff.

The city receives more than $1 million a month in cash from various sources such as courts, cemetery, jail, parking and Leisure Services operations.

"Cash handling controls are in need of significant improvement," the audit report states. "There is no assurance receipts are properly accounted for and accurately recorded."

In addition, auditors found that sites that do not regularly collect cash are not making timely bank deposits.

Auditors recommend the city treasurer's office take sole responsibility for safeguarding cash at the remote sites. That recommendation is expected to be implemented by July 1, according to Finance Director Mark Vincent.

"We need to develop a system protocol across the entire city," said Deputy City Manager Steven Houchens, who oversees finances. "Right now they may have what's convenient and what works at the various locations, but those aren't always the best controls."

The theft of $350 in petty cash from a box in the Development Services Center led to another internal audit investigation.

The box was apparently stolen sometime between April 2 and 5 from the Planning and Development office, and was reported missing on April 5 by a custodian.

The box, which had a combination lock, was found pried open the next day. Only 52 cents and four vehicle keys remained inside.

The audit suggests security controls need to be improved to prevent similar incidents because there is no clear separation of public access areas from authorized personnel areas.

The auditors also found the city has never changed either the combination to the office's door or the code to the alarm system.

"Therefore, former employees who worked at the Development Services Center and have knowledge of the codes can still access the building," the report states.

Security measures have been upgraded since the May 5 audit, Houchens said.

"I think everybody probably learned a lesson about being more careful," Houchens said.

The Audit Oversight Committee will also consider operational audits of the Information Technologies and Building and Safety departments.

The Information Technologies audit found the department was not in compliance with the city's regulations regarding records retention.

The city is supposed to retain e-mail for the same period of time as a paper record, according to the Nevada Administrative Code. E-mail is retained online for 45 days and is then backed up onto a tape for an indefinite period.

Those operations, however, were not incorporated into the department's e-mail policy. Auditors suggested the department print a policy that states files are backed-up daily and retained.

The Building and Safety audit determined tighter controls were needed in the processing of building permits and the administration of building inspections.

The staff said such controls would likely be possible with the introduction of a new computer system.