Las Vegas Sun

March 28, 2024

Some LV city departments eliminate petty cash funds

Several Las Vegas city departments have discontinued petty cash funds and others have tightened rules regarding such money in the wake of petty cash theft in the planning department that went undetected for four years, the Las Vegas Audit Oversight Committee was told Tuesday.

The report was the final chapter in the embarrassing incident of city worker Christine Drew who last year at age 49 was convicted of siphoning nearly $8,000 of taxpayer money until a regularly scheduled internal audit found the source of petty cash irregularities.

The duration of the crime also demonstrated how understaffed City Auditor Radford Snelding's office is and underscored the need to beef it up to prevent future longterm incidents, city officials said.

"We are absolutely awful with our 15-year (auditing) cycle," Snelding said after the meeting. "The standard cycle is five years."

Snelding said he and five other auditors conduct audits on 178 entities within the city and are on pace to conduct three audits every 15 years on high-risk departments, two audits during that same period on medium-risk departments and one audit every 15 years on low-risk departments.

"What is holding us back on this function (auditing) ... is a lack of resources," City Councilman Larry Brown, an audit committee member, said during the meeting. "I find a 15-year cycle is just unacceptable."

After the meeting, Brown said steps have to be taken by the city to "meet the five-year cycle."

"We have to raise the priority status of the auditing staff -- we have to have more staff in this area."

Brown said last year the city created more than 50 new positions, but "not one (was) an auditor."

Bryan Smith, senior internal auditor for the city, told the committee "deficient controls" led to the theft of petty cash from planning. He did not name Drew, but court records show she was convicted last year for the crime.

Smith said the former employee, who confessed to her supervisor as the audit was being concluded, has since paid restitution to the city totaling the $7,695 attributed to her theft via 77 falsified receipts between January 1999 and March 2003.

The audit found another 28 receipts for $2,460 that were "highly suspect," but the auditor was unable to substantiate they were false, so Drew was not held responsible for that money. Drew, a 12-year city employee and senior management analyst, told her supervisor she had a gambling problem. Drew, whose annual salary was about $84,000, was fired in April 2003. In addition to paying restitution for pleading guilty to theft, she was sentenced to two years of probation.

The audit found that planning department directors, current and past, failed to review and approve petty cash expenditure receipts; that Drew was inappropriately permitted to sign a form approving the replenishment of her own petty cash fund; and that department officials were not performing unannounced inspections of petty cash handling activities, as required by city policy.

Planning Director Robert Genzer, in response to the investigation findings in late February, eliminated the department's petty cash fund and changed department policies to require two signatures for other so-called "imprest funds" and to require original receipts be attached for reimbursements.

City Finance Director Mark Vincent said within the past year 11 city petty cash funds have been discontinued and that there currently are 40 such funds in use. Some larger departments, such as Leisure Services, which has several offices scattered throughout the city, have more than one petty cash fund, Vincent said.

Snelding said petty cash, a longtime staple of business operations, may soon become a thing of the past because of today's technology.

"There just is little need for petty cash anymore because of the P-card," Snelding said, referring to the purchase card, which creates a paper trail for city-related expenses and fosters greater accountability. "You still need safeguards in place, but it (the purchase card system) is a more efficient way" of keeping track of money spent.

In other issues before the audit committee:

archive