Since its inception in 2009, the Ulster County Comptroller’s Office has issued numerous recommendations on addressing internal control weaknesses.
What exactly are internal controls? They comprise the “plans, methods, policies, and procedures used to fulfill the mission, strategic plan, goals, and objectives of the entity.” The Office of the Ulster County Comptroller addresses internal control recommendations through audits, reports and memoranda. Through ongoing audits, we have identified potential for theft and misappropriation of assets in various parts of the County’s financial operations.
Under the current County Comptroller the Office has issued recommendations to strengthen internal controls in the following areas since 2020:
1. Establishing Proper Segregation of Duties
- The staff who take cash to the bank should not have any control over recording transactions to general ledger cash accounts.
2. Requiring Sufficient Backup Documentation for Transactions
- Electronic point of sale systems should provide both detailed and summary information about the cash collected, and receipts generated at a given station.
- Reconciliation should be performed between any ancillary financial reporting or tracking systems and the County’s primary financial system (NWS), at least monthly to ensure accuracy is maintained between all systems.
- Revenue cash receipt journal entries should require back up uploaded to the financial system such as tax bill or other invoice
- Revenue bank deposit journal entries must be segregated by revenue source and identified as such with back up documentation uploaded to the financial system
- Implementation of credit card receipts in offices such as Aging, DOH and other departments handling cash should be expedited
3. Establishing Base Level Controls Over Cash Handling Procedures
- Financial transaction entry and posting should involve at a minimum two users
- Voids should be approved by supervisors and re-entered by a new cashier
- County Departments that handle cash collections should have electronic point of sale systems in place at all stations where cash is collected.
4. Strengthening Transparency and Oversight
- There should be surveillance cameras monitoring all cash collection stations, and the feed should be maintained until a periodic internal audit of cash collections has been conducted. While there are cameras in the tax area, those are for the purpose of safety not internal control
- The County should limit the amount of cash that a taxpayer can pay at a collection station to no more than $500. This prevents both the inherent risks of cash handling and the potential for money laundering.
- Wire transfers approved by the Comptroller’s Office must include the routing number, account number, recipient, name of bank and back up with full page screenshots (not one-word images) for approval
- Intercounty wire transfers should be approved by Comptroller going forward
These recommendations were contained within the following documents:
