Prevent. Protect. Prepare.
Pat McCrory, Governor / Frank L. Perry, Secretary
MEMORANDUM
TO:Chris Oxendine, Manager
Judicial District 21, #5210
FROM:Timothy D. Harrell
DATE:August 22, 2013
SUBJECT:Audit of Judicial District 21
Internal Audit has completed a Scheduled Audit of Judicial District 21. The audit report is attached.
The purpose of the audit was to evaluate the effectiveness of the systems of management control by:
reviewing and appraising the adequacy, accuracy, and soundness of accounting, financial, and operating controls
determining the extent of compliance with established policies and procedures
determining the extent to which assets and resources are accounted for and safeguarded
We thank you and your staff for your assistance and cooperation during this audit. If you have questions or need further assistance, please contact our office.
TH/gr
Attachments
cc:Audit File #5210
Chris Oxendine
August 22, 2013
Page 1
ec:W. David Guice
Tim Moose
Anne Precythe
Larry Williamson
Betty Bauer
Bennie Aiken
Jean Burke
Joan Taylor Saucier
Roberta Morgart
Council of Internal Auditing
TABLE OF CONTENTS
I...... EXECUTIVE SUMMARY 1
II...... INTERNAL AUDIT RATING SCALE 3
III.FINDINGS AND RECOMMENDATIONS...... 6
A.ACCOUNTS PAYABLE AND PROCUREMENT...... 6
B.FIXED ASSETS...... 6
C.TELEPHONES...... 7
D.TRAVEL AND OTHER REIMBURSEMENTS...... 7
E.CONTROL OF FIREARMS...... 7
F.MISCELLANEOUS...... 8
G.SAFES...... 8
i. executive summary
The Judicial District 21 of Community Corrections (CC) is located in Winston-Salem, North Carolina. The District has ninety employees and eight units serving ForsythCounty. District 21 supervises approximately 3,920 probationers and parolees.
Internal Audit conducted a Scheduled Audit on June 3–5, 2013. A Scheduled Audit is a full audit performed to ensure the adequacy and effectiveness of the facility’s internal control and the quality of performance in carrying out assigned responsibilities in accordance with the fiscal policies and procedures. The previous audit was completed in December 2011.
The scope of our audit included a review of Accounts Payable and Procurement, Fixed Assets, Telephones, Travel and Other Reimbursements, Control of Firearms, Miscellaneous (Operating Stamps and Blood Borne Pathogens), and Safes areas.
Our audit disclosed no exceptions, strong internal controls, and a knowledgeable staff in the Fixed Assets, Telephones, Travel and Other Reimbursements, Miscellaneous, and Safes areas.
A few findings, minor in nature, were noted in the Accounts Payable and Procurementand Control of Firearms areas.
In the Accounts Payable and Procurement area,an outstanding purchase order for $1,575.00 remained open for more than sixty-one days. In the Control of Firearms area, one weapon was not properly transferred to the Division 3 office.
These appraisals are reflected in the Internal Audit Rating Scale and the Findings and Recommendations included with this report.
We held an exit conference on June 24, 2013, to inform District Management of our findings and recommendations. The following were present:
- Chris Oxendine, Judicial District Manager
- Lisa McManus, Office Assistant
- Betty Bauer, Division 3 Administrator
- Vickie Adams, Administrative Assistant
- George Randlett, Internal Auditor
- Libby Elder, Internal Auditor
During the course of the audit and exit conference, we provided facility personnel with schedules as needed to explain exceptions and to serve as supporting documentation.
The Judicial District Manager acknowledged agreement with all findings and recommendations.
In addition to our normal distribution, we may send excerpts from this report to other DPS managers, as we deem appropriate.
1
II. Internal Audit Rating Scale
Scheduled Audit
Community Corrections Judicial District 21
#5210
Listed below are the major areas examined in this audit and overall ratings assigned by auditors. Major areas are comprised of individual categories as listed on the following pages. Ratings given to categories or major areas are not averages. Ratings are based on standard audit procedures, and reflect the auditors’ assessment of the facility’s performance in various categories. The risk associated with individual findings is a large component of this assessment and may significantly impact a rating.
Rating Scale Guidelines
1 -No exceptions, strong internal controls, staff appears knowledgeable
of policies and prescribed procedures
2 -Meets expectations, a few exceptions minor in nature
3 -To minimize risk, some improvement needed to strengthen controls
4 -Below expected performance level, significant improvement needed
Overall Rating
RatingAccounts Payable and Procurement / 2
Fixed Assets / 1
Telephones / 1
Travel and Other Reimbursements / 1
Control of Firearms / 2
Miscellaneous / 1
Safes / 1
1
II. Internal Audit Rating Scale
Rating Scale Guidelines
1 -No exceptions, strong internal controls, staff appears knowledgeable
of policies and prescribed procedures
2 -Meets expectations, a few exceptions minor in nature
3 -To minimize risk, some improvement needed to strengthen controls
4 -Below expected performance level, significant improvement needed
Accounts Payable and Procurement / 1 / 2 / 3 / 4- Separation of Duties
- Direct Processing (DC-702) Purchases
- Procurement Card (P-Card) Purchases
- Purchase Orders
- NCAS/E-Procurement Security Access
Fixed Assets / 1 / 2 / 3 / 4
- Separation of Duties
- Annual Fixed Asset Inventory
- Quarterly Laptop Inventory
- Inventory Controls
- Changes, Updates, and Follow-up
- Transfers and Disposition of Assets
- Vehicle Mileage and Maintenance Records
Telephones / 1 / 2 / 3 / 4
- Internal Controls
- Review and Approval
- Cellular Phone Procedures
Travel and Other Reimbursements / 1 / 2 / 3 / 4
- Complete and Accurate Documentation
- Signatures and Approvals
Control of Firearms / 1 / 2 / 3 / 4
- Inventory Control
- Approved Memorandum Receipts
- Follow-up and Resolution of Problems
- Separation of Duties
Miscellaneous / 1 / 2 / 3 / 4
- Operating Stamps
- Blood Borne Pathogens
Safes / 1 / 2 / 3 / 4
- Safe Access Minimized
1
IIi. FINDINGS and recommendations
A.ACCOUNTS PAYABLE AND PROCUREMENT
Purchase orders for building leases were initiated by the Division office and District personnel had no authority or responsibility in this area. We reviewed the District’s procedures used for purchase orders and local purchases processed on Direct Processing Forms (DC-702s) and Procurement Cards (P-Cards) for compliance with the DPS Fiscal Policy and Procedure Manual at .2600. The following exception was noted.
Purchase Order Outstanding
Condition: A review of purchase orders having an open status in the North Carolina Accounting System (NCAS) disclosed one, totaling $1,575.00, was more than sixty-one days old. The purchase order was provided to District personnel for corrective action.
Criteria: Each section should review the CORCOS Open Purchase Orders Report each month and take appropriate action to correct problem purchase orders that remain open after delivery or in which errors are noted. The CORCOS Open Purchase Orders Report should be signed and dated by the individual reviewing the report each month and maintained on file within the facility/section. [Reference: .2606 G.3.–5.]
Cause: The Division 3 Administrative Assistant responsible for processing Judicial District 21 leases informed DPS Auditors that she was unaware that the lease was fulfilled. It was noted one month was charged to another purchase order.
Effect: Failure to close outstanding purchase orders results in unnecessarily encumbering funds that could be used for other purposes.
Recommendation: District Management should implement procedures to ensure that the CORCOS Open Purchase Orders Report is reviewed monthly and that invoices are paid timely, and purchase orders and encumbrances are appropriately closed. The Division’s requisitioner should email the purchasing agent of record in detail, the changes that need to be made to close the purchase order in the system. Staff should continue to work with DPS Purchasing and Logistics as appropriate, to ensure any purchase orders marked complete or having a zero balance are closed in the system. Corrective action was initiated during our audit.
B.FIXED ASSETS
We conducted a 20 percent test count of fixed assets, valued at $1,000 and over, to provide assurance that assets were properly accounted for. In addition, we inventoried 100 percent of the laptops. We reviewed fixed asset records to verify internal controls and to ensure compliance with the DPS Fiscal Policy and Procedure Manual at .2700 and CC Policy and Procedure Manual at Chapter B, Section .1000. Copies of all schedules relative to our physical inventories were provided to facility personnel. No exceptions were noted.
C.TELEPHONES
We reviewed internal controls over telephones and cellular phones assigned to the facility for compliance with the DPS Fiscal Policy and Procedure Manual at .2400 and .3200, and CC Policy and Procedure Manual at Chapter B, Section .0500. We examined telephone records for the months of January,February, and March 2013 for evidence that charges were reviewed for appropriateness. No exceptions were noted.
D.TRAVEL AND OTHER REIMBURSEMENTS
We examined reimbursements to employees for the period January 29 through April 29, 2013, to determine accuracy and compliance with the DPS Fiscal Policy and Procedure Manual at .4000. No exceptions were noted.
E.CONTROL OF FIREARMS
We conducted a 100 percent physical inventory of firearms to provide assurance that all firearms were properly accounted for. We performed additional testing to verify internal controls and to ensure compliance with the DPS Fiscal Policy and Procedure Manual at .1700 and CC Policy and Procedure Manual at Chapter B, Sections .0904 and .0905. Copies of all schedules relative to our physical inventory were provided to District personnel. The following exception was noted.
Improper Transfer of Equipment
Condition: One firearm (asset no. 6500253800) was located at the Division 3 office, but assigned to Judicial District 21 (#5210) in the Offender Population Unified System (OPUS).
Criteria: All weapons should be included on the Equipment Report. Changes or updates to the inventory shall be reported on the appropriate forms and returned to the Equipment Control Section for update. Facilities are responsible for their own fixed asset reporting and should follow up with the Equipment Control Section, if a request has not been processed. [Reference: .1704]
Cause: The Office Assistant informed DPS Auditors that a “Transfer of Equipment Form” (DC-272) had not been completed showing the transfer from District 21 to its current location at the Division 3 office.
Effect: Equipment listed on the Equipment Report and not physically located at the facility could result in improper accountability and may result in loss of the equipment.
Recommendation: District Management should ensure proper research is conducted andappropriate forms submitted to the Controller’s Office, Equipment Control Section to transfer this weapon to the appropriate location. District personnel should follow-up on all requests to ensure completion. Corrective action was initiated by facility staff during our audit.
F.MISCELLANEOUS
We examined certain administrative and health and safety issues for procedural compliance. We verified the accuracy of postage stamp receipts, issues, and current physical inventory. A sample of employee medical jackets was reviewed for documentation of Blood Borne Pathogens shots and training. No exceptions were noted.
G.SAFES
We examined the facility’s internal controls to ensure the one safe provided secure storage for all currently authorized items. No exceptions were noted.
1