Unannounced Audit of Petty Cash and Change Funds, July 2018

9 |  U n a n n o u n c e d A u d i t o f P e t t y C a s h a n d C h a n g e F u n d s  J u l y 2 0 1 8 3. Check endorsement and daily deposit  Observation Accounting Policies and Procedures, Chapter 9.2 Business Center Receipt, Balance, and Deposit  of Cash  states the following regarding checks:    “Management is responsible for ensuring cash and checks are deposited daily, or per  Office of Financial Management (OFM) approved department level procedures”, and   “Stamp all checks received with the “For Deposit Only” stamp.”  The auditor identified that three departments in the sample tested use remote deposit for  checks. This process allows for checks to be deposited into a bank account from another  location, without having to physically deliver the checks to the bank.   During audit work on April 23, 2018, multiple checks were observed at one location that had  been deposited remotely; however, they were not endorsed with the “For Deposit Only”  stamp. Additionally, the auditor identified one check dated October 24, 2017 for $100 that had  not been stamped “For Deposit Only”, nor had it been remotely deposited. The fund custodian  advised that it was unclear as to which permit number the payment was to be applied;  therefore, the check was never processed. On June 6, 2018, the custodian reported that it was  determined no permit was issued to the customer and that the check had been shredded by  the department.  Recommendation To ensure compliance with Accounting Policies and Procedures, Chapter 9.2 Business Center  Receipt, Balance, and Deposit of Cash, each check should be stamped “For Deposit Only” when  received and deposited daily, or in accordance with an OFM approved department level  procedure.  Management Response  Staff is now endorsing all checks received with a “For Deposit Only” stamp.  We will update the  online cash management training and provide additional clarification regarding the daily  deposit requirement as well as the endorsement stamp requirement for all checks, including  checks processed using remote deposit.