Unannounced Audit of Petty Cash and Change Funds, July 2018

11 |  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 5. Purpose of change fund Observation  Per Accounting Policies and Procedures, Chapter 9.5 Change Funds , “Change funds are  established for the purpose of making change where money is collected during transactions of  County business.”  During performance of the unannounced cash count on April 24, 2018, the auditor observed a  change fund that was properly secured at the location indicated on the Certificate and Receipt  of Imprest Funds. However, the custodian had been transferred to another location 13 miles  away approximately 10 months before that date.  At the time of the cash count, the $500 change fund was short by $100. A voucher was  observed indicating that the $100 had been provided to another employee on February 1, 2018  for the purpose of making change at a special event occurring weekly, from February 7, 2018  through March 28, 2018. The employee is located at another location and as of May 21, 2018,  the custodian reported that the $100 had not yet been returned.  The custodian advised that the fund is used only for making change at two annual special  events. One of the events occurs weekly for eight weeks at two separate locations and the  other event occurs one day at one location. The custodian provides monies from the change  fund to other employees prior to the event. Receipts from the events are recorded and  deposited at the location where the employees are located.  It appears that the use of this change fund is not in accordance with the purpose outlined in  Accounting Policy and Procedures.  Recommendation  To ensure compliance with the purpose of establishing change funds per Accounting Policies  and Procedures, the $100 should be returned to the custodian immediately and this change  fund should be closed. When change funds are needed for a special event, a completed request  to establish a change fund for that purpose should be submitted to the Finance Department.   Management Response  We are in agreement with the recommendation and are taking steps to ensure departmental  compliance. We will continue to communicate the change fund requirements in order to  achieve and maintain ongoing compliance with policies and procedures.