Overview
The IBCF and CPEF expenditures that we tested lacked proper approvals. Because SDE did not ensure that proper approvals were obtained for all expenses, there was a higher-than-acceptable risk that its funds could be misappropriated or expended improperly and that these issues could have gone undetected.
IBCF
SDE did not ensure that expenditures were approved before processing them. We reviewed a sample of 50 expenditures, totaling $200,391. Of the 50 expenditures we examined, 22 (44% of the 50, totaling $47,120) lacked approval. The expenditures that lacked approval included payments to a translation company and payments for office supplies.
CPEF
SDE did not ensure that expenditures were approved before processing them. We reviewed a sample of 50 expenditures, totaling $115,182. Of the 50 expenditures we examined, 22 (44% of the 50, totaling $21,940) lacked approval. The expenditures that lacked approval included travel reimbursement, employee training, and payments to a telecommunications company.
Authoritative Guidance
SDE’s ICP requires that department heads approve purchasing requisitions and that the Sheriff or the Sheriff’s designee approve and sign purchase orders for the department.
Reasons for Inadequate Controls
According to SDE management, the prior Sheriff allowed certain employees to complete purchases based on his verbal approval without procuring through the Purchasing Department or getting department head approval. SDE management told us that the new administration did not continue this practice and implemented required approvals by department heads and the chief financial officer before purchases.
Recommendation
SDE should ensure that all approvals of expenditures are documented.
Auditee's Response
SDE recognized a department wide deficiency regarding expenditures and upon transition took immediate action. Fund expenditure authorizations are now subject to a regulated and stricter PDF workflow with digital signatures. Record keeping has been dramatically improved as a result. This process will be further mandated by the implementation of the aforementioned CRM software suite and will be part of the overall digital file for all purchases.
| Date published: | August 27, 2018 |
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