KAREN E. RUSHING Clerk of the Circuit Court a n d C o u n t y C o m p t r o l l e r Unannounced Audit of Petty Cash and Change Funds Audit Services
Karen E. Rushing
Clerk of the Circuit Court and County Comptroller
Jeanette L. Phillips, CPA, CGFO, CIG
Director of Internal Audit and Office of the Inspector General
Audit Team
William Bousman
Internal Auditor/Investigator
July 2014
TABLE OF CONTENTS
Page
Summary and Results
3
Opportunities for Improvement and Management Response
5
Appendix A: Internal Control Observations ~ Segregation of Duties
10
Appendix B: Petty Cash and Change Fund Reconciliations
11
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 2 Summary and Results
The Clerk of the Circuit Court and County Comptroller’s Internal Audit Department and Office of
the Inspector General has completed an unannounced audit of the County’s petty cash and
change funds. The audit was planned and conducted in accordance with Generally Accepted
Government Auditing Standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit objectives. The purpose of
the audit was to review internal controls, compliance with applicable policies and procedures
and reconcile the petty cash and change funds.
Background
As of June 17, 2014, Sarasota County had fifty-one (51) petty cash and change funds totaling
$13,723, located within various departments throughout the County. Chapter 17.2 Petty Cash,
of the Accounting Policies and Procedures, provides the policy for establishing and making
purchases from a petty cash fund. The document indicates that petty cash funds are
established for the purpose of handling cash expenditures of a minor nature and are limited to
purchases of $100 or less. Chapter 9.5 Change Funds indicates that change funds are
established for the purpose of making change where money is collected during transactions of
County business.
Objectives, Scope and Methodology
In order to assist the County in meeting its stewardship responsibilities for the public assets and
resources placed in its trust, an unannounced cash count audit was performed of its petty cash
and change funds.
The objectives of this audit were to determine if (1) the County’s internal controls over petty
cash and change funds are operating effectively, (2) the reconciled balance of the fund agrees
to the amount recorded on the Certificate and Receipt of Imprest Funds and (3) the Accounting
Policies and Procedures are being properly adhered to.
To meet the objectives of the audit, the procedures performed included, but were not limited to,
the following:


Obtained an understanding of the Accounting Policies and Procedures as they relate to
petty cash and change funds.
Performed inquiries of County personnel.
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 3 


Evaluated internal controls related to segregation of duties and safeguarding the
County’s assets; specifically for petty cash and change funds.
Reconciled a sample of petty cash and change funds and agreed the balance to the
amount recorded on the Certificate and Receipt of Imprest Funds.
Identified opportunities for improvement.
Overall Results
Based on the procedures performed, the County appears to have instances of non-compliance
with the Accounting Policies and Procedures. Additionally, there are processes that are not
included within the Accounting Policies and Procedures. These areas are detailed in the
Opportunities for Improvement section of this report.
The following summarizes the result of the audit:

Segregation of Duties: Approximately 43% of the petty cash and change funds sampled
are not in compliance with the Accounting Policies and Procedures, Chapter 17.2 Petty
Cash and Chapter 9.5 Change Funds.

Reconciliation of Imprest Funds: Five (5) of the twenty-three (23) petty cash and change
funds sampled did not reconcile to the amount recorded on the Certificate and Receipt of
Imprest Funds. However, only one (1) was short by more than $1.

Management Year-End Audits of Petty Cash: Management is not in compliance with the
year-end audit requirement of the Accounting Policies and Procedures, Chapter 17.2
Petty Cash.

Custodian Retention of the Certificate and Receipt of Imprest Funds: Approximately
65% of the petty cash and change fund custodians are not in compliance with the
Accounting Policies and Procedures, Chapter 17.2 Petty Cash and Chapter 9.5 Change
Funds.

Lack of Written Policies and Procedures for Cash Handling Training: The Accounting
Policies and Procedures do not require that custodians receive cash handling training.
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 4 Opportunities for Improvement
The audit disclosed certain policies, procedures, and practices that could be improved. The
audit was neither designed nor intended to be a detailed study of every relevant system,
procedure, or transaction. Accordingly, the Opportunities for Improvement presented in this
report may not be all-inclusive of areas where improvement may be needed. Observations and
recommendations were made in the following areas:
A.
B.
C.
D.
E.
Segregation of Duties
Reconciliation of Imprest Funds
Management Year-End Audits of Petty Cash
Custodian Retention of the Certificate and Receipt of Imprest Funds
Written Policies and Procedures for Cash Handling Training
A. Segregation of duties
Ensure Compliance with Accounting Policies and Procedures.
Observation
Accounting Policies and Procedures, Chapter 17.2 Petty Cash and Chapter 9.5 Change Funds,
both require that "only the person designated the custodian is permitted access" to the petty
cash or change fund. The auditor selected a sample of twenty-three (23) petty cash and
change funds, representing 45% of the population, and performed an unannounced cash count.
Approximately 43% or ten (10) of the twenty-three (23) were accessible by one or more persons
other than the designated custodian. See Appendix A: Internal Control Observations.
Recommendation
Mandate compliance with the Accounting Policies and Procedures, Chapter 17.2 Petty Cash
and Chapter 9.5 Change Funds. Allow only the designated custodian of the petty cash or
change fund to access the fund.
Management Response
Future cash handling training sessions will reinforce this requirement and will remind staff and
their managers that compliance is mandatory. Follow-up discussions will occur with the
staff/management teams where current policies and procedures were not followed.
Administration concurs with the recommendation and will work with the Finance Department to
make edits to the Clerk and Comptroller’s “Accounting Policies and Procedures”, particularly
Chapter 17.2 Petty Cash and Chapter 9.5 Change Funds to provide more clarification to the
various requirements. These policy changes shall be completed by November 1, 2014.
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 5 B.
Reconciliation of imprest funds
Ensure Compliance with Accounting Policies and Procedures.
Observation
During the unannounced cash count, each petty cash and change fund was reconciled to the
amount recorded on the Certificate and Receipt of Imprest Funds. The auditor found that five
(5) of the twenty-three (23), approximately 22%, did not reconcile to the certificate. Of the five
(5) that did not reconcile, one (1) was short by $31.25 and the other four (4) were over or short
by less than $1. See Appendix B: Petty Cash and Change Fund Reconciliations.
Recommendation
Increase monitoring and oversight and consider modifying the Accounting Policies and
Procedures to require that management perform quarterly reconciliations for both petty cash
and change funds. Ensure that all custodians report cash overages or shortages in accordance
with the Accounting Policies and Procedures, Chapter 9.6 Cash Over and Short.
Management Response
Administration concurs with the recommendation and will work with the Finance Department to
update Chapter 17.2 Petty Cash and Chapter 9.5 Change Funds to bring more clarification to
the quarterly management requirement. This will also be communicated and incorporated into
future training. Administration will work with the Clerk and Comptroller and make edits to the
“Accounting Policies and Procedures”. These policy changes shall be completed by November
1, 2014.
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 6 C.
Management year-end audits of petty cash
Ensure Compliance with Accounting Policies and Procedures.
Observation
Accounting Policies and Procedures, Chapter 17.2 Petty Cash, requires "that management
performs an audit at year-end" of each petty cash fund. The auditor selected a sample of
twenty-three (23) petty cash and change funds and performed an unannounced cash count. Of
the twenty-three (23) selected, two (2) were petty cash funds. Neither of the funds in the
sample had documentation indicating that management had performed a year-end audit for
fiscal year 2012-2013 and both custodians indicated that a year-end audit was not performed by
management.
Recommendation
In accordance with the Accounting Policies and Procedures, Chapter 17.2 Petty Cash, ensure
that management performs an audit at year-end of all petty cash funds. See page 6,
Opportunity for Improvement B, for related items.
Management Response
As with past training sessions, this requirement will be a focus of the training. Administration
concurs with the recommendation and will work with the Finance Department and will send
reminders of these requirements immediately to all Directors to ensure proper communication.
Administration will work with the Finance Department to make edits to the Clerk and
Comptroller’s “Accounting Policies and Procedures”, particularly Chapter 17.2 Petty Cash and
Chapter 9.5 Change Funds to bring more clarification of the various requirements. The current
policy does not recommend or mention any annual audit for the change funds in Chapter 9.5
Change Funds. These policy changes shall be completed by November 1, 2014.
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 7 D.
Custodian retention of the Certificate and Receipt of Imprest Funds
Ensure each custodian retains a copy of the Certificate and Receipt of Imprest Funds
with the petty cash or change fund.
Observation
Accounting Policies and Procedures, Chapter 17.2 Petty Cash and Chapter 9.5 Change Funds,
both state that “the custodian shall retain a copy (of the Certificate and Receipt of Imprest
Funds) on file“. During the unannounced cash count, each custodian was asked to present a
copy of the Certificate and Receipt of Imprest Funds for the petty cash or change fund being
counted. It was noted that fifteen (15) of the twenty-three (23) custodians, approximately 65%,
were unable to present the current, fully executed certificate.
Recommendation
Consider utilizing current technology to retain the Certificate and Receipt of Imprest Funds and
modify the Accounting Policies and Procedures, Chapter 17.2 Petty Cash and Chapter 9.5
Change Funds, to recognize the official document retention system as the primary source for
these documents.
Management Response
Administration concurs with the recommendation and will work with the Finance Department to
discuss utilizing the Clerk and Comptroller’s iterance of OnBase which currently acts as a
document repository. A reminder has been sent to all Directors to ensure that these
certificates/receipts are currently held in accordance with the Clerk’s “Accounting Policies and
Procedures”. These policy changes shall be completed by November 1, 2014.
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 8 E. Written policies and procedures for cash handling training
Modify the Accounting Policies and Procedures to require cash handling training.
Observation
During the review of the Accounting Policies and Procedures, it was identified that there is no
formal requirement for custodians to receive cash handling training.
Recommendation
Formalize the training requirement by modifying the Accounting Policies and Procedures to
require that custodians receive cash handling training within a reasonable period of time prior to,
or immediately after becoming a custodian of a petty cash or a change fund.
Management Response
Cash handling training has been held in September of 2012 and February of 2013. These
sessions had over 360 attendees and reinforced all of the current procedures and requirements.
A new online training session is now available to all Sarasota County Government employees
and will allow for real time training to occur as new employees come in and out of our
organization. This training will be available via TRAC as this will allow management to track
who has taken the class and when. Administration concurs with the recommendation and will
work with the Finance Department to make suggested edits to the Clerk and Comptroller’s
“Accounting Policies and Procedures”, particularly Chapter 17.2 Petty Cash and Chapter 9.5
Change Funds to make mention of the suggested annual training which will be available online.
These policy changes shall be completed by November 1, 2014.
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 9 Appendix A:
Internal Control Observations ~ Segregation of Duties
The table below provides the department and location of the twenty-three petty cash and
change funds sampled and counted. The ten petty cash and change funds that were accessible
by one or more persons other than the designated custodian are highlighted in blue. See page
5, Opportunity for Improvement A, for the detailed observation.
Department
Communications
Health and Human Services
Health and Human Services
Libraries and Historical Resources
Libraries and Historical Resources
Libraries and Historical Resources
Natural Resources
Office of Financial Management
Office of Financial Management
Parks and Recreation
Parks and Recreation
Parks and Recreation
Parks and Recreation
Parks and Recreation
Parks and Recreation
Planning and Development Services
Planning and Development Services
Planning and Development Services
Planning and Development Services
Public Utilities
Public Utilities
Sarasota County Area Transit
Sarasota County Area Transit
Location
1660 Ringling Blvd., Sarasota, FL
2200 Ringling Blvd., Sarasota, FL
5531 Pinkney Ave., Sarasota, FL
100 W Dearborn St., Englewood, FL
13800 Tamiami Trl., North Port, FL
100 Coburn Rd., Sarasota, FL
1001 Sarasota Center Blvd., Sarasota, FL
1001 Sarasota Center Blvd., Sarasota, FL
1001 Sarasota Center Blvd., Sarasota, FL
2650 Waldemere St., Sarasota, FL
2050 Adams Ln., Sarasota, FL
326 S. Nokomis Ave., Venice, FL
3445 Rustic Rd., Nokomis, FL
6700 Clark Rd., Sarasota, FL
8918 Midnight Pass Rd., Sarasota, FL
1001 Sarasota Center Blvd., Sarasota, FL
4000 S. Tamiami Trl., Venice, FL
1001 Sarasota Center Blvd., Sarasota, FL
4000 S. Tamiami Trl., Venice, FL
8750 Bee Ridge Rd., Sarasota, FL
4000 Knights Trail Rd., Nokomis, FL
5303 Pinkney Ave., Sarasota, FL
1565 1st St., Sarasota, FL
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 10 Appendix B:
Petty Cash and Change Fund Reconciliations
The table below provides the department and location of the twenty-three petty cash and
change funds sampled and counted. The five petty cash and change with variances are
highlighted in blue. See page 6, Opportunity for Improvement B, for the detailed observation.
Department
Communications
Health and Human Services
Health and Human Services
Libraries and Historical
Resources
Libraries and Historical
Resources
Libraries and Historical
Resources
Natural Resources
Office of Financial Management
Office of Financial Management
Parks and Recreation
Parks and Recreation
Parks and Recreation
Parks and Recreation
Parks and Recreation
Parks and Recreation
Planning and Development
Services
Planning and Development
Services
Planning and Development
Services
Planning and Development
Services
Public Utilities
Public Utilities
Sarasota County Area Transit
Sarasota County Area Transit
Location
1660 Ringling Blvd., Sarasota, FL
2200 Ringling Blvd., Sarasota, FL
5531 Pinkney Ave., Sarasota, FL
100 W Dearborn St., Englewood, FL
Over/Under
Balanced
Balanced
Balanced
Balanced
13800 Tamiami Trl., North Port, FL
$0.15 Over
100 Coburn Rd., Sarasota, FL
1001 Sarasota Center Blvd., Sarasota, FL
1001 Sarasota Center Blvd., Sarasota, FL
1001 Sarasota Center Blvd., Sarasota, FL
2650 Waldemere St., Sarasota, FL
2050 Adams Ln., Sarasota, FL
326 S. Nokomis Ave., Venice, FL
3445 Rustic Rd., Nokomis, FL
6700 Clark Rd., Sarasota, FL
8918 Midnight Pass Rd., Sarasota, FL
1001 Sarasota Center Blvd., Sarasota, FL
$0.20 Over
Balanced
Balanced
Balanced
Balanced
Balanced
Balanced
Balanced
Balanced
$0.30 Short
4000 S. Tamiami Trl., Venice, FL
Balanced
1001 Sarasota Center Blvd., Sarasota, FL
Balanced
4000 S. Tamiami Trl., Venice, FL
Balanced
8750 Bee Ridge Rd., Sarasota, FL
4000 Knights Trail Rd., Nokomis, FL
1565 1st St., Sarasota, FL
5303 Pinkney Ave., Sarasota, FL
Audit Services - Clerk of the Circuit Court and County Comptroller
Page 11 Balanced
$0.43 Over
Balanced
$31.25 Short
Balanced