Finding - Purchasing and custodial functions were incompatible.
Finding - Some items were stored outside secured storage areas.
Finding - The Solid Waste Division did not have written policies and procedures related to storage and handling of supplies.
Finding - Space on the Store premises was used as a passageway to an office on the second floor.
Finding - Persons withdrawing parts and supplies were not required to sign.
Finding - The Solid Waste Division required an approved purchase requisition form.
Finding - Waste Division did not have reports showing accumulated fuel usage for vehicles and machinery.

The Solid Waste Division (SWD) has the responsibility to provide safe and environmentally sound disposal of municipal solid waste. In July 1993, the Solid Waste Division operated three landfills, seven transfer stations, and a drop box located in various areas of King County. The Division owns and maintains a fleet of trucks, trailers, vehicles and machinery. To ensure continuous operation of trucks, trailers, vehicles and machinery, the Solid Waste Division stores fuel, automotive parts, tires, and other operating supplies at its main storage facility located at the Cedar Hills Landfill.

The scope of the audit was limited to the review of records of purchases, receipts, withdrawals, and physical storage of automotive parts and supplies, tires, and other operating parts and supplies. Management and operations staff personnel were also interviewed. The audit focused on the period during 1992 through May 31, 1993.

The objectives of the internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles.

Some employees were performing incompatible functions. For example, staff who performed the function of purchasing parts and supplies also had responsibility for handling, storage, and recordkeeping. This condition led to a weak internal control structure.

The audit recommended that the Solid Waste Division should segregate the function of purchasing parts and supplies from the functions of handling and storage and certifying receipts of goods prior to payment of invoices. The purchasing function should be assigned to a person who has no authority for either the handling and storage of parts and supplies, or for certifying the correctness of the invoices and receipt of goods prior to the Division's payment.

Finding 2. Some items were stored outside secured storage areas.

Some parts and supplies inventory on hand were stored outside secured and fenced storage areas, thus making them accessible to anybody on the premises, and potentially exposed the parts and supplies to theft or loss.

The audit recommended that the Solid Waste Division should keep its inventory of all parts and supplies in a secured and fenced storage areas.

Finding 3. The Solid Waste Division did not have written policies and procedures related to storage and handling of supplies.

The Solid Waste Division did not have written policies and procedures relating to the handling and storage of parts, supplies, tires, fuel, and other operating supplies. Written policies and procedures relating to the handling and storage of parts, supplies, tires, fuel, and other operating supplies. Written policies and procedures would promote continuity and consistency in receiving items, physical stocking, inventory withdrawal, and recordkeeping.

The audit recommended that the Solid Waste Division should develop a written policies and procedures manual which would provide guidance and understanding of the store's procedures and practices.

Finding 4. Space on the Store premises was used as a passageway to an office on the second floor.

The store premises at the Cedar Hills Landfill were accessible to people other than those authorized to be inside the store area. Some space on the store premises was used as a passageway to the second floor where a shop supervisor's office is located. Visitors, employees, and other people who need to see the shop supervisor in this office have to use the storage area to get to the second floor. Thus, some of the parts and supplies in the storage area are exposed to possible theft or loss.

The audit recommended that the office of the shop supervisor be relocated to another place in the building that is completely separate and apart from the storage area.

Finding 5. Persons withdrawing parts and supplies not required to sign.

The store inventory withdrawal form did not require the signature of the person receiving parts and supplies from the store.

The audit recommended that the Store Unit at the Cedar Hills Landfill should require the person receiving parts or supplies from the store to sign the inventory withdrawal form. The signature on the form would demonstrate that the parts or supplies issued by the store were actually received by the person who signed the form.

Finding 6. The Solid Waste Division required an approved purchase requisition form.

The Store Unit did not use the approved written requisition form for some of its purchases of parts and supplies as required by the Solid Waste Division's procurement policy.

The audit recommended that the Solid Waste Division should enforce its procurement policy regarding usage of the requisition form for ordering parts and supplies, and the pre-numbered requisition form should be approved by the supervisor before the parts and supplies are ordered from vendors.

Finding 7. The Solid Waste Division did not have reports showing accumulated fuel usage for vehicles and machinery.

The Solid Waste Division did not maintain records for accumulated fuel usage for vehicles and machinery, and thus could not monitor each vehicle's fuel usage and performance.

The audit recommended that until the automated fuel tracking system is fully operational (Solid Waste Division purchased an automated fuel tracking system which was to be installed during the last quarter of 1993), the Solid Waste Division should maintain records of accumulated fuel usage for each vehicle, truck, and piece of machinery. The records should be reviewed by management, and any significant information indicating abnormal fuel usage should be investigated.

Updated: 06/24/02