| Dept. of
Development & Environmental Services Accounts Receivable Report No. 94-6 Paul Walker, Financial Auditor
The Department of Development and Environmental Services (DDES) accounts receivable audit was included in the Auditor's Office 1993 work program. The audit was prompted by a Financial and Management Study, conducted by Arthur Andersen & Co., of the Building and Land Development Division (BALD). (DDES was at that time known as BALD.) The objective of that study was to "identify improvements to the financial and operational management of BALD in order to maximize the efficiency of permit processing functions and provide for the financial stability of BALD." The study raised concerns about the accuracy and reliability of the Department's financial reporting. The objective of the audit was to review the accounting and internal control policies, procedures, and practices relating to the collection, recording, and reporting of DDES permit fees and related accounts receivable. MAJOR FINDINGS AND RECOMMENDATIONS Finding II-1. System allows unauthorized changes to data. The PERMITS system allows unauthorized changes to data which could affect the reliability of financial data. The audit recommended that DDES management review controls over the system and limit the ability to access or modify data; and that the system screens be modified so the user log-on identification cannot be changed, and the user identification remain with each transaction. Finding II-2. Accounting Services not centralized. The DDES finance section provided accounting services for all DDES accounts except for two sections: Hazardous Materials and Code Enforcement. The audit recommended that DDES provide accounting services to all accounts to centralize and standardize the accounting procedures across the entire DDES organization. Finding II-3. Some checks not deposited when received. Some customer checks received in the mail by DDES were held until processed, instead of being deposited the same day. The audit recommended that DDES record and deposit checks the same day they are received. Finding II-4. Time Reporting System data not reconciled to PERMITS data. Employee hours worked as recorded in the time reporting system were not reconciled to the variable hours worked entered in the PERMITS system. As a result, audit staff was not able to determine that all hours worked were billed. The audit recommended that project hours report in the time reporting system be reviewed and compared to hours entered in the PERMITS system to ensure that all possible employee hours are billed to the project. Finding II-5. Accounting Duties Were Not Segregated. Accounting duties were not segregated which increases the possibility that intentional or unintentional accounting errors may occur. The audit recommended that DDES segregate the accounting duties so that the billing clerk does not perform work as a part-time cashier. Updated: 06/24/02
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