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HomeMy WebLinkAbout2015 - Audit Report - LPD Lansing Police Department Special Operations Cash Audit rept 2015 yPN S I CITY OF LANSING INTERNAL AUDITOR 124 W MICHIGAN AVE FL 10 LANSING MI 48933-1605 (517)483-4159 I P� Fax (517)483-7630 cHIO AUDIT REPORT DATE: February 19, 2015 TO: City Council, City Clerk, Ma oi Bernero FROM: Jim DeLine, Internal Auditor RE: LPD Special Operation dit Per City Charter, "The Internal Auditor shall make a full report to the City Council of each individual audit and file a copy with the Mayor and City Clerk." To that end, this report is being sent for your review and to be placed on file. Background / Research It is my intention to periodically conduct cash audits at City government locations where cash transactions and petty cash boxes exist. While many of these audits occur unannounced, due to the confidential nature of the Special Operations Section location and the periodic cash audits conducted there by the Finance Department, it was decided to piggy-back on their cash audit scheduled for November 25, 2014. For unexplained reasons, LPD cancelled that visit. Attempts to reschedule were not successful until I met with Captain Darin Southworth, Lt. Tom Fabus and Sgt. Ellery Sosebee on January 20, 2015 to discuss both the cash audit and a procedural audit of LPD evidence handling. At that meeting, I was informed that I could now expect full cooperation from LPD personnel. No explanation of the delay was offered. I arrived at the Special Operations Section the morning of January 29, 2015 and was given a tour and overview of the section by Lt. Fabus. At approximately 10:30 a.m. he removed two cash boxes from a safe, one for transactions charged to the City of Lansing general fund and one for transactions charged to a forfeiture fund. With Lt. Fabus in the room, I proceeded to count the cash, review and tabulate receipts, and review and tabulate "paid outs" to officers. (Undercover personnel are allowed to maintain cash on their person for various duty-related transactions.) Analysis Both cash boxes balanced "to the penny" for cash, paid outs and receipts. See Attachment A for my handwritten Cash Count Sheets and correlating verification via Excel sheets. FYI - The paid out amount is duplicated in the receipts. Page 1 of 2 When I inquired what account general fund expenses were charged to, I was informed 101.343240.741820, an evidence account. I believe a miscellaneous account be, in some cases, more appropriate (like for a car wash). I would also question whether the general fund is appropriate for any Special Operations expenses. Upon returning to the office on January 29, 1 emailed Sheila Wheeler, in the Finance Department who works closely with the Special Operations supervisors to schedule a meeting to discuss the separation of paid outs and receipts. No response was received. I emailed again on February 9, 2015, requesting she meet with me and, again, no response was received. I called Finance Director, Angela Bennett, on February 11, 2015 with my questions and she suggested I contact the LPD Budget Control Supervisor reference my question of general fund vs. forfeiture fund, and that Accounting Manager, Randy Endsley, would be contacting me reference the seeming duplication of paid outs . Not having heard from him by Friday, February 13, 2015, 1 visited him in his office. He quickly was able to address my question. Recommendations While confidential informants (Cis) used by officers in Special Operations are required to sign receipts for any money given them, some employees of local businesses were not. Lt. Fabus anticipated that I would recommend they be required to do so and has already written a procedure to that affect. I have emailed the LPD Budget Control Supervisor recommending he review items charged to the general fund and provide clarity to the SOS Secretary as to appropriate accounts to charge. See attachment B. It is also recommended that when scheduled audits and / or meetings with the Internal Auditor are cancelled, an explanation be given. When emails and requests from the Internal Auditor are received, they should be answered on a timely basis. Lt. Fabus is to be commended for the cooperation shown during the January 29, 2015 cash audit. He not only complied with the cash audit being conducted, but went out of his way to provide background as to the functions of the section and its procedures. He supplied extensive written procedures used by undercover officers regarding cash handling. Those documents are retained in the office of the Internal Auditor but are being kept confidential per the lieutenant's request. Page 2 of 2 > -CV(- , CITY OF LANSING Internal Audit CASH COUNT SHEET Department: (�i Location: Date: "t Time: AM/PM Currency Quanity Total $1.00 X $2.00 X = $5.00 X j.100) F- _ — $10.00 X = $20.00 X — $50.00 X 3 = $100.00 X Z� _ — �°— Sub total currency----------------------------------------------------- J �— Coins $0.01 X + rolls $0.50/Roll = $0.05 X + rolls $2.00/Roll = $0.10 X + rolls $5.00/Roll = $0.25 X + rolls $10.00/Roll = $0.50 X + rolls $20.00/Roll = $1.00 X + rolls = Sub total Coins ------ -------------------------------------------------- Checks-------------------------�-------- -------------------------------------------- U Paid outs---------------------- J "`� - 1 Recipts -----------------------------------� J �'S Summary: �- I C J Currency--------------- - �-�------------------ I Coins------------------ - -- ---------------------- I �r Checks----------------- --- ------------------------ Paidouts------------- — ------------------- Total-------------------� - r--1 -! -------------------------------------------------- S I Less: Receipts------ - - - ----------------------------------------------- Subto al-- --------------- - ----- ------------------------------------------------- T Less: etty ash Fund---------------------------------------------------------- t Overhort) --------------------------------------------------------- ----- U co �J Auditor —�^ Department Rep. Z'v Attachment A — Page 1 of 6 Recap of expenditures from Imprest Cash that have not been Reimbursed Date PE Item Amount l- w av - N Scx� 0 00 500 • 00 300 = 00 1 00 - 00 500 00 500 = 01 500 ° 00 00 = 0c) 300 . 00 300 - 00 00 : t)0 , .300 .,oo 500 00 Side 2 of 2 Attachment A — Page 2 of 6 CITY OF LANSING Internal Audit CASH COUNT SPREADSHEET (Attach signed original) Department: Police Location: Special Operations Section Drawer: 273 drawer Date: Thursday, January 29, 2015 Currency Qty Plus banded Total $1.00 0 0 $0.00 $2.00 0 0 $0.00 $5.00 15 4 $100 ea $475.00 $10.00 51 0 $510.00 $20.00 94 2 $2,000 ea $5,880.00 $50.00 3 0 $150.00 $100.00 25 0 $2,500.00 Total Currency $9,515.00 Coins Qty Plus rolled Total $0.01 0 0 $0.50 ea $0.00 $0.05 0 0 $2.00 ea $0.00 $0.10 0 0 $5.00 ea $0.00 $0.25 0 0 $10.00 ea $0.00 $0.50 0 0 $20.00 ea $0.00 $1.00 0 0 $0.00 Total Coins $0.00 Checks (attach tape) $0.00 Paid outs (attach tape) ($5,400.00) Receipts (attach tape) $15,885.00 Total Cash Box Today $20,000.00 Total Cash Box Per Finance $20,000.00 Over (Short) $0.00 Attachment A - Page 3 of 6 CITY OF LANSING Internal Audit C/A�SH COUNT SHEET Department: C/ LoLocation: �D '--- Date: M 120 Time: L AM/ M Currency Quanity Total $1.00 X �� $2.00 X La— _ $5.00 X tlou $10.00 X = 6 oo G $20.00 X = 2r cXJf1 = zOQU $50.00 X $100.00 X _ - _ r— Sub total currency-------------------------------------------- _ u- Coins $0.01 X + rolls $0.50/Roll = $0.05 X i + _ rolls $2.00/Roll = $0.10 X + — a rolls $5.00/Roll = v $0.25 X + rolls $10.00/Roll = $0.50 X + rolls $20.00/Roll $1.00 X 71 + rolls = 00 Sub total Coins ----------------------------------------------------VLI ---- Checks--------- ---------------------------------------------------------------------------------------------------- Paidouts------------------------------ ---- ----------- -------------- ------------------------------------------------ l Recipts --------------------------------- ------------------------------------------------------------- Summary: �{ I Currency ----� !- � ?J---------------- Coins-----------------------LI-1 ------------------------------------------------- Paidouts---------------------------------------------- Total----------------�- ---- -- ----- --------------------------------- . -J -- -------Less: Receipts--- - -------------------- Sub tot ' ------------------------------ Less: P tty ash Fun - --- -------------------------------------------------- Ove ( ort) ------------------------------------------------------------- ---- -------------------- Auditor Department Rep. Side 1 of 2 Attachment A — Page 4 of 6 V 0P � Recap of axperdit FF§. from Imprest Cash that have not been Reimbursed Date Pa ye Item Amount c 1 Side 2 of 2 Attachment A — Page 5 of 6 CITY OF LANSING Internal Audit CASH COUNT SPREADSHEET (Attach signed original) Department: Police Location: Special Operations Section Drawer: 101 drawer Date: Thursday, January 29, 2015 Currency Qty Plus banded Total $1.00 0 0 $0.00 $2.00 0 0 $0.00 $5.00 1 0 $100 ea $5.00 $10.00 3 0 $30.00 $20.00 34 1 $2,000 ea $2,680.00 $50.00 0 0 $0.00 $100.00 0 0 $0.00 Total Currency $2,715.00 Coins Qty Plus rolled Total $0.01 43 0 $0.50 ea $0.43 $0.05 13 0 $2.00 ea $0.65 $0.10 21 0 $5.00 ea $2.10 $0.25 27 0 $10.00 ea $6.75 $0.50 0 0 $20.00 ea $0.00 $1.00 2 0 $2.00 Total Coins $11.93 Checks (attach tape) $0.00 Paid outs (attach tape) $0.00 Receipts (attach tape) $273.07 Total Cash Box Today $3,000.00 Total Cash Box Per Finance $3,000.00 Over (Short) $0.00 Attachment A - Page 6 of 6 DeLine, Jim From: DeLine,Jim Sent: Thursday, February 12, 2015 9:15 AM To: Prisk, Denis Cc: Fabus, Thomas (Thomas.Fabus@lansingmi.gov) Subject: Special Ops General Fund Cash Expenditures Denis: As I think you know, on January 29 1 visited the Special Operations Section and conducted a cash audit of two cash boxes which they keep in a safe there. One is dedicated to forfeiture fund expenses and the other to general fund expenses. According to their Secretary, Randy Davis, all general fund expenses are charged to 101.343240.741820, an evidence account. Some of the receipts were for miscellaneous items like car washes. Are you reviewing the expenses from this box? If not, I recommend you do so. I believe Randy may need more clear instructions as to what account numbers are for what purpose. Why can't everything out there be charged to a forfeiture account? Thanks, Jim 1 C11 Jim DeLine Jim.DeLine(olansingmi.gov Internal Auditor Voice: (517) 483-4159 Fax: (517) 483-7630 Attachment B — Page 1 of 1 1