Purpose

To determine whether the Workers' Compensation Board (WCB) has adequate controls over the cash advance accounts it oversees to ensure the money is properly accounted for and used for appropriate business expenses. The audit covers the period April 1, 2011 to March 11, 2014.

Background

Under Section 115 of the State Finance Law, cash advances are issued to State agencies for purposes such as petty cash, travel, and other funding needs (e.g., subpoena fees). Advances are issued from agency appropriations and the cash is transferred from the State Treasury to a local bank account for use by the agency. WCB was authorized to have two advance accounts with a total value of $106,000 as of March 31, 2012.

Key Findings

• One void check was missing. Notation on the check register states "void at the time of issuance," but the hard copy check cannot be located. This check was issued due to a payroll problem, but was ultimately not needed.
• Two checks have no information other than check number in the electronic check register. WCB personnel stated they had no documentation for these checks, but they were written for subpoena fees and were given to another WCB unit. We reviewed bank statements from July 2012 to February 2014 and found that both checks never cleared.
• Although the petty cash account is needed for subpoena fees, a New York State procurement card should be used for most office expenses. The largest total disbursements for a month in our scope period were $891. The average monthly disbursements totaled $115. Therefore, $6,000 appears to be an excessive authorization level for this account.

Key Recommendations

• Issue stop payment orders for the three missing checks.
• Consider reducing the petty cash fund to a more reasonable limit, such as $1,000.

Other Related Audits/Reports of Interest

Office of Children and Family Services: Controls Over Cash Advance Accounts (2013-S-52)