Purpose

To determine whether the State Education Department (SED) 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 June 12, 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., confidential, patient, and resident allowances). 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. SED was authorized to have 3 advance accounts with a total value of $300,000 as of March 31, 2012.

Key Findings

• SED no longer issues checks for travel advances and infrequently issues checks for petty cash expenses.
• SED does not routinely resolve old outstanding items or review any paid checks and consequently has no assurance that potentially improper or fraudulent transactions are detected.

Key Recommendations

• Consolidate the petty cash and travel categories into the “other “category and notify OSC to update its records.
• Promptly investigate and resolve old outstanding items and resolve the five items on the March 2014 reconciliation.
• Periodically review some paid checks to ensure funds are paid to appropriate payees.

Other Related Audits/Reports of Interest

Office of Child and Family Services: Controls Over Cash Advance Accounts (2013-S-52)
Workers' Compensation Board: Controls Over Cash Advance Accounts (2014-S-12)