Purpose

To determine whether the Office of Parks, Recreation and Historic Preservation (Parks) needs its cash advance accounts and whether the money is properly accounted for and used for appropriate business expenses. The audit covers the period April 1, 2011 through June 30, 2014.

Background

Section 115 of the State Finance Law authorizes the establishment of cash advance accounts, which State agencies may use for petty cash, travel, and other funding needs such as confidential and change allowances. As of March 31, 2012, Parks was authorized to have 14 advance accounts with a total value of $436,090, as follows: Petty Cash (including 10 “sub-accounts”) - $185,000; Change Fund - $246,590; Confidential Fund - $1,500; and Travel Fund - $3,000.

Key Findings

• Parks consolidated some of its authorized advance accounts by transferring the funds to an unrelated account, without notifying the Office of the State Comptroller (OSC) of the change.
• Two funds had shortages that originated prior to 2011, but Parks did not reconcile the discrepancies or report them to OSC as required by State law.
• Parks’ Petty Cash Account, which had not been reconciled in at least four years, contained $5,000 more than OSC had authorized, and Parks officials were unable to explain or account for the surplus.
• Parks inappropriately used Petty Cash Account funds totaling over $4,600 for employee payroll advances, which is prohibited by the Comptroller’s requirements established under Section 115.
• Parks did not routinely assess accounts for necessity or appropriate fund balances. The $3,000 Travel Advance Account had been inactive for almost three years, and the Petty Cash Account (with a balance of $185,000) was significantly overfunded.

Key Recommendations

• Establish, and adhere to, consistent accounting policies and procedures for all cash advance accounts, and strengthen the control environment to ensure processes and procedures are in compliance with State regulations and adhere to professional standards.
• Determine the source of the $5,000 overage in the Petty Cash Account, and significantly reduce its balance to more closely reflect actual use.
• Discontinue the practice of allowing payroll advances from the Petty Cash Account.
• Close the inactive Travel Account and return the authorized balance to the State Treasury.

Other Related Audits/Reports of Interest

Office of Children and Family Services: Controls Over Cash Advance Accounts (2013-S-52)
State Education Department: Controls Over Cash Advance Accounts (2014-S-11)