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HomeMy WebLinkAboutMINUTES - 10191999 - C92 " TO.- BOARD OF SUPERVISORS " CONTRA� COSTA FROM: INTERNAL OPERATIONS COMMITTEDCOUNTY DATE: October 1 , 199 �� - SUBJECT: CHECK WRITING AUTHORIZATION AND PETTY CASH PROCEDURES SPEC€r-M j ST(S)OR ROIEKD #IONS}&BACKGROUND AtO,3U FICA3iOM ACCEPT the attached report from the County Administrator's mice dated October 11; 1999_ which summarizes information provided by the Auditor-Controller's Office and the Employment and Human Services Department, of several issues onf ich vve had requested additional information. _ ACCEPT"the attached repot:from the County Administrators Office dated September 27, 1999, which summarizes information provided d the Auditor-Controller's Office and the Employment and Human Services Department heaving to do with the theft prevention measures which have been taken by the County and which addresses the use of petty cash by County departments. AGREE with the steps which been taken to date, as outlined in the attached reports, to prevent the misuse of the Employment and Human dices Departments Imprest Fund, including leaving in piece the 1000 maximum for which an Im reest Fuad check can be written, but concur with the recommendation that the maximum dollar amount be removed from the printed checks. 4. REMOVE this item as a referral to the 1999 Internal Operations Committee. BMkMo_und: On April 6, 1999, the Board of Supervisors referred to our Committee the issue of the theft of funds from the Employment and Human Services Department (formerly Social Service Department) which had recently taken place. This referral was expanded to include concerns which had been expressed regarding the size and number of petty cash fends which are in existence in the County, particularly the Immediate Need Ipret Fund, .... REOaMN,ENOATjON OF COUP ADMINISTRATOR ____AECOMMENDAMN OF BOARD COMMITTEE APPROVE OTHER � € E ILE _ UILKEMA -1QF[N 11 OTHER- VOTEOF SUKRVISOPS qjX UNANIMOUS(ASSENT AND CORRMT COPY OF AN ACTION TAKEN AYES, � NOM AND ENTERED ON MINUTES OF THE BOARD ASSENT,—.— ABSTAIN:_ SUPERVISORS ON THE DATE,SHS. Contact : € CountyAdmhist for ATTESTED Oct-ober 19� 1999 A,-,ditor-C€t#�Q= w PH;L BATCHELOR,CLERK OF THE BOARD OF 'D F tor'Empioympant and Hwmn Setvices T9epadmen SUPERVISORS AND COUNTY ADMINISTRATOR Juf;e Enea,-SoPW DapkAy Co d A dMiflii t � a By w, #EPLi Our Committee has received and reviewed the attached September 27, 1999 report from staff. Based n our discussion t that meeting, we reported back the theft of funds portion of the referral on October , 1999. We still had several questions about the petty cash funds and particularly the security of the Imprest Fund, which consists of three $100,000 bank amounts in the three major areas of the County whiff the Employment and Human Services Department staff use to meet the immediate needs of their clients. The attached October 118 1999 report from staff responds to the € ue tions we raised at our September 27, 1999 meeting. We have met with the Auditor-Controller, members of his'staff and the staff of the Employment and Human Services Department and the County Administrator's Office. We are now satisfied that the I prest Fund has been made as secure as is realistically possible, given the 10-00 limit on checks and the reed for two signatures on checks. We oto agree with the recommendation that the fact that there is a 1000 limit on the checks be removed from the face of the checks since this may actually encourage someone who warts to steal money from the County to write a series of -9 checks, knowing there is less likelihood of their being detected up front. We are.advised by the Auditor-Controller that he believes there are adequate controls or the use of the remaining petty cash funds and we are prepared to concur with that assessment. 2 TO: INTERNAL L OPE IONS COMMITTEE Contra, FROM: PHIL BATCHELOR, County Administrator Costa County DATE., September 27, 1999 _ -7: REFERRAL OF CHECK WRITING AUTHORIZATION AND SUBJEC PETTY CASH PROCEDURESFROM T E BOARD OF SUPERVISORS SPECIFIC REQUESTS}OR RECOMMENDATION(S)&BACKGROUND AND JUSTiFICATION r�`e RECOMMENDATION: RECEIVE report from the Employment and Human Services Director, Auditor-Controllerand County Administrator on: => actions taken by the Employment and Human Services Department following the filing of fraud charges against two employees, the check issuance procedures of all County departments, and accounting procedures currently in place to prevent inappropriate use of petty cash funds. BACKGROUND: On April 6, 1999, the Board of Supervisors approved a report submitted by Supervisor DeSaulnier that requested the Employment and Human Services Director to report on actions taken by the Department following the filing of fraud charges against two employees and directed the County Administrator and Auditor-Controller to review all (processes for the issuance of checks by County departments. This Fatter was referred to the internal Operations Committee for discussion, and was expanded by a request from Supervisor Dill<e #a to include controls and accounting procedures related to the appropriate use of petty cash funds. The Internal Operations Committee was to report back to the Board of Supervisors in three to six months of the referral. CONTIN U ED ON ATTACHMEN YES SIG`�ATURE: RECfu3#E# 3ATtC? #Of COUNTY ADMIN€STRATA Cc3PE €3ATIOBOARD CCJMI-rEE APPROVE OTHER SIGNATURE(S): ACMOF BOARD ON' APPROVE AS RECOMMENDED OT VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AN D CORRECT COPY OF AN AC-90N TAKEN UNANWOUS(ABSENT ; AND ENTERED ON THE MINUTES OF THE BOARD SOF S€#PERIAS #S ON THE E DATE AYES: NOES: SHO)WN. ABSENT- - ABSTAIN: A TESTED PJH� <BATCHELOR,CLERK of THE BOARD of SUPERVISORS AND COUNTY ADMIMSTRATOR CC: COUNTY ADAtflN6TRATOR EMPLOY,9ENT AND€-€U SERVICES DIRECTOR AUDITOR-CONTRO BY DEPUTY INTERNAL OPERATIONS COMMITTEE S tern er 27, 1999 Welfare Fraud,Check Issuance, Petty cash Page 2 Actions Taken by the Employment and Human Services Department Following the Filing €f Fraud Ch4fSfL,�A�lnst Two Eqj s. The Department continues to implement specific actions as detailed in its August 1998 Internal Security Plan, which specifies steps to be taken to enhance and improve its internal security environment, Specific actions that have been implemented include: Restrict Access to Closed Cases on the Case Data System (CDS). The department has implemented special programming changes on the CDS to restrict staff's computer access to re-open cases or tale any action on closed cases. This restriction will lower the overall exposure to fraud and enable monitoring to be focused on open cases. To forger reduce exposure on open cases, the internal Security and ;Compliance Unit monthly reviews selected open cases to identify any cases that should be closed. 2. The Internal Security and Compliance Unit monthly monitors payments and food stamps issuances for fraud alerts. Examples of fraud alerts include out-of-County addresses, multiple payments to the same payee, or matches between payee and employee addresses. These fraud alerts do not necessarily indicate that fraud has occurred, but are possible indicators of fraud that should be investigated. It was through this monitoring process that the recent incidences of fraud were detected. 3. The Department has implemented second-level approval of emergency benefits that requires supervisors to approve, on-line, emergency benefits (Immediate Need Warrants) submitted for issuance by caseworkers. 4. The Department has conducted a review of CDS security access and has reduced by 350 the number of employees with payment issuance access and/or ability to open new cases, thereby reducing potential fraud exposure. The Department also identified and removed 380 obsolete users from the system. Security standards have been applied more uniformly, basedon security clearance models that are consistent with employees' duties and the security system is now being managed closely. S. The Department has restricted caseworkers' ability to input or change their case assignments or CDS to firmly establish accountability for cases, as assigned by supervisors. 6. The Department implemented new programming to reliably record the user ID for CDS transactions in order to establish an audit trail and provide for chase monitoring of transactions. 7. On a temporary basis, the Department has continued limited use of a rubber authorization stamp Haat enables recipients (an average ten per month) with inadequate identification to cash a County Warrant. Use of the stamp is beim monitored until arrangements are made to suspend it permanently. The Department continues to work on remaining objectives geared to improving and enhancing internal financial security. These objectives include: 1. Expansion of the training curriculum for first-line supervisors to specifically address internal security procedures, and the reales and responsibilities of supervisory staff in monitoring, detecting and preventing internal fraud. This would include reinforcement of the zero fraud tolerance policy and password confidentiality issues through instructional memoranda and possibly an instructional video. 2. Formation of an Internal Security Committee comprising Department program operations, auditing, fiscal and information technology department staff. The mission of this Committee will be to provide liaison and technical support to assist the department in establishing and maintaining a secure internal control environment consistent with the Department's and County's zero fraud tolerance policy; and help to promote employee accountability and uniform compliance with departmental, INTERNAL OPERATIONS COMMITTEE September 27, 1999 999 Welfare Fraud,Check Issuance, Petty Cam Page 3 County, State and Federal policies and procedures. 1 The Department maintains as a key objective the development of a structured internal review process of cases by supervisors, It is expected that supervisors will be held accountable for performing and documenting this function, which would be formalized in written guidelines. 4. The Department is poised to implement a gaud Hotline and has developed guidelines for staff regarding referral protocol and confidentiality. The Department will consider extending the Fraud Hotline to the County Home Page. 5. The Department is planning to augment internal security staff to increase detection and deterrent capabilities, assist in targeted site reviews, and handle anticipated "hotline" and other referrals. 6. The Internal Security and Compliance Unit continues to monitor through periodic on- site audits, the distribution of warrants and ATPS (Authorizations to Purchase) within district offices. On-site audits of other functions are planned n the future as staffing increases. 7. Passible development, in the longer term, of added CDS programming and operational changes that would require some level of second level approval of high-risk transactions (such as vendor payments, payee name and address changes, supplemental issuances, and edits on dollar limits). However, it is clear that these modifications will require a significant financial investment for programming, widespread organizational changes, and support of staff using CICS. The County Auditor-Controller's Office has reviewed the Department's progress in addressing control weaknesses identified in the 1995.Audit Report. While it appears the Department has made much progress in limiting potential exposure and strengthening preventative controls, significant improvement can be achieved only with the training and endorsement of supervisory staff, and a re-definition of some job duties of staff. These steps tape time. In the interim, the Department continues to develop detective controls such as activity reports and exception reports to flag unusual activity for administrative follow--up. Check issuance Procedures of All County Departments. Until 1994, the focus of the work by the Auditor-Controller's Internal Audit Division was primarily on collections and the fiduciary activities of County departments. Most of the at-risk disbursements were funded with federal and state moneys and there were aggressive audit efforts by these agencies to monitor them. These ,Honeys were also audited annually by independent Certified Public accountants. .around 1994, the routine monitoring efforts by the federal and stag agencies were significantly reduced. in response, the County's Internal Audit Division specifically included the examination of these disbursement activities it its scope of work. Major projects in this area included the Community Services department in 1994, the Social Service Department in 1996 and the District Attorney (including Family Support) currently nearing completion. Of course, the Division completed many other examinations during this time including quarterly reviews of the Treasurer's accountability and annual reviews of the Treasurer's financial controls and investment activities. In response to the Board's direction, the Internal audit Division will continue to emphasize reviews of disbursement activities until all significant areas have been covered at least once. However, because the risk of loss is at least as great for collection activities, once disbursement activities have been reviewed, the Division plans to return to a comprehensive program to include reviews of procedures and controls for all the of the County's financial activity. It is important to note that even with an on-going control evaluation program, absolute immunity to fraud or embezzlement is not possible. Collusion by two or more dishonest staff can defeat the best of'controls. For example, the San Francisco Chronicle reported on INTERNAL OPERATIONS COMMITTEE September 27, 1999 Welfare Fraud, Check Issuance, Petty Cash Page 4 September 15, 1999 that workers in San Francisco's General Assistance Program are under investigation by the district attorney's office and the Department of Human Services for alleged welfare fraud. The Chronicle reported that, "It's one of those eases where one person couldn't have been doing it alone." investigators are looking into a scam in which a worker or workers invented phony clients to get general assistance; the workers or their accomplices then cashed the checks. Accounting Procedures Currently in Place to Prevent inappropriate Use of Petty Cash Funds. The internal Audit Division reviews requests for fund increase and for relief of shortages. The Division also perforins an accounting of petty cash and a review of petty cash expenditures when it does a departmental audit. Although there is no established County policy defining appropriate purchases using petty cash, the Board of Supervisors specifies by Order permissible uses when it authorizes each new petty cash fund. When reviewing petty cash expenditures, auditors look for the purchase of items that should have been obtained from Central Supply or through Purchasing and for inappropriate 'gifts of public funds" such as birthday cakes for employees, etc. The transactions of the Employment and Hunan Services Department Immediate Need Imprest Fund are reviewed concurrently with public assistance disbursements. Attached is a list of petty cash funds and their balances as of April 12, 1939 for information purposes. Petty Cash and Cash Difference Funds within General Fund 10€3300 Account# Title Amount 0020-0004 Building Inspection Petty Cash 1,200.00 0020-0005 Probation Petty Cash 4,400.00 0020-0006 Policy and Innovation Institute Petty Cash 100.00 0020-0008 Sheriff-Coroner Petty Cash 2,615.00 00200009 Social Service Petty Cash 12,000.00 00200012 Public Works Petty Cash 3,640.00 0020-0013 Personnel Petty Cash 7€30.00 0020-0014 Agriculture Petty Cash 450.00 0€320-4015 General Services Petty Cash 630.00 0020-0016 Treasurer-Tax Collector Petty Cash 425.00 0020-0017 County Counsel Petty Cash 50.00 0020-0019 County Administrator Petty Cash 100.00 0020.0023 County Clerk-Recorder Petty Cash and Cash Difference Fund 1.,140.00 0020-0026 Office of Revenue Collections Petty Cash 150.00 0020-0027 Health Services Petty Cash. 1,000.00 0020-0029 Community Development Petty Cash 175,00 0020-0032 Auditor-Controller Petty Cash 100.00 0020-0035 Community Services Petty Cash 1,500.00 0020-0037 District Attorney Petty Cash 6,550.0€3 0020-0039 Public Defender Petty Cash 1,000.00 0020-0041 Office of Emergency Services Petty Cash 1.00.00 04320-0042 Private Industry Council Petty Cash. 400.00 00200043 Animal Services Petty Cash 950.00 0020-0044 Cooperative Extension Petty Cash 100.00 0020-0045 Veterans Resources Center Petty Cash 50.00 0020-0046 ..Assessor Petty Cash 100.00 0020-0049 Social Service Immediate Need Imprest Fund 300,000.00 Total $339,625.00 __ ............................ Either Petty Cash and Cash Difference Funds Fund and Account # Title Amount 12464-0-0020 County Library.Petty Cash $ 2,460.00 131100-0010 Treasurer-Tax Collector Cash Riff. Fund (3,364.84) 140140-0020 Airport.Enterprise betty Cash 400.00 141500-e0020 Contra Costa Club Enterprise Petty Cash 500.00 1450€14-0020 Hospital Enterprise Petty Cash 28,320.00 248900-0424 County Service Area M-17 Petty Cash 1,500.40 255140-4020 County Service Area P-1 Petty Cash 4,000.00 276000-0420 County Service Area R-10 Petty Cash 1.,540.04 499800-0018 WC/Danville Superior Court Petty Cash&Cash Riff.Fund 1,050.00 499800-4422 Bay Superior Court Petty Cash& Cash Diff. Fund 925.00 499800-0024 blit. Diablo Superior Court Petty Cash&Cash Diff. Fund 1,534.04 499800-0425 County Clerk Petty Cash.& Cash Diff; Fund 2,125,00 499800-0028 Delta Superior Court Petty Cash& Cash Diff Fund 965.04 499844-0033 Superior Court Admin Petty Cash. 300.00 499800-0036 Jury Commissioner Petty Cash 10.40 816104-0020-0048 Law Library Trust Petty Cash 15€3.00 Total $ --42.374.20 _. Shortages Fund Title Amount 111840 Superior Courts $ 564.05 100340 Probation 17.45 140300 Health Services 72.26 100300 . Social Smice 15.29 10€1300 Treasurer-Tax Collector 99.60 124600 County Library � 78.55 Total 847.20 Shortages were replenished during fiscal year 1997-98 in accordance with Goverrrrert Code Section 29390.�. ........ __. _. SOCIAL SERVICE DEPARTMENTCONTRA COSTA COUNTY To: Jack Cooper, Principal Auditor May 1 T, 1999 Internal Audit From: Leslie Cutie cc: Jim`Takahashi Administra "ve lyst Marilyn Burress P Subj: Social Service Revolving Fund Accounts Following is the information you requested regarding the Social Service Department's Revolving Funds. SOCIAL SERVICE REVOLVING FUND The Revolving Fund is a master account authorized by the Board of Supervisors and administered by staff in the Social Service Fiscal Unit. The revolving find includes twelve petty cash accounts at eleven different locations, three postage due accounts, one Verifications checking account, and an unassigned portion that is used to replenish the rather accounts. The current authorized mount in this fund is $12,000. Attached is a listing of how the fund is assigned within the Department. Disbursements from the petty cash accounts are authorized for advances to clients for transportation, work-related ancillary expenses, and emergency expenses for Child Welfare Services clients. Disbursements are also authorized for employees to purchase food and incidentals for Department sponsored meetings with other agencies.and counties, for Job Workshops for CalWORKs and General Assistance clients, and for department employee recognition events and training sessions. Occasionally petty cash is used to purchase office supplies that are too small in cost to be purchasedwith a check through the purchasing process. For example, a building key, special paper,etc. The postage due accounts are used to prepay for postage at the local post office. Our "Postage Paid a Business Reply"mail is charged against these accounts. The Verifications checking account is used to pay for birth,death, and marriage certificates requested by Eligibility and Child Welfare workers. Ernergenc Benefits Issuance System fEBIS) The Emergency Welfare Revolving Fund Account is under the control of the County Welfare Director for the purpose of generating emergency payments to clients receiving Temporary Assistance for Needy Families(TANT) and General Assistance. The maximum amount of$300,000 was established by authorized action of the Board of Supervisors in 1958. The County Welfare:Director authorized the use of three commercial checking accounts with balances of$100,000 at Wells Fargo Bank locations b .................. ................ Page 2 of 2 in Pittsburg, Martinez and Richmond. The locations were selected to accommodate the client and County Welfare Department's issues regarding transportation,',issuance and cashing of warrants within East,Central and West Contra Costa County. Currently, warrants are initiated at each Social Services District office on the Case Data System (CICS). The CDS entries are checked daily by department supervisors and forwarded to Auditor-Controller and Social Services staff for reconciliation. The County Auditor- Controller replenishes the fund based on the previous month's activity and reconciliation. If you have any questions regarding this information, please feel free to give me a call at ext. 3-1652. H:Rev€L,ndltntA dmermts;doc a �• "'� � � �: � � � � � sa„ C'1 res '�' � ' ~ Un IV z CA Qn � n zts I 00 � . � . .e. a CONTRA COSTA HEALTH SERVICES Prepared by: C.McHugh PETTY CASH ACCOUNTS Updated: 15 April 1999 TYPE OF FUND SITE LOCATION PETTY CASH CHANCrE OTHER TOTAL AB3632 SPECIAL CHILDRENS PROGRAM2 2425 BISSO LANE#2S0,CONCORD $70 S70 ACCO` NTIIv'Cr;At3M:NISTRATION 20 ALLEN ST.,MARTINP7 120 12+0 ALCOHOL-WEST COUNTY 3043 RESEARCH DR.,RICHMOND 25 25 A dTIOCH CHILI4R dS MENTAL HEALTH 2400 SYCAMORE OR.#33,A.N`lOCH 50 50 BRENTWOOD CLINIC #IS OAK ST.,BIfE3PW-5- 1) 50 Sa BRENTWOOD CLINIC 118 OAK S"T.,SRENiVOOD 25 25 CCHP 595 CENTER AVE.,MARTINEZ 1165 155 CC1-T-CONCORD POST OFFICE 20 ALLEN ST.,MARTINEZ 50 50 CCRMC-ADMISSIONS 25W ALHAMBRA AVE.,MARTINEZ 50 53 CENTRAL CO.CHILDRENS MH 1026 OAK GROVE RD.#11,CONCORD 50 50 CENTRAL COMB CLINICXONE� 1420 WILLOW PASS ILII. #200,CONCORD 300 100 CHECKING ACCOUNI T 20 ALLEN ST. MARTINEZ14,855 14,855 'CLINICAL LAB-CCRMC 2500 ALHAMBRA AVE.,MARTINEZ 50 50 COMMUNITY SUBSTANCE ABUSE 395 CQv"TER AVE.,MARTINEZ 65 55 CONCORD HEALTH CENTER 3052 WILLOW,PASS,CONCORD 25 25 CONSERVATORSHIP 624 FERRY ST,MARTINEZ 175 500 575 CONTRACTS AND GRANTS 597 CENTER AVE SUITE 255,MTZ. 25 25 DATA CENTER 545 CENTER AVE.,MARTINEZ 50 50 DISCOVERY HOUSE 11 4639 PACHECO BLVD,MARTINEZ 300 2,700 3,000 EMERGENCY MEDICAL SERVICES 50 GLACIER DR.,MARTINEZ. 100 3 100 EPSDT Pro nur E,stab.7197 2450 STANWELL DR#270,CONCORD 50 50 FAMILY PA€ZTNERSHIM(fomerl 13?) 2450 STANWELL DR#270,CONCORD 75 75 GEORGE MILLER EAST 3020 GRANT,,CONCORD 100 100 GEORGE MILLER WEST 2801 ROBERT MILLER RP,RICH 75 75 HOS' ADMINISTRATION 2500 ALHAMBRA AVE.,MARTINEZ 100 100 HOSPITAL&RESIDENTIAL SERVICES 2425 BISSO LANL STE 235,CONCORD 50 50 140 PITAL CAFETERIA 2500 ALHAMBRA AVE.,MARTINEZ 1,500 1,500 'NPT PSYCH ADMINISTRATION 2727 ALHAMBRA#4,MARTTNEZ 250 250 MARTINEZ POST OFFICE 20 ALLEN,ST.,MARTINEZ 1,000 1,0w MEDICAL SOCIAL SERVICES 2727 ALHAMBRA.#3,MARTINEZ 50 50 MENTAL REAL-414.-ADULT 595 CENTER AVE,STE 200 MTZ 1,500 1,500 MENTAL HEALTH-CI#ILDREMS 2450 STANWELL DR#270,CONCORD 1,500 1,500 MENTAL HEALTH ADMINISTRATION 595 CENTER AVE.,MARTINEZ 175 175 MH Crisis Services(PES) 2500 ALHAMBRA AVE.,MARTINEZ 200 200 NURSING ADMINISTRATION 2300 ALHAMBRA AVE. MARTINEZ 50 50 NUTRITIONAL SERVICES 2500 ALHAMBRA AVE.,MARTINEZ 200 200 OP PHARMACY-CCRMC 2500 ALHAMBRA AVE.,MARTINEZ #00 t03 PATIENT ACCOUNTING 595 CENTER AVE.,MARTINEZ 100 —loo PERSONNEL 597 CENTER AVE.,SUITE 260,MTZ 300 100 PI ISBURG HEALTH CLINIC 550 SCHOOL ST.,PITTSBURG #00 100 PITTS)EAST CO MENTAL HEALTH H 550 SCHOOL ST.,PITTSBURG so 50 PITTSBURG POST OFFICE 20 ALLEN,ST: MARTINEZ 125 125 PITTSBURG REGISTRATION 550 SCHOOL ST. PITTSBURG 100 100 REHABILITATION THERAPY 2500 ALHAMBRA,MARTINEZ 70 70 RICHMOND HEALTH CLINIC 100-38TH ST.,RICHMOND 100 100 RICH D HEALTH CLINIC 100-38TH ST.,RICHMOND 50 50 RICHMOND MENTAL HEALTH ADMIN 100-38TH ST.#2400 RICHMOND 320 320 RICHMOND W REGISTRATION 100-38TH ST. RICHMOND 30 30 R#CHMOI D POST OFFICE 20 MEN ST. MARTINEZ 200 200 SOJOURNE CLINIC 3029 MACDONALi3,SHITE 102,RICHMOND 100 100 SPECIALTY CENTER 2500 ALHAMBRA AVE. MARTINS 30 30 SUMMITCE•dTER Esmb.7147 204 GLACIER DR MARTINEZ 100 # too i TTLI-CITIES DISCOVERY CENTER 2586 APPIAN WAY,PINOLE50 50 t VOLUNTEER SERVICES 2500 ALHAMBRAMARTYNEZ 20 20 WEST'CO OLDER ADULT CL 11720 SAN PABLO AVE,EL CERR:ITO 50 50 Ll WEST CO.CHILDRENS MH 303 41ST STREET,RICHMOND 50 50 T'O'I°AL Authorized Balance per Auditor-Contoiler b Overages Overage Fund 810900 Account 4 Tine Amount OF 5000209 Office of Revenue Collections $ 238.92 OF 5000210 Mt. Diablo Superior Court 562.74 OF 5000211 Bay Superior Court 223.16 OF 5000214 Walnut Creek-Danville Superior Court 794.91 OF 5000215 Delta Superior Court 1,270.72 OF 5400355 County Clerk-Recorder 512.41 OF 5000366 Animal Services 33.83 €3F 5040373 Clerk's .342.36 OF 5000374 Building Inspection 33.21 OF 5000377 Hospital Pharmacy 12.16 Total $ 4,024.42 Overages were transferred to general Fund Revenue on august 4, 1998 as required by Government Code section 29381.t. TO: INTERNAL C COMMITTEE Contra Costa FROM: PHIL BATCHELOR, County Administrator County DATE: October 11, `l 999 � SUBJECT: FOLLOW-UP REPORT ON CHECK WRITING AUTHO i'ZATiON SND PETTY CASES PROCEDURES a, woes«amaaaxuname..as,..Qaaxm.awwoax�wA..m...waa+.s. wgaa=uaaaeaa--- aarm+ �§� € C REQUESTS)OR RECOMMENDATION(S)&BACKGROUND AND JUSTBF#CATbON � RECEIVE follow-up report from the Employment and Human Services (EHS) Director, Auditor- Controller and County Administrator on the following issues raised by the Internal Operations Committee: Placing additional controls on Imprest Fund disbursements including: A dollar cap on the check amount, to be controlled by the banking institution, and * Multiple signatures on checks exceeding a pre-determined amount. Additional recommendations for strengthening controls on petty cash expenditures, particularly in relation to the Social Service Imprest Fund. Update on possible utilization by EHS of aro Oracle product to enhance fraud monitoring and protection. BACKGROUND: At is September 27, 1999 meeting,the Internal Operations Committee receivedand accepted a status report from the EHS Department, Auditor -Controller and County Administrator on actions CO'4 )NUED Cha ATTACH TNT: YES SIGNATURE. RECOMMENDATION OF COUNTY ADMINISTRATOR -RECOMMENDATION F BOARD C;OMMiTTEE APPROVE OTHER SIGN?c"8 UREt5): ACTION OF BOARD 0'°4 APPROVE AS RECOMMENDED—OTHER � r VOTE OF SUPERVISORS ' EBY CERTIFY THAT THIS 3S A TRUE AND CORRECT COPY OF AN ACTION TAKEN UNANIMOUS(ABSENT 3 AND ENTERED ON THE MINUTES OF THE BOARD Of SUPERVISORS ON THE DATE AYES: NOES: SHOWN" N. ABSENT; ABSTAIN; _ ATTESTED CONTACT:JULIE ENEA(925)335-1077 PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY Aii#+IMSTRATOR CC: COUNTY AD INISTRA~'T AUDITOR CONTR EMPLOYMENT HUMAN SERVICES DIRECTOR BY DEPUTY ........................... ....... __ . ........................................ INTtRNAL OPERATIONS COMMITTEE October 11, 1999 Welfare Fraud,Check Issuance, Petty Cash Page taken following the filing of fraud charges against two County employees, County check issuance procedures and administration of petty cash funds. The Committee decided to recommend that the Board of Supervisors refer these issues to the Year 2000 1l0 Committee for follow-up in six months, However, the Committee asked for a follow-up response to several issues that arose during the discussion on the 27"'. Additional Controls on_Lm Fpnd € isburseents Dollar Limits. A few years ago, EHS arranged with Wells Fargo Bank to have la limit on the amount of each Immediate deed check of $1,000 that is still in effect and is valid based on current statutory welfare aid payment amounts- This limit is stated on the checks. Multiple Signatures. Since the last discussion, we learned that disbursements from the Imprest Funds are not hand-written, but computer-generated checks using EHS°s Case Data System (CDS). The EHS Director's signature is stamped on the printed checks. However, the real approval "signatures" are electronic, recorded in the CICS. The two required signatures are the caseworker who initiates the transaction and the worker's supervisor, who approves it. Additional Recommendations for res As a refinement to the dollar limit on each check, it is recommended that this limit should be known to appropriate EHS personnel but not printed on the checks. Printing the limit on the checks will tell potential check forgers the maximum amount they could write checks for, without the checks being rejected by the bank. Regarding revolvingrimprest funds in general, we believe the existing policies and controls at each department and the monitoring efforts by the Auditor-Controller represent an appropriate balance between the risk of loss, amount of exposure and the cost of the controls and monitoring efforts. Adequate detective controls are in place that would likely discover any substantial misappropriation of funds. history has shown that employees are unlikely to risk loss of job and criminal sanctions to misappropriate small amounts when they are likely to be discovered. Ugdate on EHS's Utilization of an Oracle Product to Enhance Fraudonit2arih and EHS is currently negotiating costs and services with Oracle Corporation to procure an 99enterprise database system" to extract and analyze data from mainframe systems, such as CICS, and other sources. The Oracle product will essentially replace, consolidate and enhance databases now in use, including Microsoft Access. After appropriate approvals and funding' are obtained, and implementation follows, this system will provide information retrieval tools to support management and regulatory reporting and fiscal requirements under the Cali ORKS (CDS/GIS) and Child'Welfare (SIS) programs. There will be other significant departmental uses, including fraud detection and prevention. After negotiations conclude sometime this month, EHS will submit an "Advanced planning Document" to the State requesting funding; approval is expected to follow by November. EHS estimates installation of the fraud component by June 2000. This timetable will allow for technical' conversion and testing, and training of staff.. in the meantime, EHS will continue to use its existing Access database for fraud detection and monitoring.