An audit of the Long Beach Financial Management Department’s central cashiering office, which oversees the collection and processing of city revenue, found weaknesses in the office’s measures to safeguard city funds. The final audit report stated that “cash, checks, daily deposits, and keys were not always physically secured as un-endorsed checks totaling $271,000 were observed at an employee’s desk, not in a lock box or under camera surveillance.”
Additionally, City Auditor Laura Doud found that “key processes, such as sorting mail-in payments, deposit preparation and reconciliation, and daily change fund counts, were not always performed in dual custody or in areas with camera surveillance; and employees had unnecessary access to various revenue recording systems.”
Doud’s recommendations included: for future processing of payments to be overseen by at least two staff members at a time; overall cash fund changes to be updated daily; camera surveillance to be expanded; and specific work areas to be created for mail-sorting, deposit preparation and cash storage.
In Fiscal Year 2018, the cashiering office processed over $436 million in city revenue, including payments from the public for services such as utility bills, parking citations and business licenses, as well as revenue deposits from other city departments. A majority of those payments – $244 million – were paid electronically. Checks accounted for $182 million worth of payments and $9 million was paid in cash.
“We are pleased that for this major cash operation, the vast majority of the procedures and controls were found to be satisfactory,” Long Beach Director of Financial Management John Gross told the Business Journal. “The audit has provided the opportunity to identified areas for improvement in a good operation, and we will make those improvements and to make it even better.”