ASSETS, including cash and cash equivalents in the municipalities of Rota and Tinian, “are high-risk areas, susceptible to theft or fraud,” according to the Office of the Public Auditor’s flash report.
From Oct. 6 to 8, 2021, OPA said it performed an “observation and walk-through of the municipal treasury cash management systems of Rota and Tinian,” including cash receipts/collections, purchases/disbursements, reporting and accounting of funds.
OPA said Tinian and Rota should establish policies and procedures to ensure that cash collections are properly safeguarded; cash handling duties are segregated; transactions are adequately supported and recorded; and supervisory review is performed on a regular basis.
For Rota, OPA specifically recommends the following policies and procedures:
1) Preparation of daily collection reports.
2) Recording daily collections when received.
3) Review of daily collections by a supervisor/manager prior to and after deposit.
4) Obtain, attach, and maintain supporting documentation of all collections, fees, and funds transferred into Rota Municipal Treasury’s checking account.
5) Perform bank reconciliations utilizing a proper reconciliation format.
6) Establish and properly account for a minimum change fund.
OPA said management should also evaluate the adequacy of Rota Municipal Treasury’s internal control activities to achieve its objectives and ensure the municipality can respond to risks timely.
“There should be adequate supervision and review of processes, as well as the segregation of duties among personnel involved throughout for internal controls to be effective. In addition, implementing the above improvements may require the municipality to dedicate staff and/or resources to efficiently and effectively manage the day-to-day operations of the municipality’s treasury,” OPA stated.
For Tinian, OPA recommends the following:
1) Recording daily collections for all programs when received.
2) Preparation of daily collection reports.
3) Review of daily collections by a supervisor/manager prior to and after deposit.
4) Deposit cash collections on a daily basis.
5) Perform bank reconciliations utilizing a proper reconciliation format.
6) Establish and properly account for a minimum change fund.
7) Review the nature, purpose, and efficiency of managing and maintaining multiple bank accounts, including consolidating accounts to reduce recurring bank fees.
OPA said management should evaluate the adequacy of Tinian municipality’s internal control activities to achieve its objectives and ensure that it can respond to risks timely.
“There should be adequate supervision and review of processes, as well as the segregation of duties among personnel involved throughout for internal controls to be effective. In addition, implementing the above improvements may require the Tinian Municipality Treasury to dedicate staff and/or resources to efficiently and effectively manage the day-to-day operations of the municipality’s treasury,” OPA stated.
