Parks and Recreation audit identifies department glitches

The town of Wilton requested an audit of its Parks and Recreation Department because of concerns regarding the “adequacy of billing for all programs and services” and the “levels of internal controls, efficiency and organization” of the department, according to public accounting firm O’Connor Davies, which conducted the audit. It was completed earlier this year and discussed at the Board of Finance meeting on Nov. 18.

The Parks and Recreation Department is responsible for the maintenance and usage of the town’s park facilities, its athletic fields and the Comstock Community Center, in which its offices are located.

During the audit, O’Connor Davies conducted a series of interviews with the department’s management and staff about business policies, procedures and practices and the Parks and Recreation Operations Manual. The firm also:

  • Tested selected billing and collection transactions regarding the use of fields and lighting.
  • Tested the department’s compliance regarding acquisition of insurance certification and the execution of contracts from users of town facilities.
  • Assessed the appropriation of representation of town residents by organization of town facilities use.

Connor Davies identified several areas of the department’s operations that need improvement.

Field lights

O’Connor Davies found that prior to fall 2013, the department had not cross-checked the payments and invoices issued for the use of field lighting at at least six fields and courts for which it is responsible.

Parks and Recreation Director Steve Pierce started tracking the lighting usage and keeping copies of invoices in fall 2013, which “are not pre-numbered,” the report says.

In addition to using pre-numbered invoices, the firm also recommended the department begin logging the field usage and invoices on the town’s shared drive in order to enhance the town’s ability to monitor the billing for lighting and help reduce the potential for under-billing.

The department said it “has been, and will continue to log usage on the shared drive,” noting the finance department “has a license to this software and may at any time review what is in the system.”

Cash, refunds and credits

When the department collects cash for programs and its Dial a Ride program, administrative assistant Beverly Hodge receives the cash and creates the Daily Cash Report, which is then reviewed by the finance department, according to the report.

The finance department told the firm that Parks and Recreation, however, does not deliver the receipts on a daily basis.

O’Connor Davies recommended the Parks and Recreation Department deliver the Daily Cash Report and cash to the finance department every day by a designated time. The firm also said the responsibilities of opening customer payments and recording them should be divided between two different employees.

The department said all office staff has recently been trained “to ensure prompt delivery of cash receipts” to the finance department and it has scheduled “continued refresher training.”

The Parks and Recreation Department does not fully utilize the Collection of Returned Checks form provided by the finance department, according to O’Connor Davies, which recommended the department use the form and provide the finance department with a copy of the completed form for each returned check.

The Parks and Recreation Department said it will also review fund credits twice a year, and will process and return six-month-old credits to residents in the form of checks issued by the finance department.

Safe use

According to the audit report, all four Parks and Recreation staff members have the combination to the secure safe, in Mr. Pierce’s office, which was not locked during O’Connor Davies’ field work.

To enhance controls over the cash receipt process, the firm recommended locking the safe at all times, delegating responsibilities of opening and listing customer payments between two employees and periodically confirming accounts receivable balances through an internal audit or employee who is independent of the cash receipts process.

The department agreed to lock the safe at all times during the day and said it will request an internal audit through the finance department. However, the department said, the size of the department “prohibits” it from having two employees open payments and create a listing.

Budget performance

O’Connor Davies found that the Parks and Recreation budget performance reports had credits for received revenues and incurred expense charges “for which no budget amounts had been provided in the approved budget for the department.”

The firm said the budget should “reflect all anticipated items of revenue and expense,” and unusual variances during the year should be explained to the finance department, as well as the town.

Internal controls

O’Connor Davies said the department needs more segregation of duties, citing it as “one of the most effective internal controls in combating employee fraud.”

The firm said the following business processes should be divided among Parks and Recreation employees:

  • Custody of asset.
  • Record keeping.
  • Authorization.
  • Reconciliation.

“Ideally, no individual employee should handle more than one of [these] functions in a process,” the firm reported.

“When an organization separates these functions among its employees, it has implemented a strong internal control.”

The Parks and Recreation Department said based on its size, segregating all control “is not a viable option.”