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Central Regional Office
Administrative and Financial Controls
Audit Report No. 264
July 18, 1997
In March 1997, we performed an audit of administrative and financial controls in the Central Regional Office (CRO). The audit found that CRO controls were generally functioning adequately. We are recommending certain improvements, as summarized below and described in the Audit Results section.
The CRO should ensure that contracting officers are properly certified; all purchase orders are signed by the approving official; overtime is authorized and approved by separate officials; in progress reviews (IPR) are performed for all employees; and imprest fund cashiers are trained; among other improvements.
The CRO and the Office of Administrative and Personnel Management (OAPM) provided written comments (attached) on our draft report, and the Office of Information Technology (OIT) provided verbal comments. Generally, they concurred with the report’s findings and recommendations. We have modified the report to reflect the comments.
Scope and Objectives
We reviewed the financial and administrative controls of the Central Regional Office (CRO). Our objective was to determine whether the CRO’s controls were adequate, were being implemented economically and efficiently, and were in compliance with Commission policies and procedures.
The audit steps included interviews with administrative and financial staff and tests of controls. Because of time and resource constraints, the scope of testing was more limited than it would have otherwise been. We performed the review during October 1996, in accordance with generally accepted government auditing standards.
The Central Regional Office (CRO), assisted by the Salt Lake and Ft. Worth District offices, is responsible for administering Commission programs, subject to Commission oversight, in the states of Arkansas, Colorado, Kansas, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming. In carrying out its responsibilities, it exercises a broad range of financial and administrative functions, including maintaining time and attendance records; procuring supplies and services; arranging for staff travel; maintaining an inventory of property; and recording budgeted and actual expenditures of the office.
The Administrative Officer (AO) is responsible for most day-to-day administrative matters, including travel, personnel, purchasing, and budgeting and accounting. The AO maintains records for these functions, while CRO timekeepers maintain time and attendance records.
We found that CRO controls were generally functioning adequately, and operations were generally conducted economically, efficiently, and in compliance with regulations. We are recommending certain enhancements, as discussed below.
The CRO Regional Administrator and the Senior Special Counsel signed several purchase orders, even though they had not been issued warrants (SF 1402) as contracting officers. The Regional Administrator was newly appointed and was not aware of this requirement.
The CRO Regional Administrator and Senior Special Counsel should obtain warrants as contracting officers (according to the CRO and OAPM, this recommendation has been implemented).
The CRO Regional Administrator and Senior Special Counsel should obtain training on contracting.
The Office of Administrative and Personnel Management should ratify the CRO contracts signed without proper contracting authority (to prevent possible legal questions from arising).
We selected a judgment sample of eight small purchases for review. Two of the eight were telephone orders to the General Services Administration (GSA). The orders were documented through a requisition form, but not signed by an approving official.
The CRO should review its GSA telephone orders, and sign them as necessary.
We reviewed a judgment sample of 12 T&A records, and found that in two cases, overtime requests were approved after the overtime was worked. To ensure management control of overtime, all requests should be approved before the overtime is worked.
We also found that in three cases, the overtime was requested and approved by the same person, which weakens management controls. According to the Attendance Reference Guide for Supervisors, overtime must be requested and approved by two different officials.
The CRO should remind its staff that overtime must be approved before it is worked, and should be requested and approved by two different officials.
In Progress Reviews
We reviewed the personnel files of a judgment sample of sixteen staff. Three of these files did not contain evidence of an In Progress Review for the rating period from June 1995 to April 1996. Commission personnel regulations (POPPS 6-430.A) require at least one formal in progress review during the rating period.
The CRO should designate someone (for example, the Administrative Officer) to confirm that in progress reviews are performed before the end of the rating period.
Imprest Fund Training
The CRO imprest fund cashier and alternate have not received formal training, as required by the Commission’s imprest fund regulation (SECR 16-1).
The CRO imprest fund cashier and alternate should receive training on their responsibilities.
Imprest Fund Accountability
The safe for the imprest fund is kept in the office of the alternate cashier. When the primary cashier is not using the fund, she returns the unlocked cash box to the alternate, who locks it in the safe. The cashiers do not formally transfer the fund, which lessens accountability.
Since both cashiers have access to the fund, responsibility for any discrepancies could not easily be fixed. To improve accountability, the CRO proposes to purchase a locking cash box, and provide the key only to the primary cashier.
The CRO should purchase a locking cash box, and provide the key only to the primary cashier, as it plans to do.
Signature Authority Control List
The CRO imprest fund cashier did not have a signature authority control (SAC) list. The SAC list helps ensure that disbursements have been properly approved, and is required by the Commission’s imprest fund regulation (SECR 16-1).
The CRO should maintain a signature authority control list.
Travel Voucher Review
We reviewed a judgment sample of twelve travel vouchers for proper authorization, appropriate rates and supporting documentation, and mathematical accuracy. One of the vouchers had a mathematical error and incorrect mileage rate. The Comptroller’s Office corrected these errors before paying the voucher.
To prevent future errors, the CRO could designate someone familiar with the travel regulations to review vouchers before the approving official signs them (the approving official may not have much time for administrative matters, or may be unfamiliar with the travel regulations).
The CRO should consider designating someone to review travel vouchers before the approving official signs them.
ADP Customer Consultants
The Office of Information Technology (OIT) customer consultant for the CRO also has responsibility for several headquarters divisions and offices. The CRO ADP Liaison indicated that OIT’s response to the CRO is not always timely, particularly when headquarters has a major problem.
He suggested that OIT assign one consultant to the regional offices so their problems could receive appropriate attention. Also, the regions generally have similar problems which a single consultant could address in a coordinated way.
The Office of Information Technology should consider assigning one customer consultant to the regional offices (according to OIT, this recommendation has been implemented).
Many CRO laptop computers are unused because they have been replaced by notebook computers (which can be connected to a desk top monitor). The unused laptops could be used by other Commission offices.
The CRO should return its unused laptop computers to OIT.
Disaster Assistant Training
The CRO has designated five employees as disaster assistants. They will help others leave the building safely in the event of an emergency. Training and written guidance would help them perform their duties.
The CRO should provide the disaster assistants with appropriate training and written guidance.