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United States Securities and Exchange Commission, Office of Inspector General,
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SALT LAKE DISTRICT OFFICE
Audit Report No. 265
September 20, 1997
In April 1997, we performed
an audit of administrative controls in the Salt Lake District Office (SLDO).
We found that the SLDO's controls were generally functioning adequately.
We are recommending certain improvements, as summarized below and described
in the Audit Results section. The SLDO, in its attached comments, generally
concurred with our findings and recommendations.
The SLDO should improve imprest
fund procedures; use only one time and attendance log; store back-up computer
tapes off-site; and enhance readiness for possible earthquakes, among other
Scope And Objectives
We reviewed the administrative
controls of the Salt Lake District Office. Our objective was to determine
whether the SLDO's controls were adequate and in compliance with Commission
policies and procedures.
The controls we reviewed included
those over travel, time and attendance, personnel, property inventory,
and the imprest fund. We did not review budgeting, accounting, and purchasing
since these functions generally are performed by the Central Regional Office
for the SLDO. The audit steps included interviews with SLDO administrative
staff and limited tests of SLDO records. Our review was performed in April
1997 in accordance with generally accepted government auditing standards.
The district office located in
Salt Lake City, Utah, has approximately fifteen staff, and provides support
in carrying out Commission programs to the Central Regional Office in Denver,
Colorado. The Central Regional Office performs certain functions for the
SLDO, including budgeting, accounting, purchasing, and processing of personnel
actions and travel vouchers. The Salt Lake District Office maintains personnel
files, time and attendance records, travel vouchers, and property management
records, and administers its transportation subsidy program.
We found that the Salt Lake District
Office's administrative controls were generally functioning adequately,
and operations were generally conducted in compliance with Commission policies
and procedures. We are recommending certain enhancements, as discussed
The SLDO maintains a $100 imprest
fund administered by a principal and alternate cashier. We performed a
cash count and reviewed fund documentation and controls.
All cash was properly accounted for,
and the cashiers were properly authorized. We noted certain possible improvements
in operation of the fund to ensure its security, effectiveness, and compliance
with Treasury and Commission regulations, as follows:
(1) With one exception, receipts
were not stamped paid. The paid stamp is used to avoid duplicate payments.
(2) The principal and alternate cashiers
use the same cash box. Because cashiers are personally liable for the funds
assigned to them, separate cash boxes should be maintained.
(3) The cabinet used to secure the
cash box is locked with just a key. To assure fund security, Treasury and
Commission regulations recommend using a cabinet with a bar and combination
(4) The cashier had an outdated (September
1984) version of imprest fund desk procedures. We provided the cashier
with the latest (June 1993) version of Treasury regulations.
(5) The fund is only $100 and appears
too small to support SLDO's needs.
(6) The principal and alternate cashier
appear to need additional training.
The SLDO should stamp all receipts
The SLDO should obtain separate
cash boxes for the principal and alternate cashiers.
The SLDO should obtain a bar and
combination lock for the cash box cabinet, or store the cash boxes in the
The SLDO should consider increasing
the size of the imprest fund or else obtaining a government credit card.
The SLDO should provide additional
training as appropriate to the principal and alternate cashier.
Time and Attendance
We reviewed 1997 time and attendance
records for a judgment sample of six SLDO staff. The documentation was
generally complete and accurate, and timekeepers do not sign their own
reports (which would weaken controls).
We noted that the backs of sick leave
slips were not being completed and that sign-in/out procedures were not
consistently observed. During our review, the District Administrator issued
a memorandum to SLDO employees addressing these issues.
We also noted that the SLDO uses
separate logs for sign-in/out and flex time. Only one log is needed.
The SLDO should use one seriatim
time and attendance log.
To test the completeness and accuracy
of SLDO property records, we selected a judgment sample of ten items. We
traced five items from the property records to the physical property, and
five items of property to the records. All items were properly accounted
for. Also, we noted that laptop computers and their related docking stations
were adequately secured.
We selected a judgment sample of
fifteen travel authorizations to verify the timeliness and accuracy of
the related travel vouchers. One voucher had not yet been submitted, although
the travel was completed several weeks before. The SEC's Travel Handbook
(SECHDBK 17-1, November 1995) requires vouchers to be submitted within
five days after completion of the trip.
The remaining vouchers were timely and accurate.
The SLDO should remind its staff
to submit travel vouchers timely.
Backup Computer Tapes
The SLDO does not store its back-up
computer tapes off-site. If a disaster occurred, the tapes could be destroyed,
defeating the intent of maintaining them.
The SLDO should store computer
tapes off-site (for example, at the Central Regional Office).
The SLDO's local area network (LAN)
file server and communications equipment is located in an unlocked wire
closet. To improve security, access to this equipment should be restricted.
The SLDO should install a lock
on the wire closet door.
The Salt Lake City District Office
(SLDO) is in an earthquake prone area (zone 3, on a scale from 0 to 4).
We noted that the SLDO could take additional steps to reduce the hazards
of a possible earthquake. For example, bookshelves could be secured to
walls, staff could be trained in evacuation procedures, and a disaster
assistant could be designated to ensure staff are vacated during emergencies.
The District Administrator indicated
that the SLDO building has been approved by the General Services Administration
(GSA). However, the Office of Administrative and Personnel Management,
which leases Commission space, does not have documentation to verify the
building's compliance with GSA's seismic safety standards.
The SLDO should take steps to reduce
hazards from a possible earthquake.
The Office of Administrative and
Personnel Management should maintain documentation confirming that Commission
leased space in earthquake prone areas complies with GSA standards.