Skip to Main Content

Philadelphia District Office

This document is an HTML formatted version of a printed document. The printed document may contain agency comments, charts, photographs, appendices, footnotes and page numbers which may not be reproduced in this electronic version. If you require a printed version of this document contact the United States Securities and Exchange Commission, Office of Inspector General, Mail Stop 11-7, 450 Fifth Street N.W., Washington, D.C. 20549 or call (202) 942-4460.

Philadelphia District Office

Audit No. 286
December 29, 1998

Limited Audit of Financial and Administrative Controls

INTRODUCTION

The Office of Inspector General conducted a limited audit of the financial and administrative controls of the Philadelphia District Office (PDO). The audit procedures were limited to interviewing PDO staff, reviewing supporting documentation, and conducting limited tests of transactions. The purpose of the audit was to provide the Commission with negative assurance that the internal controls were adequate, implemented economically and efficiently, and in compliance with Commission policies and procedures. The audit was performed in accordance with generally accepted government auditing standards during September and October, 1998.

BACKGROUND

The Philadelphia District Office assists the Northeast Regional Office in administering Commission programs. In carrying out its responsibilities, the PDO 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.

AUDIT RESULTS

During our limited audit, we identified two material issues. Commission guidance for determining the appropriate size of imprest funds needs to be enhanced. To save money, the PDO should order only enough transit subsidy checks to cover yearly needs. These issues are further explained below.

Otherwise, our limited review indicated that the PDO's controls were generally adequate, implemented economically and efficiently, and in compliance with Commission policies and procedures. We discussed some non-material findings and informal recommendations with PDO management. The PDO concurred with the findings and recommendations.

imprest fund

The PDO verbally asked the Comptroller's Office for an increase in the size of its imprest fund (currently $500), because it felt the fund was not large enough to meet its needs. The request was denied by the Comptroller's Office.

A Treasury form (OF-211, Request for Change or Establishment of Imprest Fund), not a verbal request, is the proper means to request a change in fund size. Commission imprest fund guidance (SECR 16-1) mentions this form, but does not explain its use for this purpose. Also, the guidance does not establish criteria for determining proper fund size, as required by the Treasury.

Recommendation A

The Office of Administrative and Personnel Management (OAPM), in consultation with the Comptroller's Office, should issue guidance on the procedures and criteria for changing the size of imprest funds.

Recommendation B

The PDO should submit a request to increase its imprest fund in accordance with OAPM's guidance.

transit subsidy

The PDO orders 867 transit subsidy checks (at $21.65 each) at the beginning of each calendar year for PDO employees. The checks expire after 13 months and are not refundable. According to the vendor, the checks can be purchased monthly or quarterly rather than annually.

After the September-October disbursement, the PDO had 354 checks on hand. At current usage rates, 162 checks costing $3507.30 will expire at the end of January. The PDO needs to change its ordering procedures to prevent a waste of funds, and reduce the size of its transit check inventory.

Recommendation C

The PDO should order transit subsidy checks quarterly or monthly, based on projected needs.

Recommendation D

Before the surplus transit checks expire, the PDO should ask the Office of Administrative and Personnel Management what should be done with them (e.g., distribute them to PDO staff, transfer them to another government agency, or donate them to charity).