Pacific Regional Office
Feb. 14, 2002
Audit No. 342
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.
PACIFIC REGIONAL OFFICE
Audit No. 342
February 14, 2002
Limited Audit of Financial and Administrative Controls
The Office of Inspector General (OIG) conducted a limited audit of selected financial and administrative controls in the Commission's Pacific Regional Office (PRO) in Los Angeles, California. The audit procedures included interviewing PRO staff, reviewing supporting documentation, and conducting limited tests of transactions in Fiscal Year (FY) 2001. The purpose of the audit was to provide the Commission with negative assurance concerning these controls.1 We performed our audit in October 2001, in accordance with generally accepted government auditing standards.
The PRO, with approximately 135 full-time staff, carries out the Commission's programs, subject to Commission oversight, in Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, Oregon and in the state of Washington. The PRO's administrative officer and staff perform a broad range of financial and administrative functions, including purchasing, travel, time and attendance, and budgeting.
During the limited audit described above, except for the matter discussed below, no material weaknesses in the PRO's financial and administrative controls came to our attention.
We informally discussed a number of non-material findings and recommendations with PRO management. Management generally concurred with the findings and agreed to implement the recommendations. The recommendations below are intended to enhance PRO's property management.
The PRO's property records that we reviewed included a number of discrepancies. Out of a judgment sample of 56 (of approximately 525) automated data processing (ADP) items assigned to the PRO,2 we could not locate 29 items. Also, we identified 32 ADP items incorrectly assigned and 10 unrecorded items.
The Office of Administrative and Personnel Management (OAPM) inventoried the PRO's ADP items in May 2001, and gave the PRO a list of approximately 170 items to reconcile with the property records. Offices must promptly research these items and provide OAPM with a written report of the results. At the time of our audit, however, this reconciliation was still incomplete, so the PRO's property records were incorrect.
After OAPM's inventory, the PRO initiated a manual reconciliation of its property records, but could not access and update its records in the Commission's automated property management system. It had been unable to regain access to this system (until November 2001) since the previous property specialist left the PRO approximately a year ago. 3 Also, the PRO had not reassigned the responsibility for property management (the computer specialists helped track ADP items).4
Although the PRO is now able to update its automated property records, slow system performance still makes updating records time-consuming. The Office of Information Technology (OIT) has indicated that it is aware of the system's performance problems, and is looking at ways to improve the system.
The PRO successfully completed its inventory reconciliation in December 2001. To improve its property management, the PRO plans to assign the function to one of its administrative staff, perform its own physical inventory of its property in the near future and coordinate the results with OAPM.
The PRO should assign property management to an administrative employee, and provide the employee and the computer specialists with appropriate training.
In the future, the PRO should ensure that it promptly reconciles its property records with OAPM's after the annual inventory.
1 Negative assurance means that no material internal control weaknesses came to our attention during our limited audit.
2 We limited our tests to ADP equipment, based on materiality.
3 OAPM indicated that access to the system was not necessary to complete the reconciliation. On the other hand, the PRO indicated that it was never told that it could use its manual records to complete the reconciliation.
4 The PRO indicated that it would soon reassign this responsibility to an administrative employee.