Ventura County Grand Jury
• 2007-2008
Ventura County Fire Protection District: Inventory Control Deficiencies
⚠️ Aviso de traducción: Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 40 findings
F01
The 2004-2005 Grand Jury issued a report, “Ventura County Fire Protection District Material and Inventory Controls”, based upon a public complaint about lack of policy enforcement in the District that left the district vulnerable to misuse and theft of equipment. The inquiry did not substantiate that an alleged theft or misuse of equipment had taken place. [Ref-01]
No recommendations for this finding
F02
In an effort to promote strong internal controls, the Auditor-Controller and the CEO jointly established Internal Control Guidelines and developed a CSA Program in 2004.
No recommendations for this finding
F03
The CSA is a mandatory tri-annual requirement for all elected and appointed officials, to report on the status of internal controls in their departments.
No recommendations for this finding
F04
The Auditor-Controller replied to the 2006-2007 Grand Jury report, “Ventura County: A Failure to Audit” and responded that as a result of staff reductions in the audit division, no follow-up or review of the 2004 CSA was completed.
No recommendations for this finding
F05
The Auditor-Controller completed an audit of the District’s cash collection process in September 2007. The report stated, “. . . management disclosed a reactionary approach to internal control management, whereby active engagement in fiscal oversight activities is pursued as issues arise . . .” [Ref-02]
No recommendations for this finding
F06
The Auditor-Controller further stated, “Although our audit did not disclose specific instances of fraud, the District’s manual cash collection process was susceptible to theft, loss, or misappropriation of funds because of several significant internal control weaknesses.” [Ref-02]
No recommendations for this finding
F07
The District submitted the 2007 CSA Internal Control Questionnaire and Risk Matrix/Assessment to the Auditor-Controller on November 27, 2007. The due date was October 31, 2007. An extension was requested and granted by the Auditor-Controller.
No recommendations for this finding
F08
Within the Risk Assessment section of the 2007 CSA, the District disclosed that: • a sensitive item inventory is conducted annually • segregation of duties may be an issue • reconciliation to purchases are not performed • not all procedures are in place
No recommendations for this finding
F09
County Administrative Policy Manual, Chapter VII (B)-3, states that County non-fixed assets are subject to internal audits by the Auditor- Controller’s Office. [Ref-04]
No recommendations for this finding
F10
The District is included in an all-funds audit prepared by external auditors every year (Comprehensive Annual Financial Report-CAFR). There were no findings regarding fixed and sensitive non-fixed assets in the last three years reports.
No recommendations for this finding
F11
The last audit of the District’s Schedule of Inventory and Inventory Observation of District Departmental Supply and Repair Shop, was performed by the Auditor-Controller on June 30, 1991 (17 years ago).
No recommendations for this finding
F12
The last follow-up audit of District Management and Operations was performed by the Auditor-Controller in June 1996 (12 years ago).
No recommendations for this finding
F13
The 2006-2007 Grand Jury Report, “A Failure to Audit,” recommended that all departments be audited at least every three years. The Auditor- Controller responded, “Although an excellent goal, the County finances are not always available. Implementation of this recommendation would require a staffing increase of at least three more auditors and one more fiscal manager.” [Ref-03]
No recommendations for this finding
F14
Neither the District nor the Ventura County Treasurer-Tax Collector completed the mandatory 2004 CSA Program.
No recommendations for this finding
F15
The District is a dependent special district, formed by a special election in 1928. The BOS is the Fire District’s Board of Directors.
No recommendations for this finding
F16
The District is responsible for maintaining, control, and operation of over $90 million of fixed assets.
No recommendations for this finding
F17
A Chief Officer of the District in late 2005 contacted its Information Technology Department (IT) to advise them that the Ventura Police Department had recovered a laptop owned by the District during a law enforcement raid.
No recommendations for this finding
F18
No action, including a physical inventory, was taken by the District as a result of the reported loss of a laptop computer in 2005.
No recommendations for this finding
F19
The District completed a physical inventory of its laptop computers in October 2007. The results indicated that a total of nine computers, costing in excess of $28,000, were missing from the IT Department: • six had been purchased in 2005 • two had been purchased in 2006 • one had been purchased in 2007
Related Recommendations (1)
R05
The District and the Auditor-Controller should inventory all sensitive non-fixed assets including laptop computers. The results of the inventory should be reported to the CEO and BOS. (C-05, C-07, C-08, C-10)
F20
The Manual, Chapter VII (B)-3, establishes accountability for control over County-owned sensitive non-fixed assets. Sensitive non-fixed assets are items with a cost of less than $5,000 e.g., laptop computers, that are subject to pilferage and misappropriation and which, therefore, warrant special handling. [Ref-04]
Related Recommendations (1)
R01
The Grand Jury recommends the County revise its Administrative Policy Manual to provide guidance in reporting loss or theft of sensitive non- fixed assets. (C-01)
F21
The District advised the Ventura County District Attorney, Auditor- Controller, CEO and others on October 17, 2007 of several missing laptop computers, including the one recovered in 2005 by the Ventura City Police Department.
No recommendations for this finding
F22
In October 2007, the District requested the Auditor-Controller to perform a survey of its management of sensitive non-fixed assets.
No recommendations for this finding
F23
The Auditor-Controller completed the survey and notified the District on February 19, 2008 that an audit would be performed with emphasis on IT assets.
No recommendations for this finding
F24
As of the end of April 2008, the District (seven months after the preliminary determination of losses) had yet to initiate a comprehensive physical inventory of all sensitive items.
No recommendations for this finding
F25
The Manual requires that a “specific person” be designated in each agency or department to maintain the non-fixed asset information. Additionally, the designated person is directed to “Conduct periodic inventory of sensitive non-fixed assets and reconcile with the master list. Discrepancies should be researched and resolved.” [Ref-04]
No recommendations for this finding
F26
The Manual states, “Agency and department heads are responsible for determining which non-fixed assets should be classified as sensitive and establishing and implementing controls to maintain proper accountability over sensitive non-fixed assets.” [Ref-04]
No recommendations for this finding
F27
The District includes all communication equipment, computers, defibrillators, cardiac monitoring devices, and rescue equipment as sensitive items subject to inventory verification.
No recommendations for this finding
F28
The Manual, Chapter VII (B)-2, establishes the requirement, “Agency and department heads who have custody of fixed assets shall be responsible for filing an inventory of all fixed assets in his/her possession with the Auditor-Controller’s Office no later than July 10 of each year.” [Ref-04]
No recommendations for this finding
F29
The District’s Bureau of Fiscal Services (Bureau) is responsible for assuring compliance with County policies on fixed and sensitive non- fixed asset inventories.
No recommendations for this finding
F30
Standing Orders are memos that are distributed to the entire District and are posted on its internal Website. Each year, hard copies along with attachments of the fixed asset lists, are distributed to Fire Stations, Departments, and Program Managers, including the District’s IT Department.
No recommendations for this finding
F31
The Bureau issued Standing Orders regarding the annual fixed asset inventory in May 2005, June 2006, and June 2007. All District Program Managers were assigned responsibility for inventorying all communication and computer equipment.
No recommendations for this finding
F32
The Bureau sends a master list of sensitive items to be inventoried to all departments within the District each year.
No recommendations for this finding
F33
The IT Department Program Manager is responsible for sensitive items, and also performs the physical inventory.
No recommendations for this finding
F34
The computerized IT data base of sensitive items has not been reliable, and is supplemented by a manual tracking system.
No recommendations for this finding
F35
District practice has been to match data base items to a master list of sensitive items, instead of performing the required physical inventory.
Related Recommendations (1)
R02
The County should require annual physical inventories of all sensitive non-fixed assets, rather than the current practice of periodic inventories. (C-01, C-05)
F36
The required physical inventory of sensitive non-fixed assets, including computers owned by the District, has not been completed in at least three years.
Related Recommendations (2)
R02
The County should require annual physical inventories of all sensitive non-fixed assets, rather than the current practice of periodic inventories. (C-01, C-05)
R05
The District and the Auditor-Controller should inventory all sensitive non-fixed assets including laptop computers. The results of the inventory should be reported to the CEO and BOS. (C-05, C-07, C-08, C-10)
F37
The Bureau does a limited spot check, and does not reconcile the physical inventory count submitted by individual fire stations, warehouse or other departments in the District, to the master inventory records. The physical inventory count is assumed to be accurate.
Related Recommendations (4)
R03
The Grand Jury recommends District management correct internal control weaknesses that facilitated the loss of District property, and report corrective actions to the BOS and Auditor-Controller. (C-02 through C-04, C-06, C-07)
R06
The Auditor-Controller should review and recommend improvements to the procedures used by the District to conduct and reconcile its annual physical inventory of fixed assets. (C-06, C-08)
R07
The Auditor-Controller should take an active role in the oversight of the annual physical inventory of fixed assets and sensitive non-fixed assets for the County of Ventura. (C-02, C-06, C-08, C-09)
R08
The Grand Jury recommends that the Auditor-Controller provide audit hours each year, to observe the required annual physical inventory of all County fixed and sensitive non-fixed assets. (C-08, C-09) Responses Responses Required: Board of Supervisors, County of Ventura (R-01 through R-03, R-05) Auditor-Controller, County of Ventura (R-05 through R-08) Responses Requested: County Executive Officer, County of Ventura (R-01 through R-03, R-05) Fire Protection District, County of Ventura (R-03 through R-06) References Ref-01 2004-2005 Ventura County Grand Jury report, “Ventura County Fire Protection District Material and Inventory Controls.” Ref-02 Audit of the VCFPD Cash Collection Process dated September 28, 2007. Ref-03 Response from Auditor-Controller to 2006-2007 Grand Jury report, “Ventura County, A Failure to Audit,” dated June 11, 2007. Ref-04 County of Ventura Administrative Policy Manual – Property Control.
F38
The Bureau does not verify or reconcile the physical inventory of sensitive non-fixed assets.
Related Recommendations (4)
R03
The Grand Jury recommends District management correct internal control weaknesses that facilitated the loss of District property, and report corrective actions to the BOS and Auditor-Controller. (C-02 through C-04, C-06, C-07)
R06
The Auditor-Controller should review and recommend improvements to the procedures used by the District to conduct and reconcile its annual physical inventory of fixed assets. (C-06, C-08)
R07
The Auditor-Controller should take an active role in the oversight of the annual physical inventory of fixed assets and sensitive non-fixed assets for the County of Ventura. (C-02, C-06, C-08, C-09)
R08
The Grand Jury recommends that the Auditor-Controller provide audit hours each year, to observe the required annual physical inventory of all County fixed and sensitive non-fixed assets. (C-08, C-09) Responses Responses Required: Board of Supervisors, County of Ventura (R-01 through R-03, R-05) Auditor-Controller, County of Ventura (R-05 through R-08) Responses Requested: County Executive Officer, County of Ventura (R-01 through R-03, R-05) Fire Protection District, County of Ventura (R-03 through R-06) References Ref-01 2004-2005 Ventura County Grand Jury report, “Ventura County Fire Protection District Material and Inventory Controls.” Ref-02 Audit of the VCFPD Cash Collection Process dated September 28, 2007. Ref-03 Response from Auditor-Controller to 2006-2007 Grand Jury report, “Ventura County, A Failure to Audit,” dated June 11, 2007. Ref-04 County of Ventura Administrative Policy Manual – Property Control.
F39
The County has a Fixed Asset Subsystem Training Manual. No written procedures to direct the District in taking and reconciling the District’s annual physical inventory of fixed and sensitive assets could be identified.
Related Recommendations (3)
R06
The Auditor-Controller should review and recommend improvements to the procedures used by the District to conduct and reconcile its annual physical inventory of fixed assets. (C-06, C-08)
R07
The Auditor-Controller should take an active role in the oversight of the annual physical inventory of fixed assets and sensitive non-fixed assets for the County of Ventura. (C-02, C-06, C-08, C-09)
R08
The Grand Jury recommends that the Auditor-Controller provide audit hours each year, to observe the required annual physical inventory of all County fixed and sensitive non-fixed assets. (C-08, C-09) Responses Responses Required: Board of Supervisors, County of Ventura (R-01 through R-03, R-05) Auditor-Controller, County of Ventura (R-05 through R-08) Responses Requested: County Executive Officer, County of Ventura (R-01 through R-03, R-05) Fire Protection District, County of Ventura (R-03 through R-06) References Ref-01 2004-2005 Ventura County Grand Jury report, “Ventura County Fire Protection District Material and Inventory Controls.” Ref-02 Audit of the VCFPD Cash Collection Process dated September 28, 2007. Ref-03 Response from Auditor-Controller to 2006-2007 Grand Jury report, “Ventura County, A Failure to Audit,” dated June 11, 2007. Ref-04 County of Ventura Administrative Policy Manual – Property Control.
F40
The District had not requested, and the Auditor-Controller had not provided, training or assistance in procedures for taking and reconciling the annual physical inventory, until the reported loss of nine laptops. Conclusions C-01. No action was taken to report the loss of District laptop computers because County/District policy does not address reporting loss of sensitive non-fixed asset items valued at less than $5,000 each. (F-17, F-18, F-20) C-02. The District’s internal controls for sensitive non-fixed asset inventory procedures are inadequate based on the District’s reactionary approach to internal control issues. (F-05, F-06, F-24, F-36, F-37, F-40) C-03. As a consequence of not participating in the County’s mandatory 2004 CSA, the District facilitated the loss of District property (computers) by failing to identify internal control weaknesses. (F-02 through F-04, F-14,
No recommendations for this finding
Conclusions 5
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CL1 Page 6the inventory is supervised by an individual who is a member of the entity being inventoried
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CL2 Page 6the Bureau only spot checks physical inventory counts
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CL3 Page 6the Bureau does not reconcile book vs. physical variances
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CL4 Page 6sensitive non-fixed asset inventory results are not reviewed
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CL5 Page 6written inventory training procedures are not provided (F-01, F-08, F-16, F-25, F-34, F-35, F-37 through F-39) C-09. An Inventory and Inventory Observation Audit has not been performed by the Auditor-Controller in 17 years, increasing the risk of further District property losses. (F-09 through F-13) C-10. The County has no way of knowing the full extent of its losses because a complete physical inventory of all sensitive non-fixed assets has yet to be completed. (F-19, F-21 through F-24, F-27)
No Responses Found 4
Government entities assigned to respond to this report. No response documents have been linked in our database.
Ventura County
County
Ventura County Auditor-Controller
Elected County Office
Ventura County Board of Supervisors
Elected County Office
Ventura Fire Protection District
Fire District