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HomeMy WebLinkAbout2021-03-11; City of Carlsbad Police Department Buy Fund Review (Districts All); Rocha, LauraTo the members of the: CITY COUNCIL Date3/JI /::2,1 CA ✓ CC V cML AcM _L___ocM (3) ✓ March 11, 2021 Council Memorandum To: Honorable Mayor Hall and Members of the City Council From: Laura Rocha, Deputy City Manager, Administrative Services Via: Geoff Patnoe, Assistant City Manager (@f, {city of Carlsbad Memo ID #2021059 Re: City of Carlsbad Police Department Buy Fund Review (Districts -All) This memorandum provides information related to the City of Carlsbad Police Department Buy Fund review. Discussion The City Council approved the fiscal year 2020-21 Internal Audit Plan, including an audit of the Vice Narcotics Intelligence Unit's (VNIU) Buy Fund . The city's internal audit manager position is currently vacant. The Police Department's Buy Fund procedures require an annual external audit. Last year's audit was cancelled due to COVID-19 and with the lieutenant in the VNIU transitioning out of the unit on March 28, 2021, it was critical for this task to be completed promptly. Thus, a staff member from the Administrative Services Branch, Administration Division, who is unaffiliated with the Police Department, performed review procedures. Results of this review are provided below. The intent behind including a VNIU Buy Fund audit in the fiscal year 2020-21 lnternal Audit Plan was to perform a more comprehensive audit than the basic cash count procedures regularly performed and required by the Police Department. This would potentially include an in-depth look at Buy Fund procedures and other high-risk areas in the department. Therefore, the VNIU Buy Fund audit will be added again to the fiscal year 2021-22 Internal Audit Plan. The expanded scope of this audit will be determined by the individual who fills the internal audit manager position. Purpose The objectives were to determine that adequate documentation is available to support and track use of the Carlsbad Police Department VNIU Buy Fund and to perform a count of the Buy Fund cash and reconcile with records. Background The VNIU Buy Fund is intended to be used for such purposes as prop and drug purchases, flash money and supplies specific to the unit and informant payments. Although the VNIU supervisor maintains the funds, each detective working the unit is authorized a $200 advance, or 'front money', for field expediency. The VNIU supervisor keeps a detailed record of the daily Administrative Services Branch Finance Department 1635 Faraday Avenu.e I Carlsbad, CA 92008 I 760-602-2430 t I 760-602-8553 f Memo -City of Carlsbad Police Department Buy Fund Review (Districts -All) March 11, 2021 Page 2 activities of the Buy Fund. The daily records consist of a completed Buy Fund Reimbursement/Advance Request Form that is completed, with an original receipt if applicable, a case number if applicable, and two signatures, as required. Not all reimbursements will have a receipt due to the nature of the payments which include drug purchases, informants, and other non-traceable purchases. The daily records are used to produce monthly summary reports. Police Department procedures require the sergeant in charge of the VNIU, and the responsible lieutenant, to perform monthly audits of the Buy Fund. The procedures also require the Finance Department to perform an' annual audit of the Buy Fund. It is the intent of this review to meet that requirement. Scope & methodology A cash count was performed on the Buy Fund on March 2, 2021. Due to the nature of the VNIU, a predetermined meeting was held to schedule and conduct the count. A review of the written procedures was performed. For the period Jan. 1, 2020, through Feb. 28, 2021, a review of documentation was performed to determine that: • Monthly summary reports contained two reviewing signatures, as required by department policy. • Individual records of completed Buy Fund Reimbursement/ Advance Request Forms contained appropriate support and two reviewing signatures, as required. Audit results Buy Fund cash count The cash count was performed, and no discrepancy was found between the balance reported in Police Department records and the physical cash on-hand. At the start of the review period, the Buy Fund Monthly Summary Report stated it contained cash totaling $10,216.68. According to the city's accounting system, the only replenishment of cash during the review period was an additional $9,500 on May 7, 2020. This replenishment was reflected in the Police Department's monthly summary report for May 2020. At the date of the cash count on March 2, 2021, Police Department records indicate the Buy Fund contained $6,842.28 in cash. Each Detective working the unit is authorized a $200 advance, or 'front money', for field expediency. At the date of the cash count, Police Department records indicated $800 of 'front money' had been advanced to its officers for use in on-going operations. Therefore, the reviewer counted $6,042.28 in cash, as expected. Reimbursement/Advance Request Forms There are always at least two separate parties involved in any Reimbursement/ Advance Request payout. The request includes a signature of the "approved by" and "witnessed by" parties. In the case of payments to informants, the informant receiving the cash is assigned an informant identification number. This number is placed on the Reimbursement/Advance Memo -City of Carlsbad Police Department Buy Fund Review (Districts -All) March 11, 2021 Page 3 Request Form. Again, all Reimbursement/Advance Request Forms also include the associated case number if one exists. Based on a review of all Reimbursement/Advance Request Forms during the period, with the exception of two related to confidential informants, all contained two signatures, case numbers, and receipts, if applicable. Monthly Summary Reports The unit maintains an Excel spreadsheet summarizing all Buy Fund activity. On a monthly basis, this spreadsheet is printed out, signed by the auditing lieutenant, and placed in a notebook. This review identified a small discrepancy of $0.10 in the Monthly Summary Reports, due to a data entry error when entering a receipt for July 14, 2020. Lastly, Monthly Summary Reports indicate all transactions during the review period were consistent with this stipulation. ·Summary Based on the procedures and the results of the audit, there are no adverse findings. The city would like to extend appreciation and compliments to the Carlsbad Police Department and the VNIU for the exemplary record keeping and safeguarding of city assets. Sergeant Ernst was extremely helpful during the audit. If you have any further questions, please do not hesitate to contact Laura Rocha at 760-602-2415. cc: Neil Gallucci, Police Chief Jason Jackowski, Police Lieutenant Kevin Lehan, Police Lieutenant Jeff Smith, Police Lieutenant Mike Ernst, Police Sergeant