Numerous lack of controls that led to an alleged theft by a parks employee, no inventory of maple syrup production, and not charging sales tax on rentals amongst some of the findings
(Buffalo) – An audit completed by the Office of Erie County Comptroller found numerous lack of controls concerning county Parks Department workers and their handling of cash and checks. The recent arrest of a seasonal county worker at Elma Meadows golf course for allegedly issuing paper receipts and stealing money may have been prevented had proper cash handling protocols and procedures been followed.
The audit found that all parks employees that have cashier responsibilities have access to safes at Grover Cleveland Golf Course, Elma Meadows Golf Course, and Sprague Brook Park. Because of the ease of access to cash, the potential for theft and financial loss to the county is amplified. Due to the large volume of workers who have access to safes with cash, it would be very difficult to identify perpetrators of theft.
One audit recommendation is to limit employee access to safes with cash in them or purchase “drop safes” with a limited number of workers with retrieval access.
Pertaining to the arrest of a seasonal county worker for being suspected of providing customers with hand-written receipts rather than printed receipts from a cash register and keeping cash, there are written procedures are in place to deter this type of theft.
Current Parks Department policy requires that another employee, a “starter,” verify a printed receipt prior to letting customers on the golf course.
“Compliance with this policy would have prevented the alleged theft. Procedures and policies aren’t worth they paper they’re written on unless management follows through to make sure workers are following them. We are concerned that taxpayer’s money is not being handled in a manner it deserves,” said Erie County Comptroller Stefan I. Mychajliw.
Other recommendations include more frequent bank deposits of checks and cash, especially during peak usage of county parks and golf courses, and the immediate marking/stamping of a check as soon as it is given to a county employee.
In addition to the lack of controls concerning how Parks Department workers handle cash and checks, the audit also found that Erie County was not charging sales tax for the rental of golf equipment at county golf courses. An opinion was solicited from Erie County Attorney Michael A. Siragusa to determine whether or not the county should have been doing so.
The Erie County Attorney issued a legal opinion that stated Erie County in fact should have been charging sales tax but for golf related rentals but has not for many years:
“Under New York State Tax Law, the rental of golf carts, pull carts, golf clubs, range balls and other similar tangible property is treated as a retail sale subject to sales tax even though the County is the seller…It is my understanding that the County of Erie has never, under any administration, collected sales tax on the rental of the items mentioned above, despite being required to do so. Accordingly, all necessary action should be taken by the County of Erie to begin collecting sales tax on the rental of such items.”
Source: Erie County Attorney Michael A. Siragusa, Letter to the Office of Erie County Comptroller, 10/8/13
The Office of Erie County Comptroller recommends that Parks Department cash registers and current policies and procedures as it related to the collection of sales tax be updated.
The audit also found the county has no formal inventory of how much maple syrup it produces and sells. In 2010 Erie County renovated and reopened the Sugar Shack in the Erie County Forest. County produced maple syrup is sold at the Sugar Shack, Rath Building, and at special events.
There is no accountability as it relates to the beginning inventory, new annual production, sales, spoilage, giveaways, and ending inventory.
“Lack a formal inventory creates the risk that product could be stolen or sales purposely misstated to cover loss or theft. Unfortunately we will never know. No one would know if gallons of syrup produced at taxpayer’s expense were being stolen or sold for personal profit. The golden rule in management: if you can’t measure it, you can’t manage it,” added Comptroller Mychajliw.
The audit reviewed cash management policies and procedures by Parks Department employees over a six month-period, from January 1st, 2013 to June 30th, 2013.