Internal Controls Flawless; Fee Collection Suggested
(Wampsville, NY – June 2014) Madison County recently received the report of the Office of the State Comptroller for the audit of its Probation Department. Internal controls were found to be near-perfect; auditors suggested the county implement supervision fees collection.
“We found that the Department has established an adequate system of internal control over the collection and disbursement of restitution; however, we found that county officials were not pursuing all possible revenue sources within the Department,” auditors wrote in the report released by the OSC recently. “If the county imposed certain allowable fees, the probation department could generate an additional $25,000 annually.”
The report describes an effective system of internal controls that provides for adequate segregation of duties and independent oversight of cash operations.
“Proper segregation of duties ensures that no one person controls all phases of a transaction and provides for the work of one employee to be verified by another employee,” the report read.
According to the report, Probation has established procedures that segregate duties and provide for each employee’s work to be reviewed by another employee:
* Two office assistants collect restitution and surcharges from defendants in person or through the mail and prepare receipts.
* A third office assistant (OAIII) verifies and records the payment information from the duplicate receipts into the accounting records and prepares the deposit.
* The Deputy Director verifies the amount of the deposit and ensures that the total deposit agrees with the receipts and the amounts entered into the accounting records.
* The OAIII prepares checks for payment and the Deputy Director or a probation supervisor signs the checks.
* The Deputy Director reviews canceled checks, bank statements and the bank reconciliations that the OAIII performs.
* Both the OAIII and probation officers are responsible for monitoring delinquent payments from defendants.
* When a defendant is delinquent in payment, they submit a letter to the respective court or the District Attorney’s Office as notification of the delinquency.
“To determine whether the internal controls were operating as intended, we tested payments from 20 defendants totaling $4,596 to determine if payments were properly recorded, deposited and remitted to the intended victims,” the report read. “Our testing showed that 17 payments were properly recorded, deposited and remitted to the victims. Three defendants made no payments; therefore, we verified that the department had notified the applicable court or DA for enforcement. Notifications were sent for all three defendants.
“In addition, we reviewed the completeness and continuity of receipt numbers for one month as well as a bank reconciliation for accuracy. All receipts examined were complete and intact, and the bank reconciliation was properly prepared and showed evidence of independent review. We did not identify any errors or improprieties. Overall, we found that the Department’s internal controls over the collection and disbursement of restitution were adequately designed and operating effectively.”
The OSC says state law allows counties to adopt a local law requiring individuals convicted of a crime under Article 31 of the Vehicle and Traffic Law (driving while intoxicated) and who are sentenced to probation supervision to pay an administrative fee to the Department of $30 per month.
“Additionally, through the adoption of a local law, the Board may impose fees for drug screening,” the report reads. “If these administrative fees are not charged, department operations and functions may not be operating at the lowest possible cost to taxpayers.”
The department supervised an average of 306 individual cases per month in 2013 but did not impose administrative fees for probation supervision or drug screening. In 2013, there were approximately 720 months of DWI supervision and 260 probationers requiring drug-screening tests.
“I am very proud of the job done by departmental management and our employees to ensure the proper internal controls over the collection and disbursement of restitution are in place,” wrote Board of Supervisors Chairman John M. Becker in his response to the audit report. “Historically, supervision and other fees have not been collected by the department, as it was reasoned that the probationer’s available funds might be better directed toward other financial responsibilities associated with probation supervision.”
Becker went on to write that among those responsibilities are restitution to his or her victim(s), substance abuse or other mental health treatment and transportation, as many have lost their driving privileges.
“In summary, in Madison County to date, the payment of restitution, treatment fees and transportation costs have been prioritized over the collection of supervision or other fees,” Becker wrote. “That being said, it is understood that this is a potentially significant source of revenue for the county.”
The report indicated other counties are routinely imposing and collecting fees for DWI supervision and drug testing.
“If these fees were imposed, the department could have collected as much as $25,000 during 2013,” the report read. “Charging these fees to the individuals on probation could reduce the financial burden on taxpayers.”
A footnote to the OSC report, however, indicates that if fees are imposed, a waiver system has to be instituted so as not to create a hardship on the defendant or his or her immediate family. County officials report the $25,000 projection probably is an over-estimation.
Becker wrote that the issue would be referred to the Criminal Justice, Public Safety and Emergency Communications Committee for possible consideration of the full Board of Supervisors.