Pago Pago, AMERICAN SAMOA — The Territorial Audit Office cited “internal control weaknesses over cash handling operations” — issues that have been cited before yet were not addressed by the Port Administration Department in a surprise cash count conducted in August this year.

  The audit report was recently released and reiterated recommendations from prior reports.

 “By not timely fully implementing these audit recommendations, management is allowing cash receipts and handling risks identified in the earlier audit to remain.

 “We recommend for the Department to take immediate corrective actions.”

 Furthermore the auditors noted they found repeated issues and a concern because of significant internal control weaknesses over cash handling operations.

 “The Department of Port Administration needs to institute strong internal and financial controls that will enhance and better monitor cash handling processes. 

 “The audit was limited to review of controls over cash handling and processes of Daily Cash receipts.”

 DISCUSSION OF SURPRISE CASH COUNT RESULTS

 The matters covered in this report were discussed with the Department’s officials during and at the conclusion of the audit.

  “The draft report was discussed at the exit conference on September 22, 2022 and was submitted with a request for comments.”

 OBSERVATION, FINDINGS and RECOMMENDATIONS

 The auditors performed a risk control review on the cash handling process, which included analysis of the flow of documents from start to finish, this is to determine risks and control processes.

 The auditors recommended that in order to reduce the likelihood of inappropriate activities, the Department shall establish multiple controls.

 According to the auditors standard operating procedures (SOP) for cash handling operations are in drafts form and not inclusive.

 The auditors recommended the department to finalized cash handling policies and procedures and key controls that ensure policies and procedures are in place and effective.

  “These policies and procedures shall be maintained in a policy manual as appropriate and communicated to staff.

 Another issue cited is inadequate control over manual receipts.

 “Issuing receipts in an un-orderly manner is not good business practice as it creates problems not only in monitoring collections and would results in lost monies.

 Under recommendation the Department of Port Administration should document a policy for manual receipts, which require staff to maintain an accurate record of cash and book receipts disseminated to all finance and accounting staff involved which motivates for compliance.

 Furthermore there is inadequate segregation of duties existed in cash handling processes, the auditors said.  

 “Management should be aware that the lack of segregation of duties increases the risk of inappropriate cash handling and the misuse of funds… “

 Another issue cited by the auditors is the cashiering process which is widely manual.

 “Some of these manual processes contribute and demonstrate issues that are likely due to delays at the department level.

 According to the report, there is no register to control the issuance of Book and Cash Receipts documents.

 “To avoid inappropriate activities, receipts shall be chronological controlled to best suited the Daily Cash Receipts Policy Manual and Cash Procedures.

 “The establishment of the log book was done subsequently to the cash count [and] we appreciate the Department’s efforts in having the log book to monitor receipt document movements,” the auditors said.