What happens with Golf Course fees and fees at the stadium?
Pago Pago, AMERICAN SAMOA — An “unannounced cash count” of the Sports Complex Management Office (SCMO) by the Territorial Audit Office (TAO) identified weakness that the auditors say are “a sign of high risk in cash collection procedures and it can lead to potential fraud, abuse and mismanagement of funds by employees.”
The audit was the result of an unannounced cash count on Feb. 19th this year at the SCMO — which is also responsible for managing the affairs and events at Veterans Memorial Stadium in Tafuna and at the Ili’ili Golf Course.
According to the report, the audit was to determine whether SCMO:
• complied with policies and procedures on cash collections and whether those policies and procedures were adequate;
• cash receipts transactions were complete, accurate, adequately documented, recorded and deposited timely and intact; and
• maintain physical safeguard of cash, checks and unused receipts.
Samoa News came across the audit report, while conducting background research over concerns from golfers about fees they paid at the golf course, and whether the fees will be hiked in the near future under the Lemanu-Talauega Administration. At least one golfer recalled early this year an ASG internal audit of the SCMO.
On background information, the audit report notes that the golf course collects cash on a daily basis from green fees only, while golf cart rentals are provided and operated by a private business. “We were not informed of the current arrangement between the Management and the cart rental operators as it has been in existence for some years,” the report noted.
The report explains that the green fees at the golf course — which is open 7-days a week — “are very reasonable” and that the golf course refers to their cash collection cashiers as Starters who accept payments from players.
The last known update for fees was in July 29, 2013, according to the audit, which notes that weekends and holiday green fees for18 Holes is $10; and 9 Holes is $5. On weekdays the cost for 18 Holes is $7 while it’s $4 for 9 Holes.
For the Veterans Memorial Stadium, the report says that fee collections for high school sporting events are administered and handled by the Education Department’s ASHSAA and other events are collected by the SCMO.
TAO conducted an exit meeting with the SCMO director and other officials including the golf course supervisor on Mar. 24th. The purpose of the meeting was to present, review, and discuss the audit findings and recommendations contained in the preliminary report.
TAO’s final audit report — which outlined four findings and recommendations — includes responses from SCMO.
WRITTEN POLICES AND PROCEDURES
The first finding by the audit is that SCMO has no formal written policies and procedures for cash receipting to provide guidance and assurance over their process. It points out that ASG Cash Policy Manual provides limited general narrative of policies and procedures relative to the collections, receipting and subsequent transmittal of money to the Treasury’s Revenue Division for deposition.
TAO recommends that the SCMO director work in conjunction with ASG Treasury to establish and implement their own written policies and procedures specific for cash collection at the golf course.
In response, SCMO said it will work closely with ASG Treasury in implementing written policies/procedures and to include that cash receipting duties will be adequately segregated, cash collected will be reconciled daily, cash receipts will be deposited daily, and durning the day, all cash collections will be kept in locked drawers, cash boxes or cash registers. And if a safe is available, all cash kept overnight will be placed in the safe.
MULTIPLE RECEIPTING METHODS
Another finding is that the assigned ASG booklet of receipts used is not being applied appropriately. The audit explained that there are two types of cash receipting methods used to record collections.
The first one involves Starters using a department created sign-in sheet as their primary record for green fees paid. Thereafter, when the Starter is not occupied, the ASG sequence receipts are then filled out using SCMO sign in sheet for each player paid with no official copy of the receipt given to the player in real time at point of sale.
“There should only be one receipting method that is used. Using multiple types of receipting methods is a control weakness that increases the risk of cash being misappropriated,” the audit report said.
Additionally, this is “also a high risk for internal control structure and its operation that we consider to be a significant deficiency under standards established by the American Institute of Certified Public Accountants.”
TAO recommends the “SCMO director use only one receipting method. Revenues generated at the Golf Course are the main collections for the SCMO and this source of income should be properly controlled and safeguarded. Failure to have the appropriate controls in place over cash receipting increases the risk that cash could be misappropriated.”
SCMO responded that starting in May, Starters will no longer use a Verification log form and will use the receipt book only.
CASH COLLECTION OVERNIGHT
The audit also found that Starters hold on to daily cash collection overnight. During its interview with the golf course Starters, “we found that after a shift ends the cash collections for the day and into the weekends are taken home with the Starter overnight to be turned into the main SCMO office the next business day,” the audit report says.
TAO recommend the SCMO director “immediately stop their current practice of having the Starters take home cash collections overnight, but establish a procedure that will comply with end of shift cash to be reconciled daily and secure safeguards for overnight to cash collections.”
In its response to this issue, SCMO said, it will buy a safe deposit box or a small vault. The SCMO also explained new procedures to be implemented ensure safeguarding of cash collected.
The fourth finding by the audit is that SCMO did not have adequate physical safeguards over cash collections. “During our interview with the Division Head, it was confirmed that SCMO does not have a safe, cash box or locked drawers to hold all cash collections received at the golf course.”
While there is a vault in the Division Head office at the stadium, the report said “it cannot be used because the key for the vault is lost.”
TAO recommends to “install a Point of Sale (POS) system to streamline the cash collection process” at the golf course. And the system “will instantly account for revenues received and will default each transaction to the right revenue account and summarizes all its transactions on a daily basis.”
According to TAO, this computerized POS system will also ensure efficiencies, generate receipts and receipt numbers automatically and will allow Treasury’s Revenue Division and the SCMO administrators to “view only” access options.
“The costs to have this system set-up, installed and maintained are quite minimal and will certainly improve cash collection procedures,” TAO points out.
SCMO response: A request to the Treasurer for a POS machine for the Sports Complex will be done but “we believe that if we buy/install a Point of Sale [system], the bank fee will cost more than what we collect from a player or the whole amount of the collection per day.”
As reported by Samoa News in the past, TAO is an independent agency of the government and does conduct unannounced cash audits — which is not new and has been done in previous administrations.
The SCMO unannounced cash audit was conducted by TAO’s acting director, Sualauvi Su’a.