Controller Butkovitz Issues Annual Audit of All City Agencies

For Immediate Release
Oct. 26, 2017

Contact:  Brian Dries

Controller Butkovitz Issues Annual Audit of All City Agencies
City Controller finds outstanding issues not resolved with petty cash oversight

PHILADELPHIA – City Controller Alan Butkovitz today released the latest Annual Audit of all City Agencies that found 70 percent of departments mismanaged their petty cash accounts.  

Of the 42 total city agencies, 29 were found with at least one petty cash issue.  These accounts, which totaled $1.5 million in expenditures for Fiscal Year 2016, provide departments with sufficient cash for minor expenditures such as postage, subscriptions, licensing fees and many other items under $500.  

“Petty cash is an efficient tool for departments to make small reimbursements for business needs as they arise,” said Controller Butkovitz.  “When controls are not in place, the entire amount of funds is placed at risk. 

Several departments allowed improper disbursements of petty cash through unallowable expenditures.  Some examples included the following:

  • The Parks & Recreation Department disbursed $1,426 of petty cash funds on food and refreshments for meetings and training sessions attended only by city employees.
  • The Office of the Managing Director disbursed $866 for employee travel expenditures exceeding the limit on three separate occasions. Employee travel over $100 cannot be reimbursed by petty cash.
  • The Office of Homeless Services disbursed petty cash funds for monthly services from ADT Security, even though payments for a recurring service should be through a direct purchase agreement or a contract with a vendor.
  • The Department of Public Health disbursed petty cash funds for services from Comcast, which should have been purchased through the Office of Information Technology’s agreement.

Over the last year, the number of city departments with petty cash issues increased by half a dozen.

“This has been an ongoing issue for many years that is still not resolved,” said Controller Butkovitz.  “The significant number of departments improperly using petty cash indicates there is a lack of training and oversight by the Finance Office.” 
In releasing last year’s department audit, Controller Butkovitz called on the Finance Office to implement training for all city departments.  At that time, the Mayor’s Office indicated that it was working with departments to ensure compliance with proper procedures for handling petty cash.

“Our latest audit indicates there is still much work that needs to be done when it comes to training departments to properly managing petty cash accounts,” said Controller Butkovitz.  

In addition, as indicated last year in the City Controller’s audit, the Sheriff’s Office still cannot account for the $10,000 in petty cash related to employee travel reimbursements.  The money is missing and no documentation to substantiate the costs was ever submitted from these employees dating back to 2005.  

According to Controller Butkovitz, while the Sheriff’s Office states these activities fall under the prior sheriff and are subject to a federal criminal trial, the Finance Office needs to work with the Sheriff to resolve the missing petty cash.

Along with reporting petty-cash issues, the City Controller’s departmental audit included other findings such as:

  • On-line payroll time records were not always reviewed to ensure separated employees are removed from active status on the on-line payroll system. Four former employees continued to be paid after their termination dates and were overpaid a combined total of $5,500 from the Division of Housing and Community Development, the Police Department, and the Office of Human Resources.
  • Almost 31 percent of city agencies did not deposit long outstanding checks into the City of Philadelphia’s Unclaimed Monies Fund, which increases the risk that unclaimed property would not be forwarded to the state in violation of the Commonwealth of Pennsylvania’s Unclaimed Property Law.

“The departmental audit provides recommendations for city agencies to improve internal accountability and to assure that taxpayers’ dollars are not wasted,” said Controller Butkovitz.