City Auditor’s Office recommends ways to strengthen controls over the Water Department’s storeroom inventory
FOR IMMEDIATE RELEASE: August 29, 2018
CONTACT: Douglas Jones, City Auditor, 816-513-3300
The City Auditor’s Office released an audit of the Water Services Department’s storeroom inventories. The audit focused on whether the department had adequate controls in place to protect storeroom inventories.
The audit concluded that gaps in controls left storeroom inventories vulnerable to errors, loss, and theft. Incompatible employee duties were not segregated and as a result, an employee could commit an irregularity and conceal it. Employees shared identification cards used to issue inventory and track transactions, eliminating accountability. In addition, adjustments to electronic inventory could not be tracked. Because the reliability of the electronic inventory is questionable, we did not attempt to identify whether loss or theft had occurred.
The audit also concluded that the department did not follow recommended practices in conducting its 2018 annual physical inventory: employees did not conduct blind counts; inventory counters and those supervising were not independent; and the department did not have written policies and procedures. The department also did not count an estimated $2.9 million of materials issued to work crews.
Water Services was not following city password requirements and employee access to the electronic inventory system was not always provided timely or reviewed for continued need. The audit also determined that physical security measures needed to be strengthened.
The audit includes recommendations to improve Water Services’ methods of recording inventory transactions and adjustments, conducting physical inventories, and strengthening information technology and physical security. Management agreed with the recommendations.
View the complete report online at the City Auditor’s website on KCMO.gov.