Audit Report on the Office Equipment Inventory Practices at the Eighteen Brooklyn Community Boards
April 28, 2017 | SR17-087A
We audited the eighteen Brooklyn Community Boards to determine whether they comply with certain inventory procedures applicable to office equipment that are set forth in the Department of Investigation’s (DOI’s) Standards for Inventory Control and Management (the DOI Standards) and to determine if they maintain effective internal controls over that equipment as required by Comptroller’s Directive #1.
New York City is divided into 59 administrative districts, each served by a Community Board, which is a local representative body authorized by the New York City Charter to advocate for the residents and needs of its administrative district. Community Boards have various responsibilities which include assessing the neighborhoods’ needs, addressing community concerns, and vetting land use and zoning proposals. Brooklyn has eighteen Community Boards that collectively cover the entire borough. Each of the Brooklyn Community Boards has a District Manager and at least one full-time clerical staff person whose salaries are paid by the City of New York.
Audit Findings and Conclusions
The audit found that of twelve of Brooklyn’s eighteen Community Boards were not in compliance with the DOI Standards and with Comptroller’s Directive #1 requirements for inventory controls. We reviewed a total of 617 inventory items and found 119 discrepancies where Community Boards failed to meet required standards. Specifically, the auditors determined that Brooklyn Community Boards #3, #4, #5, #7, #9, #10, #11, #12, #13, #14, #15 and #18 were not in compliance, while Community Boards #1, #2, #6, #8, #16 and #17 were in compliance with these regulations.
As part of our review, we found that 585 of the 586 office equipment items that were listed in the Brooklyn Community Boards’ inventory records were physically present at Boards’ offices. However, we identified 32 additional items at six Community Boards (Boards #3, #5, #9, #13, #14 and #18) that were physically present in those Community Boards’ offices, but that had not been included on their inventory lists.
In addition, auditors discovered that three Boards (Boards #3, #5, and #18) did not maintain accurate inventory records due to the fact that the items on each of those Boards’ inventory lists were not properly labeled in accordance with the DOI Standards. Finally, we found that seven Community Boards (Boards #1, #6, #8, #11, #13, #15 and #16) had purchased 32 office equipment items using incorrect object codes on 20 payment vouchers.
Based on the incomplete inventory records, missing items that we could not find during our on-site testing, the failure to label items properly, and the use of incorrect object codes for purchases, we concluded that there was an increased risk of loss, misappropriation or theft at the 12 Community Boards that were not in compliance with the DOI Standards and Comptroller’s Directive #1.
Based on the audit findings, we make the following five recommendations to the Brooklyn Community Boards:
- Each Community Board should maintain complete and accurate records of all office equipment in accordance with the DOI Standards and Comptroller’s Directive #1.
- Each Community Board should conduct an annual inventory count in a manner that results in all equipment being listed as well as the location of the items.
- Each Community Board’s inventory lists should be appropriately updated to reflect changes in the location of individual equipment items, including the relinquishment of non-working items and the removal of these items from the inventory list.
- Each Community Board should ensure that identification tags are affixed to all major office equipment items and that they include a sequential internal control number.
- Each Community Board should ensure that all office equipment purchases are charged with the correct object code in accordance with Comptroller’s Directive #24, Agency Purchasing Procedures and Controls.
The eighteen Community Boards agreed with the report’s findings and recommendations and described the steps they have taken or will take to implement the report’s recommendations.