Audit Report on the Bronx Borough President’s Office’s Controls over Its Inventory of Computers and Related Equipment

Executive Summary

The objective of this audit was to determine whether the Bronx Borough President’s Office (BxBPO) has adequate controls over its inventory of computers and related equipment in compliance with applicable rules and regulations.

The Bronx Borough President, along with the Borough Presidents of New York City’s (City’s) other four boroughs, are the executive officials of their respective boroughs. The City Charter grants each Borough President various powers, including the power to recommend capital projects, to hold public hearings on matters of public interest, and to have legislation introduced in the City Council. Each Borough President also consults with the Mayor on the City’s executive expense and capital budgets; reviews and makes recommendations on applications and proposals for land use and development within the borough; provides technical assistance to the borough’s community boards; and monitors capital projects in the borough.

Computers and related equipment (including mobile devices) play a vital role in helping the BxBPO staff carry out the agency’s activities. According to the City Comptroller’s Comprehensive Annual Financial Report for the Fiscal Year ending June 30, 2019, the BxBPO’s expenditures totaled $4.98 million, which included $724,000 for Other Than Personal Services, such as general computer and equipment purchases.

Audit Findings and Conclusions

The BxBPO did not have adequate controls over its inventory of computers and related equipment. While we found that the BxBPO’s inventory records generally reflected the inventory on hand, our count revealed a gross discrepancy (overall variance) of 11 percent between the items we found on hand and the 225 items recorded in the BxBPO’s inventory records.  Additionally, the BxBPO’s inventory records contained incorrect information in one or more of the following fields: location, assignee, manufacturer, model, asset tag number, and serial number. One of the reasons for the discrepancies and missing information is that the BxBPO did not perform the required periodic physical inventory counts to help ensure the records’ accuracy.

We also found deficiencies with the BxBPO’s asset tag practices. Specifically, the BxBPO used different sets of tags, did not consistently assign tags in sequential order, and could not account for 759 tag numbers. The BxBPO also did not sufficiently segregate its inventory functions among its staff or establish compensating controls when those duties could not be appropriately segregated. The audit found that the BxBPO had no written policies, procedures, or plans regarding its relinquishment of obsolete computers and related equipment, and we found that those items were stored in a haphazard manner. Moreover, the BxBPO did not maintain an accurate record of the agency’s mobile devices. Under other matter, we found that the BxBPO paid for cell phone lines that it was not using.

The deficiencies identified in the BxBPO’s controls over its inventory significantly increase the risk of waste, fraud, and mismanagement with respect to its computers and related equipment.

Audit Recommendations

Based on the audit, we make 18 recommendations, including the following:

• The BxBPO should update its written policies and procedures to require agency personnel who are independent of the IT unit to perform and document the periodic inventory counts of its entire inventory of computers and related equipment; ensure that all discrepancies are independently investigated; and ensure that any adjustments to its inventory records are reviewed and approved by management.
• The BxBPO should ensure that tag numbers are sequentially assigned to all computers and related equipment without skipping tag numbers. Any omission or skipping of a sequential number should be explained in the inventory records.
• The BxBPO should comply with the City’s inventory relinquishment policy and develop written procedures for relinquishing its computers and related items.
• The BxBPO should ensure that it adequately organizes its storage of unused computers and related equipment, and that it maintains a reference list identifying the storage locations and the condition of the items.
• The BxBPO should ensure that key responsibilities for the management of the agency’s inventory of computers and related equipment are adequately segregated or that compensating controls are implemented.
• The BxBPO should establish written policies and procedures governing its management of mobile devices, including, but not limited to, steps requiring that complete and accurate mobile device records be maintained and updated timely.
• The BxBPO should submit a request to the Department of Information Technology & Telecommunications (DoITT) and ask that it provide the BxBPO with the agency’s detailed wireless billing information on a monthly basis. With this information, the BxBPO should review the usage and charges to verify the accuracy of the bills and to identify unusual and/or unauthorized charges.

Agency Response

The BxBPO agreed with the audit’s 18 recommendations.