Audit Report on the Financial and Operating Practices of the Office of the Public Advocate

AUDIT REPORT IN BRIEF

This audit of the Office of the Public Advocate (OPA) evaluated the agency’s internal controls over its personnel, payroll, timekeeping, small purchases, and physical assets, as well as its compliance with applicable City rules and regulations. Headed by an independently elected official, OPA represents the consumers of New York City services. It reviews and investigates complaints about City services, assesses whether agencies are responsive to the public, and recommends improvements in agency programs and procedures for handling complaints. During Fiscal Year 2003, OPA had an operating budget of $1.9 million, consisting of $1,627,775 for Personal Services (PS) and $244,949 for Other Than Personal Services (OTPS) expenditures, capital spending of $393,743 and a budgeted staff of 35 full-time employees.

We determined that all employees on the OPA payroll were bona fide and that its purchases were legitimate and necessary for its operation. However, overall OPA needs to improve its internal controls over its personnel, payroll, timekeeping, purchasing, and physical assets. We found deficiencies including: incomplete personnel files, discrepancies in timekeeping records, incomplete inventory lists, equipment not always identified, vendor invoices paid late, and bids not solicited when required.

The deficiencies found in this audit are mainly caused by an inadequate segregation of duties and management oversight. Moreover, OPA employees, including managers, are not always familiar with, nor have they received adequate training in, the appropriate Citywide policies and procedures.

To address these issues, we make a total of 22 recommendations. The major recommendations are that OPA should:

• File a Financial Integrity Statement annually that includes an update on the status of prior audit recommendations.
• Ensure that key duties and responsibilities in authorizing, processing, and recording within the personnel, payroll, and timekeeping functions be segregated among individuals.
• Provide training in Citywide personnel policies and procedures to management and administrative staff members to ensure that they are followed.
• Increase oversight by management to ensure that personnel, payroll, and timekeeping documents are independently reviewed and verified for completeness and correctness by the Director of Administration or another staff member not involved in the process.
• Maintain employees’ leave balances on the City’s Payroll Management System (PMS).
• Maintain accurate, detailed inventory records that include an OPA-assigned inventory number, the equipment serial number, the location of the equipment, and the user name.
• Ensure that key duties and responsibilities in authorizing, processing, recording, and reviewing payment voucher packages are separated among individuals. For example, no single individual should be authorized to order merchandise, verify the receipt of goods, and pay the suppliers.
• Ensure adequate oversight by management over the purchasing process and have payment voucher packages independently reviewed and verified by the Director of Administration, or another staff member not involved in the purchasing process, for completeness and correctness.
• Obtain at least five bids for all purchases over $5,000, when required, and maintain detailed documentation of the purchasing process in a procurement file, including how the vendor was selected.