Audit Report on the Kings County District Attorney’s Office’s Inventory Practice

Executive Summary

New York City’s five District Attorneys (DAs), including the Kings County DA (KCDA), are each publicly elected to terms of four years and are responsible for investigating and prosecuting crimes, assisting victims, and implementing crime prevention strategies in their respective boroughs.  DA office operations are primarily funded by the New York City (City) Treasury, but they also receive federal and State asset forfeiture funds as well as grants.

The KCDA operates out of six office locations across Brooklyn using equipment and office furniture purchased centrally by its Procurement Department.  From our review of the KCDA’s purchasing records, we estimate that during Calendar Year 2016, the KCDA purchased equipment and furniture at a total cost of $376,598, consisting of $226,951 paid from federal and State asset forfeiture funds that the KCDA disbursed directly through its agency-administered bank accounts and credit cards, and $149,648 paid from City and grant funds disbursed through the City’s Financial Management System (FMS).  The KCDA manages its equipment inventory through a decentralized structure, in which six different departments are individually responsible for maintaining their respective inventories.

We conducted this audit to determine whether the KCDA complied with the Department of Investigation’s (DOI’s) Standards for Inventory Control and Management (DOI Standards), and maintained a reliable and effective system of controls over its equipment and furniture assets inventory in accordance with Comptroller’s Directives #1 and #18.

Results

We found that the KCDA did not maintain accurate and complete inventory records in that it did not post additions, deletions, and other changes to inventory records promptly and did not record all required asset information in its inventory records.  By not maintaining accurate and complete inventory lists, the KCDA increases its risk that items could be misplaced, lost, or stolen without detection.  In that regard, we found that the KCDA could not account for 7 of 419 sampled items (1.7 percent) selected for physical inventory inspection.  The seven missing items consisted of four pieces of computer equipment, two cameras, and a DVD player.

In addition, we found that the KCDA did not maintain adequate controls over inventory. Specifically, the KCDA departments responsible for inventory either did not conduct periodic inventory counts or did not document count results, investigate discrepancies, and update inventory records as required by the DOI Standards and Comptroller’s Directive #18.  Finally, the KCDA did not segregate inventory duties among staff and document policies and procedures in writing and communicate them to staff.

To address these issues, we make a total of 10 recommendations, including that the KCDA should:

• Investigate the seven items that could not be accounted for during inventory inspections and report any missing equipment items to the appropriate authorities;
• Periodically reconcile purchasing and inventory records to ensure that it records all non-consumable goods in its inventory records;
• Develop a procedure to ensure that changes in asset location and status are reported to individuals responsible for updating inventory records;
• Conduct periodic inventory counts, document count results, investigate any discrepancies, and update inventory records, as needed;
• Segregate the duties for receiving, inspecting, and tagging equipment items, and updating and maintaining inventory records; and
• Document inventory policies and procedures in writing and communicate them to staff.

In its response, the KCDA agreed with nine recommendations and disagreed with part of a tenth while agreeing with the rest of it.  The KCDA stated, “[w]hile we appreciate the careful examination of our Inventory Practices and agree with a vast majority of the comments and suggestions proposed in the Report, we disagree with one of your findings and recommendations” regarding the inventorying and tagging of furniture.