Audit Report on the New York City Campaign Finance Board’s Controls over Its Computer and Other Computer-Related Equipment

This audit of the New York City Campaign Finance Board (CFB) was conducted to determine whether the CFB is complying with certain inventory procedures as set forth in the Department of Investigation’s (DOI) Standards for Inventory Control and Management and whether it is maintaining internal controls systems as required by the New York City Comptroller’s Directive #1.

The CFB was established in 1988 as an independent, nonpartisan agency.  It is charged with limiting the role and influence of private money in the political process, by matching small contributions with public matching funds to individuals running for public office.  The CFB is also required to publish a voter guide and provide public disclosure of campaign finance information.  Additionally, the CFB holds candidates accountable for using public funds responsibly by commencing post-election audits that could result in candidates having to repay the public funds received and additional penalties.  It also publishes detailed public information about money raised and spent in city elections by candidates and independent spenders.  The CFB also seeks to improve the voter experience by advocating for legislative changes to the registration and voting process.

Audit Findings and Conclusions

The CFB failed to adhere to DOI’s Standards for Inventory Control and Management or to Comptroller’s Directive #1.  Overall, we found that the CFB’s inventory records for office equipment were incomplete and inaccurate.  While we were able to account for all 726 items listed in the CFB’s inventory records, we identified 38 items purchased by the CFB that were physically located in the CFB’s premises but not listed on its current inventory records.  We also found 20 items that were not properly tagged.  Thus, it appears that the CFB’s inventory and inventory records have not been consistently and reliably updated to reflect CFB’s receipt of incoming items.  We further identified one item that was purchased during Fiscal Year 2014 that could not be located during our visits to the CFB and that was not recorded on the inventory list.  In addition, we found numerous instances of noncompliance with other inventory controls, including that the CFB failed to consistently record asset-control numbers and serial numbers, and that there were duplicate serial numbers and duplicate asset-control numbers in the CFB’s records.  Based on the inventory control weaknesses found during testing, we conclude that there is a potential risk of loss, misappropriation or theft.

Audit Recommendations

Based on the audit findings, we make the following five recommendations to the CFB:

• Maintain complete and accurate records of all equipment in accordance with DOI’s Standards for Inventory Control and Management and Comptroller’s Directive #1.
• Update its inventory records promptly and accurately when any inventory changes occur, including new purchases.
• Conduct an annual inventory count of all its computer and computer-related equipment, ensuring that accurate information regarding all such items is properly recorded in the inventory records.
• Ensure that the annual inventory count of computer equipment is properly supervised.
• Affix proper identification tags marked “Property of the City of New York” to all electronic equipment items and include a sequential internal control number.

Agency Response

CFB officials agreed with the report’s findings and recommendations and described steps it has taken or will take to implement the report’s recommendations.  Specifically, CFB officials stated, “Corrective actions have been taken to ensure that the deficiencies identified by the audit do not occur again.  These corrective actions include revising our internal procedures, reassigning responsibility for inventory tasks, implementing a yearly audit process, and retraining staff on correct inventory procedures.”