Audit Report on the Office Equipment Inventory Practices at the 12 Manhattan Community Boards

EXECUTIVE SUMMARY

We audited the twelve Manhattan Community Boards to determine whether they comply with certain inventory procedures applicable to office equipment that are set forth in the DOI Standards for Inventory Control and Management.  We further audited the twelve Community Boards to determine if they maintain effective internal controls over 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 district.  Community Boards have various responsibilities which include assessing their neighborhood’s needs, addressing community concerns, and vetting land use and zoning proposals.  Manhattan has twelve Community Boards that collectively cover the entire borough.  Each of the Manhattan Boards has a District Manager and at least one full-time clerical staff person.

Audit Findings and Conclusions

Our audit found that only three of the twelve Manhattan Community Boards were in compliance with DOI’s Standards for Inventory Control and Management and Comptroller’s Directive #1.  The other nine Community Boards failed to adhere to these City inventory control standards.  We found that 33 items identified on the inventory lists of four of the Community Boards (Boards #4, #8, #9 and #11) could not be located during our visits to the 4 Boards.  Further, during our visits to the Community Boards, we identified 51 items at 6 Community Boards (Boards #4, #8, #9, #10, #11 and #12) that were not listed on the current inventory lists.  Finally, we found that 9 of the Boards maintained incomplete inventory records (exceptions were Boards #1, #2 and #7) and that the items were not always labeled in accordance with DOI standards.  Based on the missing items and the inventory inaccuracies found during testing, we conclude that there is a potential risk of loss, misappropriation or theft.

In addition, we found that Community Board #5 had 12 questionable expenses totaling $1,069.47 that were made using miscellaneous vouchers.  These vouchers did not have the proper documentation to indicate the official Board purpose for the expense.  Also, we found that 5 Community Boards (Boards #2, #5, #8, #9 and #10) purchased 25 office equipment items using incorrect object codes on 20 payment vouchers.

Audit Recommendations

The audit made the following 10 recommendations that each Community Board should:

• Ensure that all missing inventory items are accurately accounted for;
• Ensure that the one piece of equipment located at a former employee’s home be promptly returned;
• Establish procedures  that require the return of any inventory items at the time of any employee’s termination of employment at the Community Board;
• Ensure that complete and accurate records of all office equipment are maintained in accordance with DOI’s Standards for Inventory Control and Management and Comptroller’s Directive #1;
• Conduct an annual inventory count in a manner that results in all equipment being listed as well as the location of the items; the Boards should ensure that the inventory count is properly supervised;
• Appropriately update inventory lists when changes occur, including by documenting any change in the location of a listed item, and properly record the relinquishment of nonworking items and remove those relinquished items from the inventory list;
• Affix identification tags to all major office equipment items and include a sequential internal control number;
• Charge all office equipment purchases to the correct object code in accordance with Comptroller’s Directive #24, Agency Purchasing Procedures and Controls;
• Ensure that all miscellaneous expenses are for appropriate agency business needs and are in the City’s best interest.  Documentation should be maintained that shows the business purpose of each expense and that payment has been made to a vendor prior to reimbursement being made;