Audit Report On The Procurement Practices Of The New York County District Attorney’s Office

AUDIT REPORT IN BRIEF

This audit determined whether the New York County District Attorney’s Office (NYDA Office) maintained adequate financial controls over procurement practices as required by Procurement Policy Board (PPB) rules and Comptroller’s Directives.

The NYDA Office investigates and prosecutes more than 100,000 criminal cases annually in Manhattan. The NYDA Office’s Fiscal Department is responsible for preparing and monitoring the Office’s budget; purchasing expenditures; authorizing and preparing disbursements for requested services, equipment, and material; and reimbursing staff for approved out-of-pocket expenditures. During Fiscal Year 2007, the NYDA Office’s Other Than Personal Expenditures (OTPS) totaled $8.5 million.¹ OTPS expenditures covered the procurement of supplies, materials, and services necessary to support agency operations.

Audit Findings

The audit determined that the NYDA Office maintains adequate financial controls over its procurement practices and generally complies with many aspects of Comptroller’s Directives and PPB rules. However, the NYDA Office uses an inordinate number of miscellaneous payment vouchers. During Fiscal Year 2007, the NYDA Office expended more than $4 million (48%) of its $8.5 million Other Than Personal Service budget on PVM vouchers, including $1.9 million to various vendors and another $2.1 million to fund or reimburse the NYDA Office demand account for monies disbursed from the account. The audit identified $1.3 million of the $1.9 million paid to vendors using PVM vouchers for goods and services that would have been more appropriately processed through FMS procedures requiring purchase documents or contract documents.

While the NYDA Office maintains adequate safeguards over cash on hand, and its control and reporting procedures generally comply with Comptroller’s Directive #3, our review disclosed certain weaknesses, including the lack of: (1) surprise cash counts; (2) a cash-on-hand total (limit); and (3) segregation of duties.

Audit Recommendations

To address disclosed weaknesses, the audit made nine recommendations. Some of the major recommendations include that the NYDA Office should:

• Limit the use of miscellaneous vouchers, in accordance with Comptroller’s Directive #24, to those purchases in which the estimated or actual expenditures cannot be determined.

• Obtain bids for purchases over $5,000 and enter into contracts with those vendors for which estimated purchases for similar goods and services throughout the Fiscal Year will exceed $10,000, in accordance with PPB rules.

• Budget for various routine, recurring, ordinary expenses; prepare purchase documents and draw down from these encumbrances as goods or services are paid.

• Conduct periodic surprise counts of petty cash funds and review the supporting records and reconciliations.

• Establish a control limit for petty cash reserves against which expenditures and reimbursements should be periodically reconciled.

• Ensure that conflicting duties of petty cash fund responsibilities and monthly reconciliations of the NYDA Office demand account bank currently assigned to one Fiscal employee be appropriately segregated and assigned to different employees.

NYDA Office Response

Of the nine recommendations made in this audit, NYDA Office officials agreed with seven and partially agreed with two.