Follow-Up Audit Report On Financial And Operating Practices Of The Queens Borough Public Library

AUDIT REPORT IN BRIEF

This audit determined whether the Queens Borough Public Library (the Library) implemented the nine recommendations made in the Audit Report on the Financial Controls of the Queens Borough Public Library (MG05-95A), issued on June 30, 2005. The Library is one of the three separate library systems serving the City. It is guided by a 19-member Board of Trustees appointed by the Mayor and the Queens Borough President. The Mayor, the Speaker of the City Council, the Comptroller, the Public Advocate, and the Borough President are ex-officio members of the Board. The Library Director is responsible for the administration of the Library.

The Library receives the majority of its operating funds from the City. In Fiscal Year 2007, the Library spent $115,188,597—$71,743,052 for Personal Services (PS) and $43,445,545 for Other Than Personal Services (OTPS), of which the City provided $96,060,713—$66,819,459 for PS expenses and $29,241,254 for OTPS expenses.

The previous audit report concluded that the Library had weaknesses in its purchasing practices, book sales revenue processing, computer equipment inventory controls, banking procedures, and payroll check distributions.

Audit Findings and Conclusions

Of the nine recommendations made in the previous audit, the Library has implemented six, partially implemented two, and did not implement one. The Library implemented the previous audit’s recommendations to strengthen the approval process of purchases, to better segregate duties related to book sales revenue, to improve the management of fines and fees, to establish written computer inventory procedures, and to have better controls over the payroll distribution process. However, weaknesses remained in computer inventory management, and new concerns were identified relative to purchasing practices and the accounting of book sales revenue.

Audit Recommendations

To address the issues that still exist, we recommend, among other things, that the Library:

• Regularly update its computer inventory records to ensure that all its computer equipment is in the reported location and that additions and deletions of inventory are properly recorded, to include detailed information on how, when, and to whom computer equipment is relinquished.

To address new issues, we recommend, among other things, that the Library:

• Comply with its existing bid solicitation procedures and consistently solicit the required number of bids.

• Ensure that its bid solicitation procedures cover purchases of supplies costing more than $5,000 and services other than building services.

• Ensure that all payments made without purchase orders are properly authorized with the required number of approval signatures.

• Establish a procedure to clarify which purchases need purchase orders and which do not.

• Sequentially number its contracts and ensure that they are properly recorded in SAP.

• Establish adequate controls so that book sales revenue and related expenses are properly supported and accounted for.

Agency Response

In its response, the Library agreed with 16 recommendations, disagreed with one, and stated that it would conduct assessments of the remaining three.