Follow-up Audit Report on the Computer Equipment Inventory On-Hand at the Human Resources Administration’s Stockrooms

AUDIT REPORT IN BRIEF

This is a follow-up audit to determine whether the Human Resources Administration (HRA) has implemented recommendations made in an earlier audit entitled Audit Report of the Computer Equipment Inventory On-Hand at the Human Resources Administration’s Stockrooms (Audit No. 7A00-155, issued May 31, 2001). The earlier audit evaluated HRA’s control over its computer hardware and software stored in HRA stockrooms and in a warehouse of Time Record Storage Company, a contracted storage vendor. In this current audit, we discuss the recommendations we made earlier as well as the implementation status of those recommendations.

The previous audit made four recommendations to HRA, of which one has been implemented and three have not been implemented. The details of these recommendations and their current implementation status follow.

1. "Create an inventory project team, reporting to the Commissioner, whose sole function would be to overhaul and redesign HRA’s inventory system, in accordance with DOI’s [Department of Investigation] Standards for Inventory Control and Management and in the New York City Comptroller’s Directive #1. The ultimate goal would be an inventory control system that is: (1) accurate (i.e., records match on-hand balances); (2) timely (i.e., records are adjusted to immediately reflect disbursements/receipts); (3) useful (i.e., reorder points are defined and are realistic); and (4) encompassing (i.e., the system tracks items that are supposed to be tracked)." .
2. "Investigate the discrepancies identified in this report. HRA should maintain documentation showing how the discrepancies were resolved."
3. "Refer all significant and unresolved discrepancies to DOI for further investigation, if HRA has not already done so." .
4. "Recoup the value of the missing 97 computers from the Time Record Storage Company." .

To address the above issues that still exist, we now recommend that HRA:

• Reassign the inventory project team to report to the Commissioner.
• Ensure that the project team overhauls and redesigns the HRA inventory system in accordance with DOI’s Standards for Inventory Control and Management and New York City Comptroller’s Directive #1. The ultimate goal would be an inventory control system that is: (1) accurate (i.e., records match on-hand balances); (2) timely (i.e., records are adjusted to immediately reflect disbursements and receipts); (3) useful (i.e., reorder points are defined and are realistic); and (4) encompassing (i.e., the system tracks items that are supposed to be tracked). In that regard, the project team should ensure that:
  • inventory reconciliation procedures are developed and implemented;
  • inventory responsibilities are properly segregated;
  • a complete log is maintained of all computer equipment received by the agency;
  • equipment disbursement forms are issued in sequential order;
  • disbursement forms contain all required authorizations; and
  • annual physical inventory counts are taken.
• Continue to investigate the discrepancies noted in the prior audit and maintain documentation showing how the matters were resolved. All unresolved discrepancies should be referred to DOI.