Erie County Comptroller Mark C. Poloncarz today released an audit (the "Audit") of Erie County's (the "County") Department of Central Police Services' ("CPS") internal controls and oversight of computers and certain electronic devices for the period January 1, 2006 to April 30, 2008.

The Erie County Comptroller's Office commenced the Audit in late April 2008 following its receipt of a letter from the Erie County Attorney in which she disclosed for the first time that items were missing at CPS. In addition the Comptroller's office received several anonymous letters regarding missing computers and other alleged improprieties at CPS.

"Our auditors have completed the emergency audit of CPS and have identified a number of issues that must be addressed going forward," said Comptroller Poloncarz. "We found troubling problems regarding the failure of CPS and the County's Division of Information and Support Services ("DISS") to each keep accurate lists of computer equipment inventory at CPS, and a failure of CPS to properly follow internal controls related to asset tracking," said Poloncarz. He added, "Simply put, CPS' records did not adequately document their assets nor could they identify the location and status of many of those computer assets."

The Audit found that deficiencies exist in CPS internal controls over computer inventory and revealed the following significant findings:

• A physical inventory of all equipment at CPS has not been performed since January 24, 2000.
• 213 items including desktop and laptop computers could not be accounted for as of the completion of our testing though it appears that the vast majority of these items may have been disposed of as surplus in prior years.
• Tests revealed that two laptop computers have not been accounted for as of the date of the Audit's issuance.
• Assets costing $500 or more have not been recorded consistently since the County's SAP financial and accounting system was implemented in 2004.
• No reconciliation of inventory additions and deletions was performed.
• Newly purchased computers and related items were not recorded in SAP as County assets.
• Internal CPS segregation of duties over equipment is weak.
• No authorization was found for items deleted from the department's inventory.
• The source of surplus inventory items discovered at CPS could not be determined.
• No log is maintained for the final disposition of surplus inventory.
• A number of items in physical inventory were not found in CPS inventory records.
• Physical safeguards over assets are adequate.

In addition, the Audit noted that the County's Accounting Manual should be jointly revised by the Comptroller's Office Division of Accounting, and Division of Purchase, DISS and the Division of Budget and Management to address a variety of developments since the manual was issued in 1988. The Comptroller's Office Division of Accounting is commencing such a revision.

The Audit also found that while the County is complying with Governmental Accounting Standards Board ("GASB") requirements for asset tracking, such requirements do not extend to items valued at less than $10,000. As a result, computers and other equipment valued at between $500 and $10,000 are not all being accounted for as assets in the County's SAP financial and accounting system. The failure by not only CPS but most County departments to record such lower-value assets began in the mid-1990s when the County's then-asset tracking process was functionally ended when the County changed to a different accounting software system.

The Audit noted that starting in summer 2007, the Office of Comptroller's Division of Accounting began working with DISS to ensure proper asset tagging and tracking of computers and related equipment. That 2007 process has been furthered by a joint Comptroller/County Executive process begun in April 2008 in which all County departments are conducting a new asset tracking initiative. Under this initiative, all County entities will physically identify and asset tag all assets (not just computers) valued at $500 and greater and report that data to the Offices of Comptroller and Division of Purchase for uploading of asset data into SAP. This initiative is scheduled to be completed by June 30, 2008.

"While the Audit raises serious issues regarding the failure of CPS to properly track County assets, concerns which exist in many other County departments as well, I am pleased to note that the County is progressing on the new asset tracking initiative which should address many Audit findings and recommendations," concluded Poloncarz.

A copy of the Audit can be found at: http://www.erie.gov/comptroller/county_audits.asp.