Wayne County - Office of Sheriff
At June 30, 2011, the office had a cash shortage of $6,261.87 from the sale of a surplus vehicle. This cash shortage resulted from sale proceeds being receipted but not being deposited to the official bank account or being accounted for otherwise. On January 31, 2011, the office sold a 2007 Ford Explorer XLT through an internet auction site. The vehicle was sold for $5,825 plus the transaction fee charged by the auction site of $436.87. The purchaser arrived at the Sheriff’s Office on February 4, 2011, to take possession of the vehicle. Deputy Henry Williams handled the transaction for the Sheriff’s Office, and receptionist Belinda Graham wrote a receipt for $6,261.87 for the transaction coded as “cash.”
During our examination, it was determined that the receipt of $6,261.87 was not deposited to the bank or recorded in the official cash journal. A search of the office failed to discover the missing money. Deputy Williams first stated that he received the payment in the form of a check and that he contacted the issuer’s bank and verified sufficient funds. Subsequently, Deputy Williams stated that he did not remember whether the payment was cash or check. Receptionist Graham stated that she wrote the receipt upon the instruction of Deputy Williams, without ever counting or even seeing the actual funds. She had been hired as the receptionist in January 2011 and was new to the position. The sheriff contacted the purchaser who stated that he had given Deputy Williams the payment in cash contained in an envelope, and that Deputy Williams had placed the envelope in an orange bank bag without counting the money. Sheriff Wilson confirmed that the office does use orange bank bags. The sheriff subsequently contacted the Tennessee Bureau of Investigation (TBI) and filed a fraud report with the state Comptroller’s Office. The matter is currently under investigation by the TBI.
It should be noted that after the discovery of the missing sale proceeds, a check was written to GovDeals from the county’s General Fund totaling $436.87 for payment of the transaction fee. It should also be noted that due to a dispute over the stated
versus actual mileage on the car, the sheriff and Deputy Williams decided to refund $650 of the purchase price. Deputy Williams obtained a check totaling $650 from the county’s General Fund made payable to the purchaser. Therefore, this sale has cost Wayne County $6,261.87 in missing sale proceeds,$436.87 for the transaction fee, and $650 for the refund to the buyer for a total of $7,348.74
Our examination identified the following internal control deficiencies, which resulted from a lack of management oversight over risks related to safeguarding assets:
A. Collections were received by one employee and receipted by another employee who did not have possession of or even count the money.
B. The receipt for the sale of the vehicle was not included in the official cash journal. The official cash journal is the office’s control record and should reflect all financial activity.
C. The sale proceeds were not deposited to the bank or subsequently remitted to the county trustee for deposit into the county’s General Fund within three days of collection as required by Section 5-8-207, Tennessee Code Annotated.
D. Vehicle mileage details were not reviewed for accuracy on the internet auction website.
E. Management did not make any attempt to determine if the funds were posted to the official cash journal or deposited to the official bank account.