May 9, 2013

Cash handling criticized in Essex County sheriff, probation departments

BY LOHR McKINSTRY Press-Republican

---- — ELIZABETHTOWN — State audits of both the Essex County Sheriff’s Department and the County Probation Department recommend tightening controls over collection of cash paid for bail, fees, surcharges and fines.

Although all funds are accounted for, the audits showed that cash paid by people to the two departments should have been handled more securely, the Comptroller’s Office said.

In some cases, probation officers who had forgotten to bring receipt pads with them to meetings with probationers simply wrote informal receipts on scraps of paper and gave those to people when cash was paid for restitution, alcohol-monitoring fees and other costs.


In the Sheriff’s Department, cash paid for bail and civil judgments “was not properly accounted for, secured and deposited in a timely manner,” the audit said.

That resulted in a civil office overdraft of more than $6,000 in August 2012, the report said. In another case, $2,000 in bail payments was not deposited for three months.

Also, the computer program in use allowed users to delete or modify entries at will.

“I want to point out that there were no discrepancies with any funds passing through our office,” Sheriff Richard Cutting told the Press-Republican. “All monies coming in were handled and were accounted for appropriately.”

He said their computer program did have control registers in effect but not in a format that was in keeping with what the auditors wanted.

“IT (County Information Technology Department) is working on a new system to fulfill that recommendation.”


The audit recommended that no single person be allowed to control all phases of a transaction. The monthly check register should also be verified by the sheriff, undersheriff or chief deputy, the report said, because that was not being done on a consistent basis.

Cash bail is locked in a safe that at least nine people had the combination to, the audit noted. Cash receipts were not issued in sequentially numbered order.

A signature stamp for the sheriff was used without oversight, and in one case, the civil-cases deputy initialed a bank reconciliation statement that showed a negative bank balance of more than $39,000.

Auditors said in the report that the civil deputy told them he didn’t know what he should be looking for when he reviewed the bank statements.

“As to the issue of a stamp of my signature, that process is being reviewed with a number of alternative solutions being considered,” Cutting said.


He said they are working on correcting each of the problems the auditors pointed out.

“As to the recommendations, I have been working with the county auditor, (Treasurer) Mike Diskin and County Manager Dan Palmer to finalize policy and procedure that answer the recommendations in the report as well as works for our agency.”

He said one of the main issues was a separation of duties for accountability.

“We are a small agency and in our civil office, we have one clerk and one deputy. The deputy also does enforcement of civil actions, leaving one person to handle routine office procedures. The report strongly recommends separation of intake, processing, deposits, check writing and so on.

“We have developed what we feel is a workable solution with the civil office and the administrative offices to separate these duties, review and sign for transactions.”

Receipts for cash will now be handled electronically, the sheriff said.

“Some of the issues revolve around handwritten receipts from a receipt book. We are working with IT systems to develop a computer version of the receipts that can be used both in the jail for inmate funds as well as the civil office and will ensure an unbroken numbering system.”

Cutting said that almost all the issues revolved around a limited staff doing numerous duties concurrently.

“In the area of cash handling, we have streamlined our procedures so that any incoming money goes to one secure location, whether it is inmate funds, bail, fines or civil fees, and that money is then processed and deposited on the same or next business day in the case of holidays or weekends.”


County Probation Director Juliann Beatty was not in charge during the audit period, and she referred to the letter County Manager Daniel Palmer sent the Comptroller’s Office in response to the audit.

“The evolution of the numerous collection responsibilities related to restitution, restitution surcharge, administrative fees (for) DWI, fines, drug-test fees and electronic-monitoring fees found the Probation (Department) ill-prepared, from an accounting standpoint, to handle,” Palmer wrote.

“Staff expertise related to accounting and financial controls was lacking, and no guidelines to assist were forthcoming (from the state).”

Despite that, he said, the department did its best to ensure that all monies collected were properly accounted for.

“As the audit concluded, $247,667 was collected and properly accounted for during the period audited, and no exceptions were noted following a random review of 110 receipts.”

This week, the County Board of Supervisors voted to accept the audits, and Palmer said they will make any necessary corrections to procedures.

“Both departments have already provided quite a lot of information (on correction plans),” he said.

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