Office of the Chuuk State Public Auditor- Petty Cash fund: controls were found to be inadequate

Office of the Chuuk State Public Auditor

The Office of the Chuuk State Public Auditor (OCPA) announces the release of an Inspection and Evaluation of Petty Cash Fund, which covered the fiscal year 2017 to 2020. Reports may be made available by request to any interested individual at the OCPA in Nantaku, Weno, Chuuk.

The Public Auditor’s authority is based on the Chuuk State Constitution Article VIII Section 9 and Truk State Law 6-21 which states in part:

“The Auditor shall conduct audits of all financial transactions of all branches, departments, offices, agencies, and instrumentalities of the government, and of all accounts kept by or for them.”

We conducted this inspection in accordance with the 2011 US Quality Standards for Inspection and Evaluation issued by Council of Inspectors General on Integrity and Efficiency.

The  objective  of  this  audit  included  determining the adequacy of controls on petty cash fund.

The results of the audit disclosed that the Treasury had implemented  inadequate  controls  to protect the Petty Cash Fund. Specifically, our inspection and evaluation have disclosed the following weaknesses:

  1. Inadequate Written Procedures Could Potentially Lead to Misuse, Abuse and Misappropriation of Funds Without Timely Detection
  2. Non-compliances of payments with the Existing Written Control Procedures
  3. Absence of Periodic Surprise Cash Count and Periodic Checking Could Result in Discrepancies and Missing Funds not Detected Timely

The audit recommendations, if implemented, will strengthen the internal controls on Petty Cash Fund to prevent the risks of fraud, abuse and misuse of the petty cash funds.

The Department of Administrative Services submitted a Management Response, which was in agreement to the findings. We  included such response in the final report.

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