ML20056D075

Review of Imprest Funds

ML20056D075
Person / Time
Issue date:	06/22/1993
From:	Barchi T NRC OFFICE OF THE INSPECTOR GENERAL (OIG)
To:
References
OIG-93A-18, NUDOCS 9308030225
Download: ML20056D075 (21)

Text

I OFFICE OF THE INSPECTOR GENERAL US NUCLEAR J

REGULATORY COMMISSION g

I REVIEW OF IMPREST FUNDS OIG/93A-18 June 22,1993 I

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%, w f June 22,1993 OFFICE OF THE INSPECTOR GENERAL MEMORANDUM FOR: James M. Taylor Executive Director for Operations

- TO FROM:

Thomas J.

archi Assistant Inspector General for Audits I

SUBJECT REVIEW OF IMPREST FUNDS I

Attached is the Office of the Inspector General's audit report entitled," Review of Imprest Funds".

On June 18,1993, the Deputy Executive Director for Nuclear Materials Safety, Safeguards and Operations Support provided comments on our draft report. We have reviewed his comments and agree with his planned corrective actions.

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Attachment:

As stated I

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cc:

H. Thompson, EDO J. Sniczek, EDO

.h S. Chilk, SECY W. Parler, OGC D. Rathbun, CA I

T. Murley, NRR E. Jordan, AEOD E. Beckjord, RES I

R. Bernero, NMSS P. Norry, ADM R. Scroggins, OC I

P. Bird, OP T. Martin, RI S. Ebneter, RII I

A.B. Davis, P.III J. Milhoan, RIV i

J. Martin. RV I

I J. Blaha, EDO J. Funches, ICC I

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I Review of imprest Funds l

TABLE OF CONTENTS I

REPORT SYNOPSIS................................. 1 I NTR O D U CTI O N...................................

1 B ACKG R OUN D............................... 2 I~I N D I N G S.......................................

3 CONCLUSIONS 4

l R E COM M END ATI ON S............................... 4 AGENCY COMMENTS........

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APPENDICES l

I Objectives, Scope, and Methodology II Headquarters - One White Flint North Imprest Funds III Headquarters - Office of Inspector General I

Imprest Funds g

IV Region I Imprest Fund V

Region II Imprest Fund VI Region III Imprest Fund VII Region IV Imprest Fund VIII Region V Imprest Fund I

IX Agency Comments on Draft Report X

U.S. NRC Functional Organizational Chart XI Major Contributors To This Report I

I Review of imprest Funds l

REPORT SYNOPSIS The Nuclear Regulatory Commission (NRC) maintains imprest funds at I

Headquarters and at all five regional offices for the purpose of making cash disbursements: 1) to vendors for goods and services; 2) to employees as l

advances for authorized expenditures; and 3) to employees as reimbursements for authorized expenditures. NRC Manual Appendix 1101, Part IV, Section A requires the Office of the Inspector General (OIG) to conduct unannounced audits of each imprest fund as frequently as deemed necessary, but at least annually.

This review was conducted to ensure that all imprest funds were accounted for and to determine whether appropriate internal controls were in place to protect the funds from loss or misuse. We performed counts of all imprest funds maintained at NRC IIeadquarters and at the regional offices, interviewed cognizant personnel, and reviewed applicable documentation.

All imprest funds were accounted for during our review and appropriate internal controls were generally in place to protect the funds from loss or I

misuse. One internal control weakness was observed within the operations of the One White Flint North (OWFN) imprest fund. Unlike cashiers in NRC regional offices, OWFN cashiers accept cash,in addition to checks and money orders, from NRC employees in settlement of travel claims. We recommend that this practice be discontinued because it increases the agency's risk ofloss of these monies.

l INTRODUCTION NRC is required by the Treasury Financial Manual (TFM) to periodically make unannounced verifications of cash balances in imprest funds and I

determinations that procedures are being followed that will adequately protect the funds from loss or misuse. The TFM states.nat an agency will develop its own requirements for performing the functions mentioned above.

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Review of Imprest Funds In March 1993, OlG initiated a review of NRC's imprest funds to determine if the funds were accounted for and controls were in place to prevent loss or misuse. Appendix I contains additional details on the objectives, scope, and methodology of our review.

BACKGROUND The TFM defines an imprest fund as "a fixed-cash or petty-cash fund in the l

form of currency, coin, or Government check, which has been advanced as Funds Held Outside of Treasury and charged to a specific appropriation g

account by a Government agency official to an authorized cashier for cash B

payment or other cash requirement as specifically authorized. The fund may be of a revolving type, replenished to the fixed amount as spent or used, or l-may be of a stationary nature such as a change-making fund."

An imprest fund should satisfy a definite, continuing need of an agency for making cash disbursements. Payments from an imprest fund are generally made: 1) to vendors for goods and services; 2) to employees as advances for authorized expenditures; and 3) to employees as reimbursemem3 for authorized expenditures.

NRC Manual Appendix 1101, Part IV, Section A requires each office and region with an imprest fund to perform a quarterly verification of its imprest fund using NRC Form 229, " Imprest Fund Balance Verification." This form serves as a certification by the reporting office that an accounting of the authorized amount of the imprest fund has been made. Appendix 1101 als I

requires OIG to conduct unannounced audits of each imprest fund as e

frequently as deemed necessary, but at least annually.

I The location and authorized amount of each NRC imprest fund follows:

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I Review of imprest Funds l

Location Amount NRC Headquarters:

One White Flint North

$ 40,000 Office of the Inspector General 10,000 Regions:

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King of Prussia, Pennsylvania 35,000 II Atlanta, Georgia 35,000 I

III Glen Ellyn, Illinois 25,000 IV Arlington, Texas 20,000 V

Walnut Creek, California 15.000 Total

$180.000 I

For more information on each of these funds, see Appendices 11 through VIII.

g FINDINGS All imprest funds were accounted for during our review. Adequate internal I.

controls were generally in place to protect the funds from loss or misuse. We did, however, note one area that needs to be addressed.

Unlike regional office cashiers, OWFN imprest fund cashiers accept cash from NRC employees in settlement of travel claims. Most of the cash receipts ll result from refunds of advances for canceled trips. From discussions with the l

cashiers and a review of cash receipts logs, we learned that these receipts can total several hundred dollars on any given day.

The receipt of cash by imprest fund cashiers in settlement of employee travel g

claims is a poor internal control practice that increases the agency's risk of loss of these monies. This increased risk is attributable to the susceptibility of cash to diversion because of its obvious liquidity and the possibility that a s

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5U Review of imprest Funds theft of cash can be concealed, at least temporarily, due to a lack of an adequate documentation trail.

Alternate forms of travel claim settlement (checks and money orders) are available that are less susceptible to diversion, easier to replace if lost or stolen, and provide an excellent audit trail. Most NRC employees settle their g

travel claims via personal check. Also, regional office cashiers do not accept E

cash to settle travel claims.

I CONCLUSIONS I

Allimprest funds were accounted for during our review. Appropriate internal controls were generally in place to protect the funds from loss or misuse.

One internal control weakness was observed within the operations of the OWFN imprest fund. The OWFN cashiers accept cash,in addition to checks and money orders, from NRC employees in settlement of travel claims. We believe this practice should be discontinued because it increases the agency's g

risk of loss of these monies.

5 RECOMMENDATIONS To improve the internal controls within the operations of the OWFN imprest fund, we recommend that the Controller direct the fund cashiers to discontinue the practice of accepting cash in settlement of employee travel l

claims.

I AGENCY COMMENTS On June 18, 1993, the Deputy Executive Director for Nuclear Materials Safety, Safeguards and Operations Support (DEDO) provided comments on g

our draft report. His comments are included as Appendix IX.

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I Review of Imprest Funds

.l The DEDO agreed with our recommendation that discontinuing the practice of accepting cash in settlement of employee travel claims would improve the internal controls within the One White Flint North imprest fund. However, I

he is concerred as to whether NRC may be legally required to accept cash for payment of debts. The Office of General Counsel (OGC) will be requested I

to provide a legal opinion on this matter. If OGC determines that NRC can legally require other than cash for settlement, our recommendation will be implemented. The DEDO will advise us should OGC decide otherwise.

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Appendix 1 Review of Irnprest Funds I

OBJECTIVES, SCOPE, AND METHODOLOGY The objectives of our audit were to ensure that all funds were accounted for and to determine if appropriate internal controls were in place to protect the l

g funds from loss or misuse. We performed counts of all imprest funds maintained at NRC Headquarters and at the regional offices, interviewed cognizant personnel including fund cashiers, and reviewed applicable l

documentation.

Our audit was performed in accordance with generally accepted Government I

auditing standards.

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'l Appendix 11 Review of imprest Funds

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I HEADQUARTERS - ONE WHITE FLINT NORTH IMPREST FUND Location:

Bethesda, Maryland Date of Count: April 1,1993 Principal Cashier:

Tonya Newman I

Verification of Funds I

Amount of Funds Advanced:

$ 40,000.00 Accounted for as follows:

I Currency and Coin 5 3,780.25 Unscheduled Vouchers 3,591.86 l

Unreimbursed Vouchers 12,074.96 Interim Receipts 3,552.93 Cash Advanced to Alternate Cashiers 12,000.00 Cash Advanced to Sub-Cashiers 5.000.00 l

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i E Total accounted for:

$ 40.000.00 I

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I Appendix til Review of Imprest Funds HEADQUARTERS - OFFICE OF INSPECTOR GENERAL IMPREST FUND Location:

Bethesda, Maryland Date of Count: April 30,1993 Principal Cashier:

Deborah Huber I

Verification of Funds I

Amount of Funds Advanced:

S 10,000.0_0 Accounted for as follows:

l Cash in Bank 5 10.000.00 j

Total accounted for:

S 10.000 00 I

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I Appendix IV Review of imprest Funds REGION I IMPREST FUND Location: King of Prussia, Pennsylvania Date of Count: March 2,1993 Principal Cashier:

Teresa McCullough l

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, Verification of Funds 4

Amount of Funds Advanced:

S 35,000.00

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I Accounted for as follows:

I Currency and Coin S 10,524.79 Unscheduled Vouchers 5,580.31 l

Unreimbursed Vouchers 10,764.90 j

Interim Receipts 130.00 Cash Advanced to Alternate Cashiers 8.000.00 i

I Total accounted for:

S 35.000.00 I

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Appendix V Review of imprest Funds REGION II IMPREST FUND Location:

Atlanta, Georgia Date of Count: March 11,1993 Principal Cashier:

Kenneth Hendricks

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Verification of Funds Amount of Funds Advanced:

$ 35,000.00 Accounted for as follows:

Currency and Coin

$ 4,873.72 Reimbursement Checks 15,901.26 Unscheduled Vouchers 2,093.44 Unreimbursed Vouchers 10,508.20 Interim Receipts 135.00 Cash Advanced to Alternate Cashiers 1.488.38 L

Total accounted for:

$ 35.000.00

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Appendix VI Review of Imprest Funds i

REGION III IMPREST FUND l

Location:

Glen Ellyn, Illinois Date of Count: March 8,1993 Principal Cashier:

Mary Erckman Verification of Funds

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Amount of Funds Advanced:

$ 25,000.00 Accounted for as follows:

Currency and Coin S 5,212.10 h

Reimbursement Checks 8,275.07 Unscheduled Vouchers 2,829.50 Unreimbursed Vouchers 5,683.33 Cash Advanced to Alternate Cashiers 3.000.00 Total rccounted for:

$ 25,000.00 L'

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Appendix VII Review of imprest Funds I

REGION IV IMPREST FUND Location:

Arlington, Texas Date of Count: March 23,1993 Principal Cashier:

Stacey Rosenberg I

Verification of Funds I

Amount of Funds Advanced:

$ 20.000.00 Accounted for as follows:

Currency and Coin S 5,792.56 Reimbursement Checks 6,002.86 l

Unscheduled Vouchers 3,637.08 Interim Receipts 67.50 Cash Advanced to Alternate Cashiers 4.500.00 Tctal accounted for:

S 20.000.00 I

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Appendix Vill Review of imprest Funds I

REGION V IMPREST FUND Location: Walnut Creek, California Date of Count: March 24,1993 Principal Cashier:

Margaret Brennes I

Verification of Funds I

I Amount of Funds Advanced:

$ 15,000.00 I

Accounted for as follows:

I Currency and Coin S 9,125.23

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Unscheduled Vouchers 2,354.77 l

Unreimbursed Vouchers 1,495.00 Interim Receipts 25.00 Cash Advanced to Alternate Cashiers 2.000.00

$ 15.000.00 g

Total accounted for:

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I Appendix IX I

Review of imprest Funds AGENCY COMMENTS ON DRAFT REPORT I

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June 18, 1993 MEMORANDUM FOR: Thomas J. Barchi Assistant inspector General for Audits Office of the Inspector General FROM.

Hugh L. Thompson, Jr.

l Deputy Executive Director for l

Nuclear Materials Safety, Safeguards l

and Operations Support 1

SUBJECT:

DRAFT REPORT - REVIEW OF IMPREST FUNDS This responds to the May 10, 1993, memorandum transmitting the subject audit report. We are pleased to note your conclusion that all imprest funds were accounted for and appropriate internal controls were generally in place to protect the funds from loss or misuse. With respect to your specific recommendation, we submit the following:

Recomendation lo improve the internal controls within the operations of the OWFN imprest fund, we recommend that the Controller direct the fund cashiers to discontinue the practice of accepting cash in settlement of employee travel claims.

Festerse Agree ir part. We agree that discontinuine: the practice of accepting cash in l

I the settlement of employee travel claims would improve the imprest fund operational internal controls. However, we are concerned there is a legal recuirement that U.S. currency can be used as legal tender for all debts, public and private. The Office of the Controller will request a legal opinion I

from the Office of the General Counsel (OGC) as to whether NRC may be legally required to accept cash for payment of debts. If the OGC determines we can legally require other than cash for settlement, we will implement the recommendation. Should 000 decide otherwise, we will keep you advised.

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Hugh. Thompsong Jr.,9 Depu Executive'Diretf or for lear Materials $4fety Safeguards, and Operations Support OIG/93A-18 Page 1 of 1 I

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Apperdix X 5

Review of imprest Funds h

U.S. NRC FUNCTIONAL ORGANIZATIONAL CHART I

NRC Commissioners I

Executive Director for Operations Opwam.ms I

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I Appendix XI Review of Imprest Funds I

MAJOR CONTRIBUTORS TO THIS REPORT William Glenn, Team Leader h'

Garj Janosko, Senior Auditor I

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