HILO — Several County Council members quizzed the legislative auditor and administration officials Tuesday, seeking assurances the county isn’t leaking cash when people rent facilities.
At issue is an audit of the Department of Parks and Recreation that found sloppy handling of cash payments and a lack of numbered receipts and other controls in renting permits for pavilions and other park facilities.
Three offices maintain the reservation books: the Kona Permit Office, Hilo Main Office Administration and the Recreation Division. The program reported it collected $176,000 for 1,297 permits in the 2014-15 fiscal year.
It’s not known how much money might have been lost in cash transactions.
“We couldn’t tell if anything didn’t make it to deposit,” said Legislative Auditor Bonnie Nims.
Nims said the problems seemed to stem from a lack of training, and no segregation of duties so the same person taking the money isn’t also the one who balances the books at the end of the day.
“I think this was more of a training issue,” Nims said.
Other problems identified in the audit were numerous miscellaneous errors and deposits not always made or posted timely.
A lack of numbered printed forms also contributed to the lack of control, Nims said. The auditor focused on this particular area because she sees cash receipts as an “inherently high-risk process.”
Kohala Councilwoman Margaret Wille wanted to know how widespread the problem was.
“Is this the tip of the iceberg?” Wille asked. “That just seems so basic that each permit is numbered … Does half of the money go in … ‘One for the county, one for me’?”
The audit reviewed 138 facility use permits from July through September 2015 at the Hilo and Kona locations, plus an additional nine from June 2015 at the Kona location.
Inadequate accounting of shortages and overages was one of the problems cited. The Hilo office, for example, kept an envelope in the cash drawer where overages were deposited. When there was a shortage, money was taken from the envelope to balance the books.
The Kona office reported no shortages or overages at all, considered a red flag by auditors. Another red flag in Kona were blocks of three or four days where no reservations were issued or money apparently collected, an anomaly in the very popular program.
Hilo Councilman Dennis “Fresh” Onishi asked if the current system had been in place in prior administrations, and was told the prenumbered permit forms were abandoned when the system was computerized.
Department officials say they’re getting a handle on the problems and are taking the auditor’s recommendations to heart.
“We will look at going back to a prenumbered system,” said Parks and Recreation Director Clayton Honma.
The facilities rented from the Hilo Main Office Administration are Bayfront Parking Lot 1 &2, Bayfront Canoe Area, Coconut Island, Honolii and Isaac Hale beach parks, Kalakaua Park, Liliuokalani Gardens, Mooheau Park Bandstand and Mooheau Concession Area.
The Kona Permit Office handles Kona Imin Center and Old Kona Airport Runway North and South.
Parks and Recreation Business Manager Reid Sewake said the department has switched to a new software system that puts data into the accounting system when the permit information is input, rather than a dual-input system. He said the permit number column has been locked so employees can’t change it.
The department also has started accepting credit cards, adding another layer of paper trails, enhanced training and it began conducting surprise cash counts for double-checking.
Finance Director Deanna Sako said her office would increase training for employees handling cash, saying there are new employees.
“I’m satisfied with what seems to be going in the right direction,” said Puna Councilman Danny Paleka after he questioned officials in detail.