Office of the Chief Financial Officer

Executive Summary for In Progress Reports

As of October 16, 2013

Original Report

Report No. OIO 12-02-10-OFT : Audit of Dishonored Checks Processing at the Office of Finance and Treasury and the Office of Tax and Revenue, dated September 30, 2013.

Current Status

In Progress.

Chief Risk Officer’s Risk Assessment

The Office of Finance and Treasury (OFT) and the Office of Tax and Revenue (OTR) take seriously its fair collection of all revenues due the District, including collection of amounts due and fees associated with dishonored checks. However, the revenue associated with these transactions is relatively small (less than one-half of one percent) and the impact on the entire revenue portfolio aligns with an inherent risk rating of Medium. However, OFT and OTR continue their efforts to improve this process as demonstrated by the progress cited in the report, and all three recommendations from OIO are being pursued.

Overview of Recommendations

OIO offered three recommendations and one has been successfully completed.

• OFT has updated the dishonored check policies and procedures to incorporate the additional procedures added.

Of the three recommendations offered by OIO, two are still In Progress.

• OTR is taking steps to reinforce the requirements of OTR's policies and procedures to ensure that RAA forwards dishonored checks within the required 30-day period. RAA recognizes root causes for delays include bank delays and the suspension process in ITS. To mitigate the risk associated with these root causes, RAA is creating a log to track dishonored checks that have not posted to ITS. Unposted payments will be forwarded to RPA for remediation. RAA will start the 30-day clock once the payment has posted to ITS. This effort is to be implemented by October 31, 2013.
• OTR is taking steps to reinforce that the policies and procedures for processing dishonored electronic check payments are adhered to by all OTR staff involved in the process. The following specific steps are being taken to ensure risk is adequately mitigated and will be completed by October 31, 2013:
  • Reviewing the dishonored check process end-to-end to identify risks and controls;
  • Reassigning dishonored check reversal tasks to individuals responsible for each deposit account;
  • Segregation of the deposit account reconciliation and tracking database management tasks;
  • Modifying the tracking database to include e-checks; and
  • Establishing a monthly reconciliation of the database to General Ledger and ITS.

To view the full report, click Audit of Dishonored Checks Processing at the Office of Finance and Treasury and the Office of Tax and Revenue.