Government of the District of
Columbia
Office of the Inspector General
Cash Verification of the Metropolitan Police Department’s Main
Imprest Fund, IF-FA-39
E. Barrett Prettyman, Jr., Inspector General
OIG Report No. 9820-16
November 13, 1998
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Attachment
METROPOLITAN POLICE DEPARTMENT
Office of the Chief Financial Officer
MEMORANDUM
TO: E. Barrett Prettyman, Jr., Inspector General
FROM: Daniel Tangherlini, Chief Financial Officer
DATE: November 3, 1998
SUBJECT: Response to the Metropolitan Police Department's Main Imprest Fund, If-FA-39
The following is the Metropolitan Police Department's response to the audit findings
and recommendations contained in your draft audit report of October 1998. Additionally, we
have provided draft copies of our Financial Issuance for the Confidential Fund and the
course outline for imprest fund custodians and Commander/Directors which are designed to
improve the administration and internal control of the Confidential Fund.
Should you have any further questions, please feel free to contact me on 727 4317.
Attachments
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METROPOLITAN POLICE DEPARTMENT
Office of the Chief Financial Officer
Findings and Recommendations
Finance and Budget Division
A. Prior audit Recommendations Not Implemented
Auditor' Recommendation
The Auditor recommends that the Chief of Police take the necessary action to:
1. Deposit immediately the $8,453.06 to the District's General Fund.
MPD's Response
MPD deposited the $8, 453.06 in the District's General Fund on October 22, 1998.
2. Provide our office with the results or the status of the investigation regarding the
$8,453.06 unidentified funds.
MPD's Response
The MPD agent who is working on the case will soon conclude his investigation. As soon
as the investigation is concluded, the OIG will be informed of the outcome.
B. Inadequate Documentation From An Element's Commander or Director
Auditor's Recommendation
The Auditor recommends that the Chief of Police take necessary measures to:
1. Have the current commanders and directors comply with General Order 304.5 and sign cash
advance receipt vouchers acknowledging receipt of the funds and responsibility for the
internal control of the funds assigned.
2. Require that the commanders and directors notify the FBD regarding changes in the
delegated fund custodian of their elements.
3. Ensure that cash advance receipt vouchers for the commanders and directors are updated
when changes occur at an element and are forwarded to the FBD custodian to account for the
total MPD imprest fund.
4. Require a reconciliation of the element's fund when a commander, director, or the
designated custodian changes, holding the commander or director and the delegated
custodian responsible for any fund shortage.
MPD Response
MPD has developed a training course for for managing the Confidential Fund. All of the
citations above will be fully addressed in the training manual. A draft copy of the
training outline is included for your review.
C. PD 152 Sub-vouchers Not Canceled After Reimbusement.
Auditor's Recommendation
The Auditor recommend that the Chief of Police take the necessary measures to ensure
that an FBD official, other than the FBD custodian. cancel all PD Form 152 sub-vouchers
submitted for reimbursement in accordance with General Order 304.5.
MPD's Response
MPD agrees with the Auditor. All PD 1 152s will be canceled immediately after
reimbursement, effective November 3, 1998.
D. FBD Confidential Fund Account Book not Maintained.
Auditor 's Recommendation
We recommend that the Chief of Police take the necessary measures to ensure the FBD
maintains the Confidential Fund Account Book in accordance with the requirements of
General Order 3045
MPD's Response
MPD agree with the auditor. Confidential Fund Account Book was re-established on
October 1, 1998.
E. MPD Imprest Fund Losses Not Reported To The OIG
Auditor 's Recommendation
We recommend that the Chief of Police take the necessary measures to ensure that all
impress and/or confidential fund shortages or loss of funds are reported to the OIG in
accordance with Section XII of Mayor's Memorandum 82-29 "Impress Fund
Procedures."
MPD's Response
MPD agreed with the auditor. Losses will be reported to the OIG as soon as the Office
of the Chief Financial Officer knows of such losses through the reviews and audits.
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Criminal Investigations Division-Homicide Unit
A. Cash of CID-Homicide's Confidential Fund
Auditor's Recommendation - None
The Auditor observed That previously reimbursed documents remained in the safe with
unreimbursed documents due to the PD 128 control sheets were not maintained. OIG gave
verbal instruction to the new custodian as to how reimbursed documents should be filed.
MPD's Response
The Office of the Chief Financial Officer has developed a training curnculum to
certify all custodians. Additional frequent reviews and audits will be conducted to assure
that procedures will be followed as outlined in General Order 304.5.
B. Inadequate Records Documenting Fund Activity
Auditor's Recommendation
We recommend that the Chief of Police take the necessary measures to:
1. Reconcile periodically and examine all confidential and impress funds issued to the
various elements to ensure that the funds are accounted for.
2 Ensure that proper records are maintained in accordance with General Order 304.5.
MPD's Response
The Office of the Chief Financial Officer will conduct periodic reviews, to reconcile
documents and cash, and ensure that proper records arc maintained in compliance with
General Order 304.5. This requirement is now a past of the workload of the General
Accounting staff in the Office of the Chief Financial Officer, MPD.
C. Inadequate Training of Confidential Imprest Fund custodians
Auditor's Recommendation
We recommend that the Chief of Police take the necessary measures to:
1. Ensure that all confidential and imprest fund custodians are adequately trained and are
provided copies of the Mayor's Memorandum 82-29 and MPD General order 304.5 regulations.
2. Ensure that the required cash advance sub-voucher is prepared and signed when there is
a change in an element's commander/director and the funds is reconciled when a change in
fund custodian occurs. The outgoing custodian is responsible for any shortages noted in
the fund on transition of the fund custodian.
MPD's Response
1. The Office of the Chief Financial Officer has developed a training curriculum to
certify all custodians. Part of the training package includes distributing Mayor's
Memorandum 82-29 and General Order 304.5.
2. MPD's CFO has established new procedures to audit and reconcile the imprest funds when
a change in fund occurs, holding the outgoing custodian responsible for shortages.
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Fourth District
A. Cash Count of the Confidential Fund
Auditor's Recommendation
The OIG recommends that the Chief of Police instruct the Fourth district confidential
fund custodian to submit the $30 overage to the FBD custodian for deposit in the
District's General Fund.
MPD's Response
The overage of $30.00 was deposited in the General Fund on November 3, 1998.
B. Transactions Not Recorded In a Timely Manner
Auditor's Recommendation
The OIG recommends that the Chief of Police take the necessary action to:
1. Institute a monthly reconciliation and review process to ascertain that all
confidential fund custodian are complying with the requirement of MPD General Order 304.5
with respect to recording expenditures and reimbursements daily to the PD 128- control
sheet.
2. Ensure that the officers' qualifications are taken into consideration before
designation as custodians so as to make certain that the officers can perform their
assigned responsibilities while maintaining the funds as required.
MPD's Response
1. MPD's CFO has been charged with the responsibility to conduct monthly
reconciliations and a review process to ensure that all confidential fund custodians are
complying with the MPD General Order 304.5 with respect to recording expenditures and
reimbursements daily to the PD 128 control sheet.
2. Officers' qualifications and workload will be taken into consideration when
commanders/directors recommend custodians to the Chief of Police. Maintaining and
administering the Imprest fund will be a high priority for all custodians.
C. Inadequate Controls Over the Payment Process
Auditor's Recommendation
We recommend that that chief of Police take action to ensure that:
1. MPD officials supervise and inspect the maintenance of the confidential funds on a
regular basis and in a timely manner. There should be a training/educational process to
instruct the custodians about the established procedures and to guide them in their
performance of those procedures.
2. Appropriate action is taken to establish guidelines for all elements with confidential
funds to ensure compliance with established approval requirements
MPD's Response
1. MPD's CFO will conduct regular reconciliations and reviews of the confidential fund and
report findings to immediate supervisor through the chain of command. The Office of the
Chief Financial Officer has developed a training curriculum to certify all custodians.
Additional frequent reviews and audits will be conducted to assure that procedures will be
followed as outlined in General Order 304.5.
2. The Executive Assistant Chief will establish guidelines to ensure that the proper
approval process is followed for payments made to Special Employees.
D. Non-compliance with Approval Requirements
Auditor's Recommendation
We recommend that the Chief of Police take appropriate action to revise the layout of
forms PD-127, Confidential Expenditure Sheet, and PD 153, Receipt for Expended Advanced
MPDC Funds, to provide for indication of review and approval in accordance with MPD
General Order 3045.
MPD's Response
The commanders/directors will attend the custodians training to provide updates on the
approval process.
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General Comments
A. PD 127, 152 & 153 Forms should be pre-numbered
Auditor's Recommendation
The MPD should have the PD forms 127. 152, and 153 (used to document and account for
individual confidential fund receipt, expenditures, and reimbursement pre-numbered to
facilitate control and accountability. Because a normal receipt or invoice does not
support confidential funds expenditures, the use of a pre-numbered voucher will provide
added information and an audit trail for tracing expenditures to supporting documentation.
MPD's Response
MPD will investigate prenumbering the PD-127 and 152 forms.
B. Validate Reimbursement documents to Prevent Reuse
Auditor's Recommendation
There are currently procedures in place for for destroying or or mutilating the
reimbursement documents supporting the PD-152 reimbursement request submitted to the FBD
unit to replenish the confidential fund. Because the supporting documentation is not
submitted with the reimbursement request to the FBD custodian, the unit commander or
director should validate the supporting documents when approving the PD152 sub-voucher for
reimbursement. With the use of pre-numbered PD 152 sub-vouchers, the commander or director
could validate the supporting documents (PD 127s & PD 153s) simply by noting on the
forms. "Reimbursed by PD 152 No. xxxx dated xx/xx/xx "
MPD's Response
MPD proposes to- require the Commander/director to mark the reimbursed vouchers
"Reimbursed" with the number of the PD 152 and the date.
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METROPOLITAN POLICE DEPARTMENT
Office Financial Officer
Confidential Fund Training
Course Outline
I. General Discussion on Confidential Fund
A. Purpose
B. Authority
1. District of Columbia Municipal Regulations DCMR, Title 27, Section 1815
2. Mayor's Memorandum 82-29
3. MPD General Order 304.5, Confidential Fund
4. Office of the Chief Financial Officer, Financial Issuance #99-01, Confidential Fund
Procedures
C. Establishing or Modifying Confidential Funds
II. Roles and Responsibilities
A. D.C. Chief Financial Officer
B. Chief of Police
C. MPD's Chief Financial Office
D. Commander/Director
E. Field Custodian Cashier
F. Central 1 Custodian Cashier
G. D.C. Inspector General
H. D.C. Auditor
I. General Accounting Office
III. Discuss Daily Operations
A. Locked Safe
B. PD 128 Confidential Funds Monthly Summary- of Expenditures and Reimbursements
C. PD 129 Confidential Funds - Officer's Account Record
D. PD 127 Confidential Expenditure Sheet
E. PD 152 Sub-voucher for Reimbursement of the Confidential Fund
F. PD 153 Receipt for Expended Advance MPDC funds.
G. Bates-Type Sequential Numbering Stamp
H. Confidential Fund Account Book
I. FMS Form 436, Imprest Fund Voucher
J. Record keeping
IV. Emphasize new reimbursement process
A. Stamping of PD 152 and duplicate after reimbursement of funds
B. Recording of PD 152 in the Confidential Fund Account Book
V. Audits, Reviews and Cash Reconciliation
A. Performed by Commander/ Director
B. Performed by Office of the Chief Financial
C. Performed when changing custodian cashiers
1. Responsibilities for outgoing and incoming custodian cashier(s)
2. Documentation of problems and resolutions
3. Appointment of new custodian cashier(s)
D. Audit report and report of shortage of funds
VI. Questions and Answers
VII. Award of Certifications
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METROPOLITAN POLICE DEPARTMENT
Office of the Chief Financial Officer
October 21, 1998
To: Terrance Gainer, Executive Assistant Chief, Operations
From: Dan Tangherlini, Deputy Chief Financial Officer
Subject: Confidential Funds Reinvention Follow-Up
Attached please find the OCFO's most recent proposal for the reorganization of the
Department s various confidential funds. This reorganization attempts to address the
issues raised both by the OIG Report (10/16) on confidential funds management and the
Department's recent reorganization. In addition to the fund reinvention outlined in the
attached memorandum, the OCFO is currently designing a curriculum for training fund
managers. The training component will be critical in ensuring the future financial
management success of this important activity Please feel free to share with me any
questions or comments you may have on this proposal.
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METROPOLITAN POLICE DEPARTMENT
Office of the Chief Financial Officer
MEMORANDUM:
TO: Executive Assistant Chief of Operations
FROM: Daniel Tangherlini, Deputy Chief Financial Officer
DATE: October 2!, 1998
SUBJECT: Reorganization of the Mayor's Travel Fund and Confidential Fund
The following is the recommendation of the Office of the Chief Financial Officer (CFO)
to reorganize the Mayor's Travel Fund and the Confidential Fund. Also included are
responses to concerns expressed by members of the command staff and operational personnel
who currently use the funds.
Mayor's Travel Fund
1. Given the change in personnel; the amount of the cash shortage ($550.00); lack of
operational training in the handling and reporting of cash transactions; weak internal
controls; and infrequent audits, this office recommends writing off the shortage of cash
in the Mayor's Travel Fund. As part of the broader effort to reinvent cash accounts, the
Mayor's Travel Fund should be included in the proposed programmatic changes detailed
below.
Confidential Fund
II. Reduce the number of sub-funds from 15 to 6 and amount of fund from $125,000 to
$100,000.
| Office of the Professional Responsibility |
$7,000 |
| Office of the Chief Financial Officer |
20,000 |
| Regional Operations Command North |
10,000 |
| Regional Operations Command Central |
20,000 |
| Regional Operations Command Eastern |
10,000 |
| Special Services Group |
33,000 |
| TOTAL |
$1,000,000 |
II. Nominate cashiers and obtain approval by the Central CFO for
employees who will be conducting cash transactions for specific impress funds.
III. Provide training by the Office of the CFO for the approved unit cashiers who will
now be responsible for cash transactions and financial reporting.
IV. Include a $3.000 fund in the Special Services Group for food provision in emergency
incidents for police and support staff to conduct investigations and special events that
will not allow these employees to leave the worksite for meals. The $20,000 maintained by
the CFO will provide a backup when unit funds have been depleted while awaiting
reimbursement checks.
V. Answers to concerns raised by command staff and users of the Confidential Fund
Comment: (Various) Non-sworn custodians should not operate the fund.
Response: The fund will be operated by "trained" sworn staff.
Comment: (SD) Locating the funds at some location off site combined
with the reduction in its base allocation would curtail or suspend certain vice
operations.
Response: The location of the fund can be made convenient to handling
vice operations. The CFO has funds available should your funds become depleted. If your
average expenditure per month increases such that it exceeds your allocation, an increase
can be provided from unit allocations that are not as active.
Comment: (formerly Support Services CID) A central location was not user
friendly combined with the requirement to obtain the signature of the Chief of Police on
voucher documents presents in acquiring funds and delays in obtaining reimbursement.
Response: The Chief may delegate signature responsibility.
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Office of the Chief Financial Officer
Financial Control Directive
Financial Issuance No. 99-01
Issuance Date: November 21,1998
Effective Date: November 21, 1998
The purpose of this order is to establish policies and procedures for controlling and
disbursing funds allocated to the Confidential Fund as approved by the D.C. Chief
Financial Officer, as an impress fund. The policies and procedures included herein will be
consistent with guidelines set forth by the D.C. Chief Financial Officer and the
requirements of the Metropolitan Police Department to carry out the prevention and
detection of crime and vice activities.
PART I: Policy and Functional Requirements
PART II: Operational Procedures
PART I
A. Policy
- The Confidential Fund shall be operated and housed in a locked safe, within the security
of a locked office where access is controlled by the Metropolitan Police Department.
Access to the locked safe must be for persons solely responsible as custodian cashiers for
the funds contained in the safe.
- The Confidential Fund shall not be used to purchase equipment, for reimbursement of
gasoline mileage, or for similar purchases where normal purchasing or reimbursement
procedures exist.
- The disbursement of cash must be limited to persons authorized as custodian cashiers by
the Metropolitan Police Department's Chief Financial Officer (MPD CFO) and the
Chief of Police for a particular fund.
- A cash count and reconciliation audit must be conducted for each fund, on a monthly
basis, and to change custodian cashiers.
- Field custodian cashiers are subordinate to the central custodian cashiers in MPD's
Office of the Chief Financial Officer for training. conducting financial reviews and
reconciliation.
B. Terms
- Imprest Fund The total funds advanced to the Metropolitan Police Department that
are used to operate the Confidential Imprest Fund.
- Central Custodian Cashiers Custodian cashiers are located in the Office
of the Chief Financial Officer who duties include instructional training to certify field
custodian cashiers, review field imprest fund operations and reimburse field operations'
fund allocations. Central custodian cashiers are nominated by the Chief of Police and
MPD's Chief Financial Officer and approved by the D.C. Chief Financial Officer to
administer the confidential fund.
- Field Custodian Cashiers Field Custodian Cashiers are located in police
operational units who have been approved by the Chief of Police and the Chief Financial
Officer and certified by central cashiers to administer unit confidential fund. The field
custodian cashier(s) duties include maintenance of records, disbursement of cash,
preparing financial reimbursement and status reports. The field custodian cashier must
have sole access to the locked safe and the disbursement of cash from a particular unit's
sub-fund allocation. Field cashiers are subordinate to the central cashiers.
- Sub-Fund Advances or Allocations Temporarily allocation of the total impress fund
to a division or program that is administered by the field custodian cashier.
C. Establishing or Changing Imprest Fund Custodians and Commanders
1. To establish impress fund cashiers, the department's Chief Financial Officer and the
Chief of Police shall nominate primary central impress fund custodian cashier (s) and
field custodian imprest fund cashier(s) and alternates for approval by the D.C. Chief
Financial Officer. Forms to complete and submit to the D.C. Chief Financial Officer for
nomination and approval of Imprest Fund Cashier (s) include:
a. A signed copy of "Statement Acknowledging Responsibility of Imprest Fund
Cashier(s)" for each custodian cashier;
b. Two completed "Signature Authorization Cards-Imprest Fund Cashier and
alternate(s); and
c. A transmittal memorandum.
2. To change impress fund custodian cashier(s), Commanders/Directors must notify MPD's
CFO, who will complete the forms for nomination, a transmittal memorandum requesting a
deletion, by name, of each subject cashier, and if desired, a nomination for replacement
(s) using the procedures for establishing impress fund custodian cashiers as indicated
above in (C. 1. a, b., and c.)
3. When Commanders/Directors are appointed over a new unit confidential fund, he/she
must sign a cash advance receipt voucher acknowledging receipt of funds and responsibility
for any shortages and internal control of the funds.
D. Required Materials and Forms
1. A Log Book is the ledger that records all disbursements of cash, deposits of cash
and daily status of funds. There shall be at least one entry every day (365 days a year)
in the log book. On days that there is no activity, including "days off", the
log book shall indicate "no activity-on leave" or "days off', the previous
closing day's balance shall be recorded. This log book is maintained by each central and
field impress fund custodian cashier(s).
2. Form SF 11 65, "Receipt book" shall be used as an interim receipt when
cash is advanced from the central impress fund custodian cashiers to field custodian
cashiers.
3. A Bates-type sequential numbering shall be used to pre-number each receipt from the
receipt book. Care should be taken to ensure that the stamp is functioning properly and
that the number assigned to the receipt portion of the form also appears on the
corresponding interim receipt. The Bates-type sequential numbering stamps is maintained
and operated by the central and field custodian cashier(s).
4. The central and field cashiers shall have a combination safe to maintain cash,
reports, log books, bates-type numbering stamp, reimbursement vouchers and other forms
relating to the Confidential Fund. The safe must be kept in a locked room.
5. PD Form 127-Confidential Expenditure Sheet This form is used by officers who
expend cash for prevention and detection of crime and vice activities. Receipts are
attached to this form and submitted to the unit field custodian cashier. Field custodian
cashier transfers information on the PD form 127 on to the PD form 128 and 129 regarding
expenditures.
6. PD Form 128-Confidential Funds Monthly Summary of Expenditures and Reimbursements
This form is use by the field cashiers to record monthly expenditures and
disbursements incurred by all officers and submitted the central cashier.
7. PD Form 129-Officer's Account Record This form is used by the officer to
record receipt of cash, disbursement of cash and cash balances.
8. PD form 152-Sub Vouchers for Reimbursement of the Confidential Fund This
prenumbered form is used to request reimbursement of sub-fund allocations wing accumulated
PD 127 Forms.
Part II. Operational Procedures
A. Receipt Requirements
Receipts shall be obtained in support of all disbursements of cash. Sworn officers (MPD
employees) shall obtain receipts for submission to field cashiers for field disbursements.
B. Reimbursement
- The central custodian cashier shall prepare FMS Form 436 "Imprest Fund
Reimbursement Voucher" after reviewing the approved reimbursement package for forms
PD 128, 152, 127 and 129.
- The Chief Financial Officer or his designee shall certify FMS Form 436 for data entry
into the city's financial management system to generate a check.
- Once the D.C. Treasurer has generated the reimbursement check, the central custodian
cashier shall cash the check, deposit funds in the safe, record the cash amount and date
of reimbursement of cash in the Daily Log Book stamp or mark the relevant vouchers
"Reimbursed" or "Paid."
- The central custodian cashier will reimburse the field custodian cashier and obtain a
signed receipt. The field custodian cashier will annotate the Daily Log Book, indicating
the amount reimbursed. The commander/director will cancel the PD-152 by marking
"Reimbursed #xxxx date reimbursed xx/xx/xx on the PD 152 to correspond with the
amounts received by the unit custodian cashier.
C. Audits
- Cash reconciliations and audits of the fiends are conducted when changes of unit
custodians or commanders/directors occur.
- The central custodian cashiers shall conduct reviews of cash transactions of impress
fund operations for the Confidential Fund and its sub-fund allocations.
- The audits may include unannounced audits or regular monthly audits of each sub-fund or
division fund that are to be conducted by MPD's CFO.
- Results of the audits conducted by the Office of the Chief Financial Officer must be
provided to the applicable field units for turnaround response of 10 days from issuance of
the draft report. The final report to the Chief of Police will he submitted 20 days from
issuance of the draft report. Shortage of Funds will be reported to the Office of the
Inspector General.
- The Confidential Fund is also subject to audits by the D.C. Controller, D.C. Auditor,
Inspector General, Justice Department and the General Accounting Office. Responses to
their audit findings will be 10 working days from the date of issuance of the draft
report. Responses are to submitted to the Office of the Chief Financial Officer. The Chief
Financial Officer w ill prepare the response for the Chief of Police.
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