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ESSEL & COMPANY CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS November 7, 2016 Board of Commissioners ‘Somerset County Courthouse 111 East Union Street ‘Somerset, PA 15501 RE: Tax Claims Bureau We were engaged to assist in the investigation of potential misappropriated cash funds from the Somerset County Tax Claim Bureau for the two year tax cycle 2014 - 2015, with delinquent real estate tax payments received in 2015 and 2016. This investigation was predicated upon the Tax Claim Director, Linda Barkley, discovering a deleted tax property from their software system, as she was cross checking unpaid real estate tax records to the delinquent properties list in preparation for the | September 13, 2016 tax sale. OBJECTIVES The objectives of the investigation were to: 1. Determine if funds were misappropriated during the time period January 1, 2015 through September 14, 2016. 2. Determine the amount, if any, of misappropriated funds. 3. Prepare a list of recommendations to enhance controls in the Tax Claim Bureau. BACKGROUND INFORMATION Background of Tax Claim Bureau Personnel + Linda Barkley ~ Date of Hire 2/22/06 — Appointed Director of Tax Claim Services in May 2015. * Brittany E. Carroll - Date of Hire 8/13/10 — Originally held position with voter registration. At 12/12/11, she was transferred to tax claim services. She had held the position of Assistant Director for approximately 1 year. * Cindy Hagans — Date of Hire 6/8/15 — Tax Claims Clerk Events Leading up to the Investigation On September 9, 2016 Linda Barkley, Director, discovered a deleted property record of a local taxpayer, thinking the error was a software problem, Linda emailed the County Information Technology (IT) Department a work order requesting them to look into the deleted data file to correct and restore the record that was erroneously deleted. Glen Wagner, Somerset County's Director of IT, has extensive experience using the real estate tax software system, AS400. He was able to navigate to a feature called Journaling that records all record changes and deletions that can then be restored, Glen ran and restored various files and compared the February 2016 Master Tax Claim database file with the February 2015 Master Tax Claim data base file as well as with the September Tax Claim files. Glen's research resulted in the identification of additional missing property records and deleted tax payment transactions, see Schedule 1. Glenn alerted the County ‘Commissioners and Solicitor regarding his findings and on September 14, 2016, Brittany Carroll and Cindy Hagans were suspended with pay until an investigation could be completed. The County uses a dated system backup process, electronic data is backed up on cassette tapes. These cassette tapes are re-used every two weeks overwriting the previous data. The IT department does maintain one (1) permanent file that records activity once per month. However, the data retained was stil limited as such reports, as the audit system review and journaling are only maintained for the last week of each month. Much of the database details, or the audit trail, are overwritten and were not initially recoverable. Therefore, additional efforts were made to obtain @ copy of the payment receipt from the tax payer. Jeff Doman, County Detective with the District Attorney's office was in the process of contacting the remaining tax payers identified to obtain a copy of their payment receipt. The office copy of the payment receipts were also missing from the Tax Claim office files. The tax payment receipt provides transaction details such as time, date and tax claim employee initials involved in the payment transaction. SCOPE OF THE INVESTIGATION ‘The scope of our investigation was the period January 1, 2015 through September 14, 2016. SOURCE DOCUMENTS We inspected the following documents + Daily deposit reports, reconciled bank statements, various paid and unpaid tax receipts. + Various databases and electronic reports. APPROACH Fraud Examiner Team Members Stephanie Stohon, CPA, CFE; Jared Mishler, CPA; Tyler Crawford, CPA; all with Wessel & Company; Procedures As part of the examination of this matter, the following actions were taken: On September 12, 2016, Stephanie A. Stohon, Partner at Wessel & Company received a phone call from Dan Rullo, Somerset County Solicitor, requesting forensic accounting services to investigate certain Tax Claim Bureau transactions that have been identified as irregular. Dan provided the contact information for Glenn Wagner, the County's IT Director, who was our initial Point of contact for the investigation. On September 19, 2016, Wessel & Company personnel met with Somerset County representatives including Dan Rullo and County Commissioners: Gerald Walker, John Vatavuk and James Yoder. Following the planning meeting, Wessel & Company personnel met with Glen Wagner, IT Director to gain an understanding of the AS400 software and the process he went through to determine and identify missing property records. Wessel & Company personnel also met with Linda Barkley, Director, as she is the only employee from the Tax Claim who was not suspended, Linda provided additional background information and was able to provide detailed work logs for the two employees suspended with pay. Linda also provided daily deposit reports, bank statements and related tax payment information We received databases from Glen Wagner, IT Director, as follows: ‘+ Tax Claim Original - TCMASTER (Tax Claim Master File): Records are properties that ae sill outstanding ~ This is theic most current data fle ‘+ Tax Claim Original - TCHMASTR (Tax Claim History Master File): Records that have been paid — this is their most current data file + Tax Claim Original ~ TCMASTFeb2015 > this is a tax claim master file that was restored from the client's permanent tape from February 2015. + Tax Claim Original — TCMASTFeb2016 - this is a tax claim master file that was restored from the client's permanent tape from February 2016. With the database files Wessel & Company was able to test and duplicate Glen Wagner's list of missing payments by joining the current TCMASTER AND TCHMASTR files. This appended file was joined to the TCMASTER files of February 2015 and 2016 on two separate instances. An additional 26 and 25 records were found from tax years 2013 and 2014, respectively. However, upon further investigation, these properties were correctly removed from the tax assessment software, as these properties were “County Owned" properties and are exempt from taxation, It was determined that the original 12 transactions previously identified in ‘Schedule 4, were the only property records in question. 9 ‘Subsequent to the work performed by Wessel & Company, Glenn Wagner completed research for data recovery options in the AS400 system. He was able to find a recovery tool, "Work with Database File (WRKDBF),” to recover deleted records for all of the properties. He continued gathering electronic data and evidence to support a total financial loss amounting to $15,058.79, beginning in May 2015. E. We prepared this report to summarize our findings and recommendations. FRAUD THEORY “Misappropriation” of assets can also be called “embezzlement.” According to Black's Law Dictionary, “Embezzlement is the fraudulent appropriation of property by one lawfully entrusted with its possession. To "embezzle” means wilfully to take, or convert one’s own use, another's money or property, of which the wrongdoer acquired possession lawfully, by reason of some office or employment or position of trust.” Embezzlement normally has three stages: + Theft Act - The act of taking assets. + Concealment - The attempt to hide the theft, for example, by altering documents. + Conversion - This involves converting the stolen assets to cash and spending the money, FINDINGS. The Theft Act and Conversion: Cash receipts schemes fall into two categories, skimming and larceny. The difference in the two types of fraud depends completely on when the cash is stolen. Cash larceny is the theft of money that has already appeared on a victim organizations book's, while skimming is the theft of cash that has not yet been recorded in the accounting system. Somerset County's Tax Claim Bureau suffered a financial loss from a cash larceny scheme. The Concealment: 4. Deleted Tax Property Records and Related “Cash” Payment — H@SRB On August 10, 2016, J. HMB property owner, paid his 2014 real estate taxes at the Tax Claim office, in cash in the amount of $1,756.25. His cash payment was received by Brittany Carroll who provided J. Hg with a payment receipt. The payment transaction and the property record was later deleted from the system. ‘See Schedule 2 for documentation used to support this as a cash loss. On September 6, 2016, J. NGI property owner, paid his 2014 real estate taxes at the Tax Claim office, in cash in the amount of $645.30. His cash payment was received by Brittany Carroll who provided J. NEE with a payment receipt. The payment transaction and the property record were subsequently deleted that day from the system. Various time and date stamped reports were used to verify that Linda was not involved with this transaction, and Cindy Hagan was not in the office at the time the payment and property record was deleted from the software system. See Schedule 3 for documentation used to support this as a cash loss. 2. Deleted Tax Property Records and Related “Cash” Payments CONCLUSION Based upon source documents tested and procedures performed, sufficient evidence exists, strong enough to support a loss of $2,401.55 from real estate tax funds by Brittany Carroll. ‘See Schedule 4 for recommendations to enhance intemal controls and computer security to reduce the County's risk of fraud within the Tax Claim Bureau. ADDITIONAL ANALYSIS We reserve the right to amend this report based on information received after issuance of the same. RESTRICTIONS This report is intended solely for the use of the Somerset County Commissioners and should not be used for any other purpose, without our prior permission for each occasion. The validity of this report is predicated on the extent to which full, honest and complete disclosure was made to all parties. Very truly yours, WESSEL & COMPANY Certified Public Accountants Stephanie A. Stohon, CPA Shareholder Certified Fraud Examiner Forensic CPA Certified Fraud Specialist Certified in Financial Forensics Attachments: Schedules 1 through 4 Schedule 4 9 - aunos, sieiep wsped sty Moqqo} 09 Pap2ou 2q TTS ARN WBA 20) s9quinu aouazayax parysyysry ay, "wre xvi Jo 9adojdura ue 01 payniuapr u92q anvy spsooas oan WOOg ay} saniacoad Buysstu Jo 1s paytduto> axp stuasaxd wowmn>0p StL (wrosees leswees esas peor aa Fe ovo ee Tats ress oon SE store orate SSE cates oo STE feecs ion ES sees natn EPS foaae [aot sures hoch pre shoo FEDS mon aS (Ocs5t vs Noo en SET «seit v4 coons00 ‘own ae oesst vs nm paielep Ayn Suns ION) wer) xe, ut saRsodoag Buss] w type Term 0 crvrcn1s/To031t 6 Somerset Uo, vax Claim sureau Somerset Co. Office Building 300 N. Center Somerset, PA 814-445-1550 Tax Statement 0c10 eSaGERETAOTS District 42 Ref. No. 0 Reg Pate Intr Assd | uype or Value COUNTY TAX 2014 27200 THE/BORO TAX 2014 27200 SCHOOL TAX 4 ois’ 47260 counry cosT 2014 payment | Payment Date 8/10/2016 1/19 ove Tax Due 399.74 48.18 1034.29 85.00 nto Payment, Amount, ‘2,786.25 1,756.25 * Ave. Suite 370 15501 a vey Lvs zuae jute on eraria 995 at, propery owner ned QR FM paid 2011 Rel Bate fore is pepment wer madeln ca and wen ireceived by Brittany Carroll who initialed tt pvment Se highlighted ara fox sport This Fees ns provided y Me ol wh enced Britany asthe pean Wonks pyeen LAND/BLDG INFO address: [ae 995/899 FON PWG RG Property Loc S Exp Date cum mez. Payments 51.00 450.74 6.12 84.30 W31.92 1166.21 85.00 Recd Tran By ‘Type jOMERSET TOWNSHIP Payment Amount Net am naj Due ‘Total Due Receipt For Final Payment for Real Estate Taxes only. ‘Above Taxes Have Been Paid In Full. vaid 5y SOD Director Linda D. Barkley Date SHWHVaD NOLONTAOS Date tspesryTa — 8BtLT St0z/y0/60 8/10/2016 8/10/2016 me Work Request Ticket Number: Date Submited: Time Submited: Status Date Updated Undated By: Work Requested HiGien, Sable ae mentee 5802 sezot6 808 AM Cosed sxv016 Gien Wasner Submited By: Unda Barkley Department, Tax Claim Bureau Notes: “Take to Linda and taked wih upstairs Gen ‘This isan IT ticket submitted by Linda Barley, Ditector on 9/9/16 to Glen ‘Wagner, Director. Linda explains that the HMMM property was deleted and how Mr. Fbprovided Linda a receipt. Furthermore, Linda acknowledges the payment missing on their dil cash report. Re RRND. tert hat was deed ond you restored yesterday for us. (Mho;paymentis not showing on our ally repay probably becau HELP Unda View Request ofthe dtetion tht day. 9/9/2016 : “Thisisa summary of eah collected on + crvbatin/to005s 34:96:27 ara 8/10/16, the date ofthe Ha scocniy "" ERERARENOE (Se CSLIEGEER RGECIABION G/UZZOIG rage 3 Incldent. See next few pages for further deuils . me tex tax Interest Tax Interest total oe Year Collected collected naj Aaj collected coowne ax aor 3,405.69 3e.98 3,708.67 zs 475.99 16.05 435.06 | 3,005.68 399.83 auzs.s. + | ‘TwP/noRo TAK 213 60 60 | aoe sst.g0 32.88 307.76 asa ae 30.20 273.56 | aamss 143.56 3,267.52 ¢ scoou Tax a3 2,290.86 706.62 3,000.18 wu 3.92.19 aon. 430.30 | ais 2,165.59 59.52 2,225.05 7402.28 1,167.85 4,569.13 « couwry cost 2013. 20,00 20.00 zoe 510.00 10.00 2s 44.00 44.00 634.00 e34.00 + InN ceRTErrcaTes 30.00 30.00 | 33,055.32 4,712.24 766.56 9 Paynenta 14,706.56 cash adjustments for 8/1016, The PNC seep tal up cash and check total. The Somtret County TD slip totals up ret cad receipts. As you wil se AH@MBpaid 8,756.25 cash on S//16, which not ncded this Iara ols @PNCBANK EAR ~ Ove 4 ianetouac 108 EAST MAIN STREET © * o-o2+ SONERSEOBA 26501 O+10+ O°10+ Business Date AUG 10, 2018 0-50+ Calendar Date AUG 10, 2018 200+ Deposit H 60-00+ Transaction Number 50*00+ acount Type 900+00+ Account Nurber 008 - Transaction Anount ~& 8, 180,6 : Cesh Anount. 8 1,012.72 Ip 0129726 Check Amount $ 8,187.84 B137+94+ EEE 00s verification and tote ult uf rgtetios of 9»150+660 this bank, Deposits nf ho bb aiGlfable For ‘eeietevithirvn, Reet sat be ned eres ‘until verified vith your stetanent.. P?S15-80% 010 149766+56« N\ 70° 00+ 103-224 425 +6654 1671 -15+ 52 096-874 81137+94% ot To i oot Sh wean Seg cay can ae Oh Cae Se ad ise Yee swe SETLENT RR Bat Dist ". cervece ie rog25 eactwor Payment Date ‘Aout sniois 5.00 sfio/2016 70.00 srlovais 19.02 afio/216 21.34 sfio/2016 108.22 afi0/2016 112.51, sflo/als = 2.74 syio/216 21.90, 8/0/2016 arlo/2016 sriove0is ariovz0is a/10/2016 srio/z01s sniovecis 1,294.92 ayiove0i6 430.00 s/lo/z0ls. 107.00 aloes 7.96 ayio/2016 © 220.41 ayio/e016 85.00 ariov20i6 $07.28 ariovecis 303.80, 8/10/2016 1,061.7 arioecis 85.00 8/10/2016 465.84 sriave06 279.56 sfioecis 977.05, afiaveas 22.00, errors 9.40 anioené 31.99 ei0/206 85.00 10/2016 380.00 ario/eais 40.00 enioené. 73.43 sfio/ea6 20.99 ariovenn6 166.42 sria/enié 85.00 srioveni6 8/10/2016 10/2016 8/10/2016 10/2016 sria/enie si0/2016 ariovenis sri0/2016 5/10/2016 sni/20i6 Ref, co 160 13090 13080 9700 18060 18060 3070 3070 9200 9290 6450 11300 6540 6540 2370 20250 20280 20250 20250 46730 Tax Year $5790 2 45790 45720 45730 45730 4570 45730 50970 50970 50970 8380 4400 20420 20420 20420 20420 23030 59870 Sonerset Co. Tax Claim Bureau Name 14:26:92 09/10/2016 Page 1 Type aK ox ox OK ox THK ok om ok chk cK aK cK oH cK These page’ area detailed breakout of funds received by tax claim on 4/10/16, You will ot find teansaction on this ist scrytecie/toonzs Somerset Co. Tax Claim Bureau 14:26:32 08/10/2016 TcBcINOY — “at y Depdstt Listing as of a/l0/2016 Page 2 Payment. ist Ref. Tax Li bate mount: Wo. No. Year s/ioveos 200.00 418380 2004 s/lo/ais = 97.6142 «$2380 2014 eloveis «= 11.79 4252380 2018 ayio/e0i6 10.60, 42 $2380 2014 anoveis = 77.91 20 aaeen as nO aloes §— 27.09 20 2nee0 214 0 a/io/ané §— 90.00 34.2 29480 “2015, 0 135.00 * s/lo/ané 61.15 20 960 28 1 e/lo/aé 40.00 209860. 2013, 1k e/lo/aci6 686.18 209860 2014 1% e/lo/ecis = e220 96024 11% anio/aci6 6) 42 11290 2013, TK e/10/aci6 2,199.03 42 11290 2013, Tx snares §— 40.00 42 11290 2013, TK a/lo/amé — 726.98 4211290 2014 1% eiovecié 7.50 4211290 2014 1% a/lorenié 1,981.35 42 11290 2014 TK sovacié 85.00 42 11290 2014! ck 6,731.01 * 14,766.56 ** 14,766.85 crx 1,204.92 CRE 5,615.90 cH 1,049.73 PM 135.00 TK 6,731.01 ‘Aep yey paysodap sem yeyrn| ‘uy Uo JOU S| ou 40} jays yseo AEP 2 tI = ) Tk oy SE | AF, DEI, WI: au ee FP OTE =G; YA, a ae AP a 7, eT SF as a 7 CE WY C SieHUT io eBuEyS ULUSED TOL #7a are Display Journs? exery Sequence... = -. ee " as Go002" sein dedasedrboi 20x dricumammeczcséacezcecnSroese Saass “eaoterapoozsectroaaai eae FsExit _Fé-Dieplay only entey specific data Flosdispiay only entry devaile Fisecenesl P2t-More keys Schedule 3 {Glen Wagner, IT Director was able to pallthe raw data in regards othe {incident on 9/6/16. The sumber'1SB10"is the reference number toMy Ny Sec deleted properties for suppor Use the sequence number '2603"to fallow the next, several pages for this transaction. Display Journal Eneztes Journey + omueries Library ssinbooottctett ESSGSIE samiaiod inte on thin teren + Gobodedobooceeebssty (0m 9/6116, the payment from) NIB was StoiEpiay sotive eneey recorded a 104853 AM, Opt Seqvence code Type Object Library Job ine ace “R" TH eonaae Givi te — Geaoevocac "sra0:39 ie fir femme © Gia Gmenanos ant 2590 mR «PT ToOROAF © GrvvcLia © GpADEVOoOs 10145104 2 Bo tf femor © coactin Goumvsooe ugi2e = He tf femur | Srnctie Gonuersooe = 2s ft neameas Grvverie Greoevaaae € foe ff Sirens Gaowowe etry E elk Sennevosse tet Senoevaass S ceo Seaaevaase ee proring FP coeration n annette racont br cond seed FL4soLopiey previous entey ‘This is a detailed report of the recording ofthe ayment with a date and time, Also, take notice that this payment was recorded onthe front olfice (Community) computer, referenced a, “TCROFFIC" The RRN number (Relative Record Number) 713636, wil be used inthe following pages to trace through the deletion ofthe transaction, Meabee | Di Toonone a Treonpacte ie Minimizes antey data: ‘MORE ede opezation on specific eecord cs Pay suispLeplay Hexadecimal format ‘This is an additional ra data report showing the sequence ‘numer ied 1 the NEED transaction, In addition, under the specific data secon, the report identifies Britany Carol asthe person who recorded the payment and the payrent type asa cash transaction, Britany Carll is denoted by her initials, "BEC." The cash transaction is denoted as, "CSH,” for cash, Eeanie eyete io! iste peorie oe Floebisplay entry flzscencel upenry + micgere o ‘ra9gr/reeorricrgencevoane issoisplay previous entey HISSBLSpuay enly ently apecacie data ‘This is detailed report onthe deletion ofthe payment, The deletion occurred on 916/16 at 11:2052 AMon the fon! teler computa. The relative reference ‘number 713636 can be matched the recording the NG tcansaction. Refer to sequence amber 2751 forthe neat few pages. 3 tanboe on this HIMIMY_ "| bebobodobaneBnogeese | Ncoiapley entice entey ‘This port shows the éltion of the NE transaction identified by the sequence number 2751 and ee Dior Delete eho ype faction | . a 6 | = fe? & Sree eononce | BS ota cence dexeevonee | Beta Seria Genoevovee | Root & Seviaie enoevoeee = ost Series exoeoeen =o Met of Secu feeoeer = Rte eects febeoeer = HB hfe Foote Gevreuia Genres | Gene riecarcet EHEQGPL /AIDOOE LON, HOTTLE 8 Go S916 1:88:01 System Abit Review Meu tame arta Date ine Gin ark Stine TeNcLson—TEBLINOR” “G706/2076 10:57:47 Gaewe aaa oan Tunes seer, ino) 2 GMO CMTE TouCL600 —TEBLINDA —§/06/2016 11:10:29 07 | QPADeIONTO. —CLIENTATIS ToLcLGo —TEBLINOA —$/06/2016 11:11:87 07 QPADeIONTO. —CLIENTATIS ToNcLGOD —TEBLINDA —§/06/2016 11:15:26 07 QPADeIONTO. —CLIEMTATI3 ToUCLG00 —TEBLINDA 9/06/2016 11:17:19 12 QPADAIODTO. -LiewT4tn3 TOUCLGO — TEBLINDA —$/06/2016 11:17:46 12 QPADEVONTO. —CLueNT4TI3 ToLCL999 — TCBLINOA —§/06/2016 11:18:42 oT QPADEIODTO. —CLuewT4N13 TOUEL9G —TEBLINDR © 9/06/2016 11:18:46 10 PADevODTO. —cLlewTanN3 used Teno Sg Thea PINOT TOUCLEOD —TEBLINDA 9/06/0016 11:18:55 PADevoo1O —CLiENTaNIS ToUeLGO —TCBLINDA 9/06/0016. 11:19:01 CeNDEvOIO CL tewatta = ae su me Fasbxit Ftent Review PRINT = Hard Copy ie ‘This document presents Linda Batkelys sytem audit review fr 9/6/16. This data represents what one was doing at their own computer a given time. Linda recorded data at 11:1953 AM and 11:21:58 AM. The deletion ofthe ansaction oocrced at 1:20:52 AM. tt would have been extremely dificult for nds wo have performed the deletion with approximately a minute in between either side of data being recorded on her personal computer. BHCQGPL /ALDOOS BULON, HOTTLE& co System Abit Review None TONLE ToLeLB0D e001 999 TonCLB0O TONLE ToUeLB00 TeneL60D TeneLs00 a ae Shh: Se ser Nene TeaCINOY ‘TeeclNoy TesciNoy TeeCINOY ‘Tescinoy Teseinoy Toscinoy Tesci Noy ate 06/2076 9/06/2016, 9/05/2016, 9/05/2016, 9/05/2016, 9/05/2016 9/05/2016, 9/05/2016, S96 11:50:45 ‘ine In. Option Work Station Client Sa0:T1 07 PADEVOODL CLIENTETTS 0:02:15 05 CPADEYONOL —CLIENTANI3 0:18:46 01 QPADEVOOOL —CLIENTATI3 10:15:47 0§ —CPADENOOOL —CLIENTANIS 10:15:50 07 QPADENOOOL—CLIENTANIS 0:41:24 OT CPRDENOOOL —CLIENTANTS 10:48:37 07 QPADENMOOL—CLIENTATIS 0:43:43 07 QPADEVOOOL—CLIENTATIS TOUCLsO —TORCINOY —$/06/2016 12:10:26 TOUCLEOO — TORCINOY 9/06/2006. 12:10:39 TOUCLGOO . TORCINOY 9/06/2006. 12:10:55 TOUCLGOO — TOBCINOY. —$/06/2006. 12:11:08 FlsExit FlcNext Review PRINT = Hard Copy 05 fi} 0% 0 PADD PAD NOL CPADENNOOL (PADD CLiewren3 CLiewens culenant3 Chiewrant3 Ao this Cindy Hogans system ait review for 9/618. Cindy ad recorded data ther personal computer at 104920 AM. The recording ofthe payment occured at 10853 AM. ei very unlelythat Cindy recone the transaction 27 second trate front teller computer. Addionlly, Cindy didnt record ‘ay data at her des aghn un 1.5934 AM. “Talking wih County personne tis typical for (indy to take her hunch hour fom L112 AM, Furthecnre se the allow page that hows (Cindy s acces into the office frm he card swipe. This shows that he wasnt nthe oom ‘when the deletion of the NE tnsaction ‘was performed. Wid 6z:0v'1 oLoz/z6 WY 00:05:11 9L0z/4/6 Wy zs:s'6 s10ziZ6 Wy 1s:0F8 1026 Nd S196: 8107/0168 WY CE:L5:41 902/016, iy 12:26" 9L02/0/6 Wy Po:s0:8 sLozva16 auiLyayeg eBessoy, xeL ages, 1 ApUID ‘sueBeH, pouiwpy (N)) eouenu3, aahojdw3 Wie, xeL agee,ye ApUID ‘suebeH, PenupY (NI) souenua eefoidiw3 we! xeL ages, 1 .ADUID ‘suebely, Panlupy (ND) eouenua, afoidiu3 wie|9 xeLagee, 18 fpuID ‘suebeHy, pewupy (NI) pouenu3 eefoidw3 we, xeL ages, 1 .ApUuld ‘sueBeH, pmwupy “(NI) ,eouenuS eekoidua ws xeL agee, 18 ApUID ‘sue6eH, penlwupy (NI) souequ3, ‘eafoidiuy wei xeL agee, ye ApuID ‘sue6e}, pomwpy (NI) ouenua sefo(dww3 WEI penlupy pied penwupy preg) poniwpy pie) ponnpy pied ponmupy pied pentupy pie, poniupy pie) zebed souequg se foldury wieIO xeL BEE eouenuS, eeKojdw3 WwieID xeL Agee souenus, sakoidw3 wield xe] AEE eouenug sakojdwy wielg xe Bgee souenuy sofolduy wieI9 xe1 GOCE ssf uieo ser soe eouequS, eakojdwa wietg xe avee souequg, eefojdwa wietD Xe] BEE jou sojensiuiwipy g10zirLi6 Apuig ‘suse Apuig ‘suedeH Apuig ‘suebeH ‘Apuig ‘sue sey Apuig “sue6eH Apuig ‘suebey Kpuig ‘suebeH, ody abessoy, yo] oBessow 80) jeunor ewen 100g ‘ewieN 40pjoupseD Teummor our sex ays sanduo> puns J jo Foy Bup0291 5 JaNNOSuad Eee 01 pazats-o1 wom 945 TW 9TZ5'6 1°91/9/6 UO woo! ap pratUD ays ods ss57e s0Op 9 ue, AUIS ST Q20fey 40 ywWpy) yodey sseo0y 400G - 99HMS Byuno-3 BHONEPL /AUDOOR ALLO, HOFTLE & Oo nn 11:86:10 System dit Revie ote Uae tae — Dae Option fork Station Client TORT “9706/2076 06 QPDEVOOOHCLIENTATIS Tain Tat Sean 7 PADANOOGHcLiBrTATI3 TeveLg00 TORIT 9/06/2016 06 PADEVOOGH —cLIByTATI3 TencLe00 § TORIT 9/06/2016 7 PAOevoooH —cLipyTan13 Toso TORT 9/06/2016 66 ADEVOONH —cLIBTANI3 Tones TOBRIT 9/06/2016 2 CPHDEWOH CLIBTTS ooo TORI 9/06/2016 7 CPeDEVONH cLiematn3 TeNeLECO | TOBRIT 9/05/2016 7 PAOEvoOOH—cLiearaTn3 Toye.ges — TOBRRIT — 9/06/2006 10:42:21 10 PADEMGOOH—LIENT4TI3 Tones TOBRIT 9/06/2016 10:42:34 01 CPADENGOOH—CLIENTATI3 oan Tot Svn6 mc:o} ewa cue Tooc999 TRIT 5/06/2016 10:48:30 10 cuean13 Toogge9 TORRIT. 9/06/2016 108-41 ot Ceo GIL TORIT TORIT TORIT FaeExit Fete Review PRINT = Hard apy ‘This is Britany Carell’ system audit review for 9/5/15. Prior the ocording ofthe N leansacton, Brittany last recorded data at her des at 10:44:59 AM She then returned toler des at 1:13:17 AM to record data at her desk. The transaction was recorded at 10:48:53 AM. With the cvidenge above, it appears that Brittany recorded the transaction atthe front teller computer BHONGPL /AUDOOS BILON, HOTLE & Oo sng 11:57:00 Syston Audit Review ne [This sa continutaton of Brittany Carrols system lault review. She hada gap from 11-1317 AM 112706 AM where she didnot ecord dai at her lown computer The deletion of he QD ToeLs0O © TCBRRIT 9/06/2016 11 5 0 aut ransaction ocenrred at 11:20:52 AM. 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FacGxit) FésNoxt Review PRINT = Hard Copy Schedule 4 ESSEL & COMPANY CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS Somerset County — Tax Claim Bureau Recommendations Report Computer Security Controls The computer software program used by the Tax Claim Bureau appears to be very good program, however we have the following control recommendations to enhance security controls, record retention and provide a detailed audit trail for all ax collection transactions. Password Controls — All Computer Stations 1. Currently, each employee has their own computer station that requires them to log-in with their individual passwords. However there are two (2) computer stations in the front of the office set up to handle customers making a payment at the counter. These two (2) computer stations can be accessed without using a password log-in process identifying the employee who handled a transaction. We recommend all computers require employee log-in and password controls to maintain a detailed audit trail documentation for every payment transaction. Print to File Controls 2. Currently, when a property owner makes a payment, two (2) receipts are printed. One receipt is given to the customer and the other receipt is retained at the office. We recommend computer controls be enhanced to automatically have a third copy printed or saved to a separate secure network file that is not accessible to any of the Tax Claim Bureau employees. This would aid in creating a permanent record of all customer payments in the event the office copy would be misplaced or destroyed. Record Deletion Controls 3. In the Tax Claim office, it is necessary, at times to delete, edit or correct a tax payer file. Currently, all Tax Claim employees have the ability to delete records. While having these rights might be necessary, we recommend deleted files be automatically saved to a separate network drive and reviewed monthly to determine the legitimacy or reason for deletion, and/or require a second level of approval by the Bureau Supervisor before a file can be deleted. Additionally, computer controls should be established to not allow files be deleted from the front office workstation computers. We would then recommend the Internal Auditors review all documents saved in the secure files each month and audit or verify unusual transactions. Annual Comparison Procedures Currently, the IT Director runs a year-end report for the Tax Claim Bureau to match and compare the property records list from the prior year to property record list for the current year. Alll differences are then reviewed to verify the accuracy of added or deleted properties. The County may want to consider performing this process every quarter to catch mistakes or to detect deleted property records on timely basis. Review and Approval of Monthly Bank Statement Reconcili tions Currently, the Assistant Director of the Tax Claim Bureau prepares the monthly bank statement reconciliation. From there, a complete reconciliation package is copied and provided to the County Intemmal Auditors, without review and approval by the Tax Claim Bureau Supervisor. We recommend the Supervisor review and approve all monthly reconoiliations to enhance controls and to ensure accuracy and completeness. Password Security Employees should be provided a written policy where they are instructed to never share their computer log-ins or passwords with another employee. Additionally, a pre- set “change password” alter should be set-up requiring employees to change their passwords periodically. Modernize File Back-up and Storage Currently, the County stores electronic data and information to tape files, which is an outdated method of data retention. Technology has evolved to allow for massive amounts of data storage utilizing a cloud based service or an external drive that can hold terabyte(s) of memory without overwriting files. We recommend the County consider upgrading your digital file storage process to a more modem method to allow for expanded storage capabilities.

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