View Audit Report

Comptroller Makes 9 Recommendations to Improve Safety Controls

Comptroller William C. Thompson, Jr. today issued an audit that found that the Department of Buildings (DOB) left office areas, desks and safes unguarded and unlocked, leaving cash vulnerable to theft.

“I am troubled by these findings,” Thompson said. “There are no continuous monitoring measures, such as security surveillance cameras or an electric card-key system to prevent access to the office areas by unauthorized persons.  The measures that are in place are not adequate to prevent or detect theft or misappropriation of cash receipts.”

The DOB is responsible for ensuring the safe and lawful use of more than 900,000 buildings and properties through New York City by enforcing the City’s Building and Electrical Codes, Zoning Resolutions, and other laws applicable to the construction and alteration of buildings.  The DOB imposes and collects fees for various licenses and construction permits it processes each year, collecting cash at seven locations.  For Fiscal Year 2005, the DOB collected $77 million in revenue from license and permit fees.

The audit, covering Fiscal Years 2005 and 2006 through December 31, 2005, found that, while the DOB generally maintains adequate financial controls over cash receipts collected, there were a number of security weaknesses.  One such weakness concerned the physical security measures at each of the DOB’s cash collection locations that allowed unauthorized personnel access to cashier and office work areas.

For example, at the Manhattan Borough office, which handles approximately $150,000 each day, the door leading to the office and cashier area was unlocked and, while there was a sign on the door indicating access was restricted to authorized personnel, there was no receptionist at the door or any physical security measures to prevent or deter unauthorized persons from entering the office. 

In the Bronx office, the door separating the cashier area from the customer waiting area was not locked during the day and did not automatically close after being opened.  There also were no signs posted on the door to the cashier area explaining that access is restricted to authorized personnel only.

At the Staten Island office, the counter at the cashier window was not equipped with security glass and the half-door at the end of the cashier counter was unlocked. Similarly, there was no sign to delineate restricted access to the area.

At a number of DOB cash collection locations, in addition, the audit found instances of noncompliance with established cash controls resulting in cash receipts not being adequately secured or safeguarded.  Safes were left unlocked in the Staten Island and Bronx offices, unsecured cash receipts were found at the Bureau of Electrical Control (BEC) and at the Staten Island, Bronx and Brooklyn offices, and unguarded manual receipt books were found at the Staten Island office. The audit noted that a cashier at the Bronx office disclosed the combination of the safe to auditors, and that the combinations of safes at all seven borough offices were not periodically changed.

Auditors found that the DOB’s licensing unit waited days, weeks and sometimes months to deposit cash receipts in the bank, as opposed to within a day of receipt, in compliance with DOB control procedures. 

Thompson’s audit further found that the BEC did not maintain adequate controls over cash receipts, failed to restrictively endorse checks upon receipt, and did not maintain a mail log to record all cash payments received by mail.

The Comptroller made nine recommendations, among them asking the DOB to:

• Require BEC cashiers to immediately stamp all remittance checks with a restrictive endorsement stamp upon receipt.

• Require the BEC to implement and maintain a log to record and track cash receipts received by mail. In compliance with DOB procedures, the log should be used by the Fiscal Unit to monitor cash receipts processed by the BEC.

• Ensure that all cash receipts received through the mail, by the Licensing Unit or another unit, are deposited in the bank on the day that the mail is received, or at the least on the next business day, as required by Comptroller’s Directive #11.

• Ensure that the safes at all the cash collection locations are kept locked at all times and that access be limited to authorized personnel.

• Ensure that cash receipts, whether received by mail or in person, are appropriately safeguarded and secured in a locked safe or cash drawer.

• Institute effective security measures to deter and limit access to cashier and office work areas to authorized personnel.  Consider installing an electronic or combination locking system to restrict access to the cash collection and office areas by authorized DOB personnel.  At a minimum, DOB should ensure that the doors leading to the cashier and work areas are kept locked.

The DOB agreed to implement- or has implemented all of the recommendations.

 You can view the audit at the Comptroller’s website: www.comptroller.nyc.gov

###