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New York City Comptroller William C. Thompson, Jr. today issued an audit finding that the New York City Clerk’s Manhattan Office has inadequate controls over marriage licenses, leaving them susceptible to theft.

“There is concern that these forms, which bear the City Clerk’s signature, can be easily misappropriated without detection and used to produce fraudulent marriage documents,” Thompson said. “As such, the Manhattan Office should implement stronger internal controls over the tracking and secure storage of these important documents.”

Thompson’s audit – which can be viewed at www.comptroller.nyc.gov – identified how packages of blank certificates and marriage licenses are not safeguarded and locked away at the end of the day.

Overall, Thompson’s auditors found that the City Clerk’s Office generally complied with a Comptroller’s Directive pertaining to “Cash Accountability and Control.”

“Overall, we found that the City Clerk’s Manhattan Office has been adhering to the directives put forth by my office and the City,” Thompson said. “We found only minor examples of non-compliance, which were not of sufficient materiality to detract from our overall opinion.”

In Fiscal Year 2007, the City Clerk’s Manhattan Office collected revenues of $2.7 million, approximately 55 percent of the total revenue collected by all five boroughs. The Manhattan Office oversees a Marriage License Bureau (MLB), which provides marriage licenses, domestic partnership registration, civil marriage ceremonies, registration of marriage officiates, copies and amendments of marriage records, and certificates of non-impediment.

The City Clerk charges the public various fees for these services, and therefore, like other City agencies, must comply with Comptroller’s Directive #11, which provides guidance for the internal control and accountability for cash. The fees for services include: $35 for a marriage license, $25 for a marriage ceremony, $36 for registering a domestic partnership, and $150 for the initial lobbyist registration.

Auditors noted that the Manhattan Office accepts as payment only money orders and certified checks from the public and company checks from the lobbyists. The Office also issues computer-generated, sequentially-numbered receipts, makes daily deposits, requires two signatures for the issuance of refund checks, and performs monthly bank reconciliations.

However, the audit identified some weaknesses, such as: inadequate controls over blank certificates and marriage licenses, lack of reconciliation of fees collected with fees deposited, ability of employees to override their own transactions, and inadequate controls over the issuance of refund checks.

Auditors, however, found that the Manhattan Office does not maintain inventory records for boxes containing packages of the sequentially-numbered, pre-printed blank certificates and marriage licenses.

Additionally, the Office does not account for each certificate and marriage license by using the numbers already printed on them. Instead, the Office uses a number automatically generated by the MLB system when the certificates and licenses are issued each day. These numbers do not match the numbers printed on the issued certificates and marriages licenses and cannot be used to detect gaps in sequence numbers that would indicate if forms were missing.

The audit also found that the Manhattan Office does not have an adequate control over the issuance of refund checks: it has no method of reconciling the refund checks issued to the daily computer report. As a result, there is a risk that refund checks may be issued to individuals who do not warrant them, that they may be issued for the incorrect amount, or that they may not be issued to all individuals due a refund.

Thompson made nine recommendations as a result of the audit, including that the City Clerk’s Office should:

• Ensure that a proper inventory system is maintained to track blank certificates and marriage licenses.

• Develop a daily reconciliation to track the pre-printed numbers of the certificates and marriage licenses to ensure that all issued and voided documents can be accounted for since the MLB system does not have the capability to record this information.
• Issue a written procedure requiring that the daily computer report be reconciled with the daily cash receipts before the cash is deposited in the bank. In addition; all discrepancies found during the reconciliation should have a written explanation and be approved by a supervisor.
• Limit the transaction override function to one or two supervisors within each unit and should not allow individuals to override their own transactions. In addition, it should modify the MLB system so that overrides are not needed for regularly performed transactions.

• Develop a log to record and track refunds to ensure that only authorized refund checks are processed and that all required checks are issued to the public. This log should include all necessary information to allow the transaction to be traced to the MLB system for verification.

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