Here's the press release. To see the city's response, check out the full report:
Butkovitz Finds 90% of Technology's Property Not Inspected in Annual Inventory
City Controller Alan Butkovitz says it could not locate computer items from sample
PHILADELPHIA – City Controller Alan Butkovitz today released the FY07-09 audit of the Division of Technology (DOT) that found as part of its annual inventory the Department inspected only 10 percent of its $4.8 million information technology assets.
DOT, which is now titled Office of Information Technology, informed auditors that they physically observed a random sample of items, approximately 10 percent, from their subsidiary records, leaving 90 percent of the property absent from a physical count.
"City regulations require all departments to perform annual physical inspections of all personal property," said Butkovitz. "Failure to physically observe all personal property items increases the risk of undetected loss or theft."
In reviewing Technology's inventory, the Controller's auditors selected 13 personal property items and could not locate five, or 38 percent, of the computer-related items valued at $11,000.
"This is clear evidence that property can go missing when it's not properly accounted for," said Butkovitz. "The Department needs to implement procedures to ensure that annual inspections of all items in its custody are performed in accordance with city regulations."
Along with finding a lack of internal controls over property, the Controller's audit also found Technology could not produce any evidence that franchise fees were properly documented in the city's accounting system. The City's cable service providers are required to remit five percent of their annual gross revenues as franchise fees.
Technology officials informed the Controller's auditors that they only perform a cursory review of the audited statements but maintained no documentation.
"The Department needs to reconcile the franchise fees deposited with the Revenue Department with the figures reported in the City's primary accounting system ," said Butkovitz. "This will ensure that the city is collecting every dollar it's owed."
To view a copy of the FY2007-09 Division of Technology Auditor's Report, please visit the City Controller's website at www.philadelphiacontroller.org