Government’s Big Bags of Money

Many jurisdictions lack good internal controls for handling the money their employees collect. A treasurers’ group can help fix that.
by | August 27, 2012 AT 11:00 AM

Back in 1996, while I was city auditor of Kansas City, we undertook an audit of cash control that discovered hundreds of thousands of dollars stuffed in trash bags at the zoo. That was only the worst of what we found at the dozens of different locations throughout the city that collected cash.

The people who collect the cash in most governments are often lower-level employees, with virtually no training and little direct supervision, working in diverse locations: utility customer services, courts, animal shelters, building-permit counters, park facilities, libraries, toll gates. In the case of the Kansas City zoo, a lot of those handling cash were teenagers hired for the summer. We found no evidence of theft, but that's often precisely the point. In the absence of good internal controls, theft can occur without a paper trail to show what happened and with no one being the wiser.

There's no doubt that plenty of government cash is being stolen. Anthony Francisco, finance director for Norman, Okla., and chair of the Cash Handling Committee of the Association of Public Treasurers of the United States and Canada, points to a recent case in Cleveland, Okla., in which the city clerk, who had just retired after 36 years of service, was accused of taking close to $90,000 from the city's utility funds. A Google search of the words "city employee cash" turns up lots more cases. In Hazard, Ky., for example, a city employee was filmed allegedly taking $540 from a cash drawer. In McCleary, Wash., a state audit alleged that a city employee pocketed more than $450,000 in cash payments made at city hall. And the possible theft of public funds isn't the only issue. As Francisco reminds us, money that doesn't get to the bank earns zero interest.

Protecting public funds is why the APT created a program to train public employees who handle cash. Training in cash handling will not prevent a dishonest person from taking money. But in most cases the losses occur not as the result of some complex and sophisticated scheme but because basic internal controls were missing. The training offered by APT can protect taxpayer money by enabling honest employees to recognize and take action to correct these problems.

A second component of the APT cash-handling program is certification. By completing an APT-sponsored seminar based on APT's Cash Handling Training Manual, treasurers can develop training programs for their jurisdictions that can be customized to conform to local laws and circumstances.

Since the inception of the APT cash-handling program, more than 6,000 local-government employees have received training and about 30 jurisdictions have been certified. Mayors, school superintendents, city managers, county executives and others who want to make sure the money paid by their taxpayers and patrons actually gets to the bank — and who want to spare themselves the embarrassment of watching a trusted employee doing a perp walk on the evening news — ought to get in touch with the APT.

To find out more about the APT's cash-handling program, contact the association at 301-495-5560.