The West Virginia State Police was created in 1919 under ß15-2-1 of the West Virginia Code. The agency's structure is quasi-military utilizing a rank system and training methods similar to the U.S. Military. Detachments of officers are located throughout the state. The mission of the State Police is:
"...Statewide enforcement of criminal and traffic laws with emphasis on providing basic enforcement and citizen protection from criminal depredation throughout the state and maintaining the safety of the state's public streets, roads and highways."
This evaluation includes the West Virginia State Police's Bureau of Criminal Investigations (BCI).
During the review, issues were noted regarding internal controls of funds. The BCI has substantial amounts of cash and allows officers to maintain balances of cash indefinitely without requiring settlement. Officers within the Bureau work in an undercover status dealing with criminal elements that operate solely on cash making it necessary to have cash readily available. Although cash is required for the BCI to operate in the manner it does, there are steps that can be taken to increase accountability.
Issue Area 1: Weak Internal Accounting Controls and Lack of Oversight in the Bureau of Criminal Investigation Leaves an Unaccounted Difference of $11,445 and an Unreconcilable Shortage of $1,156 in Region B.
The Bureau of Criminal Investigation's weak and inconsistent internal accounting controls created an unaccounted for net difference of $11,445 for the five year period reviewed and a December 1995 unreconcilable difference of $1,156 in Region B which was written off in March of 1997. These two amounts make up .6% of the total cash advanced during the audit period, demonstrating the effect of weak internal accounting controls over cash. The Legislative Auditor found no evidence that this unaccounted for difference or unreconcilable shortage was due to fraudulent activity. This is more likely an effect of inadequate accounting of BCI funds.
Issue Area 2: Interest Earned in Checking Accounts is Accounted for by a Reduction in Expenses instead of Revenue.
The BCI accounts for interest earned by their local checking accounts as a reduction to expenses. This has the same effect as actually reporting interest revenue, but understates the agency's expenditures. Consequently, it does not represent the actual financial transactions occurring within the organization. The BCI personnel and Comptroller of the Division of Public Safety stated they accounted for interest as a reduction to expenditures because they were not sure how to account for revenues earned on advancements when settling with the State Auditor.
Issue Area 3: BCI does not settle the prior quarterly cash advances until receipt of the next quarters cash advance.
During the review of BCI financial records, it was noted the prior quarterly cash advances were not settled until receiving the next quarter cash advances. The current process by the BCI, in essence, allows borrowing from the next quarter's advance to settle the past quarter's advances. BCI used this practice in order to continue operations without interruption. This type of procedure is commonly referred to as "lapping".
Twenty of twenty-one quarters reviewed noted various amounts of lapping. The amounts of lapping ranged from ($15,415) for the first quarter of calendar year 1995 to $84,585 for the third quarter of calendar year 1994. The procedure of lapping is a large internal control weakness in the current system. This procedure makes it difficult to uncover a possible unreconcilable difference or uncover a shortage in the current quarter. In the event a shortage occurs, it may be made up with the next quarter's advance.