The City Treasurer’s office is in need of security enhancements to safeguard the tens of thousands of dollars that move through the city’s banking arm daily, according to an internal audit.
Without the security enhancements, deposits, which come from various city departments, including Glendale Water & Power and Community Services & Parks, are at risk of misappropriation, the Sept. 6 audit stated.
City Treasurer Rafi Manoukian said he could not discuss the type of security problems and how they could be improved to ensure the safety of the treasurer’s staff and city funds.
Manoukian, a former longtime councilman who was elected as the city treasurer in May, said he asked for an audit of the department, which currently has about $372 million in its investment portfolio.
“I think any executive should know the weaknesses of their department,” Manoukian said, adding that he has already started implementing some of the identified changes. “It’s a great start.”
In addition to the lack of proper security in the office, the audit also called for an update of the treasurer’s cash-handling guidelines, thorough background checks of employees and a system to track who accesses computer accounts tied to financial records keeping.
The audit found that account access is not revoked in a timely manner when an employee leaves the office and a log of employees who have access to one of the systems that tracks cash is not maintained.
Without keeping tight controls over access, the city runs the risk of unauthorized use of banking information, according to the audit.
At the same time, the treasurer’s office saw all five of its employees turn over as the city reduced staff through early retirements, Manoukian said.
Those changes meant that the new employees who came into the office did not have banking training. Manoukian said new employees, who came from other city departments, are being trained on the new programs inspired by the audit.
Some of the issues described in the audit stretch back decades. For example, the city has not looked for a new bank since 1998. Without periodically looking at new banks, the city could be missing out on finding a new financial institution with advanced services and lower fees, according to the audit.
While Manoukian agreed with the need to open up a search for a new bank, he plans to keep Bank of America and issue a request for banking proposals within the next three years. Now would be a difficult time to change banks due to the high employee turnover, he said.