This section of the Audit contains recommendations that involve modifications of current accounting practices. Some of the procedures described in the recommendations such as reconciliation of accounts and segregation of responsibilities are already in place. Changes involving how revenues and accounts receivable are entered into the accounting ledgers must be discussed at length with subject matter experts such as the City Controller before a final decision can be made on implementation.

· Recommendation of Auditor"s report

4.5.1 Modify accounting procedures to ensure both billable and non-billable EMS charges are reflected in the accounts receivable balance. This is consistent with fundamental principles of accounting with regard to recording accounts receivable and revenues. Establish written policies and procedures with regard to such accounting.

· Assessment of Department

The Department will analyze the recommendation of the audit.

The Department intends to discuss the implementation of this recommendation with the City Controller"s Office and Allied Information and Services (AIS-the Departments EMS billing service.) The collection on `non-billable" accounts is difficult in the routine and impossible in the extreme. To include this category of accounts in the Accounts Receivable Table would appear as an overstatement of EMS revenue amounts. Whenever additional information becomes available on accounts that have been previously deemed `non-billable", payments on said accounts are reflected as additional EMS revenue. The implementation of this recommendation is complex and will likely increase the workload of the Financial Division and the EMS Administration Section.

· Department Action Plan or Timeline

Department staff will meet with subject experts to discuss implementation of this accounting change. The Department expects completion of its analysis by July 2002.

· Recommendation of Auditor"s report

4.5.2 Modify accounting procedures to ensure that the revenue recognized is appropriately offset by an allowance account based on the amount the Department expects to collect. This is consistent with fundamental principles of accounting with regard to recording accounts receivable and revenues. Establish written policies and procedures with regard to such accounting.

·Assessment of Department

The Department will analyze the recommendation of the audit.

The Department will review this recommendation with subject matter experts. The Controller"s Office, in 1998, recommended and developed the accounting practices currently in place in the SFFD. Principals in this development process were the Deputy City Controller, the Fire Department CFO, the President and COO of AIS, and the EMS Administration Section Chief. The implementation of this recommendation is complex and will likely increase the workload of the Financial Division and the EMS Administration Section.

·Department Action Plan or Timeline

Department staff will meet with subject experts to discuss implementation of this accounting change. The Department expects completion of its analysis by July 2002.

· Recommendation of Auditor"s report

4.5.3 Ensure appropriate segregation of duties exist between staff who make entries in the accounting records.

·Assessment of Department

The Department concurs with the recommendation of the audit.

This recommendation is consistent with current Department procedures. The Department"s written policies contained in the "Lockbox Revenue System and Internal Controls" program detail individual account functions and segregation of duties. The Department"s Accounting personnel and operatives in the Controller"s Office make all EMS revenue entries in FAMIS. No other personnel have access to the EMS FAMIS accounting files.

· Department Action Plan or Timeline

Complete.

The Department finds its current procedures to be consistent with this recommendation.

· Recommendation of Auditor"s report

4.5.4 Ensure the Department receives daily deposit summaries directly from the bank

·Assessment of Department

The Department concurs with the recommendation of the audit.

This recommendation is consistent with current Department procedures. The Department Accounting Section and the EMS Section Chief of Administration already receive deposit summaries on a daily basis. This reporting procedure has been ongoing for years. The "Lockbox Revenue System and Internal Controls" details account flow and responsibilities. Payments to account receivables are reconciled and balanced against AIS records on a monthly basis.

·Department Action Plan or Timeline

Complete.

The Department finds its current procedures to be consistent with this recommendation.

· Recommendation of Auditor"s report

4.5.5 Establish criteria for the classifying accounts as uncollectable and provide for periodic audits of such accounts by the Department.

·Assessment of Department

The Department concurs with the recommendation of the audit.

Currently, accounts are classified as `uncollectable" after 180 days of active listing. These accounts represent open balances without arrangements for payment. The Department has updated its written guidelines for defining uncollectable accounts with AIS. The Department will regularly audit AIS for compliance with these guidelines.

·Department Action Plan or Timeline

Complete.

The Department has reviewed the current language that defines an uncollectable account with AIS and will ensure compliance with these guidelines through regular audits.

· Recommendation of Auditor"s report

4.5.6 Conduct monthly reconciliation of accounting records, AIS records,, and bank records to detect and address inconsistencies in a timely manner. Establish written policies and procedures with regard to such reconciliations.

·Assessment of Department

The Department concurs with the recommendation of the audit.

·Department Action Plan or Timeline

This recommendation is already in place. Payments to accounts receivable are reconciled and balanced against AIS, bank, and Department records on a monthly basis. The appropriate personnel, the EMS Administration Section Chief, the Department CFO, and the Allied Information and Services (AIS) CEO immediately address any reconciliation inconsistencies. The Department will review its written policies and procedures and update them within 90 days as necessary to reflect current practice.

The Department will continue with currently established reconciliation practice.