Appraisal of Internal Control System From the San Francisco Chronicle, April 3, 1971:

The flap over missing ferry fares was peacefully—and openly—resolved at a meeting of the Golden Gate Bridge District finance committee yesterday.

Only a week ago, the subject was a matter of furious dispute in which bridge manager Dale W. Luehring was twice called a liar and there were prospects of a closed meeting on personnel matters.

But yesterday, after a week of investigation, the meeting turned out to be public after all, and attorney Thomas M. Jenkins revealed the full total of stolen ferry tickets equaled $26.20.

The controversy began when auditor Gordon Dahlgren complained that there was an auditing “problem” and that he had not been informed when four children swiped $13.75 worth of tickets February 28. Committee chairman Ben K. Lerer, of San Francisco, ordered a full investigation.

Jenkins said the situation was complicated because children under 5 have been allowed to ride the ferry without a ticket, but after May 1 everyone will have to have a ticket, allowing for a closer audit.

Secondly, Jenkins explained, the “vault” in which tickets are deposited was proved insecure (resulting in two thefts totaling $26.20 worth of tickets) but has been replaced.

In the future, it was decided, all thefts of cash or tickets must be reported immediately to the California Highway Patrol or the local police, the bridge lieutenant on duty, the general manager, the security officer, the auditor-controller, and the transit manager.

In addition, employees must make a full written report within 24 hours to the president of the district board, the chairman of the finance-auditing committee, the auditor controller, the attorney, the bus transit manager, the water transit manager, the toll captain, and the chief of administration and security.

What is your reaction to the new system? Explain, giving particular attention to applicable criteria for appraising an internal-control system. lo1