Okaloosa County BOCC — January 18, 2013 — reading text

totaling $1,200, including 2 debit cards that were issued to the former TDC Executive Director, supporting documentation did not include a qualifying paid receipt from a lodging facility. For these 6 debit cards, County records did not demonstrate that the debit cards were issued pursuant to the approved Program and, as such, the $1,200 represents questioned costs subject to disallowance by the grantor. The former TDC Executive Director controlled the distribution of the remaining 1,349 debit cards, totaling $269,800, of which 302 debit cards were either not used or County records did not evidence how they were used. However, County records evidenced that 1,047 debit cards were not issued pursuant to the approved Program as follows: 4 In connection with this grant, the Florida Division of Emergency Management was indicated as the designated State agency. 22 Packet Pg. 356  9.1.a ****PRELIMINARY AND TENTATIVE FINDINGS**** 1,000 debit cards totaling $200,000 were issued to an airline company. However, the County did not have a written agreement with the company stating the purpose for which the debit cards were issued. 46 debit cards were partially used by individuals, including the former TDC Executive Director, to purchase a variety of goods and services totaling $6,330.45. These goods and services included such items as furniture and furnishings, lodging, food and drinks, alcoholic beverages, tips, entertainment, gas, sales taxes, and other unspecified items. One debit card was used as a prize in a local golf tournament. Attachment: Attorney General P&T Audit (1278 : Response to the Auditor General's Report) County records did not evidence that the above purchases and uses were allowable uses of the State grant funds. As such, these purchases and uses totaling $207,730.45 represent questioned costs subject to disallowance by the grantor. Recommendation: The County should consult with the Florida Division of Emergency Management as to the allowability of the $207,730.45 in questioned costs. Finding No. 20: BP Claims and Reimbursements During the aftermath of the oil spill, BP contracted with the County to provide four land-based medical aid stations for clean-up crews working along the beaches. BP paid the County $634,041 for these services based on a Medical Services Support Agreement that provided hourly rates to be paid for the various services provided at each station. Our tests of invoices submitted to BP by the County disclosed errors in the rates used and calculations made by County personnel. For example, the County invoiced BP for an ambulance at one of the stations at a rate of $100 per hour when the agreement provided for a rate of $50 per hour, resulting in an overcharge of $27,062.50. County personnel indicated that they used the rate of $100 per hour since it was the rate listed in the County?s emergency medical services fee schedule and was the same rate listed in the agreement for the other stations. BP also entered into a Deepwater Horizon Funding Agreement (Agreement) with the Florida Division of Emergency Management through which the County could request reimbursements from BP for costs it incurred in responding to the oil spill. The Agreement required the County to include complete documentation, including invoices, checks, and proof of payment with its requests for reimbursement, and subsequent guidelines indicated that BP would generally reimburse the costs of increased or additional public services, response and removal costs, and lost revenues as a direct result of the oil spill. The County received $1,262,915.71 in reimbursements from BP, of which $981,447.70 (77.7 percent) related to payments the County made to a contractor that assisted County personnel in responding to the oil spill. We reviewed selected documentation supporting the reimbursements the County received from BP for the payments made to the contractor and noted certain costs that were inadequately supported or were for goods and services not clearly related to increased or additional public services, response and removal costs, or lost revenues. For example, we noted the following: The County received reimbursements, totaling $370,208, for wages paid to the contractor?s employees. However, the County did not require the contractor to provide time cards or work logs to support the number of hours used to calculate wages. The County received reimbursements for rental fees, totaling $6,122.36, for boats rented by the contractor. However, the County did not require the contractor to provide invoices from the boat owners to support the rental fee amounts. The County received reimbursements, totaling $3,199.04, for purchases made at restaurants and convenience stores. However, the County did not require the contractor to provide invoices or receipts indicating the items purchased and, in some cases, the person(s) that received or consumed them. As a result, County records did 23 Packet Pg. 357  9.1.a ****PRELIMINARY AND TENTATIVE FINDINGS**** not evidence that the items purchased were necessary and allowable costs related to the response to the oil spill. The County received reimbursements, totaling $5,655.23, for various goods or services for which County records did not evidence were necessary and allowable costs incurred by the contractor in responding to the oil spill. These goods and services included such items as an alcoholic beverage, personal hygiene products, prescription drugs, over-the-counter medications, out-of-state lodging and car rental, and airfare to and from locations outside the County. County personnel indicated that they obtained the best available supporting documentation for the contractor?s Attachment: Attorney General P&T Audit (1278 : Response to the Auditor General's Report) expenses under the circumstances, provided that support to BP, and BP approved the expenditures as reimbursable costs. Although BP reimbursed the County for these expenditures, the above reimbursements, totaling $385,184.63, were not supported by documentation required by the Agreement. Recommendation: For future reimbursement agreements, the County should ensure that reimbursement requests are made pursuant to terms of the agreements, including submission of required supporting documentation. Motor Vehicles Finding No. 21: Fuel Cards The County issued fuel cards for use in its vehicles, including those vehicles assigned to the Tourist Development Department and the convention center, and the Fleet Operations Department was responsible for compiling the monthly fuel charges invoiced by vendors and allocating the fuel charges to user departments. User departments were then responsible for reconciling the monthly fuel charges to gas receipts submitted by employees. During the period May 2010 through May 2012, the Tourist Development Department and the convention center were charged $24,146.86 for fuel purchased using fuel cards. Our review of these charges and the procedures used by County personnel to ensure the propriety of these charges disclosed the following deficiencies: The Fleet Operations Department generated exception reports, by vehicle, to identify unusual fuel consumption. However, the parameters for generating exceptions on these reports were default parameters of the tracking software and were not reasonable. For example, the fuel limits for vehicles assigned to the Tourist Development Department and the convention center ranged from 250 to 400 gallons per day and 900 to 1,050 gallons per week. When such high parameters are used for generating exceptions, the County is at an increased risk that unusual fuel consumption will not be detected. All six user department reconciliations of fuel card charges to gas receipts that we reviewed were not signed by the employees that prepared the reconciliations, and County records did not evidence that supervisory personnel reviewed and approved the reconciliations. In the absence of this information, County records did not evidence that the reconciliations were performed or reviewed and approved by an individual that did not use the fuel cards assigned to the departments? vehicles. Gas receipts for $3,672.25 (79.3 percent) of $4,628.43 in fuel charges that we reviewed were not retained by the user departments. County personnel indicated that the gas receipts may have been lost, destroyed, or not turned in by employees. In the absence of gas receipts, the County cannot demonstrate that fuel charges invoiced by vendors were accurately billed, and user departments cannot demonstrate that fuel costs charged to their departments were accurately allocated. 24 Packet Pg. 358  9.1.a ****PRELIMINARY AND TENTATIVE FINDINGS**** Recommendation: The County should strengthen its vehicle usage procedures to include more reasonable fuel consumption parameters, the effective use of fuel card exception reports and user department reconciliations of fuel charges to gas receipts, and the retention of all gas receipts by user departments. Accounting Controls Attachment: Attorney General P&T Audit (1278 : Response to the Auditor General's Report) Finding No. 22: Classification and Reporting of Expenditures Section 218.32, Florida Statutes, requires that local government reporting entities submit annual financial reports to the Florida Department of Financial Services (DFS). Section 218.33, Florida Statutes, provides that the DFS shall make reasonable rules and regulations regarding uniform accounting practices and procedures by local governmental entities, including a uniform classification of accounts, as it considers necessary to assure the use of proper accounting and fiscal management techniques. To that end, the DFS developed a Uniform Accounting System Manual for Florida Counties (Manual) to be used as the standard for classifying and recording financial information. The Manual provides for expenditures to be recorded and reported using object (e.g., personnel expenses, operating expenses, capital outlay) and sub-object (e.g., salaries and wages, professional services, machinery and equipment) codes to identify the types of the expenditures. Our tests of 60 purchasing card transactions, totaling $37,000