Okaloosa County BOCC — January 20, 2015 — County's Response to Preliminary and Tentative Findings — reading text

its p-card policies and procedures to ensure that an independent review and approval is documented for all purchases; employees and reviewers certify they reviewed the applicable p-card expenditure report, that it correctly reflects the supporting receipts, and that all purchases made were for official business and in accordance with applicable rules and directives; p- card certification and receipt forms are timely signed by employees; employees acknowledge the receipt of goods and services; and BCC records evidence the authorized public purpose served by the expenditures. Results of Follow-Up Procedures The BCC’s actions partially corrected this finding. Our review of 19 p-card transactions totaling $13,914 made during the period January 2014 through July 2014 disclosed that an independent review and approval was documented for all purchases; employees and reviewers certified they reviewed the applicable p-card expenditure report, that it correctly reflects the supporting receipts, and that all purchases made were for official business and in accordance with applicable rules and directives; p-card certification and receipt forms were timely signed by employees; and employees acknowledged the receipt of goods and services. However, our review disclosed that BCC records did not adequately evidence the authorized public purpose served for 5 of the 19 transactions totaling $4,735 at the time the purchases were submitted for payment. The purchases were for storage units, meals for visiting groups, a sponsorship of a local chamber of commerce meeting, and Mardi Gras parade supplies. BCC staff subsequently provided us with explanations of the public purpose served by these expenditures. Recommendation: The BCC should take steps necessary to ensure that documentation is maintained that adequately evidences the authorized public purpose served for all p-card purchases. COUNTY RESPONSE: The County believes that the BCC has fully and completely addressed and implemented the recommended corrective actions. The various changes in policy have been implemented to address the prior identified deficiency. As to the 5 purchases noted in the Results of Follow-Up Procedures, each of the expenditures served a public purpose and was authorized. The comment is based upon the perceived insufficiency of the documentation accompanying the expenditure. The County will continue to improve its implementation of the policies to assure that the public purpose is adequately documented for each expenditure. Travel Finding No. 14: Travel Expenditures Previously Reported The BCC needed to enhance its policies and procedures to ensure that travel expenditures were preapproved, adequately documented, and supported by completed and signed travel vouchers. 9 We recommended that the BCC strengthen its procedures to ensure the preapproval of travel expenditures for all authorized persons and the use of properly completed and signed travel vouchers to support all travel expenditures and entertainment-related expenditures pursuant to law. Results of Follow-Up Procedures The BCC’s actions partially corrected this finding. Section 112.061, Florida Statutes, generally provides travel requirements for public officers, employees, and other authorized persons. Further, pursuant to Section 125.0104(9), Florida Statutes, the TDC is authorized and empowered to make expenditures for transportation, lodging, meals, and other reasonable and necessary items and services for such persons, as determined by the head of the TDC, in connection with the performance of promotional and other TDC duties. Vouchers for payment of public funds should contain sufficient information for the paying agency, its pre- auditors, officials, and the post-auditor to determine whether the requested payment is authorized by law. Additionally, Section 125.0104(9), Florida Statutes, states “Complete and detailed justification for all travel and entertainment-related expenditures made pursuant to this subsection shall be shown on the travel expense voucher or attached thereto.” Our review of $11,195 in travel expenditures during the period January 2014 through July 2014 relating to three trips for three BCC employees and four trips for three nonemployees disclosed that travel vouchers were completed for the BCC employees. However, our review disclosed that travel vouchers were not completed for $8,782 in travel expenditures for the three nonemployees. Sufficient information was provided by the travelers to determine compliance with Sections 112.061 and 125.0104, Florida Statutes, for three of the trips performed by nonemployees. However, there was insufficient information for one trip for $3,159 in which a contracted film liaison was reimbursed travel on several days she was scheduled to attend a conference and participate in industry appointments for the Emerald Coast Film Commission. In this case, the BCC’s records supporting the disbursement did not evidence documentation supporting the industry appointments she attended. Subsequent to our request, we were provided with a list of the industry appointments. Recommendation: The BCC should take steps necessary to ensure that travel expenditures for nonemployees are properly documented in accordance with Sections 112.061 and 125.0104, Florida Statutes. COUNTY RESPONSE: The County agrees that it has taken steps necessary to ensure that travel expenditures for both employees and non-employees are properly authorized and documented. The Results of the Follow Up Procedures notes that travel vouchers were not submitted by various non-employees who were under contract with the County. Though the County agrees with that statement, there is no requirement that they submit state-approved travel vouchers under the law and the County has not incorporated that requirement into its agreements. Therefore, the documentation which was submitted is consistent with what is required under the law and by the County. The County may consider the inclusion of that requirement in its future agreements. As to the travel related to the contracted film liaison, the County agrees that the documentation supporting the industry appointments should have been included and the County will continue to improve its implementation of the policies to assure that the expenditure is adequately demonstrated. 10  Special Events Grants and Sponsorships Finding No. 15: Special Events Grants Previously Reported The BCC had not initially developed written policies and procedures relating to special events grants, and the BCC did not document that the special events grants were used for allowable purposes or were effective in increasing tourism and the use of lodging facilities. Subsequently, in September 2012, the BCC adopted written special events grants policies and procedures. We recommended that the BCC strengthen its subsequently adopted special events grants policies and procedures by addressing the methodology for calculating the amounts of the grants and requiring grant recipients to sign written agreements acknowledging the terms and conditions of the grants. Results of Follow-Up Procedures During the period covered in our initial audit, the BCC characterized certain payments as special events and other payments as sponsorships. Since that time, the BCC adopted combined special event and sponsorship funding policies and procedures. See the results of our combined follow-up procedures in finding No. 16. COUNTY RESPONSE: Please see the Response relating to Finding 16. Finding No. 16: Sponsorships Previously Reported The BCC had not initially developed written policies and procedures relating to sponsorships of organizations or events. In addition, the BCC did not consistently document the purpose for which the sponsorships were provided, that the sponsorships were used for allowable purposes, or that the sponsorships were effective in achieving the purposes for which they were provided. Subsequently, in September 2012, the BCC adopted written sponsorship policies and procedures. We recommended that the BCC strengthen its subsequently adopted sponsorship policies and procedures by addressing the methodology for calculating the amount of sponsorships, requiring sponsorship recipients to sign a written agreement acknowledging the terms and conditions of the sponsorships, and requiring sponsorship recipients to provide documentation evidencing how the sponsorship moneys were used and that the sponsorships were effective in achieving their intended purpose. 11 Results of Follow-Up Procedures The BCC’s actions partially corrected this finding. The BCC adopted special event and sponsorship funding policies and procedures that include the authorized use of special event and sponsorship funds and the methodology for calculating the maximum funding that can be provided. In addition, these policies and procedures require that recipients sign a written agreement acknowledging the terms and conditions of the funding, submit invoices for reimbursement of expenses incurred, and submit a post-event report that provides visitor and attendee, lodging, and media/marketing information. However, our review of BCC disbursements during the period January 2014 through July 2014, totaling $35,975, for the sponsorship of two special events, disclosed that the BCC did not obtain adequate supporting documentation for $17,377 in sponsorship disbursements as follows: The BCC paid $11,877 (reduced from $12,250 to meet funding cap restrictions) to a sponsorship recipient for sales calls to promote the recipient’s event at a rate of $3.50 per estimated out-of-town visitor. In a memorandum to the BCC finance department, the Tourist Development Director stated that there is a definite marketing value in the telephone sales calls. However, the BCC did not obtain support from the recipient to document that costs were incurred by the recipient in making the sales calls or to support the rate of reimbursement used. The BCC paid $3,560 (reduced from $3,600 to meet funding cap restrictions) to a sponsorship recipient as compensation for the recipient’s events appearing on the first page of a Google search. A rate of $150 per month per event was used to pay the recipient. In a memorandum to the BCC finance department, the Tourist Development Director stated that there is a definite marketing value in appearing on the first page of results of a Google search. However, the BCC did not obtain support from the recipient to document that costs were incurred by the recipient in accomplishing the Google search results, to document the number of months that the Google search results were achieved, or to support the reasonableness of the rate of reimbursement used. The BCC paid $1,940 to a sponsorship recipient for Web site promotion of the recipient’s event. A rate of $0.20 per visit to the Web site was used to pay the recipient. In a memorandum to the BCC finance department, the Tourist Development Director stated that there is a definite marketing value in Web site exposure, and the TDD pays third-party vendors based on a per-visit basis as part of the strategic marketing plan. He further indicated that a rate of $0.20 per visit had been used in other special event funding applications. However, the BCC did not obtain support from the recipient to document that costs were incurred by the recipient in generating these impressions, to document the number of visits that were made to the Web site, or to