Okaloosa County BOCC — November 5, 2013 — reading text

Tourist Development Department to all other departments of the County. In particular, the County amended Section C of the Purchasing Manual which strictly prohibits employees from engaging in any conduct or business that present a conflict of interest. Though the amendment requires a Conflict of Interest Disclosure by any supplier of goods and services in excess of $2500, the amendment prohibits any direct or indirect participation in the procurement process by an officer or employee where there is any financial interest by that officer or employee or any member of their family, regardless of the amount. Further, that section of the Purchasing Manual expressly incorporates the provisions of section 112.313, F.S., as well as the National Institute of Governmental Purchasing Code of Ethics. These amendments strengthen the controls related to the issues raised by this Finding. The County will continue to review, as needed, its policies and procedures to place controls so as to avoid conflicts of interests. 3 Packet Pg. 694  ADMINISTRATIVE MANAGEMENT Finding No. 4: Listings of disbursements that included the check number, amount, payee, and authorized public purpose of each expenditure were not recorded in the BCC minutes, contrary to law. Recommendation: The BCC should ensure that the check number, amount, payee, and authorized public purpose of each expenditure are recorded in the BCC minutes as required by law. COUNTY RESPONSE: Initially, under the Constitution of the State of Florida, the CCC and the BCC are independent constitutional offices. Though the Clerk, under Article V, section 16 of the Florida Constitution is empowered to serve as the “ex officio clerk of the board of county commissioners, auditor, recorder and custodian of all county funds,” the operation of his office is not subject to the direction of the BCC. In those roles, the Clerk is both the keeper of the minutes and responsible for the disbursement of County funds. The Clerk’s constitutional grant of authority vests him with the independent authority within these areas of responsibility. This includes the applicability and compliance with section 136.06, Florida Statutes. Therefore, the County will continue to work with the CCC to assure that the proper recording of expenditures satisfies the requirements of Florida law. Finding No. 5: The BCC had not adopted policies addressing an acceptable level of unrestricted fund balance in its General Fund or developed a plan to replenish the unrestricted fund balance should it fall below target levels. Recommendation: The BCC should adopt formal policies addressing an acceptable level of unrestricted fund balance in its General Fund and develop a formal plan to replenish the unrestricted fund balance should it fall below target levels. COUNTY RESPONSE: The County acknowledges that Government Finance Officers Association (GFOA) recommends that local governments establish a policy on the level of unrestricted fund balance that should be maintained for the General Fund. The County views this recommendation as a best practices tool and not a requirement of law. Additionally, the extent of unrestricted fund balances that may be held during the course of a given year may vary. The County closely monitors these fund balances throughout the course of the year both as to anticipated and potentially unanticipated expenditures. The County will continue to work toward assuring that there are sufficient fund balances available to meet these needs. RESTRICTED RESOURCES Finding No. 6: The BCC had not established separate accountability for each type of fuel tax to demonstrate fuel taxes were spent for authorized purposes. 4 Packet Pg. 695 Recommendation: The BCC should establish separate accountability for each type of fuel tax to demonstrate fuel taxes were spent for authorized purposes. COUNTY RESPONSE: The County agrees with the audit finding and recommendation. While the respective BCC departments exercise prudence in overseeing the appropriateness of expenditures related to the fuel taxes and examples of inappropriate use was not noted in this report, the BCC acknowledges that it should and will take further steps to ensure separation of respective gas tax dollars in order for the County to track expenditures to the respective allowable tax. Additionally, under the Constitution of the State of Florida, the CCC and the BCC are independent constitutional offices. Though the Clerk, under Article V, section 16 of the Florida Constitution is empowered to serve as the “ex officio clerk of the board of county commissioners, auditor, recorder and custodian of all county funds,” the operation of his office is not subject to the direction of the BCC. In those roles, the Clerk is the custodian of all County funds and the manner in which those funds are accounted for are solely within his determination. The Clerk’s constitutional grant of authority vests him with the independent authority within that area of responsibility. Therefore, the specific issue raised in regards to the functioning of the Clerk’s office either has been addressed or will be the subject of future coordination between the respective constitutional bodies. Finding No. 7: The BCC did not obtain adequate support for certain disbursements from the law enforcement trust fund, or document its decision as to how certain disbursements represented allowable uses of law enforcement trust fund moneys in accordance with the provisions of law. Recommendation: The BCC should continue its efforts to obtain adequate support for all disbursements from the LETF, document its decision as to how the disbursements represent allowable uses of LETF moneys in accordance with the provisions of law, and provide such documentation to the CCC. In addition, the BCC should ensure that organizations receiving LETF moneys provide the CCC with the required accounting of the use of LETF moneys. COUNTY RESPONSE: The County agrees with the audit finding and recommendation. As noted in the Finding, in September 2012, the County adopted procedures relating to the application, approval and accounting of the Law Enforcement Trust Fund moneys. The County will continue to review this process and the procedures to make certain that all necessary documentation as to the application, approval and use of these funds are in accordance with these procedures. 5 Packet Pg. 696  PROCUREMENT Finding No. 8: The BCC did not document that certain professional services could not be competitively procured because the services could only be obtained from one company. Recommendation: The BCC should ensure that professional services are competitively procured or document the reason competitive procurement is not possible in accordance with its policies and procedures. COUNTY RESPONSE: The County agrees with the audit finding and recommendations. This Finding is based on a review of two professional service contracts entered into during the period October 2011 through February 2013. As part of the corrective action plan implemented by the County in response to Auditor General Report No. 2013-085, issued January 2013, the County prepared significant revisions to its Purchasing Manual on April 2, 2013. The purpose of these changes was to apply many of the controls that were implemented for the Tourist Development Department to all other departments of the County. In particular, the County amended Section L of the Purchasing Manual relating to request for proposals for professional services and Section G.b.4. relating to sole source items. These amendments strengthen the controls related to the issues raised by this Finding. The County will continue to review and strengthen those policies as circumstances dictate. Finding No. 9: The BCC needed to strengthen its procedures regarding the procurement of contractual services. Recommendation: The BCC should strengthen its procedures to ensure that all contracts include adequate provisions to effectively protect the interests of the BCC; contract payments are properly supported at the time the payments are approved and paid; required approvals are obtained for all contract payments in accordance with BCC policies and procedures; contract payments are properly monitored and do not exceed maximum amounts stipulated in the contracts; and contract renewals are properly executed in accordance with contract provisions and BCC policies and procedures. COUNTY RESPONSE: The County agrees with the audit finding and recommendations. As noted in the Findings, a review of contracts in effect during the period of October 2011 through February 2013 disclosed deficiencies in internal controls over contractual services. As part of the corrective action plan implemented by the County in response to Auditor 6 Packet Pg. 697 General Report No. 2013-085, issued January 2013, the County prepared significant revisions to its Purchasing Manual on April 2, 2013. The purpose of these changes was to apply many of the controls that were implemented for the Tourist Development Department to all other departments of the County. In particular, the County amended Section Q.VII. relating to support, approval and monitoring of contract payments. Further, the County amended Section Q.XVII. relating to contract/lease renewals. These amendments strengthen the controls related to the issues raised by this Finding. The County will continue to review and strengthen its control of contractual services and incorporate necessary protections, support requirements for contractual payments and renewals. Finding No. 10: BCC records did not adequately document the authorized public purpose served by certain promotional and training-related expenditures. Also, the BCC did not establish written procedures over the use of promotional gift cards. Recommendation: The BCC should strengthen its procedures to ensure that the authorized public purpose of expenditures is adequately documented in BCC records and establish written procedures over the distribution and use of promotional gift cards. The BCC should also document the necessity of providing food and beverages to employees attending training and paying for facility and equipment rentals when its own facilities are available. COUNTY RESPONSE: The County agrees with the audit finding and recommendations. The Finding identifies various expenditures and questions the documentation supporting the public purpose for these expenditures. Though the County believes these expenditures do serve a public purpose, the County agrees that it will work toward providing documentation and will continue to do so. As noted in the Findings, a review of expenditures during the period of October 2011 through February 2013 disclosed that BCC records did not adequately document the authorized public purpose served. As part of the corrective action plan implemented by the County in response to Auditor General Report No. 2013-085, issued January 2013, the County prepared significant revisions to its Purchasing Manual on April 2, 2013. The purpose of these changes was to apply many of the controls that were implemented for the Tourist Development