Okaloosa County BOCC — November 5, 2013 — reading text

Department to all other departments of the County. In particular, the County amended the following sections of the Purchasing Manual relating to the review of whether a particular expenditure serves a public purpose: Section G.2.e. provides: Prior to authorizing any expenditure listed above, the Department Director shall review the purchase and determine that the 7 Packet Pg. 698  expenditure serves a public purpose and that the necessary approval and procedures for the expenditure has been complied with. Section G.9.b.(1) provides: The Finance Department shall review the purchase order and determine that the expenditure serves a public purpose, that the necessary approval and procedures for the expenditure have been complied with and certify that funds are available for the purchase. The funds are encumbered and obligated at this point in the purchasing process. The Finance Department shall forward the certified purchase order to the Purchasing Department. The Finance Department referred to in Section G.9.b.(1) above is under the authority and supervision of the CCC. These amendments strengthen the controls related to the issues raised by this Finding. Finding No. 11: The BCC needed to enhance its procedures relating to the use of purchasing cards. Recommendation: The BCC should strengthen its p-card policies and procedures to ensure that an independent review and approval is documented for all purchases; p-card expenditure reports include the required statement that employees and reviewers have certified they reviewed the applicable p-card expenditure report, the report is supported by receipts, all purchases made were for official County business, and the purchases were in accordance with applicable rules and directives; single transaction limits have not been exceeded; prior to payment, employees have acknowledged the receipt of goods and services purchased; BCC records evidence the authorized public purpose served by the expenditures; and p-cards for terminated employees are timely canceled. COUNTY RESPONSE: The County agrees with the audit finding and recommendation. As noted in the Findings, a review of P-card expenditures during the period of October 2011 through February 2013 disclosed deficiencies in the controls and monitoring of P-card expenditures. 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 N of the Purchasing Policy relating to Purchasing Card Policy and Procedures. These amendments strengthen the controls related to 8 Packet Pg. 699 the issues raised by this Finding. The following is a list of revisions made to the Purchasing Manual: • Section N.C.10.(c) requires P-card expenditure reports of Department Directors to be reviewed by the County Administrator. Reports of the County Administrator are reviewed by the Chairman of the BCC. Reports of the BCC members are reviewed by the Clerk’s Finance Department. • Section N.A.3. relating to the cancellation of P-cards for cardholders that are no longer employed by the County. • Section N.C.2 and 3 requiring that goods or services are received prior to payment. • The revised P-card Expenditure Report (page 63 of Purchasing Manual) requires employees and reviewers to certify they reviewed the report, the report is supported by receipts, all purchases were made for official County business, the purchases were in accordance with applicable rules and directives, documents the public purpose of the purchases, and the date on which the goods/services were received. The County recognizes the importance of P-cards in the elimination of petty cash for small purchases as well as the intangible benefit of rebates from the issuer. In that regard, the County will also review and consider the amendment of the policies and procedures to address controls related to the use of P-cards, as determined to be needed by the County. Finding No. 12: The BCC did not document the necessity of paying for certain goods and services in advance of their receipt, contrary to law. Recommendation: The BCC should strengthen policies and procedures to ensure that advance payments are approved and paid only if the payments result in a savings that is equal to or greater than the amount that would be earned by investing the funds and paying later, or if the payments are essential to the BCC’s operations and the goods or services being paid for are available only if advance payment is made. COUNTY RESPONSE: The County agrees with the audit finding and recommendations. As noted, the County has adopted amendments to its Purchasing Manual on April 2, 2013 which significantly strengthened the review and documentation required for expenditures. The County will continue to review and strengthen these controls, as necessary, including limitations on the advancement of payments. 9 Packet Pg. 700  TRAVEL Finding No. 13: Several County Commissioners received monthly travel allowances based on typical months’ travel statements that were outdated, included unallowed mileage, or did not include adequate descriptions of the travel claimed. Recommendation: The BCC should strengthen its procedures to ensure that travel allowances are paid based on typical month’s travel statements that are updated annually, include sufficiently detailed information, and are correctly calculated in accordance with the provisions of law and guidance provided in applicable Attorney General opinions. COUNTY RESPONSE: Though the County does not necessarily agree that all of the examples cited in the Finding were contrary to the requirements of law, the County will review and revise where necessary, its procedures to ensure that travel allowances are paid based upon the requirements of Florida law. CONTRIBUTIONS Finding No. 14: The BCC had not adopted policies and procedures for making contributions to private nonprofit corporations. Also, the BCC did not consistently document how contributions to the corporations served an authorized public purpose, require the corporations to enter into a written agreement stating the purpose for which the contributions should be used, or obtain a subsequent accounting from the corporations as to how the contributions were ultimately used. Recommendation: The BCC should adopt written policies and procedures addressing criteria to be used to make contributions to private nonprofit corporations, the methodology for calculating the amount of the contributions, and the responsibilities of the corporations receiving the contributions to provide an accounting as to how the contributions were ultimately used. In addition, the BCC should document how each contribution serves an authorized public purpose and obtain a subsequent accounting from each corporation to document that the authorized public purpose was accomplished. COUNTY RESPONSE: The County agrees with the findings and recommendations. The County will consider the adoption of written policies and procedures addressing criteria to be used to make contributions to private nonprofit corporations, the methodology for calculating the amount of the contributions, and the responsibilities of the corporations receiving the contributions to provide an accounting as to how the contributions were ultimately used. In addition, the County will strengthen its procedures to establish how contributions serve a public purpose. MOTOR VEHICLES 10 Packet Pg. 701 Finding No. 15: The BCC had not established adequate controls over the use of fuel cards. Recommendation: The BCC should continue its efforts to strengthen controls over the use of fuel cards by requiring BCC departments to retain all receipts from retail locations and perform reconciliations of fuel charges to those receipts. COUNTY RESPONSE: The County agrees with the audit finding and recommendation. The County currently monitors fuel sales through a variety of documentation. The primary source of review is the electronic transaction data which establishes the purchaser, the fuel card number, the vehicle that was fueled, the fueling location, the amount purchased and the price. The County has already reviewed the parameters for all fuel cards and adjusted the parameters where appropriate. The County will continue to review its procedures and controls to provide assurance that adequate documentation is available. The County will also strengthen its vehicle usage procedures to include fuel consumption parameters and more effective use of its fuel card exception reports. Further, the County will review the viability of requiring user department reconciliation of fuel charges to gas receipts and the retention of all gas receipts by user departments. Findings 16 through 21 are directed to the Clerk of the Circuit Court and as such, no response is required by the County. 11 Packet Pg. 702  FINDINGS AND RECOMMENDATIONS Our report No. 2013-085, issued in January 2013, included our findings related to the BCC’s oversight of the Tourist Development Council and use of tourist development taxes by the Tourist Development Department, a BCC department. The scope of this audit did not include a review of Tourist Development Department transactions. However, for the areas of BCC operations that were included within the scope of this audit, we found several issues that were similar to issues also noted in our report No. 2013-085. This may be attributable to the fact that the period (October 2011 through February 2013) in which we primarily focused our examination of records and transactions for this audit overlaps to some extent with the period (May 2010 through May 2012) covered in report No. 2013-085. The County’s efforts to address the recommendations included in report No. 2013-085 are ongoing, and include corrective actions such as revision of its purchasing-related policies in April 2013 as indicated in finding Nos. 3, 9, and 11. Finding No. 2: Statements of Financial Interests Section 112.3145(6), Florida Statutes, provides that the Florida Commission on Ethics (Commission) shall annually prepare a listing of local officers required to file a statement of financial interests and provide that listing to the local supervisor of elections. Section 112.3145(2), Florida Statutes, provides that each local officer must file a statement of financial