Okaloosa County BOCC — January 20, 2015 — Okaloosa Follow-Up Letter and PT — reading text

the BCC had initiated its inquiry. On December 11, 2014, the Chairman of the FCNCC responded to the County indicating that since BP did not object to the County’s proposal, FCNCC deemed the proposal approved. However, as of December 18, 2014, the County had not transferred the funds. Recommendation: The BCC should transfer the $117,994 in tourist development taxes to an account to be used for purposes allowable under the terms and conditions of the BP grant. Finding No. 19: BP Grant Funds – Grant Compliance and Controls over Debit Card Program Previously Reported As part of the Emerald Coast Money Debit Card Program, the BCC used $207,730 of BP grant funds for purposes that BCC records did not evidence were allowed by grant provisions. We recommended that the BCC consult with the FCNCC as to the allowability of the $207,730 in questioned costs. Results of Follow-Up Procedures The BCC’s actions partially corrected this finding. In November 2013, the BCC’s legal counsel submitted a letter to the FCNCC that proposed a transfer of $7,730 of tourist development taxes to an account to be used for purposes allowable under the terms and conditions of the BP grant. In the letter to the FCNCC, the BCC’s legal counsel stated that, although Vision Airlines had not provided the BCC with an accounting of $200,000 in debit cards provided to Vision Airlines as part of the Emerald Coast Money Debit Card Program, Vision Airlines verbally confirmed that the debit cards were properly used. The BCC’s legal counsel requested direction from the FCNCC as to whether additional documentation would be required. Having received no response, in September 2014, the BCC’s legal counsel submitted a letter to BP Gulf Coast Restoration Organization informing BP that no response was received from the FCNCC and requesting that BP respond to the matter. On October 1, 2014, the Senior Counsel for BP responded that BP could not provide direction to the BCC regarding the $207,730 in questioned costs at this time and recommended that the BCC contact the FCNCC to “close the loop on this matter” as this was where the BCC had initiated its inquiry. On December 11, 2014, the Chairman of the FCNCC responded to the County indicating that 11  ****PRELIMINARY AND TENTATIVE FINDINGS**** since BP did not object to the County’s proposal, FCNCC deemed the proposal approved. However, as of December 18, 2014, the County had not transferred the funds. Recommendation: The BCC should transfer the $7,730 in tourist development taxes to an account to be used for purposes allowable under the terms and conditions of the BP grant. Finding No. 20: BP Claims and Reimbursements Previously Reported The BCC overcharged BP $27,063 in connection with medical support services provided, and BCC records did not adequately support the allowability of $385,185 in reimbursements received from BP. We recommended that, for future reimbursement agreements, the BCC ensure that reimbursement requests are made pursuant to terms of the agreements, including submission of required supporting documentation. Results of Follow-Up Procedures No occasion to correct. Our review disclosed no similar reimbursement agreements during the period February 2013 through July 2014. Motor Vehicles Finding No. 21: Fuel Cards Previously Reported The BCC had not established adequate controls over the use of fuel cards. We recommended that the BCC 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. Results of Follow-Up Procedures The BCC’s actions corrected this finding. Our review of July 2014 fuel card purchases by the TDD disclosed the BCC was using reasonable fuel consumption parameters, effectively using fuel card exception reports and user department reconciliations of fuel charges to gas receipts, and retaining all gas receipts. Accounting Controls Finding No. 22: Classification and Reporting of Expenditures Previously Reported The CCC incorrectly classified and recorded certain expenditures in the accounting records, contrary to guidance provided by the Florida Department of Financial Services in the Uniform Accounting System Manual for Florida Counties (Manual). We recommended that the CCC strengthen its procedures to ensure that expenditures are properly classified and recorded in accordance with the Manual. 12  ****PRELIMINARY AND TENTATIVE FINDINGS**** Results of Follow-Up Procedures The CCC’s actions corrected this finding. Our review of 15 purchases totaling $372,692 made during the period January 2014 through July 2014 disclosed that expenditures were properly classified and recorded in accordance with the Manual. Electronic Funds Transfers Finding No. 23: Controls over Electronic Funds Transfers Previously Reported The BCC had not adopted written policies and procedures, and the BCC had not established adequate controls over the authorization and processing of electronic funds transfers (EFTs). We recommended that the BCC develop written policies and procedures addressing EFTs as required by Section 668.006, Florida Statutes, including providing for an adequate separation of duties over access to BCC assets and the related accounting records, and documenting independent approvals before the funds are transferred. We also recommended that the CCC revise its funds transfer agreement with the bank to address the deficiencies noted and timely update its funds transfer agreement with the bank when changes in authorized personnel occur. Results of Follow-Up Procedures The CCC’s actions corrected this finding. The CCC, which makes EFTs on behalf of the BCC, adopted a policy that addresses the authorization and processing of EFTs as required by Section 668.006, Florida Statutes. This policy requires a dual control for EFT transactions whereby one employee initiates the EFT and a second employee must approve the EFT. Our review further disclosed that the CCC’s funds transfer agreement with the bank was updated and included only authorized current CCC employees. Information Technology Controls Finding No. 24: Access Controls Previously Reported The BCC had not established adequate controls over employee access privileges to data and information technology (IT) resources. We recommended that the BCC strengthen its procedures to include the periodic review of IT access privileges granted to employees and timely remove or modify unnecessary or incompatible access privileges detected. Results of Follow-Up Procedures The CCC’s actions corrected this finding. The CCC, who maintains the accounting records for the BCC, adopted and implemented several policies requiring independent reviews of journal entry reports and changes made to the payroll system and master vendor file. In October 2013, the CCC also adopted a policy requiring the CCC’s Financial Services Manager to review employee access to all financial software systems. In October 2014, the CCC’s Financial Services Manager performed and documented such a review. 13  ****PRELIMINARY AND TENTATIVE FINDINGS**** Public Records Finding No. 25: TDC and TDC Subcommittee Meeting Minutes Previously Reported The BCC did not record minutes of a TDC and TDC subcommittee meeting, contrary to law. In addition, the minutes of the remaining meetings were not signed or otherwise designated to indicate the minutes were the official minutes approved by the TDC or TDC subcommittees. We recommended that the BCC continue to strengthen its procedures for maintaining official minutes of the TDC and TDC subcommittees by recording minutes for all meetings and requiring that the final approved minutes made available for public inspection be signed by the TDC or TDC subcommittee chairman and the employee who recorded the minutes. Results of Follow-Up Procedures The BCC’s actions corrected this finding. The last remaining TDC subcommittee was abolished in February 2013. Our review of the official minutes of the TDC meetings indicated that minutes were maintained for all TDC meetings and were signed by the TDC chairman and the Tourist Development Director. END OF P&T DOCUMENT 14