Okaloosa County BOCC — September 3, 2013 — September 3 Regular Meeting — reading text

September 3, 2013 Regular Meeting The regular Tuesday meeting of the Okaloosa County Board of County Commissioners was called to order at 6:00 p.m. at the Crestview Courthouse. Members present were Don R. Amunds, Chairman; Dave Parisot, Vice Chairman; Wayne Harris; Nathan Boyles; and Kelly Windes. Also present were Gary Stanford, Finance Director, Clerk’s Office; Ernie Padgett, County Administrator; John Dowd, County Attorney; and members of the press. PUBLIC INFORMATION OFFICER UPDATES Mrs. Kathy Newby, Public Information Officer, opened her presentation with a promo for the Okaloosa Today program which airs on Cox Channel 6. In keeping with publicity for the “Viva Florida 500” Event, celebrating five hundred years of Florida history, Mrs. Newby provided a historic picture of downtown Crestview. Recently, the county’s “Have a Heart” 5K run/walk was held to raise funds for the American Heart Association and Wounded Warriors. In conjunction with the Okaloosa County event, the 143™¢ Combat Sustainment Support Battalion in Kuwait organized a 5K run/walk for the same purpose. A photograph of the Battalion’s runners was shown. Mrs. Newby announced a special Tourist Development Council meeting will be held on September 9. She also provided dates and times for the county’s budget hearings (Tentative: September 5 at 6 p.m. in Crestview; Final: September 16 at 6 p.m. in Fort Walton Beach) COUNTY ADMINISTRATOR'S UPDATE Mr. Padgett sought clarification on advertisements relative to establishing a Legal Department. He stated since August 15, staff has been in the process of advertising for the position of County Attorney, which will continue to be advertised until filled. He asked the commissioners if it is their desire to also provide a Request For Qualifications (RFQ) for legal representation by a law firm. Mr. Amunds asked if the advertisement could be structured for responses from either an individual attorney or a firm. Mr. September 3, 2013 -1- Minute Book 70, Page Okaloosa County Board of County Commissioners Boyles stated the purpose for considering representation by a firm is to provide depth but solo applications for the position should also be accepted. Mr. Parisot agreed. Mr. Windes commented “so we are painting with a broad brush” and could get more coverage through a firm. Mr. Amunds stated the Board will look at proposals from firms but does not want to penalize individual attorneys. COUNTY COMMISSIONER’ S MINUTE Mr. Boyles stated he has nothing. Mr. Parisot asked Public Works Director John Hofstad to comment on the TPO meeting held on August 22. Mr. Hofstad stated one of the discussions at the monthly TPO meeting was reapportionment which had been tabled from a previous meeting. He advised there are 19 elected officials on the TPO and all five commissioners of the Okaloosa County BCC sit on the TPO. Mr. Hofstad reported that at the last meeting no Okaloosa County commissioners could be present. He said the TPO members present voted to cut the Board’s representatives from five members to three. Mr. Hofstad encouraged the commissioners to be in attendance at the next TPO meeting on September 19 when this subject will again be discussed. Mr. Parisot announced an Open House will be held this Saturday at the National Guard Armory in Crestview to celebrate the return of the 870 Engineering Unit from a one and half-year tour in Afghanistan. Mr. Harris stated he has no comment at this time. Mr. Windes relayed a story of a problem at his place of business where his wife is manager. He stated deputies responded within minutes of a call for assistance and he is appreciative of the quick response. Mr. Amunds stated he is honored to speak on behalf of the Bud Day family this morning. The Day family thanks the community for its support. VISITOR - STEVEN RIGGS OF CARR, RIGGS & INGRAM; INTERNAL AUDIT AND RISK ASSESSMENT Mr. Steven Riggs with Carr, Riggs & Ingram thanked the Board on behalf of the firm for the opportunity to work with the county. September 3, 2013 -2- Minute Book 70, Page 2 Okaloosa County Board of County Commissioners He said he appreciated their comments with regard to having no sacred cows even if it includes commissioners in the audit. Mr. Riggs told the Board members they have had an opportunity to read the risk assessment which did not focus on fraudulent activities but on general errors and fraud. He advised that he will go over statements made in the transmittal letter. Mr. Riggs said in the RFP for the risk assessment the county said it wanted an assessment regarding the tone at the top with regard to financial reporting. He stated the Board said the tone at the top is very important and sets the foundation for other controls. Mr. Riggs felt that whatever is important to management becomes important to staff. Mr. Riggs said he felt it was important to determine who is in charge of financial reporting. He stated the Constitution and the Statutes give that authority to the Clerk of Court. However, Mr. Riggs said the difficulty comes with the fact that the Clerk and the Board of County Commissioners are separate Constitutional Offices. He told the commissioners that at one point they suggested to the Clerk to become more involved and provide more oversight. Mr. Riggs stated as he understands the responsibilities, they went into the departments to determine what happens. He said the departments initiate action and at some point it gets to the Finance Department who records the activity. Mr. Riggs commented it is very difficult to steal from TDD (Tourist Development Department) . He continued, saying there is so much focus on that one department. Mr. Riggs wanted to look at the issues related to that department and said so much authority was concentrated in one person. He expressed concern that same authority had made its way to other departments. Mr. Riggs stated a real example is with the Airports Department because of the multiple revenue streams. He said within the Airports Departments there was a question or concern of what the department did with financial records before they go to Finance. Those revenue sources include hangar leases, air carriers, and parking. Mr. Riggs said some of the questions he had concerned how often the leases are reviewed and whether or not the county got the money it should have. He remarked the Finance Department did not have an answer to these questions. It was Mr. Riggs contention that the Finance Department is charged with oversight and it should know what the departments September 3, 2013 -3- Minute Book 70, Page 3 Okaloosa County Board of County Commissioners are doing with regard to county transactions. He said after his discussion with the Finance Department, he perceived a hole. Mr. Riggs stated he asked them “What do you think we should do differently?” and said their comment is they don’t know if they have the authority to tell departments what to do on financial reporting. It was Mr. Riggs’ view the Finance Department has every bit of authority and felt those employees are charged with that task. He said he asked this department to pretend authority was not an issue and to provide suggestions. Mr. Riggs said no suggestions were provided. Continuing, Mr. Riggs opined that the Finance Department must have oversight of county departments. He said he is expecting ownership and accountability. Mr. Riggs stated you cannot assume they (county departments) did it or trust the information is accurate. With regard to the internal audit function, Mr. Riggs said they talked with every department and the smaller ones were sent surveys to complete. They asked when the last time an internal audit was conducted of their departments and a report issued. He stated that no departments acknowledged an internal audit had been conducted or a report issued with findings or recommendations. Mr. Riggs then told the Board how the Carr, Riggs & Ingram firm conducts internal audits in Brevard County. Mr. Riggs said he would like to go back to TDD and the recommendations from the Auditor General. Measures were taken to prevent a recurrence in this department but he did not see the same focus on all departments. He questioned consistent application of these measures throughout the county. Mr. Riggs felt the Finance Department to be reactive rather than proactive in implementing changes. He said in his overall assessment he did not see a sense of responsibility and did not feel the Finance Department thought they would be held accountable. Tt was Mr. Riggs’ opinion that if changes are not made, it is not a question of “if” another negative outcome of fraud or unintentional errors but “when.” Mr. Parisot asked Mr. Riggs if any specific instances of theft or fraud were found during this risk assessment. Mr. Riggs replied in the negative but added the RFP was not designed for that purpose. Mr. Parisot pointed out there was a much different tone from the after report to the transmittal letter and he is trying to figure out the relationship between those September 3, 2013 -4- Minute Book 70, Page 4 Okaloosa County Board of County Commissioners two documents, noting that the letter comes down pretty hard on the Clerk of Courts. Mr. Parisot read from a prepared statement. He said during the 21 years he was in the military, he attended a number of leadership courses. Mr. Parisot stated he learned that you can delegate authority but not responsibility. He said perhaps guidance should come from the Clerk’s Office but as the policy makers, the Board is responsible for the weakness in its system. Mr. Parisot felt it was the commissioners’ responsibility to actively participate in the fixes. He said the Board needs to direct its staff to do their jobs. Mr. Parisot also expressed views on lease payments, responsibilities of the financial managers in the enterprise departments, and Mr. Riggs’ comments about the IT Department. He questioned whether or not Mr. Riggs had validated the information received from the departments supplied through surveys and not on-site visits. Mr. Parisot Stated that he has spoken with Mr. Padgett on the credit card issues and expects that problem to be corrected within two weeks. Mr. Riggs responded the county did not engage the firm to look at credit card transactions but they questioned whether there was a legitimate need for 217 people to have credit cards. He felt the risk would be reduced with eliminating some of those cards. Mr. Amunds stated this was a risk assessment not a forensic audit. Referring to the use of credit cards, he said he believes every county in this state has a high probability of risk. Mr. Amunds stressed that no one is saying any law was violated, Mr. Riggs stated they have not implied there was fraud going on anywhere and they were addressing the risks in various departments. Mr. Harris stated the Board placed into effect stringent policies in the wake of the Auditor General’s report, to which Mr. Riggs replied in the affirmative. Mr. Harris read from the third paragraph of the transmittal letter “The County must have systems in place to either prevent or more quickly detect theft and other errors in this County. The systems currently in place are insufficient due to the current financial reporting structure of the County.” Mr. Harris asked Mr. Riggs to address this comment and asked if he felt the harsh measures/policies put into effect are without value. Mr. Riggs answered they are of value but in relationship to the TDD. Mr. Harris asked if he September 3, 2013 -5- Minute Book 70, Page 5 Okaloosa County Board of County Commissioners is wrong but he felt those policies applied to all departments. Mr. Amunds acknowledged that to be a correct statement. Mr. Riggs acknowledged those measures but repeated he believes there is a “big hole.” He said there is a significant amount of trust and reliance on someone to do the right thing. Upon inquiry by Mr.