Okaloosa County BOCC — July 15, 2014 — Minutes — reading text

negotiations were not easy and gave a big “hoorah” to the TDC attorney. Mr. Schroeder requested approval of the contract for the coming year. Mr. Harris made motion, seconded by Mr. Parisot (for discussion), to approve the contract. Mr. Parisot questioned the provision in June 3, 2014 -1ll- Minute Book 71, Page 82 Okaloosa County Board of County Commissioners the contract restricting the number of events which may be catered by an outside business. Mr. Schroeder asked if the commissioner wants this provision changed. Mr. Parisot replied that in the past, events did not book with us because of ARAMARK's costs. Mr. Bill Leaman, ECCC Manager, reported there have been conflicts in past years with outside caterers. He said a primary concern has been food safety. Mr. Harris commented we do not have control over outside vendors but do have control over ARAMARK. Mr. Leaman confirmed Mr. Harris’ assessment. of the situation. Mr. Boyles stated he was on the review committee for this service and was outvoted by the majority. He said Mr. Schroeder reported our attorney had to “carry most of the water” and asked for an explanation of the issues. Mr, Stewart replied, realistically, in the prior contract ARAMARK was using the facility for free and had a sweetheart deal. He said there was no incentive for them to move quickly in the negotiations. Other issues included responsibility for cleaning the facility and exclusivity of the arrangement. Mr. Stewart also noted that previously there were funds not accessible to the county, commenting now the county has control over those dollars. The vote was taken on the motion to approve the contract—4 yeas, 1 nay (Mr. Boyles voted no). WATER & SEWER SYSTEM - RENEWAL OF AND AMENDMENT TO CONTRACT WITH HORIZONS FOR LANDSCAPING SERVICES Mr. Jeff Littrell, Water & Sewer System Director, requested approval of a renewal and amendment to the contract (C97-0066- WS) with Horizons of Okaloosa County for landscape maintenance. He said the amendment will add two sites: Eglin Main Pump Station and the 7° Special Forces Group Pump Station. The amendment will increase the annual contract cost to $47,424. Mr. Harris made motion, seconded by Mr. Boyles, to renew this contract and amendment with Horizons as outlined above. 5 yeas. NEW BUSINESS ~ PRESENTATION BY CLERK OF COURTS’ INTERNAL AUDITOR Mr. Don Howard, Clerk of Circuit Court, stated there will be two items before the Board. One is a status report of the Auditor General's Audit of the TDC and its findings relating to the Board of County Commissioners and the Clerk of Courts. He stressed the importance of doing everything humanly possible to respond to and correct those findings. Mr. Howard stated a copy June 3, 2014 -12- Minute Book 71, Page 83 Okaloosa County Board of County Commissioners Sere es ripen S a4 of the Internal Auditor’s report was sent to each commissioner prior to the meeting, noting it is the first of many reports. Mr. Howard advised the second portion of the presentation will be a recommendation to formalize the Internal Audit function, saying the process works but it can only work well if both the Clerk's Office and the Board of County Commissioners are on the same page. Mr. Howard said the Board plays a big part of this process, explaining enforcement must come from the Board’s side. He stated the bottom line is we are moving forward and have already made great strides. Mr. Howard stated Sam Scallan came on board as the Internal Auditor in January and hit the ground running. He noted that Mr. Scallan previously work in this same capacity in Leon County and understands the structure and duties of the position. Mr. Howard introduced Mr. Scallan, listing his qualifications and certifications. Mr. Scallan referred to the copy of his report previously transmitted to the Board and stated he will provide a high level summary of its contents. He stated in January 2013 the Florida Auditor General (AG) issued an audit report on the Board’s oversight of the Tourist Development Council (TDC) and its use of funds. The audit was initiated as a result of the criminal investigation of the former TDC Executive Director relating to misuse of funds. The audit report contained 25 findings and requires the AG conduct a follow-up review in June or duly 2014. Mr. Scallan stated the Clerk directed him to conduct an internal follow-up review in preparation for the AG’s return. He said although his review has been thorough, there is no guarantee the AG will agree with the conclusions reached in this report. Mr. Harris commented, “And, that’s okay.” Mr. Scallan stated the county’s response to the misfortunes which occurred in 2012 were swift and decisive. He pointed out by the time the Auditor General’s Office issued its report, the Board had established a number of policy and procedural changes. Mr. Scallan listed these measures and said they were designed to strengthen internal controls over expenditures of tourist development and BP funds. He noted the Clerk has also revised several policies and created new ones to reinforce his role as the last line of defense in preventing fraud in Okaloosa County. Mr. Scallan said the AG divided his findings into nine categories. The summary below will identify the findings in dune 3, 2014 -13- Minute Book 71, Page 84 Okaloosa County Board of County Commissioners each category, measures taken to correct findings, and current Status of the findings in each category. Organizational Oversight Findings No. 1 through No. 4 TDC Ordinance amended, simplifying the budgetary re- strictions on TDC funds Both TDC subcommittees eliminated TDC Policies and Procedures Manual amended to clarify the TDC's role as advisory TDC required to review detailed monthly expenditure reports Language added to address conflicts of interests and requirements for members to abstain from voting on any matters in which they might have a perceived conflict These four findings have been resolved Fraud Controls and Control Risk Assessment Findings No. 5 and No. 6 Whistle Blower Policy established Formal Code of Conduct being developed Policy on Unlawful Acts being created Anti-fraud Policy which establishes a Fraud Response Plan A formal fraud risk assessment was conducted last year as part of the audit conducted by one of the local CPA firms The county has addressed several risks identified in this report and will continue its efforts to address these risks Policies requiring periodic fraud risk assessment need to be developed (status: ongoing) Procurement of Goods and Services Findings No. 7 through No. 14 Contracts with two existing advertising firms were terminated A new advertising firm was selected following Board policy A restructured contract was entered into with the new advertising firm Amendments were made to the Purchasing Policy and the TDC Policy and Procedures Manual The Clerk's Office has intensified its pre-audit procedures for invoices, reviews to see if the requirements have been met, and that expenditures serve a public purpose June 3, 2014 -14- Minute Book 71, Page 85 Okaloosa County Board of County Commissioners oo eaereshania Se dines ake: | Ee saber a a ole Bau iat seas ital ® Requests for payment which do not meet these requirements are returned e These findings have been resolved (NOTE: The Board is in litigation seeking repayment of these funds.) Travel Expenses ® Finding No. 14 e The Board's travel policies and travel forms were revised e TDC Policies and Procedures Manual was amended to address travel relating to marketing and promotional activities e The Clerk addressed travel expenses and travel reimbursement in the Finance Department’s Policy Manual e This finding has been resolved Special Events Grants and Sponsorships e Pindings No. 15 and No. 16 e Amendments made to TDC Policies and Procedures Manual in September 2012 and March 2013 by: o adding a method for calculating the amount of the award or sponsorship o defining the types of expenses to be reimbursed o adding requirement for grant/sponsorship recipients to sign an agreement acknowledging terms and conditions of award o adding requirement for recipients to submit a post- event report documenting the effectiveness of the event in increasing hotel room nights e These findings have been resolved TDC and BP Funds (Restricted Resources) e Findings No. 17 through No. 20 ® Auditor took exception with use of some of these funds e Board’s legal counsel issued an opinion regarding use of funds for lifeguards, beach patrols and beach shuttle services * No response has been received to letters sent to BP Gulf Coast Restoration Organization and Florida's Coastal Northwest Communications Council requesting direction e These matters are pending June 3, 2014 -15- Minute Book 71, Page 86 Okaloosa County Board of County Commissioners County Fuel Cards e Finding No. 21 ® Fleet Management Department has modified controls for use of fuel cards by revising limits of fuel card for daily and weekly uses, requiring employee ID and odometer readings e A fueling exception report is automatically generated and reviewed by Fleet Management e¢ Monthly exception reports, as well as monthly fuel usage reports, are sent to each department Classification of Expenditures 6 Finding No. 22 e Clerk issue: As mentioned in the original audit report, the Clerk recorded expenditures based on the documentation provided and consistent with the Uniform Accounting System Manual published by the Florida Department of Financial Services e Corrective actions taken with regard to contracts and supporting documentation will enable the Clerk to more clearly identify what is being purchased and enable his staff to better determine the proper classification of expenditures e This finding has been resolved Electronic Funds Transfers e Finding No. 23 e Clerk revised policies to require two people to complete a wire transfer, banking agreement was amended to reflect this requirement, and the maximum number of wire transfers was revised e This finding has been resolved User Rights and Adequate Separation of Duties over Accounting Transactions e Finding No. 24 e Clerk revised employee user rights and instituted mitigating controls over the processing of accounting entries to compensate for lack of adequate staff (separation of duties) e This finding has been resolved June 3, 2014 -~16- Minute Book 71, Page 87 Okaloosa County Board of County Commissioners Sl SCsale ask etitee wal Nad a asa CRN Hieecte Nes oa, RaW pices uy fides sonnet mes cee i RCN jee Bie ff See ial Serene spananesmenr esis 9 Ee “i Public Records (dealing with minutes of TDC and subcommittee meetings} ® Finding No. 25 e Minutes of meetings are approved by TDC each month and signed by TDC Chairman ¢ This finding has been resolved Mr. Scallan concluded by saying all of these steps have strengthened internal controls in Okaloosa County. Mr. Boyles gave his thanks to Mr. Howard and Mr. Scalian. He stated this has been a long road and we continue to make progress. Mr. Boyles told the Clerk they are with him and will provide the support needed to strengthen the process and the procedures. He agreed with Mr. Howard that the process works better when the Board and Clerk work together. Mr. Harris stated he could not agree more with Mr. Boyles’ remarks. He said locks are for honest people and a thief can overcome any obstacle. Mr. Harris’ words of advice were to not let down our guard, be cautious, and prosecute to the fullest extent of the law. Mr. Scallan said the second item in the presentation, as mentioned by Mr. Howard earlier, is consideration to formalize the Internal Audit function. He stated the State Constitution designates the Clerk as the auditor of the county. In fulfilling his duties, Mr. Howard hired a Certified Internal Auditor. Continuing, Mr. Scallan stated the previous Internal