Okaloosa County BOCC — December 4, 2012 — Minutes — reading text

Consortium. 5 yeas. Mr. Parisot recommended a letter regarding Mr. Windes appointment be provided to FAC. NEW BUSINESS – COUNTY ADMINISTRATOR’S RETIREMENT PLAN Mr. Curry stated that he entered the DROP Program in 2008 and must leave his employment with the county by October 2013. He felt it was important for the new Board to be in place before bringing his plans forward and encouraged the commissioners to begin the replacement process as quickly as possible. Mr. Curry reported that he conducted a survey across the state on this topic, saying the replacement process could take as little as three months or as much as nine months. Mr. Curry pointed out the new County Administrator will inherit the Fiscal Year 2014 budget and said it will be advantageous for the replacement to be on board before certification of the budget takes place. Mr. Curry reiterated the importance of beginning the search and recommended the use of a professional firm to seek applicants. Mr. Windes said he believes it is important to begin sooner rather than later and would like to have the selection completed by sometime in May. Mr. Windes made motion, seconded by Mr. Harris, to direct the Human Resources Department (HR) to take proposals from recruiting firms at the next meeting. Mr. Harris asked when the County Administrator budget meetings and negotiations with the Constitutional Officers take place. Mr. Curry answered he meets with the Constitutional Officers and department heads beginning in May. Discussions and work on the budget continues from June 1 until July 15. Mr. Amunds recommended HR have the RFQ prepared and presented at the next Board meeting and felt the RFQ should go out by the first of the year. He added that he likes the idea of using a head hunter and the public expects the search to be done nationally. December 4, 2012 -16- Minute Book 68, Page Okaloosa County Board of County Commissioners Mr. Parisot asked Purchasing Director Richard Brannon if he will prepare the RFQ (request for quotes). Mr. Brannon said the process would be much the same as for a bid but he does not believe there is sufficient time to get quotes and qualifications before the next Commission meeting. He noted that if the quote is less than $25,000, it does not have to come back before the Board. Mr. Curry responded that he believes the selection should come back to the Board. He said the specifications could be crafted and advertised but questioned whether or not proposals could be submitted prior to the meeting on December 18. Human Resources Director Kay Godwin stated they can give the proposers one week to submit packages. Mr. Windes said he will leave his motion as stated. Mr. Harris withdrew his second. Mr. Windes clarified that he is asking for proposals from recruiting firming by the next meeting. After further discussion, Mr. Harris renewed his second. 5 yeas. NEW BUSINESS – INTERNAL AUDITOR FOR BCC Mr. Windes highlighted the initiative he spoke about at the last meeting. He said an Internal Auditor for the Board will improve internal controls, minimize future fraud, and foster/document best practices. The Internal Auditor would report directly to the Board but will work with the County Administrator, department heads, the Clerk of Courts and Clerk’s employees. The focus would be on policies and procedures with a risk assessment to be performed annually. The purpose of the position is to identify all auditable activities of the Board of County Commissioners and to evaluate each activity based on risk factors. Mr. Windes stated the most important thing is to be a good steward of the people’s money and history has proven there could be more oversight. He said the proposal has received the blessings of the County Administrator, the Human Resources Department (HR), and the external auditing firm. Mr. Windes stated that he is not asking for a decision now but would like for the proposal to be reviewed. Mr. Windes made motion to direct HR to bring back a policy structure, to create a job description for the position, and a reporting process. Mr. Amunds stated the commissioners are policy makers and not accountants. He felt having an Internal Auditor would provide another layer of checks and balances and agreed with the provision this individual should report directly to the Board. December 4, 2012 -17- Minute Book 68, Page Okaloosa County Board of County Commissioners Mr. Amunds said a new Internal Auditor could work on best practices hand-in-hand with the Clerk of Courts and provide a fresh perspective to avoid further problems. He noted this would help us to be more accountable and provide greater transparency to the public. Mr. Amunds pointed out the Clerk’s Office does a good job with auditing, noting the Finance Officer always asks for additional information. Mr. Harris said it is important for the public to realize the Board has great auditors and great people in the Clerk’s Office but “you will not stop a thief.” He agreed it is imperative for this position to report directly to the Board. Mr. Boyles recommended delaying final action until the final report is issued by the Auditor General. He also stated he would like to have information from other counties on how they handle this issue. At this point Mr. Parisot seconded Mr. Windes’ motion for discussion. Mr. Parisot read through the PowerPoint presentation attached to the agenda package and posed several questions: • Who will provide administrative support? • Where would this person’s office be located? • Would the Internal Auditor have access to expenditures of Constitutional Officers funded by the BCC? • The Clerk of Courts has an internal audit position. Has it provided a look at BCC departments and programs? Mr. Parisot said there are some weaknesses in the auditing program and maybe another set of eyes is needed. He questioned why the current accounting system has failed to find glaring deficiencies. Mr. Parisot referred to the issues in the Tourist Development Department (2012), the kickback scheme in the Sheriff’s Office (2008) and the issue in the Tax Collector’s office where employees who opted out of the health insurance program received payment into deferred comp (2005-09). Mr. Harris replied there are three types of audits: financial, operational and forensic. He stated a financial audit will not find fraud or theft. Mr. Don Howard, Clerk of Circuit Court, stated everyone in this room is very concerned about the recent past and the propriety of actions of some people. He referred to some of the questions brought forward by Mr. Parisot, saying he has some of those same December 4, 2012 -18- Minute Book 68, Page Okaloosa County Board of County Commissioners concerns. Mr. Howard asked if this is to be an audit function established by the Board to look at Board functions or an audit function to incorporate the Constitutionals, pointing out some of Mr. Parisot’s references occurred in other Constitutional Offices. He stated that he is not aware any of those officials have been included in these conversations. Mr. Howard stated that he has met with Mr. Windes and the external auditors on this issue. He stressed that he is not opposed to more scrutiny but he believes there are some issues in how you go about doing that. Mr. Howard pointed out the Constitution of Florida was written in 1838 and specifically describes the responsibilities of the audit function relating to Board functions. Under the Constitution, the Clerk of Courts is the accountant to the Board of County Commissioners and has the responsibility for internal audit. Mr. Howard advised this responsibility was upheld by the Second District Court of Appeals. He stated that he is not saying the Board cannot have an auditor doing certain things but asked what this auditor is to do. Mr. Howard said the Clerk of Courts as an independently elected official is one of the tenants of the system of checks and balances. He asked if an internal auditor hired by the Board finds a problem, will he tell his supervisor or will it be done publicly. Mr. Howard again underlined the importance of the separation of duties outlined in the Constitution. Mr. Howard said his Internal Audit Department could be expanded if the Board dedicated funds for that purpose. He advised the expansion of the department would allow more detailed review. Mr. Howard noted the Board for the last three fiscal years has requested reductions in budgets and he has reduced his non-court related budgeted by more than 9%. He said he believes he is the only department in the General Fund to do that. Mr. Howard stated this issue came up in 2009 and it was primarily a financial issue, emphasizing no one was opposed to scrutiny. He said for six years there have been no adjustments for employees and there have been layoffs. Mr. Howard stated there has been a financial issue about expanding anything. He said spending has been very strict and in the non-court side of his office, he turned back $624,000 in unspent fees to the Board. Mr. Howard concluded his remarks by reiterating that he is not saying the proposal will not work but if it is designed to be a December 4, 2012 -19- Minute Book 68, Page Okaloosa County Board of County Commissioners financial internal auditor, he will have a problem because that responsibility belongs to the Clerk of Courts. Mr. Amunds pointed out the Board previously discussed these authorities and what can be done without stepping on the toes of Constitutional Officers. Mr. Windes said he is aware of Mr. Boyles’ comments and his motion is to make a decision at the next meeting on a job description for the Internal Audit position. He added that the Board is aware of its limitations with regard to the Constitutional Officers. Mr. Amunds commented this discussion is healthy. Mr. Parisot stated he also thought about providing additional funding to the Clerk to expand his Internal Audit Department. Mr. Howard said that is an option. Mr. Windes stated his whole premise is to look at this from another angle. He said he does not want to expand the Internal Audit Department in the Clerk’s Office. Ms. Angela Balent with Warren Averitt O’Sullivan Creel (external auditing firm) stated she has spoken to many in the room about internal auditing, saying the topic is near and dear to her heart. In 2009 she made the recommendation to the Audit Committee but that proposal had a much broader scope. Ms. Balent underscored the fact that anything the Board can do to enhance internal controls will be of value. She asked the Commissioners to keep in mind that the Board and the Clerk are tied, saying for the internal auditor to be effective there must be cooperation between Board personnel and the Clerk’s financial personnel. Ms. Balent referred to the risk assessment. She said this should not only entail what is important at the moment but would involve dialogue with the Clerk, Finance Office personnel, County Administrators, and department heads and to ask them what keeps them up at night. Ms. Balent stated an internal audit should “dive deep” and you may only be able to get to three projects per year. Mr. Windes stated his motion is asking for preparation of a job description for an Internal Auditor by the next meeting. He suggested Ms. Balent work with Mr. Dowd and HR Director Kay Godwin on this job description while formulating what the Board December 4, 2012 -20- Minute Book 68, Page Okaloosa County Board of County Commissioners can and cannot do. Mr. Balent agreed to assist with the job description. Mr. Dowd stated they will need to work with Mr. Howard also. Mr. Harris