Okaloosa County BOCC — January 8, 2013 — Final AG Report and Board Response - January 2013 — reading text

board or commission meetings be promptly recorded and open to public inspection. Florida’s Government-in-the-Sunshine Manual, compiled by the Florida Attorney General’s Office, further provides that advisory boards and committees created by public agencies may be subject to the Sunshine Law, even though their recommendations are not binding upon the entities that create them. When an advisory board or committee has been delegated decision-making authority as opposed to mere information-gathering or fact-finding authority, their meetings must be open to public scrutiny, regardless of the review procedures eventually used by the traditional governmental body. The TDC is responsible for advising the BCC on the implementation of its tourist development plan, including making recommendations to the BCC regarding the effective use of tourist development taxes. In carrying out its responsibilities, the TDC established two standing subcommittees that met during the period May 2010 through May 2012. The Promotion Review Subcommittee met periodically until October 2010 when it was disbanded. The Marketing Subcommittee was then formed and began meeting in May 2011. The stated responsibilities of both subcommittees included reviewing and recommending advertising and marketing consultants to the TDC and reviewing and recommending specific tourism marketing proposals presented to the TDC by private industry and nonprofit organizations. As discussed in finding No. 15, the TDC and TDC Marketing Subcommittee also awarded special event grants to selected groups or organizations. Based on their responsibilities, both the TDC and the TDC subcommittees are subject to the Sunshine Law. The minutes of the TDC and TDC subcommittee meetings were generally recorded, approved at subsequent meetings, and electronically stored by the County. However, our review of the minutes of the TDC and TDC subcommittee meetings disclosed that County procedures for maintaining official records of the meetings needed improvement. For example, we noted that minutes were not recorded for a TDC meeting and a TDC subcommittee 27 JANUARY 2013 REPORT NO. 2013-085 meeting held on December 8, 2010, and October 28, 2010, respectively. We also noted that the minutes of the remaining meetings were not signed by the committee or subcommittee chairman or the employee who recorded the minutes. In addition, we noted several meetings for which two versions of the minutes were retained by the County. The County’s legal counsel indicated that the different versions represented draft and final versions of the minutes, and a specific file for the final approved and official meeting minutes of the TDC and TDC subcommittees was not maintained. In the absence of meeting minutes signed by the TDC or TDC subcommittee chairman and the employee who recorded the minutes, the County cannot demonstrate that the minutes made available for public inspection represent the official record of the discussions and actions taken at the meetings. In September 2012, the BCC adopted policies and procedures regarding TDC and TDC subcommittee minutes as part of the TDC’s operations and procedures manual. These policies and procedures require written minutes to be maintained for all TDC and TDC subcommittee meetings and an audio recording of each TDC meeting to be made and retained as a public record. Recommendation: The County should 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. RELATED INFORMATION The State Attorney, 1st Judicial Circuit, and several law enforcement agencies, including the Okaloosa County Sheriff’s Office, the Florida Department of Law Enforcement, and the Federal Bureau of Investigation, are investigating alleged improprieties involving the TDC and the former TDC Executive Director. At the close of our audit fieldwork, these investigations were ongoing. OBJECTIVES, SCOPE, AND METHODOLOGY The Auditor General conducts operational audits of governmental entities to provide the Legislature, Florida’s citizens, public entity management, and other stakeholders unbiased, timely, and relevant information for use in promoting government accountability and stewardship and improving government operations. This audit was conducted pursuant to Section 11.45(3)(a), Florida Statutes, based on a May 15, 2012, request by the then Senate President-designate. We conducted this operational audit from May 2012 to September 2012 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. The objectives of this operational audit were to:  Evaluate management’s performance in establishing and maintaining internal controls, including controls designed to prevent and detect fraud, waste, and abuse, and in administering assigned responsibilities in accordance with applicable laws, rules, regulations, contracts, grant agreements, and other guidelines. 28 JANUARY 2013 REPORT NO. 2013-085  Examine internal controls designed and placed in operation to promote and encourage the achievement of management’s control objectives in the categories of compliance, economic and efficient operations, reliability of records and reports, and the safeguarding of assets, and identify weaknesses in those controls. This audit was designed to identify, for those programs, activities, or functions included within the scope of the audit, deficiencies in management’s internal controls, instances of noncompliance with applicable laws, rules, regulations, contracts, grant agreements, and other guidelines, and instances of inefficient or ineffective operational policies, procedures, or practices. The focus of this audit was to identify problems so that they may be corrected in such a way as to improve government accountability and efficiency and the stewardship of management. Professional judgment has been used in determining significance and audit risk and in selecting the particular transactions, legal compliance matters, records, and controls considered. For those programs, activities, and functions included within the scope of our audit, our audit work included, but was not limited to, communicating to management and those charged with governance the scope, objectives, timing, overall methodology, and reporting of our audit; obtaining an understanding of the program, activity, or function; exercising professional judgment in considering significance and audit risk in the design and execution of the research, interviews, tests, analyses, and other procedures included in the audit methodology; obtaining reasonable assurance of the overall sufficiency and appropriateness of the evidence gathered in support of our audit’s findings and conclusions; and reporting on the results of the audit as required by governing laws and auditing standards. The scope and methodology of this operational audit are described in Exhibit A. Our audit included the selection and examination of various records and transactions occurring from May 1, 2010, through May 31, 2012, and selected actions taken subsequent thereto. Unless otherwise indicated in this report, these records and transactions were not selected with the intent of statistically projecting the results, although we have presented for perspective, where practicable, information concerning relevant population value or size and quantifications relative to the items selected for examination. An audit by its nature does not include a review of all records and actions of agency management, staff, and vendors, and, as a consequence, cannot be relied upon to identify all instances of noncompliance, fraud, waste, abuse, or inefficiency. AUTHORITY MANAGEMENT’S RESPONSE Pursuant to the provisions of Section 11.45, Florida Management’s response is included as Exhibit C. Statutes, I have directed that this report be prepared to present the results of our operational audit. David W. Martin, CPA Auditor General 29 JANUARY 2013 REPORT NO. 2013-085 EXHIBIT A AUDIT SCOPE AND METHODOLOGY Scope (Topic) Methodology Organizational oversight. Reviewed County controls related to the receipt, use, and monitoring of tourist development taxes and funds received from BP. Fraud controls and control risk assessments. Reviewed the County’s anti-fraud program and determined whether the County had performed recent fraud and control assessments to identify and address potential risks. Public records. Examined BCC, TDC, and TDC subcommittee meeting minutes for evidence of compliance with selected Sunshine Law requirements (e.g., preparation and retention of official minutes). Competitive procurement. Examined County records relating to the procurement of goods and services (including professional services) from tourist development taxes and BP grant funds to determine compliance with laws, rules, and County purchasing policies and procedures. Contract design, monitoring, and preauditing of contract Reviewed contracts to determine whether they were invoices. adequately designed to protect the interests of the County, and examined County records relating to contract payments from tourist development taxes and BP grant funds to determine whether the payments served an authorized public purpose and were properly approved; adequately supported; accurately classified; reasonable, necessary, and allowable uses