Okaloosa County BOCC — April 5, 2016 — JLAC Audit Response 4-16

Board of County Commissioners State of Florida April 5,2016 Honorable Daniel Raulerson, Chair Joint Legislative Auditing Committee 111 W. Madison St., Room 876 Tallahassee, Florida 32399 RE: Okaloosa County Board of County Commissioners The Okaloosa County Board of County Commissioners, during the year ending September 30, 2015, and prior, has taken corrective action to resolve audit findings 2014-5 and 2014-6. The audit of Okaloosa County, Florida for the year ending September 30, 2015 has not been completed as of this date due to information needed from the Florida Retirement System to implement GASB 68, Accounting and Financial Reporting for Pensions. It is anticipated that there will be comments in that audit report reflecting the corrective actions taken by the county. The current status of each item is as follows: Finding 2014-5 Year End Close Water and Sewer Enterprise Fund Management Response Water & Sewer personnel now have documented policies and procedures for year-end business processes related to taps and capacity expansion fees, project accounting, overhead allocations, and other accounting functions. Staff were trained on the policies and procedures and the documents are available to all staff members via the department intranet site. Revisions will continue to be made as necessary to ensure the policies and procedures are current at all times. Staff will be advised of all revisions. Finding 2014-6 Enterprise Risk Management Management Response Management has taken a multifaceted approach to respond to this finding. The County contracted with an outside accounting firm, Carr, Riggs and Ingram (CRI), who completed an overall fraud and control risk assessment for the County. A majority of the recommendations made by CRI have been implemented, and additional efforts are on-going, including the addition of staff to oversee compliance-related actions. The Institute for Senior Professionals (ISP) has completed its first department risk assessment designed to find control gaps, strengthen existing controls and remove redundancies for the Growth Management department. Management is incorporating corrective actions as necessary while the ISP will continue their enterprise-wide risk assessment with focus on the Public Works Solid Waste department. In addition to the ISP’s assessments, the Board of County Commissioners has contracted with the Clerk’s internal audit function for an assessment of the Airport Enterprise Fund. Further, an external firm has been retained to complete arisk assessment of the County’s Information Systems, to include computer networks and security; 1 this following a network and security risk assessment of the Clerk of Courts’ computer systems that host finance and accounting infrastructure for the Board. Each significant activity of the county will be evaluated on a rotational basis for risks and the process will be evidenced by written documentation. Sincerely, Charles K. Windes, Jr. Chairman, Board of County Commissioners