Okaloosa County BOCC — August 18, 2015 — Okaloosa Follow-Up Letter and P&T — reading text

used for unauthorized purposes. Recommendation: The BCC should establish separate accountability for each type of fuel tax to demonstrate fuel taxes were spent for authorized purposes. Finding 7: Use of Law Enforcement Trust Fund Moneys Previously Reported The BCC did not obtain adequate support for certain disbursements from the law enforcement trust fund (LETF) or document its decision as to how certain disbursements represented allowable uses of LETF moneys in accordance with the provisions of law. We recommended that the BCC continue efforts to obtain adequate support for all disbursements from the LETF, document its decision as to how the disbursements represent allowable uses of LETF moneys in accordance with the provisions of law, and provide such documentation to the CCC. We also recommended that the BCC ensure that organizations receiving LETF moneys provide the CCC with the required accounting of the use of LETF moneys. Page 4  OKALOOSA COUNTY BOARD OF COUNTY COMMISSIONERS AND OKALOOSA COUNTY CLERK OF THE CIRCUIT COURT Follow-Up on Report No. 2014-068 PRELIMINARY AND TENTATIVE AUDIT FINDINGS NOT AN AUDIT REPORT Results of Follow-Up Procedures The BCC’s actions partially corrected this finding. In January 2014, the Okaloosa County Sheriff’s Office (OCSO) and BCC Joint Operating Procedures for the LETF (Procedures) were revised to describe the requirements for initiating a request for expenditure from the LETF, authorized uses of LETF moneys, BCC review and approval process, and process for disbursing funds and submitting receipts. Section 5 of the Procedures requires the OCSO and any entity or organization receiving LETF moneys to provide supporting documentation, such as a summary of the costs and related receipts, for expenditures of those moneys within 90 days of disbursement by the BCC. Organizations other than the OCSO must provide the documentation for expenditures to the OCSO with a copy to the CCC. During the period August 1, 2014, through January 8, 2015, the BCC disbursed $15,000 in LETF moneys to the OCSO for subsequent disbursement to six different organizations. In approving the disbursements of LETF moneys, the BCC ensured that the intended use of the disbursements represented allowable uses of LETF moneys. However, the BCC did not ensure that the documentation for LETF expenditures was provided to the CCC within 90 days of disbursement by the BCC nor, in the absence of the required documentation, did the BCC seek reimbursement of the LETF moneys from the organizations. As of April 15, 2015, the required documentation had been provided to the CCC by only one of the six organizations. The risk that LETF moneys will be used for unallowable purposes increases when adequate support is not obtained for disbursement requests. Recommendation: The BCC should ensure that organizations receiving LETF moneys timely provide the CCC with the required documentation of the use of LETF moneys or seek reimbursement from the organizations. PROCUREMENT Finding 8: Procurement of Professional Services Previously Reported The BCC did not competitively procure certain professional services and did not document that these services could only be obtained from one company. We recommended that the BCC ensure that professional services are competitively procured or document the reason competitive procurement is not possible in accordance with its policies and procedures. Results of Follow-Up Procedures The BCC’s actions corrected this finding. BCC policies and procedures require that requests for proposals or qualifications be issued to competitively procure professional services. When only one company can provide specific professional services, BCC policies and procedures require that a sole source data sheet be completed by the requesting department and reviewed, approved, and signed by Page 5  OKALOOSA COUNTY BOARD OF COUNTY COMMISSIONERS AND OKALOOSA COUNTY CLERK OF THE CIRCUIT COURT Follow-Up on Report No. 2014-068 PRELIMINARY AND TENTATIVE AUDIT FINDINGS NOT AN AUDIT REPORT the Purchasing Director to document that competitive procurement is not possible. Our tests indicated that professional services acquired during the period August 2014 through January 2015 were competitively procured when required and, as applicable, sole source data sheets were generally completed by the requesting department and reviewed, approved, and signed by the Purchasing Director. Finding 9: Contractual Services Previously Reported The BCC needed to strengthen its procedures regarding the procurement of contractual services. We recommended that the BCC strengthen procedures to ensure that all contracts include adequate provisions to effectively protect the interests of the BCC, contract payments are properly supported at the time the payments are approved and paid, required approvals are obtained for all contract payments in accordance with BCC policies and procedures, contract payments are properly monitored and do not exceed maximum amounts stipulated in the contracts, and contract renewals are properly executed in accordance with contract provisions and BCC policies and procedures. Results of Follow-Up Procedures The BCC’s actions partially corrected this finding. Contract Design. The BCC strengthened procedures to ensure contracts included adequate provisions to effectively protect its interests. Our test of 13 of the 67 contracts entered into during the period August 2014 through January 2015 disclosed that the BCC’s legal counsel reviewed the proposed contracts to ensure the BCC’s interests were effectively protected. Approval and Support for Contract Payments. Our review of 13 contractual services payments totaling $148,241 made during the period August 2014 through January 2015 disclosed that required approvals were obtained for the contract payments in accordance with BCC policies and procedures and that contract payments were properly supported at the time the payments were approved and paid. Monitoring of Contract Payments. CCC personnel assigned a project number to each contract to record contract payments and could compare cumulative contract payments to maximum amounts stipulated in the contracts. The 13 contractual services payments tested did not disclose any contracts that were overpaid; however, BCC records did not evidence a comparison of cumulative contract payments to maximum amounts stipulated in the contracts. Without effectively monitoring contract payments, there is an increased risk that the BCC may make contract payments in excess of the maximum amount stipulated in contracts. Contract Renewals. Our review of seven contracts renewed during the period August 2014 through January 2015 disclosed that the contract renewals were properly executed in accordance with contract provisions and BCC policies and procedures. Page 6  OKALOOSA COUNTY BOARD OF COUNTY COMMISSIONERS AND OKALOOSA COUNTY CLERK OF THE CIRCUIT COURT Follow-Up on Report No. 2014-068 PRELIMINARY AND TENTATIVE AUDIT FINDINGS NOT AN AUDIT REPORT Recommendation: The BCC should strengthen its procedures to ensure that contract payments are properly monitored and do not exceed maximum amounts stipulated in the contracts. Finding 10: Questioned Expenditures Previously Reported BCC records did not adequately document the authorized public purpose served by certain promotional and training-related expenditures. Also, the BCC did not establish written procedures for the use of promotional gift cards. We recommended that the BCC strengthen procedures to ensure that the authorized public purpose of expenditures is adequately documented in BCC records and establish written procedures for the distribution and use of promotional gift cards. We also recommended that the BCC document the necessity of providing food and beverages to employees attending training and paying for facility and equipment rentals when its own facilities are available. Results of Follow-Up Procedures The BCC’s actions corrected this finding. The BCC incurred $136,000 in promotional activity expenditures (excluding expenditures related to the Tourist Development Department) during the period August 2014 through January 2015. Our review of 20 promotional activity expenditures totaling $61,748 disclosed that the authorized public purpose of the expenditures was documented in BCC records. BCC personnel indicated that no promotional gift cards were purchased or used, no food or beverages were provided to employees attending training, and no facilities or equipment were rented for training when BCC facilities or equipment were available during the period August 2014 through January 2015. Further, our review disclosed no such expenditures. Finding 11: Purchasing Card Controls Previously Reported The BCC needed to strengthen its procedures relating to the use of purchasing cards (p-cards). We recommended that the BCC strengthen p-card policies and procedures to ensure that an independent review and approval is documented for all purchases; p-card expenditure reports include the required statement that employees and reviewers have certified they reviewed the applicable p-card expenditure report, reports are supported by receipts, all purchases made are for official County business, and the purchases are in accordance with applicable rules and directives; single transaction limits are not exceeded; prior to payment, employees acknowledge the receipt of goods and services purchased; BCC records evidence the authorized public purpose served by the expenditures; and p-cards for terminated employees are timely canceled. Page 7  OKALOOSA COUNTY BOARD OF COUNTY COMMISSIONERS AND OKALOOSA COUNTY CLERK OF THE CIRCUIT COURT Follow-Up on Report No. 2014-068 PRELIMINARY AND TENTATIVE AUDIT FINDINGS NOT AN AUDIT REPORT Results of Follow-Up Procedures The BCC’s actions corrected this finding. In April 2013, the BCC updated its p-card policies and procedures to provide for independent reviews, certifications from employees and reviewers, the timely cancellation of p-cards for terminated employees, and acknowledgments that goods or services were received prior to payment. Our review of 23 p-card transactions totaling $23,843 incurred during the period August 2014 through January 2015 disclosed that an independent review and approval was documented for all purchases; p-card expenditure reports included the required certification statements from employees and reviewers; BCC records evidenced the authorized public purpose served by the expenditures; single transaction limits were generally not exceeded; and prior to payment, employees acknowledged the receipt of goods and services purchased. In addition, our review of p-card records for seven employees who terminated during the period August 2014 through January 2015 disclosed that each employee’s p-card was timely canceled. Finding 12: Advance Payments Previously Reported The BCC did not document the necessity of paying for