City of West Palm Beach Internal Auditor s Office

Transcription

1 POST AUDIT REVIEW AUDIT OF HOUSING AND COMMUNITY DEVELOPMENT Report No. PAR June 14, 2018 City of West Palm Beach Internal Auditor s Office Beverly Mahaso, Interim City Internal Auditor, Esq., CIA, CFE Elena Georgiev, Senior Internal Auditor, CPA, CGMA, CIA Ellen Misita, Senior Internal Auditor, CGAP

2 June 14, 2018 City Commission Audit Committee City of West Palm Beach 401 Clematis Street West Palm Beach, Florida RE: POST AUDIT REVIEW OF THE HOUSING AND COMMUNITY DEVELOPMENT AUDIT, AUD Dear City Commissioners and Audit Committee Members: In FY 2016, the Internal Auditor s Office released an audit of the City s Housing and Redevelopment Department. We performed certain procedures, as enumerated below, with respect to activities of Housing and Community Development in order to render a conclusion on the status of the recommendations made as a result of that audit. This Post Audit Review consisted primarily of inquiries of City personnel in Housing and Community Development, and examinations of various supporting documentation. It was substantially less in scope than an audit in accordance with generally accepted government auditing standards. The evidence obtained provided a reasonable basis for our conclusions; however, had an audit been performed, other matters might have come to our attention that would have been reported to you and our conclusions may have been modified. The audit contained five (5) recommendations that addressed the audit s findings. Based on the review performed, we concluded that all five (5) recommendations were implemented. We have enclosed a table listing all the recommendations with the current statuses. We found that management made significant efforts to take corrective action. Further, we note that the Departments are actively continuing to make improvements. 1

3 Recommendation Status with Priority 5 5 Medium High Implemented Partially Implemented Not Implemented We thank the personnel at the Housing and Community Development Department for their assistance in conducting this review. Respectfully submitted, /s/ Beverly Mahaso Interim City Internal Auditor cc: Jeri Muoio, Mayor Jeff Green, City Administrator Dorritt Miller, Deputy City Administrator Scott Kelly, Assistant City Administrator Armando Fana, Director of Housing and Community Development Encl. 2

4 Post Audit Review of Housing and Community Development AUDIT RECOMMENDATIONS Legend 1 Payment Procedures Management should establish business processes which will ensure that vendors are not providing services without fully executed contracts. There should be a process both in the Department and in Accounts Payable to ensure invoices are properly matched against prices established in the contracts prior to approval for payment. We wish to acknowledge that the Director, with the assistance of the City s Administration, has taken corrective action and put in place a system of internal controls to ensure contracts and contract amendments are processed timely. The addition of the new Finance Manager completes the restructuring of the senior management of the Department, and further strengthens the internal control structure. Community Development concurs with the concerns. Under current management and leadership, the Department has designated a key staff member to serve as the Contract Administrator for all Departmental contracts. Utilizing the City s Contract Database, the Contract Administrator is responsible for ensuring that contracts and/or contract amendments are fully executed by both parties prior to work commencing and/or continuing. As the improved database now provides reminders to project managers, the Contract Administrator is informed of any contract expirations and addresses the matters accordingly. In addition, the Department has hired a Housing Finance Manager who is responsible for the fiscal compliance operations of HCD. MANAGEMENT UPDATE 03/2018: Community Development continues to implement and adhere to the processes outlined in the response provided. The Housing and Community Development Projects Administrator continues to be the contract administrator. Auditor's Note: The Housing Finance Manager is no longer with the City and currently, the Department plans on replacing that position with a Senior Fiscal Analyst. Some of the fiscal compliance operations, such as those associated with mortgages will be outsourced. 3

5 Legend Post Audit Review of Housing and Community Development 2 Evaluating Vendor Performance Management should ensure that consultant contracts contain clearly defined responsibilities for both the City and the contractor, including a Scope of Services that states performance measures that can be utilized to evaluate vendor performance. Community Development concurs with this concern. Under current management and leadership, the Department requires that all contracts provide a clearly defined and measurable scope of work. MANAGEMENT UPDATE 03/2018: Community Development continues to implement and adhere to the processes outlined in the response provided. 3 Staffing Capacity Although the HCD Operations have been brought in-house, management should always ensure that consultants provide assurance that they have an adequate level of staffing and resources to commit to a project. This should be determined as part of the RFP process, with periodic follow up and verification processes. (HCD Department) Community Development concurs with this concern. Unfilled positions and large turnovers in staff have greatly affected the Department s ability to build capacity, maintain consistency in the development and implementation of programs, and continue to expand and grow in its efforts to address the needs of the community and its residents. With the support of City Administration and under current management and leadership, the Department has filled several vacant positions which included a Program Administrator, a Construction Coordinator, and a Housing Finance Manager. The new staffing resources and Departmental reorganization have MANAGEMENT UPDATE (HCD) 03/2018: Community Development continues to implement and adhere to the processes outlined in the response provided. MANAGEMENT UPDATE (Procurement) 03/2018: Procurement has worked with the City Attorney's Office to develop solicitation templates for Requests for Qualifications (RFQs). The templates contain a description of the Evaluation Process and Evaluation Criteria which reference and are in agreement with Section 4

6 Legend Post Audit Review of Housing and Community Development vastly helped in the Department s efforts to ensure that community needs are met and that compliance with all program requirements is achieved. (Procurement Department) We concur with this recommendation. Contract Management checks and balances and safeguards are in place in the competitive solicitation process. Periodic follow up and verification will be done to ensure the consultant is adhering to the terms of the contract selection of respondent, best value in the Procurement Ordinance. Additional criteria can also be included to ensure respondents are aware of and evaluated against the criteria relevant to the specific procurement. 4 Vendor Selection Process The Procurement Department should take steps to ensure that all procedures related to vendor selection are completed and documented in a manner that ensures transparency and offers a clear understanding of the methodology used in vendor selection. All price increases and decreases should contain documented support for such changes. (Procurement Department) We concur with this recommendation. The procurement process has checks and balances and safeguards in place in all formal solicitations to comply with the report s recommendations. The Procurement Department will ensure that the proper procedures are followed. The vendor selection process will be documented to ensure transparency and changes to contracts will be approved through the proper channels. MANAGEMENT UPDATE (HCD) 03/2018: N/A MANAGEMENT UPDATE (Procurement) 03/2018: Procurement has worked with the City Attorney s Office to develop solicitation templates which reference Section Selection respondent; best value, in the Procurement Ordinance. The 5

7 Legend solicitation templates also include selection criteria which are in agreement with the Ordinance. The selection process is conducted and documented according to Florida Statute Chapter 286 Public Business: Miscellaneous Provisions, more commonly known as the Sunshine Law to ensure the transparency of the process. Post Audit Review of Housing and Community Development Changes to contracts including changes in pricing, are made through formal contract amendments. Furthermore, Procurement reviews the contract pricing information that is available against what is provided in purchase order requisitions to ensure they are in agreement. 5 Required Documentation Management should update its procedure to require updated Certificates of Insurance as necessary. We have been advised that corrective action has already been taken. Community Development concurs with this concern. At the time of onsite review, HCD staff took immediate actions to address this concern. On January 1, 2016, the Department began implementing a project management tool designed to track all of its housing and community development projects. MANAGEMENT UPDATE 03/2018: Community Development continues to implement and adhere to the processes outlined in the response provided. While the CDM software is not being utilized, the Department has implemented a more user friendly cloud based software, 6

8 Legend Post Audit Review of Housing and Community Development Among the many features specifically designed to address the complexity of HCD s operations, Community Development Management (CDM) software organizes and provides important notices on all projects and vendors. Complete utilization of CDM will be implemented by no later than October 1, Furthermore, the City has made numerous updates to its Contract Database. The improved database now provides reminders to project managers on matters that include contract and insurance expiration dates. For additional training purposes, on Friday June 17th, 2016, HCD staff attended a Contract Database training conducted by the City s Purchasing Department. Neighborly Software, providing a comprehensive and tailored solution for the administration of Departmental programs. The software provides an all in one solution for project management and includes a feature that provides notices for expired documents. HCD is currently in the implementation phase with the software, which should be completed in June