City of West Palm Beach Internal Auditor s Office

Transcription

1 AUDIT OF PARKS AND RECREATION Audit No March 17, 2016 City of West Palm Beach Internal Auditor s Office Roger Strout, City Internal Auditor, CIA, CRMA, CFE, CICA Beverly Mahaso, Deputy Internal Auditor, JD, CFE Elena Georgiev, Sr. Internal Auditor, CPA, CGMA

2 Internal Auditor s Office P.O. Box 3366 West Palm Beach, Florida Tel: 561/ Fax: 561/ March 17, 2016 Audit Committee City of West Palm Beach 401 Clematis Street West Palm Beach, Florida RE: Audit of Parks and Recreation, Audit No Dear Audit Committee Members: Attached is the City of West Palm Beach s Internal Auditor s Office report on Parks and Recreation. Although the Parks and Recreation Department has done a commendable job implementing controls, additional opportunities for improvement are presented in this report. We thank the management and staff of the Parks and Recreation Department for their time, information, and cooperation during this audit. Respectfully Submitted, /s/ Roger Strout City Internal Auditor cc: Jeri Muoio, Mayor Jeff Green, City Administrator Dorritt Miller, Deputy City Administrator Danielle Slaterpryce, Assistant City Administrator Leah Rockwell, Director of Parks and Recreation Mark Parks, Director of Finance

3 Table of Contents BACKGROUND... 4 STATEMENT OF OBJECTIVES... 4 STATEMENT OF SCOPE... 5 STATEMENT OF METHODOLOGY... 5 STATEMENT OF AUDITING STANDARDS... 5 AUDIT CONCLUSIONS AND SUMMARY OF FINDINGS... 5 NOTEWORTHY ACCOMPLISHMENTS... 6 Opportunities for Improvement 1) PERFORMING BACKGROUND CHECKS ) DOCUMENTING BACKGROUND CHECKS ) ADEQUATELY SECURING CASH COLLECTIONS ) RESTRICTING ACCESS TO THE SAFES ) DROP SAFES COMBINATION CHANGE ) TIMELY DEPOSITS ) SAFEGUARDING RECTRAC CREDENTIALS ) LOGGING OUT OF RECTRAC ) NON-CASH TERMINALS ) PROCESSING CANCELLATIONS ) RESTRICTIVELY ENDORSING CHECKS AND TIMING AND PATTERN OF DEPOSITS (MINOR ITEM) ) SEQUENTIAL DOCUMENTATION (MINOR ITEM) ) SHIFT RECONCILIATIONS (MINOR ITEM) APPENDIX A INTERNAL AUDIT REVIEW OF THE PARKS AND RECREATION CONTRACTED OUTSOURCING AND EFFICIENCY ANALYSIS BY MANAGEMENT PARTNERS... 27

4 Background The Parks and Recreation Department has a very ambitious mission, which is to develop and enhance a healthy, family oriented environment by creating, promoting, maintaining, and implementing recreational and cultural opportunities for youth, teens, adults, and seniors in parks and public spaces. The Department, in coordination with the Parks Maintenance Division, is responsible for 54 parks and the West Palm Beach Waterfront, which is a total of nearly 578 acres of park land. In addition, the Parks and Recreation Department develops and implements a variety of award winning leisure time activities from after care, camp, dance, fitness, and community events. The Department is a member of: the Florida Recreation and Parks Association, the National Recreation and Parks Association, the International Festival and Events Association, the Florida Festival and Events Association, the National Alliance on Youth Sports, the Florida School Age Child Care Coalition, the National School Age Child Care Coalition, and the National Association for the Education of Young Children. Department staff members serve on the boards of many of these organizations. In addition, the Department is licensed by the Florida Department of Children and Families. In October 2014, the Parks and Recreation Department was reorganized to create efficiencies. The responsibility over the Parks Maintenance Division was transferred to the Department of Engineering and Public Works, leaving the Department of Parks and Recreation with three divisions: Recreation, Community Events, and Waterfront Operations and Maintenance. Statement of Objectives The objectives of this audit were to determine: 1) Whether Parks and Recreation has begun implementing Management Partners recommendations and the Department s progress. Please see the separately issued Internal Audit Status Report on the Implementation of Management Partners Outsourcing and Efficiency Analysis located at the end of this report as Appendix A; 2) Compliance with Parks and Recreation Standard Operating Procedures; 3) Security Over Cash and Parks and Recreation Department s Cash Handling Procedures Page 4 of 36

5 Statement of Scope The audit period was October 1, 2013 through September 30, However, based on the work performed during the preliminary survey and the assessments of risk, the audit period varied depending on the audit objective. The audit included examinations of procedures, controls, transactions and records associated with the Parks and Recreation Department s activities. Statement of Methodology We utilized several audit methodologies to achieve the objectives. These evidencegathering techniques included, but were not limited to: Reviewing applicable local, state and federal regulatory requirements; Interviewing Parks and Recreation Department employees; Performing walk-throughs, and observing processes; and Examining the internal control systems and identifying any material weaknesses. Other audit procedures determined necessary. Statement of Auditing Standards We conducted this audit in accordance with Generally Accepted Government Auditing Standards (GAGAS). 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. Audit Conclusions and Summary of Findings Based upon our interviews, analytics, and testing, we concluded that opportunities exist for the Department to improve its cash collection and volunteer background check processes and related internal controls, including records retention. Additionally, the Department should continue its efforts implementing the recommendations made by Management Partners as a result of their Outsourcing and Efficiency Analysis. Management Partners Recommendations Status 54% 11% 35% Implemented - 13 Partially Implemented - 4 Not Implemented - 20 Page 5 of 36

6 Noteworthy Accomplishments It is important to recognize the significant accomplishments achieved by the Parks and Recreation Department. Below is a list of some of their notable achievements: They have continued to automate as many processes as possible by allowing online payments using credit cards, as well as the entire summer camp registration process. During the 2015 Summer Camp registration, Parks and Recreation offered a reduced cost for early registration, reducing the stress from the last minute rush to process high volumes of registrations. Community Events during the Green Market season launched a vendor online payment process. This eliminated the necessity for vendors to come to City Hall with their Oracle produced invoices and pay the cashiers in Cash Management for their weekly/monthly participation. The Department s afterschool programs were licensed by the Palm Beach County Health Department in record time. A process, which can take up to eight months, was completed in six weeks. This included staff earning specific credentials, facilities being renovated to meet physical requirements, etc. Volunteers involved in after school programs and coaching are background checked on a national level, where previously it was only through FDMV. Palm Beach County Summer Scholarship program instituted a new requirement in 2012 requiring all summer camps that were accepting Palm Beach County Scholarships to perform Level 2 background checks for all staff. The City of West Palm Beach was the leader in this movement and had formed a partnership with the Sheriff s Department to reduce the initial cost of fingerprinting for this process. During the August 2014 to August 2015 period, the Volunteer Services Division oversaw 2,012 volunteers with 9,747 hours of service, which valued at $23.07/hr. (national hourly benchmark) equals over $224, in value to the City. Since our audit findings were presented to management, many of the issues have already been addressed and the staff is being retrained on the policies and processes. Remaining portion of this page left blank intentionally. Page 6 of 36

7 Opportunities for Improvement 1) Performing Background Checks Condition As part of the Parks and Recreation audit, we noted that the Department of Parks and Recreation supplements its staff by utilizing the services of volunteers. Being one of the departments most affected by the budget cuts following the most recent recession, it welcomes volunteers, who lend a helping hand in solving many pressing local needs. However, we noted the following: Criteria - One time volunteers are not background checked. - Regular volunteers, including athletic coaches, are not fingerprinted; instead a national search is performed based on the volunteer s social security number only. - No record is kept of who participates as a group volunteer and group volunteers are not background checked. - The department has a relationship with Prime Time, a non-profit organization, which also provides the City with volunteers. It is Prime Time s responsibility to background check these individuals, however, the Department does not obtain copies of the background checks. - The Department also processes all volunteer applications for the Library and Grassy Waters Preserve. According to the US Department of Justice National Sex Offender Public Website (NSOPW), 62,939 cases of child sexual abuse were reported in Furthermore, only thirty (30) percent of sexual assault cases are reported to the authorities because of shame, negative reactions by family members and friends, and fear of retaliation and further victimization by the abuser. According to NSOPW, an estimated sixty (60) percent of perpetrators of sexual abuse are known to the child, but are not family members, including child care providers, coaches, family friends, etc. Furthermore, the passing of laws such as the Jessica Lunsford Act, which bans registered sex offenders from living near schools, parks, and other places where children congregate, has turned sex offenders into transients, making them more difficult to track. Page 7 of 36

8 In a climate such as this, background checking has become a necessity. According to a study conducted by SEARCH, which is a non-profit criminal justice support organization, fingerprint based criminal history record checks are more accurate than name based checks, which may return results that are a false positive (incorrectly associates an individual with a criminal record) or a false negative (fails to associate an individual with his/her criminal record). They are also more accurate than social security number based checks since it may be difficult to always ascertain that the social security number really belongs to the person in question. Cause The Department s budget does not currently support the added expense of performing Level 2 fingerprint based background checks on all volunteers. Effect Due to reasons previously stated, a person with a questionable background could potentially obtain access to a child or a vulnerable adult. We recognize that the Department has expanded and improved its background verifications processes over the years. Additionally, the Department provides staff to supervise groups of volunteers when children are present. However, we recommend that the Department of Parks and Recreation perform Level 2 background checks with fingerprints on all volunteers who have direct access to children or vulnerable adults. This should be done annually. Recommendation As a minimum, we recommend the following for each volunteer type: A. One time and regular volunteers, including athletic coaches, should be asked to provide a notarized Affidavit of Moral Character, like the one provided on the Florida Department of Children and Families web site. B. A record should be kept of each person volunteering as part of a group. In addition, each individual volunteer in the group should be asked to provide a notarized Affidavit of Moral Character. If any of these volunteers are expected to be around children or vulnerable adults, the organizer (for example, their employer) should be asked to provide proof that the volunteer has received Level 2 background check (with fingerprints) within the past year. C. The department should ask Prime Time to provide proof of Level 2 background checks with fingerprints for all volunteers that may be around children or vulnerable adults. The department should also ask Prime Time to provide proof that all other Page 8 of 36

9 volunteers have been background checked. Finally, all volunteers should be asked to sign an Affidavit of Moral Character. D. The Department should apply the above recommendations when processing any volunteer applications for the Library and Grassy Waters Preserve. During the audit, we contacted a number of municipalities in the state of Florida and noted that some of them also performed drug and tuberculosis tests on their volunteers. The Department may consider this as well. As an alternative, the Department could consider outsourcing its volunteer recruitment to a company that specializes in providing fully background checked volunteers. Management Response We agree, however, Level 2 can only be performed through the State Clearing House for Licensed Child Care facility employees. A national background check is presently done based on National Parks & Rec standards. One time volunteers, if around children, are supervised by our staff, and large group volunteers typically work on park clean up and are not working with children. The Department will investigate options for background checks that are similar to the Department of Children and Families Level 2 for volunteers that are around children and vulnerable adults, such as coaches. We will evaluate the risk versus the cost as well. Target Implementation Date: We will look to other avenues for possible solutions by June 1, Remaining portion of this page left blank intentionally. Page 9 of 36

10 2) Documenting Background Checks Condition As part of the Parks and Recreation audit, we noted that instructor related background checks are not centrally maintained. In addition, the Department was unable to locate six (6) of the nine (9) files requested, or sixty seven percent (67%). Criteria The Florida Department of State publishes a General Records Schedule, which specifies that security screening records for individuals who are not employees or candidates for employment should be maintained for two years after receiving the results of the screening or termination of an individual s access, whichever is later. Best practices suggest that sensitive documentation such as, in this case, background checks, should be maintained centrally and safeguarded. Cause As part of the audit, we noted that that the Department does not have policies and procedures related to maintaining background check records. Documented policies and procedures are an excellent way to control access and prevent creative and/or unauthorized actions. Effect Not centrally safeguarding sensitive records may result in an unwanted exposure of an individual s personal information, such as their social security number or address. Furthermore, the Department s inability to locate the requested files, more specifically, the background checks, may be an indication that background checks were not performed, thus possibly exposing children and vulnerable adults to individuals with questionable backgrounds. Recommendation We recommend that the Department of Parks and Recreation develop appropriate records policies and procedures. While policies are more general, procedures are very useful in communicating specific requirements such as forms, dates, or the responsible party for a specific action. Most importantly, the files should be maintained centrally and safeguarded. Page 10 of 36

11 Management Response We agree with this recommendation. Target Implementation Date: We will implement this immediately. All background checks that are required for instructors and volunteers will be kept in a secure central location effective on March 1, Remaining portion of this page left blank intentionally. Page 11 of 36

12 3) Adequately Securing Cash Collections Condition As part of the Parks and Recreation audit, we noted that cash collections were not adequately secured. More specifically, we found that on many occasions, the Cash Balancing Worksheet, which is used to detail the cash collected during the day or shift and aids in reconciling the cash on hand to the record in RecTrac, was not printed and signed by staff and the reviewer at the end of the work day. In order to complete the Cash Balancing Worksheet, cash cannot be placed in a sealed deposit bag because subsequent verification must be performed. Therefore, the cash is placed in the safe. However, at some locations, all staff have access to the safe. RecTrac, the software used by Parks and Recreation, is a fully integrated parks management software, which is capable of providing management with extensive reporting and statistical data. The Department uses it to record transactions and store relevant data. Criteria Best practices indicate that unnecessary clerical routines and handling of cash or cash related documentation should be eliminated to lessen the risk of loss and exposure to errors. Cash and checks received should be safeguarded until the deposit has been completed. Cause There is not always a supervisor/second employee to complete the final cash count and verification at the end of the day. Effect With so many staff members having access to the safes, the opportunity exists to misappropriate cash. During the month of October, the combined cash and checks collected at the ten (10) points of sale, amounted to $100, Recommendation Page 12 of 36

13 We recommend that the Department of Parks and Recreation purchase lockable bags and store any cash collected during the day in such bags until a manager has the chance to complete all cash counts and verifications the next morning. Management Response We agree and are currently in the process of researching the most cost efficient and secure bags for end-of-day collections to be dropped in the safe. Target Implementation Date: April 1, 2016 Remaining portion of this page left blank intentionally. Page 13 of 36

14 4) Restricting Access to the Safes Condition As part of the Parks and Recreation audit, it came to our attention that at some locations all staff with RecTrac access also have access to the safes on premises. Criteria Best practices indicate that access to cash should be restricted. Cause As situations arise, combinations are shared with staff members. However, contrary to the Policy, combinations are not always changed after they have been shared. Effect Allowing multiple staff members to access the safe and the cash stored within, could result in misappropriations. Recommendation We recommend that the Department of Parks and Recreation limit the access to the safes to three (3) staff members, including the center supervisor and two (2) other persons who serve as backup in the absence of the center supervisor. Management Response We agree with this finding. In certain instances, due to the hours and days that the Center is open, additional individuals may be required to have access to the safes. Target Implementation Date: Each Center s procedures will be reviewed and access to safes will be adjusted accordingly by April 1, Remaining portion of this page left blank intentionally. Page 14 of 36

15 5) Drop Safes Combination Change Condition As part of the Parks and Recreation audit, it came to our attention that the drop safe combination is not changed once every six months as required by Policy. These changes are documented in logs, which are simple spreadsheets with space for the date, the supervisor s signature, and reason for the combination change. Overtime, the center supervisors, when required, tend to give the combination to the drop safe to many staff members. Criteria According to the policy written on the Drop Safe Combination Change Report, the combination to the drop safe must be changed once every six months or immediately upon return of the center supervisor or campus manager, when the center supervisor or campus manager has given the combination to an authorized employee. Cause Center supervisors rely on the Senior Accountant to go to their locations and change the combinations. Effect Not changing the combination and thus not restricting staff members access to the drop safe could result in misappropriations. Recommendation We recommend that the center supervisors be informed that it is their responsibility to change the drop safe combination in accordance with the policy. In addition, the Senior Accountant should incorporate the logs examination, including review for timely safe combination changes, into the surprise audits of the facilities. Management Response We agree with this finding, however, this is not applicable to all the centers but only to very specific locations. All staff will be retrained on the policy for consistency. Target Implementation Date: All safe combinations have been changed as of February 27, We will implement Page 15 of 36

16 October 1 st and April 15 th of each year as mandatory dates to change the safe combinations. Remaining portion of this page left blank intentionally. Page 16 of 36

17 6) Timely Deposits Condition As part of the Parks and Recreation audit, it came to our attention that cash was not timely deposited. In some instances it took staff six days to make the deposit. Criteria Best practices indicate that deposits should be processed within prescribed intervals. Next business day deposits are considered appropriate for most businesses. Cause Staff members may wait several days and deposit all the cash and checks collected at once. Effect With so many staff members having access to the safes, the opportunity exits to misappropriate cash, if cash is not deposited in a timely manner. During the month of October, the combined cash and checks collected at the 10 points of sale amounted to $100, Recommendation We recommend that the Department emphasize that cash and checks must be deposited on the next business day. In addition, we recommend that the Senior Accountant perform surprise counts, and similar procedures, at least once a quarter. These may identify untimely deposits and similar conditions, as well as act as a deterrent. Management Response We agree with this recommendation. Please note: It is the procedure to make deposits on a daily basis on business days. Centers that fail to follow this procedure will and have been counseled. Target Implementation Date: Will retrain by April 1, Page 17 of 36

18 7) Safeguarding RecTrac Credentials Condition As part of the Parks and Recreation audit, it came to our attention that some staff members share RecTrac credentials among themselves. RecTrac, the software used by Parks and Recreation, is a fully integrated parks management software, which is capable of providing management with extensive reporting and statistical data. The Department uses it to record transactions and store relevant data. Every transaction within RecTrac is labeled with the initials of the user who is logged in. Criteria Best practices indicate that computer system sign on credentials, including usernames and passwords, are not to be shared. Cause Staff members share credentials in order to expedite the process in one s absence. Effect Using another s credentials may give staff members the opportunity to perform actions, which they would not otherwise be allowed to perform when using their own credentials. Recommendation We recommend that the Parks and Recreation Department train its staff members about the risks of sharing credentials, especially for supervisory personnel. Furthermore, the Department should create policies, which carry consequences for employees who share credentials. Finally, if a situation arises, which requires supervisory assistance, the staff member should direct his/her questions to the Senior Accountant. Management Response We agree with this recommendation. SOP (Standard Operating Procedure) will be written and refresher training will be given and a copy of the SOP provided. Target Implementation Date: Implementation expected to be complete by June 1, Page 18 of 36

19 8) Logging Out of RecTrac Condition As part of the Parks and Recreation audit, it came to our attention that some staff members do not log out of RecTrac when not using the system. Criteria Best practices indicate that computer terminals providing access to software systems, which are not in use, should be locked to prevent unauthorized access. Cause Staff members do not log out of RecTrac when not using the system for customer convenience. Effect Similarly to the Safeguarding RecTrac Credentials issue, using another s credentials may give a staff member the opportunity to perform actions, which he/she would not otherwise be allowed to perform if using one s own credentials. Recommendation We recommend that the Department of Parks and Recreation trains its staff members about the risks in allowing others to operate under one s credentials. Furthermore, the Department should create policies, which carry consequences for employees who share credentials or allow others to operate under their credentials. Management Response We agree with this finding. A formal SOP (Standard Operating Procedure) will be written in addition to providing refresher training with a copy of the written SOP. Target Implementation Date: June 1, 2016 Remaining portion of this page left blank intentionally. Page 19 of 36

20 9) Non-Cash Terminals Condition As part of the Parks and Recreation audit, we noted that many of the locations have several computer terminals, which have RecTrac installed on them. As such all the terminals can process transactions, but only one terminal has a cash drawer attached to it. More importantly, these locations process cash transactions on the terminals not attached to the cash drawer. In addition, we observed that many of the cash drawers are opened with a key instead of being opened automatically. Criteria Best practices indicate that unnecessary handling of cash should be eliminated to lessen the risk of loss and exposure to errors. Cause Centers have not designated the terminals not attached to the cash drawers as non-cash terminals. In regards to manually opening the cash drawers, some are opened with a key to facilitate the deposit of money collected elsewhere and others are broken. Effect Not depositing cash in a cash drawer immediately, increases the risk of loss. Recommendation We recommend that centers designate all terminals not attached to a cash drawer as non-cash terminals and only use these to process transactions that do not involve the exchange of cash. This will eliminate the need to manually open the cash drawers. Finally, the ones that are broken should be fixed as soon as possible. Management Response We agree with this finding. When waiting lines are long, we attempt to provide quick and excellent customer service. Therefore, we will only take checks and credit card payments at non-cash drawer terminals. Broken cash drawers have not been reported but will be replaced immediately with the assistance from IT. Target Implementation Date: April 1, 2016 Page 20 of 36

21 10) Processing Cancellations Condition As part of the Parks and Recreation audit, it came to our attention that all staff members are given the authority to cancel transactions. Criteria Best practices suggest that certain transactions, including cancellations, should be limited and occur only after approval from the designated individual who has been delegated the authority. Cause Management believes that asking the Senior Accountant to examine all transactions daily and to monitor for anything that appears to be out of the ordinary is an adequate mitigating control. Effect Cancelled transactions may be used to misappropriate cash and the lack of supervisory approval may allow this to occur undetected. Additionally, someone very familiar with the system may process cancellations in a way that appears to be a legitimate purpose, escaping the scrutiny of the Senior Accountant. Recommendation We recommend that all staff members obtain written approval from a supervisor prior to processing cancellations. Such approval should be attached to the paperwork provided to the Senior Accountant and scanned and attached into RecTrac. As an alternative, discounts or cancellations may be processed solely by a supervisor. Management Response We agree with this recommendation. When a supervisor is available, they need to approve RecTrac cancellations. If staff in charge is not a center supervisor, the next highest ranking employee shall be given authority to approve and notate for the accountant s reconciling. Target Implementation Date: April 1, 2016 Page 21 of 36

22 11) Restrictively Endorsing Checks and Timing and Pattern of Deposits (Minor Item) Condition Upon inspection, we noted that one of the locations does not stamp the checks accepted by its staff For Deposit Only. In addition, upon inquiry of staff, it came to our attention that one location does not vary its timing and pattern of deposits. Criteria Best practices indicate that checks should be restrictively endorsed immediately upon receipt to prevent the misappropriation of funds. Additionally, best practices suggest that the timing and patterns of delivery of deposits to the bank should vary. Cause Center staff lost the For Deposit Only stamp and did not inform the Senior Accountant so that a new stamp could be procured. In addition, staff members do not think of the facilities as cash heavy. Effect Not restrictively endorsing checks and leaving them blank on the back of the check poses the risk of misappropriation. Furthermore, predictable deposit times and patterns could increase the possibility of an attack thus placing a staff member in physical jeopardy and exposing the funds to an increased possibility of loss. Recommendation In regards to restrictively endorsing checks, we recommend that staff obtains a new For Deposit Only Stamp and begins to restrictively endorse all checks accepted from customers. In addition, we recommend that an extra stamp be ordered for each center so that there is one available to replace a lost stamp immediately. Page 22 of 36

23 In regards to the timing and pattern of deposits, we recommend that the Department research the security issues pertaining to cash deposits and determine if there is a need to change its procedures, if there are available resources. At the very least, the Department should encourage all staff members to vary the timing and patterns of deposits. Management Response We agree with this finding. One center lost the For Deposit Only endorsement stamp. They will be counselled on the importance of the stamp. New stamps have been ordered. We agree with this recommendation. Staff will do the best they can to take varying routes and times to banks for daily deposits. Target Implementation Date: Immediately upon the arrival of the new For Deposit Only stamps, and by March 1, 2016 Remaining portion of this page left blank intentionally. Page 23 of 36

24 12) Sequential Documentation (Minor Item) Condition Upon inspection, it came to our attention that two of the locations do not use their official receipts in sequence. In addition, according to management, a third location has not used any official receipts in the past year and has disposed of its previous year s log. As a result, we cannot determine if this location used its official receipts in sequential order. Criteria Best practices indicate that forms with sequential numbering should be used to document cash related transactions to enhance reconciliation and accountability. Cause Since the Department began using RecTrac, official receipts are rarely used and have become almost obsolete. Thus, staff members are not always using them in sequence. Effect If receipts are not used in sequence, it becomes easier to collect cash, issue a receipt to a customer, fail to enter the sale into RecTrac, and misappropriate the cash. Recommendation We recommend that staff be trained on the importance of using official receipts in sequential order and timely submitting them to Cash Management. In addition, we recommend that the Department monitors the use of receipts and performs a thorough review of the books of a location where receipts are used out of sequence. As an alternative, we recommend that each location be issued a traditional duplicate receipts book to ensure that a copy of the receipt remains at the location. Management Response We agree with this finding. Current policy states that receipts must be used in sequential order. Our staff will be retrained on this policy. Target Implementation Date: Retraining by April 1, Page 24 of 36

25 Finance Department Response Cash Management Division would be pleased to provide sequentially numbered receipt books to the Parks and Recreation Department. Target Implementation Date: Upon request. Remaining portion of this page left blank intentionally. Page 25 of 36

26 13) Shift Reconciliations (Minor Item) Condition As part of the Parks and Recreation audit, it came to our attention that one of the locations does not reconcile cash collections at the end of each shift and only performs a reconciliation at the end of the day. Criteria Best practices indicate that supervision of cash management activities should be strictly and continually administered. Cause As center staff get busy, they unintentionally neglect to reconcile cash collections to the record in RecTrac between shifts. Effect Although this is a minor item, not reconciling cash collections to the record in RecTrac between shifts may prevent management from pinpointing mistakes and/or questionable practices. Recommendation We recommend that staff be required to reconcile cash collections to the record in RecTrac between shifts in addition to reconciling at the end of the day. Management Response We agree with this recommendation. Current policy states that shifts are to reconcile at the end of each shift. The last shift then drops cash out and float in safe for the following day reconciliation and segregation of duties. Target Implementation Date: Immediately, March 1, Remaining portion of this page left blank intentionally. Page 26 of 36

27 APPENDIX A INTERNAL AUDIT REVIEW OF THE PARKS AND RECREATION CONTRACTED OUTSOURCING AND EFFICIENCY ANALYSIS BY MANAGEMENT PARTNERS Page 27 of 36

28 March 17, 2016 Audit Committee City of West Palm Beach 401 Clematis Street West Palm Beach, Florida RE: INTERNAL AUDIT REVIEW OF THE PARKS AND RECREATION CONTRACTED OUTSOURCING AND EFFICIENCY ANALYSIS BY MANAGEMENT PARTNERS Dear Audit Committee Members: In September 2014, Management Partners, a management consulting firm specializing in governmental operations, completed an analysis of the Department of Parks and Recreation. As part of our recently completed audit of Parks, we performed certain procedures, as enumerated below, with respect to activities of the Department of Parks and Recreation and the Department of Public Works, Grounds Maintenance Division, in order to render a conclusion on the status of the recommendations made by Management Partners as a result of their analysis. This Internal Audit Review consisted primarily of inquiries of City personnel and examinations of various supporting documentation. It was substantially less in scope than an audit in accordance with generally accepted government auditing standards, because our objectives were to determine the status of management s implementation of the Management Partners recommendations. The evidence obtained provided a reasonable basis for our conclusions; however, had a full audit been performed of the specific items Management Partners reviewed, other matters may have come to our attention that would have been reported to you and our conclusions may have been modified. The analysis contained 37 recommendations that addressed the analysis findings. Based on our review, we concluded that 13 recommendations were implemented, 4 were partially implemented, and 20 were not implemented. However, it is important to note that a number of the recommendations are currently in the not implemented status as management is waiting for the implementation of new Page 28 of 36

29 software systems. Recommendations Status 54% 11% 35% Implemented - 13 Partially Implemented - 4 Not Implemented - 20 We have enclosed a table listing all the recommendations with the current statuses. We found that management has made progress with respect to corrective action. However, additional tasks remain to be completed. We thank the personnel at the Department of Parks and Recreation and the Department of Public Works, Grounds Maintenance Division for their assistance in conducting this review. We encourage both departments to continue their efforts and fully implement the recommendations provided. Respectfully submitted, /s/ Roger Strout City Internal Auditor cc: Encl. Sylvia Moffett, Commission President Keith James, Commissioner ShanonMaterio, Commissioner Paula Ryan, Commissioner Cory Neering, Commissioner Jeffrey Green, City Administrator Dorritt Miller, Deputy City Administrator Danielle Slaterpryce, Assistant City Administrator Leah Rockwell, Director of Parks and Recreation Mark Parks, Director of Finance Page 29 of 36

30 RECOMMENDATIONS No. MANAGEMENT PARTNERS RECOMMENDATION MANAGEMENT S STATUS UPDATE URGENCY* 1 Outsource right-of-way and median maintenance, and redirect personnel resources to parks maintenance. Implemented: The Grounds Maintenance Department has outsourced all of the right-of-way and median maintenance, but the City s own. 2 Generate financial statements for the City s cemeteries to obtain a better understanding of their financial condition. 3 Explore the costs and benefits of outsourcing cemetery maintenance to reduce costs and extend the life of the cemetery sinking fund. 4 Require staff to initiate work order requests through MainTrac to improve the work order process. 5 Route all maintenance requests through the Parks and Grounds Maintenance Division secretary who will request priority assignment from maintenance chiefs. 6 Require maintenance crews to enter completed work order information directly into MainTrac. This will reduce possible transcription errors and free up valuable time for the maintenance chiefs. 7 Purchase Mobile MainTrac and hardware for maintenance crews. 8 Invest in additional training for staff including maintenance chiefs, secretaries, and crew leaders to support the use of MainTrac and reduce manual work tracking. Not Implemented: Per discussion with the Senior Accountant in charge of this, each month a General Ledger report is generated to see if the City has collected any revenues from cemetery lot sales. If it has, the receipts are collected from the Cashiers and based on them the information is entered into a spreadsheet. A journal entry is booked at the end of the year based on the spreadsheet. No financial statements are prepared for the cemetery; it is accounted for as part of the General Fund. Not implemented: See #2 above. Only the sales of the lots are tracked, not the associated costs. Implemented: Staff has begun initiating work order requests through MainTrac. Implemented: Currently, all maintenance requests are routed through the Parks and Grounds Maintenance Division secretary and then given to the maintenance chiefs to prioritize. Implemented: Currently, all completed work orders information is entered directly into MainTrac. Not Implemented: A decision has been made to transition from MainTrac to ViewWorks by December 31, Implemented: The Parks and Recreation Accountant is providing on demand training. Page 30 of 36

31 No. MANAGEMENT PARTNERS RECOMMENDATION MANAGEMENT S STATUS UPDATE URGENCY* 9 Incorporate full cost and time data for work orders into Not Implemented: A decision has been made to transition MainTrac. from MainTrac to ViewWorks by December 31, Use the Inspection and Results Module and the Job and Task Maintenance Scheduling Module from MainTrac. Not Implemented: A decision has been made to transition from MainTrac to ViewWorks by December 31, Work with the Fleet Division during and after implementation of the new asset management system to ensure that the Parks fleet information is available when needed. Not Implemented: Grounds Maintenance keeps a list of parts, other than this, the Fleet Division keeps a record of equipment. Per further discussion with the General Services Manager, the Purchasing Department just issued a PO (the week of July 13) for a new system. The system selected is AssetWorks, which is used by other government agencies, including the NYPD, and a number of foreign agencies. He also explained that his staff inventoried the Grounds Maintenance equipment and noted that the list was not properly maintained. However, he decided not to invest the time to fix these issues. Instead, he created a list of what is currently on hand and is very determined to keep it current. This is the list that will be uploaded into AssetWorks. The software will be delivered to the City by March 31, Create standard operating procedures for the major tasks accomplished by the Parks and Grounds Maintenance Division. 13 Create a tiered maintenance plan for the Parks and Grounds Maintenance Division. Not Implemented: The Assistant City Administrator in charge of Maintenance explained that her goal is to move Grounds Maintenance toward an American Public Works Association (APWA) Certification. As part of this process, she is committed to putting together a comprehensive set of Standard Operating Procedures (SOPs). Not Implemented: The Parks Maintenance Operations Manager explained that a tiered maintenance plan has not been implemented yet due to current staffing levels. She expects to have it completed by July 1, Page 31 of 36

32 No. MANAGEMENT PARTNERS RECOMMENDATION MANAGEMENT S STATUS UPDATE URGENCY* 14 Create a rotating parks maintenance schedule that Not Implemented: The Parks Maintenance Operations ensures better coverage than the current schedule provides. Manager explained that she made adjustments to the schedules of two (2) staff members. If adequate staffing is provided, this recommendation can be implemented by January 1, Coordinate with the Sanitation Department for the collection and transportation of green waste. 16 Replace trash bins with solar compactors in the park system. 17 Track the personnel, operating and internal services costs related to mowing to analyze whether contracting with a third party would be more cost-effective. 18 Evaluate whether a Safe Neighborhood Improvement District is an appropriate way to secure additional funds for the maintenance of pocket and neighborhood parks. Not Implemented: The Parks Maintenance Operations Manager explained that the schedule of the lawn maintenance and tree trimming crews is request driven. With the current staffing levels, their schedules are coordinated with those of the Sanitation Department whenever possible. Parks Maintenance is working on this recommendation. If adequate staffing is provided, this recommendation can be implemented by January 1, Partially Implemented: Grounds maintenance purchased twenty six (26) refurbished/second hand solar compactors. They will be installed by the waterfront, on Clematis, and in the Northwood Village neighborhood by January 31, Their useful life will be 4-5 years. Management Partners, in their report, described the experience the City of Delray Beach had when they first installed solar compactors. Unfortunately, since then Delray Beach discontinued the use of solar compactor and disposed of them. One of the reasons for this might have been the fact that they installed the solar compactors in close proximity to the beach where the conditions were not conducive for such use. Not Implemented: Grounds maintenance does not have a budget analyst on staff, thus, it is difficult, if not impossible, for them to track the personnel, operating costs, and internal service costs related to mowing. They cannot contract with a third party if they do not know if this would be the more cost effective solution. Partially Implemented: The Safe Neighborhood Improvement District issue was discussed at one of the City Commission's work shops. However, it has not been addressed further. Page 32 of 36

33 No. MANAGEMENT PARTNERS RECOMMENDATION MANAGEMENT S STATUS UPDATE URGENCY* 19 Develop a proposal to adopt a Parks and Recreation Capital Facilities Fee for consideration by the City Commission. 20 End the practice of trimming trees that are the responsibility of private property owners or charge the $100 fee per hour as adopted in the comprehensive fee schedule for tree trimming services. Not Implemented: This has not been a priority and has not been addressed. Not Implemented: The Parks Maintenance Operations Manager explained that the tree trimming crews continue to trim trees that present an immediate safety hazard. The property owners have not been informed that it is their responsibility. Auditor's Note: We recommend that property owners are informed that going forward there will be fees associated with trimming trees that are their responsibility. Furthermore, we recommend that a review process is designed for handling any disputed charges. 21 Repair, update and expand the City s Toro Sentinel system for monitoring and controlling the irrigation system. Partially Implemented: The Assistant City Administrator in charge of Maintenance explained that the irrigation system is repaired as issues occur. Per further discussion with the Parks Maintenance Operations Manager, she explained that in order to begin to resolve the issues, she needs a dedicated Internet line. She sent a request to the IT Department (the week of July 20). The second step would be to get additional money in the budget (for new controllers, for example). Furthermore, she sent a memo to the Assistant City Administrator in charge of Maintenance on September 17, 2015 outlining the steps required in order to move in the right direction. This memo was forwarded to the Interim IT Director. 22 Reclassify one of the irrigation technician positions to a maintenance leader. 23 Reclassify one of the tree trimmer positions to a maintenance leader. Not Implemented: The Parks Maintenance Operations Manager explained that she attempted to re-classify the position, but the re-class was not approved for FY She is planning to attempt this again for FY Not Implemented: The Parks Maintenance Operations Manager explained that this is being worked on. Page 33 of 36

34 No. MANAGEMENT PARTNERS RECOMMENDATION MANAGEMENT S STATUS UPDATE URGENCY* 24 Test the new online registration process during winter camp registration to make appropriate adjustments for summer implementation. Implemented: The Department has begun promoting the online registration process. However, there were a limited number of online registrations for both winter and spring camps. The summer camp registration was opened on March 2. Over the next few months, there were 136 online registrations for summer camp. 25 Provide incentives for users to pay for summer camps using credit cards, debit cards and online checks. 26 Adopt a timeline for the registration process to provide more time for staff and campers to prepare for summer camp. 27 Adopt early registration discounts and late payment fees to encourage registrants to sign up early or on time. 28 Create a public outreach campaign to inform registrants of changes in the camp registration process and encourage the use of online forms. Not Implemented: No incentives are offered to users who wish to pay with a debit/credit card. It is the Department's position that this way they do not pass any unnecessary fees to the user. Implemented: In prior years the Department opened the registration process for summer camp on April 8th. This year, however, the Department is opening the registration process on March 2nd. The auditor was provided with the 2015 Summer Camp brochure where it specifically lists March 2nd as the first day of the registration period. Implemented: The registrants are encouraged to make payment early and in full through the offering of a discount. The 2015 Summer Camp brochure specifically explains that if a full payment is received by March 31, the registration is $300 instead of $325. There is no registration deadline and no late fee because the goal is to enroll as many children as possible. Implemented: The 2015 Summer Camp Brochure explains that registrations will be accepted online and by mail. Walkins will be accepted only after April 20th. The brochures were distributed on February 23. In addition, an blast from RecTrac was sent out on March 5th. In addition to the Brochure, center staff communicated the information to parents and announcements were made at City wide events i.e. Easter Egg, etc., and through City s partners, i.e. PB Parenting Magazine, Newspapers, Early Learning Coalition, TV 18, etc. 29 Create an automated account activation system to reduce Implemented: Registrants are encouraged to create online Page 34 of 36

35 No. MANAGEMENT PARTNERS RECOMMENDATION MANAGEMENT S STATUS UPDATE URGENCY* manual work and enhance the activation/ deactivation process. profiles. They first need to come in to a center or to the main office so staff can verify their residency status. Registrants need to come in every year for such verification. 30 Track direct and indirect costs for camp operations. Not Implemented: Fees are not changed annually. Every several years (last one was done in ), the Director calculates the direct cost of the programs, she also approximates the percentage of time each full-time employee spends on planning and implementation of these programs, as well as the percentage of time these programs run for, and calculates the utilities costs and center upkeep supplies. For example, if the program capacity is 124 children, she takes the total expense (calculated above) and divides it by 124. That would be the non-resident rate. The Director expects to complete another analysis in late Establish a cost recovery policy for camp programs that aligns with City goals. 32 Explore the market for outsourcing some of the after school programs currently provided in house. 33 Negotiate a cost sharing agreement with contractors for use of community centers for after school programs. Partially Implemented: Fees for residents are determined by the City Commission. They are such that promote use of the programs. Thus, a cost recovery policy should first be established by the City Commission. This was brought up during the discussion of the Master Plan. Not Implemented: The City is currently running highly recognized afterschool programs and currently not considering outsourcing any of them. They have and continue to receive awards and are considered model programs. It is not in the interest of the resident families using the services to bring in another program provider. The Department will periodically re-evaluate this. Implemented: Currently, Faith s Place pays a small portion of the electric costs. This is stipulated in their agreement. It also pays a portion of the student transportation costs, but only in cases when a pickup is requested from a site which is not already assigned to Pleasant City. It has been Page 35 of 36