Audit Recommendations Status Report as of December 31, 2018

Transcription

1 SO U THWEST F LORIDA Internal Audit Report Audit Recommendations Report as of December 31, 2018 Date: March 15, 2019

2 To: The Honorable Linda Doggett, Lee County Clerk of the Circuit Court & Comptroller From: Tim Parks, Chief Internal Audit Officer/Inspector General Internal Audit/Inspector General Department Date: March 15, 2018 Re: Lee County Board of County Commissioners (BOCC) Audit Recommendations Report as of 12/31/18 Dear Ms. Doggett, The Inspector General Department has completed its BOCC Audit Recommendations Report as of 12/31/18, which reflects the implementation status of outstanding audit report recommendations for the Lee County Board of County Commissioners as of December 31, The report fulfills the IG Department s accountability for reporting on issues through their resolution. This audit activity conforms to the Institute of Internal Auditor s (IIA) International Standards for the Professional Practice of Internal Auditing (Red Book) and the Association of Inspectors General (AIG) Principles and Standards for Offices of Inspector General. The follow-up on recommendation status was conducted during the fourth quarter of We reviewed the status of the audit recommendations with the department personnel responsible for implementing the audit recommendations. The follow-up procedures covered the audits of the BOCC GCN Digital Retrofit Project Feasibility, BOCC Emergency Medical Services, BOCC Community Development Revenue, BOCC Fleet Management, and BOCC Community Development Code Enforcement. A summary of the recommendations status is presented in the headings of the attached report. The follow up report contains information regarding each outstanding recommendation, including recommendation status, management actions taken, and Internal Audit Follow Up Notes. We wish to express our appreciation for the cooperation and assistance provided us by the Departments during this review. Should you have any questions, please do not hesitate to contact me. Sincerely, Tim Parks, Chief Internal Audit Officer/Inspector General TJP/GK

3 BOCC GCN Digital Retrofit Project Feasibility (Project , Issued January 2017) BOCC GCN Digital Retrofit Project Feasibility Observation Recommendation Original Management Response We recommend rapid adoption and completion of The Department of Public Safety (DPS) is currently the BOCC GCN all-digital conversion to: working with County Administration and Budget Comply with Department of Homeland Services to move forward in the development of a Security interoperability standards. plan for update and replacement of the GCN to an Get beyond the end-of-life system issues all-digital radio network. This project will include that may cause continued difficult radio acquisition of a contracted consultant to design and maintenance issues. plan the system, and working with County Prepare for future County-wide growth Administration and Budget Services to thoroughly and expansion. explore all available funding sources, and develop a Allow for effective communications Capital Improvement Plan for the project. between authorities during large-scale emergencies and disasters. The risks associated with the analog portion of the GCN include: The current analog system does not meet the Department of Homeland Security s inoperability standards. In the event of large-scale emergencies and disasters, communication with external government agencies could potentially be difficult, and require workarounds. The production of existing analog radio system equipment was discontinued in , with correlated supplier repair and technical support ending as of December 31, Thus, there is the potential impact of GCN communication services which are difficult to repair. There is no assurance that analog parts will be obtainable from government agency surplus donations or from online used equipment suppliers. There are currently fewer towers than is necessary to remedy poor outdoor and inbuilding radio coverage in Central, South, and East Lee County. 6/30/17 Last Update N/A TBD Current Recommendation Action 7/17/17 - Procurement has issued the RFP for the Radio Communications P25 Migration Consultant. It remains open until August 23, The Department of Public Safety is committed to a thoughtful and thorough evaluation of the audit s recommendation, and will assure the information contained herein remains relevant in the Government Communications Network replacement plan moving forward. In Progress IA Follow-up Notes 7/17/17 - Management is taking action on the project. We will continue to monitor the adoption process until completion.

4 4/9/2018 It remains open at this time. GCN is currently engaged with the consultant and is expecting to be out to bid within 90 days. We will continue to monitor, with follow up in 90 days. 6/30/2018 It remains open at this time. Consultant s initial phase of work is done and we re crafting the RFP for competitive bid. 9/14/18 It remains open at this time. The competitive RFP is expected to be issued within 60 Days BOCC Emergency Medical Services (Project , Issued March 2017) Policies and Procedures Observation Recommendation Original Management Response We recommend that documentation be developed The Department of Public Safety (DPS) is currently and implemented to formalize the policy and working with McKesson to develop a process to maintenance procedures. Written policies and allow more specific monitoring of patient accounts. procedures are industry standards that define how DPS leadership is also inquiring with other similar organizations deal with everyday operational items EMS agencies around the country how they handle to comply with regulations and codes. Failure to account reconciliation in their services. Our goal is have and maintain current policies and procedures to have these processes in place by the end of this can lead to inefficiencies and confusion. fiscal year. Written policies and procedures were insufficient to document the processes that are followed by EMS to monitor or reconcile service billing and collection activities. 9/30/17 12/31/17 In Progress Last Update Current Recommendation Action IA Follow-up Notes N/A Management change and natural disaster (Hurricane Irma) have put this behind schedule. We will follow up until completion. 4/9/2018 Remains open at this time We have engaged the support of a billing consultant to help us a broader evaluation of our billing processes; there is no estimated timeline for completion at this point. 2

5 6/30/2018 Remains open at this time We continue to work with the vendor to clarify roles/responsibilities; we re also going out to bid for these services in the fall, as the contract expires in September /14/18 Remains open at this time We are rebidding this project to explore the options available to us in the market. That timeframe is TBD. BOCC Community Development - Revenue (Project , Issued July 2018) Fees Observation Recommendation Original Management Response It is recommended that the nine fees be resubmitted to the BOCC for proper authorization. A sample of fees charged by the Community Development Department was traced to the fees listed in the External Fees and Charges Manual. All of the fees in the sample conformed to the fees listed in the manual. No exceptions were found. We will work with County Administration to schedule Board action on this issue at an upcoming BOCC meeting. All of the Community Development Department fees listed in the External Fees and Charges Manual were traced to BOCC approval of the fees. Nine of the fees listed in the manual could not be traced to the BOCC action authorizing the fee. 9/28/18 1/30/2019 In Progress Last Update Current Recommendation Action IA Follow-up Notes 9/18/18 In Progress It is estimated this will go to BOCC in Jan BOCC Fleet Management (Project , Issued November 2018) 3

6 Timeliness and Communications in Customer Services Observation Recommendation We surveyed BOCC departments regarding It is recommended that Fleet Management improve customer service. The respondents would like to see the timeliness of vehicle services and improvements in timeliness and communication on communications on repair and maintenance status service progress. For example: by: Some vehicles are critical to their operations, and they would like those vehicles to be designated as a priority for repair or maintenance Some vehicles are special equipment, and the repairs and maintenance have to be done by outside vendors. The time that the vehicles sit at Fleet Management before they are transferred to the outside vendors extend the overall service time Once vehicles were sent to outside vendors, there was a lack of communication on the progress of the service Some vehicles are custom-built, and it may take as long as a year in the procurement process to obtain them. There was concern that the timing might be excessive Working with the departments to prioritize mission critical vehicle repairs and maintenance to reduce vehicle downtime Improving the diagnosis process to enable quicker decisions on in-house vs. outsource repairs for special equipment Working with Procurement to negotiate contracts with outside service provider that requires timely service updates Working with user departments and IT to improve the live reporting interface on SharePoint Improving communication with customer departments on a reasonable timeline for custom-built vehicle procurement Original Management Response The audit also confirmed the need of some things management had been working on prior to the audit such as:... the need to be more transparent by sharing information and making it more available to departments (24/7 access to work order notes, work order statuses and a list of equipment on order with status is now available on intranet). 12/31/18 Last Update Current Recommendation Action Closed as of 2/1/2019 IA Follow-up Notes Recommendations have been implemented 4

7 Parts Invoice Approval Written Proof Observation It was noted that parts vendor invoices did not have a consistent management proof and usage approval format: Parts manager or supervisor s signatures for invoice approval were not consistent. Out of the 30 sample invoices tested, only 4 had parts manager s approval notes added in the OnBase workflow. Invoices for work orders had Fleet Management stamps on the invoices. However the invoice approving stamps only included the service writer's signature. The service writer s signatures indicated that the work orders were verified. They don t replace the function of the parts manager or supervisor s signature; indicating that the invoice amounts were verified as reasonable and as expected Parts usage references on the invoices were not consistent. Some invoices were stamped "Stock" in the line of "Vehicle#". Others didn't have a stamp, or they lacked vehicle reference on the stamp 3/31/19 Last Update Recommendation It is recommended that Fleet Management implement a standard operating procedure to consistently document: Written proof of supervisor or manager approval on all vendor invoices, either in OnBase workflow or with the printed stamp on the invoices Reference details of the vehicle number or stock on the invoices Current Recommendation Action Original Management Response As things were found, they were addressed, SOP's were changed or strengthened, weekly and monthly accountability was put into place and training was given (and is ongoing) to our parts room staff. Closed as of 2/1/2019 IA Follow-up Notes Recommendations have been implemented. FASTER Parts Invoice Data Entry and Reconciliation Against Accounting System E1 Observation Recommendation I I Original Management Response 5

8 It was noted from observation and sample testing of data entry for parts invoices that there were internal control deficiencies: Parts invoices were manually entered in FASTER. Manual entries are at risk for recording errors Parts invoices and data were not timely and accurately entered into FASTER due to the parts room employees not following the SOP. We tested 468 invoices and credit notes received from one vendor for Fiscal year 2016 and 2017 that were recorded in E1. There were 117 credit notes (approximately 25 percent of the total number of invoices and credit notes) missing in FASTER with a total net amount of $40, Out of the 351 invoices that were recorded in FASTER, 66 (about 14 percent of the total recorded invoices) had errors in cost that exceeded a $10 difference with the original invoice amount. Management also found errors in invoice numbers, part numbers, and quantities There is no routine reconciliation of E1 Parts invoices against FASTER report to ensure that all invoiced parts are recorded. Without reconciliation, data entry errors or omissions will not be detected and corrected timely. Inaccurate FASTER system data does not provide management with accurate information for operations and decision making, and it creates the risk for potential fraud or abuse 3/31/19 It is recommended that Fleet management: Determine the cost vs. benefit of directly transferring parts invoice information from E1 into FASTER to enhance efficiency and mitigate potential human data entry errors If manual data entry must be retained, improve employee training to follow the timeline and format of data entry according to the SOP Implement a process to periodically reconcile E1 parts invoices report with FASTER receiving report to ensure all invoiced parts are recorded timely and accurately Implement a routine automatic reporting process with BOCC IT department's help to investigate and analyze the discrepancies Management has reached out to the Clerk's Office about integrating the Faster (asset management system) data into E1. The Clerk's Office asked for a copy of the audit recommendations to help them evaluate the effort. Management will work with the Clerk's Office to determine feasibility. Closed as of 2/1/2019 6

9 Last Update Current Recommendation Action IA Follow-up Notes Recommendations have been implemented. Lack of Resources for Internal Control Roles Observation Recommendation Original Management Response Fleet Management lacked adequate resources and coverage for certain positions with important internal control roles: Upper level management positions The Director position was vacant for more than two years. The Superintendent is acting as the Interim Director, and he lacked back-up for performing certain duties. Parts Manager position The Parts Manager position had a high turnover rate during the past two years. The parts managers weren t given permission to approve invoices due to not being fully trained. Only the operation manager was approving the parts invoices. Fiscal officer and Business Analyst positions There was no backup for the Fiscal officer and Business Analyst. Fleet management requested a staff increase to cover the two positions. It is recommended that management strengthen the coverage of positions with important internal control roles by filling the vacant positions and training the resources/staff in the roles including: Upper level management Parts Manager Fiscal officer and Business Analyst The audit also confirmed the need of some things management had been working on prior to the audit such as...an additional employee for fiscal and fuel backup and two mechanics to help address vehicle downtime (three new employees were approved for this fiscal year). 3/31/19 Closed as of 2/1/2019 Last Update Current Recommendation Action IA Follow-up Notes Recommendations have been implemented. Parts Storage Room Internal Controls (receiving, checking out, and storage) Observation I Recommendation I Original Management Response 7

10 There were control weaknesses for storage room processing, including receiving, storage, and checking inventory: There was no security camera installed inside the storage rooms Lack of segregation of duties: It was possible for the same staff to authorize, record and take custody of inventory Data entry of the parts and storage location into the FASTER system was manual, which put it at risk of human error and inconsistency 3/31/19 Last Update It is recommended that Fleet Management improve the parts room internal controls by: Installing security cameras in the storage rooms Separating duties such as having different persons in authorizing, recording, and receiving Automating the data entry of parts and storage locations into the FASTER system; such as implementing a bar code scanner entry of the parts and their storage locations Current Recommendation Action Periodic Parts Inventory Count, Reconciliation and Adjustments Observation Recommendation It was noted that Fleet Management processes: As a good business practice, it is recommended that Fleet management: Do not have guaranteed periodic inventory Establish a process to ensure periodic counts between the annual inventory counts inventory counts and check against FASTER Lack written documentation for the reported records between fiscal year ends periodic inventory counts Document periodic inventory counts Lack documentation for inventory adjustments Document the reasons for manual inventory ups or downs adjustments The audit identified some things in our parts room that needed to be addressed. The auditors requested parts information from fiscal years thru (2 years), during that timeframe our parts room had three different Parts Managers and was short staffed for most of that time. When the first parts issue surfaced, management also started to investigate the areas of concern in our parts room and the processes being used. As things were found, they were addressed, SOP's were changed or strengthened, weekly and monthly accountability was put into place and training was given (and is ongoing) to our parts room staff. The audit also confirmed the need of some things management had been working on prior to the audit such as: a bar code scanner for the parts room (in the budget for this fiscal year). Closed as of 2/1/2019 IA Follow-up Notes Recommendations are implemented except installing cameras. Management accepts risks on not installing cameras Original Management Response The audit identified some things in our parts room that needed to be addressed. The auditors requested parts information from fiscal years thru (2 years), during that timeframe our parts room had three different Parts Managers and was short staffed for most of that time. When the first parts issue surfaced, management also started to investigate the areas of concern in our parts room and the processes being used. As things 8

11 Periodic inventory counts and reconciliations are effective ways to timely detect any potential fraud or errors, and to maintain an accurate FASTER parts inventory database. Written documentation for adjustments increases accountability. were found, they were addressed, SOP's were changed or strengthened, weekly and monthly accountability was put into place and training was given (and is ongoing) to our parts room staff. 3/31/19 Closed as of 2/1/2019 Last Update Current Recommendation Action IA Follow-up Notes Recommendations have been implemented. Security Cameras at Fuel Sites Observation Recommendation Original Management Response It was noted that security cameras are not installed at all major Fleet Management fuel sites. We recommend that Fleet Management install security cameras at all major fuel sites Management will take the recommendations of adding cameras in our parts room and at the fueling sites under consideration. 3/31/19 Closed as of 2/1/2019 Last Update Current Recommendation Action IA Follow-up Notes BOCC Community Development Code Enforcement (Project , Issued October 2018) Administrative Fee Observation Recommendation Original Management Response It is recommended that the $150 administrative fee for nuisance violations be approved and included in the External Fees Manual. A sample of 20 violations was selected for review. The activity and charges for each violation were reviewed. An Administrative Fee of $150 is charged for both lot mowing violations and nuisance violations. This administrative fee is authorized in the lot mowing 9 This is a similar issue to the findings from the earlier audit indicating that previous authorization for nine of the fees in the External Fees Manual could not be confirmed, with a recommendation that we seek BOCC reauthorization of those fees. We are moving forward with an Agenda Item Report

12 ordinance (Ord 14-08) and is included in the External Fees Manual. This administrative fee is not authorized in the nuisance ordinance (Ord 93-39); nor is it included in the External Fees Manual. 1/7/2019 Last Update Complaints Observation Code Enforcement's stated goal is to investigate complaints within three working days. This goal is not documented in any formal written policy or procedures. A sample of 30 complaints from June and July 2018 was reviewed to determine whether the goal was met. The average response time for the complaints in the sample was 3.8 working days. Thirteen of the 30 complaints were not investigated within three days. 3/31/19 Current Recommendation Action Recommendation It is recommended that the goal to investigate complaints be included in a formal written policy or procedure. Steps should be taken to monitor compliance with this goal. to bring the previously-identified fees to the BOCC for consideration, and will include this Administrative Fee for nuisance violations in that same action. Open IA Follow-up Notes Updated status as of 1/24/19 Original Management Response As far as not meeting the goal, the time period that was analyzed coincided with a transition to new permitting software that has not gone smoothly. One particular trouble area in the software related to Code Enforcement reporting and case assignment and tracking, which contributed greatly to the longer response times noted in the audit. We have been working diligently since June with our IT group and contractor to improve the software and significant progress has been made, which has improved our response times. For most complaints we receive, the Code Enforcement Specialists respond by the next day. 1/7/2019 Last Update Current Recommendation Action In Progress Open IA Follow-up Notes 10