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Home My WebLink About1516-7 Follow-up report on 2015 County Fair Food and Beverage (Final 2-17-2016)Follow-up report of 2015 County Fair – Food and Beverage #15/16-7 February 2016 FOLLOW-UP REPORT 2015 County Fair – Food and Beverage (Internal audit report #15/16-2 issued November 2015) To request this information in an alternate format, please call (541) 330-4674 or send email to David.Givans@Deschutes.org Deschutes County, Oregon David Givans, CPA, CIA, CGMA Deschutes County Internal Auditor PO Box 6005 1300 NW Wall St Bend, OR 97708-6005 (541) 330-4674 David.Givans@Deschutes.og Audit committee: Shawn Armstrong, Chair - Public member Chris Earnest - Public member Lindsey Lombard – Public member Michael Shadrach - Public member Jennifer Welander - Public member Anthony DeBone, County Commissioner Nancy Blankenship, County Clerk Dan Despotopulos, Fair & Expo Director Follow-up report of 2015 County Fair – Food and Beverage #15/16-7 February 2016 TABLE OF CONTENTS: 1. INTRODUCTION 1.1. Background ………………………………………...………………................................... 1 1.2. Objectives & Scope ……………………………………..………………………….…….… 1 1.3. Methodology ……………………………………………………..…………………….……. 1 2. FOLLOW-UP RESULTS ……………….…...………………………….............................. 2 3. APPENDIX 3.1. Appendix I – Updated Workplan for Report #15/16-2 (Status as of February 2016) …........................................................................ 3-6 Follow-up report of 2015 County Fair – Food and Beverage #15/16-7 February 2016 Page 1 1. Introduction 1.1 BACKGROUND Audit Authority: The Deschutes County Audit Committee has suggested that follow-ups occur from nine months to one year after the original report issuance. The Audit Committee’s would like to make sure departments satisfactorily address recommendations. 1.2 OBJECTIVES and SCOPE Objectives: The objective was to follow-up on the outstanding audit recommendations. Scope: The follow-up included nine (9) recommendations from the internal audit report on 2015 County Fair – Food and Beverage (operated by County Fair & Expo) (#15/16-2 issued November 2015). The Fair and Expo management have addressed these recommendations within three months in order to meet budgetary and County fair planning timelines. The follow-up reflects the status as of February 2016. The original internal audit report should be referenced for the full text of recommendations and discussion. 1.3 METHODOLOGY The follow-up report was developed from information provided by Dan Despotopulos, Fair & Expo Director. In cases where recommendations have not been implemented, comments were sought for the reasons why and the timing for addressing these. The follow-up is, by nature, subjective. In determining the status of recommendations that were followed up, we relied on assertions provided by those involved and did not attempt to independently verif y those assertions. The updates received from the Fair & Expo are included in Appendix I. Since no substantive audit work was performed, Government Auditing Standards issued by the Comptroller General of the United States were not followed. DESCHUTES COUNTY INTERNAL AUDIT REPORT DESCHUTES COUNTY INTERNAL AUDIT REPORT DESCHUTES COUNTY INTERNAL AUDIT REPORT Follow-up report of 2015 County Fair – Food and Beverage #15/16-7 February 2016 Page 2 2. Follow-up Results Figure I - How were recommendations implemented? The follow-up included nine (9) recommendations. Management agreed with all of the recommendations. Figure I provides an overview of the implementation status of the recommendations. The details of the updated workplan are provided in Appendix I. With this follow-up one hundred percent (100%) of the recommendations are completed. The Fair & Expo department should be commended for addressing all of these recommendations by the first follow-up. Follow-up report of 2015 County Fair – Food and Beverage #15/16-7 February 2016 Page 3 3. Appendix Appendix I – Updated Workplan for Report #15/16-2 (Status as of February 2015) Rec# Recommendation Department Comments Current Status UPDATED COMMENTS 1 It is recommended for Fair & Expo management to address the identified cash control weaknesses for food and beverage operations. We agree and will meet with Finance and discuss this at our scheduled monthly meeting in December to start the process. Finance It is not clear that the Finance effort will continue into the future. We need to talk with Dan about potentially paying for that service in the future. The process works very well as it is currently laid out and is tightly controlled. I am not sure we could handle daily closing of a number of food and beverage registers and deposits with the same staff. No question the cash controls you mention in your recommendations should be reviewed and implemented in a practical way. Complete Department provided 2016 Proposed Procedures for "Food and Beverage Cash Handling Procedure for 2016 Fair" 2 It is recommended for non-register controlled alcoholic beverage sales be overseen by someone not involved in those sales. We agree and will begin working on this to come up with a satisfactory solution. We may look at selling tokens pre-purchased at a specified location(s). This would control the cash handling. Finance I think the token idea for alcohol sales would work well and provide a better environment for solid cash controls. Complete Department provided 2016 Proposed Procedures for "Food and Beverage Cash Handling Procedure for 2016 Fair" Follow-up report of 2015 County Fair – Food and Beverage #15/16-7 February 2016 Page 4 Rec# Recommendation Department Comments Current Status UPDATED COMMENTS 3 It is recommended for Fair & Expo management to consider and weigh the benefits of promoting more third party food concessionaires at the County Fair instead of competing with them. We agree with this recommendation and as a result of the extensive work done in this audit it shows this would be a good direction to follow. We will begin to accept applications for food booths 12/1/15 and will take the list and see which ones would/could benefit us. Complete The Food and Beverage Department will operate the concessions in the Bank of the Cascades Center, Juniper Arena, Corn Dog booth and Greek Stand. All other previous locations will be sub contracted and put under the control of the Fair Concessions contract auditor. 4 It is recommended for Fair & Expo management to develop an estimate of their gross profit margin for food and beverage operations during the Fair. We agree with this recommendation and can remove the alcohol activity from our totals. We will have to do a better job of breaking things down to attain that goal. The challenge being we may order 10 lbs. of hamburger for example and sell 8lbs. during the fair and use the remaining 2 lbs. for events after the Fair. Same would apply to alcohol, we may have x amount of kegs/partial kegs left, which we will sell at events after Fair. We will begin work immediately on this. Complete Alcohol sales and expenses will be kept separate from food and beverage sales. They will be recorded and reported separately on the fair financial report. 5 It is recommended that Fair & Expo weigh the benefits and costs for having the ability to accept credit cards for food and beverage sales. We agree with this recommendation, however would like to point out we do have 6 ATM locations for patrons to access cash, also with the new chip readers it becomes a slow process, one that takes up to 1 minute / 30 seconds approx. We discovered this at our gates last year where lines were long and things were somewhat slower. We will look into this to see if there is a speedier process. We have found that folks are using their debit cards more often. Complete We will add two credit card machines, to the two food booths. Follow-up report of 2015 County Fair – Food and Beverage #15/16-7 February 2016 Page 5 Rec# Recommendation Department Comments Current Status UPDATED COMMENTS 6 It is recommended for Fair & Expo management to require vendors provide receipts to customers. Complete Department provided 2016 Deschutes County Fair Food Concessionaire Requirements. Additionally we will provide each food vendor with a laminated sign saying please ask for a receipt. 7 It is recommended for vendors with credit card processing separate from their register, utilize a sales type category for credit card sales that will allow comparison of credit cards sales processed to those entered into the register. We agree with this recommendation and will enter this into our contracts that will be available online 12/1/15. At the end of each shift each credit card machine will be required to do a report of total sales, which will match up to the cash register credit card sales. They will be required to each day show their cash register tapes that match up to the credit card report. Finance Fair staff need to develop a better inventory system for their food and ingredient inventory. If they are going to be in the food and beverage business, they should look into some sort of more sophisticated inventory system. Complete Department provided 2016 Deschutes County Fair Food Concessionaire Requirements. Follow-up report of 2015 County Fair – Food and Beverage #15/16-7 February 2016 Page 6 Rec# Recommendation Department Comments Current Status UPDATED COMMENTS 8 It is recommended County Fair & Expo management determine how to comply with Oregon budget law and County Code for establishing service fees. We agree with this recommendation and have as a matter of practice anytime we increase a fee for gate admission or vendor booth space, which is not very often, had approval from the County Fair Board and County Fair Association Board of Directors. We will in a timely manner have all of this info included in the County fee schedule for the public hearing. Finance I suggest that the Fair fees and charges be included in the County fee schedule each year and be included in the public hearing. As you mention, the fees and charges would be the maximum for each type of rental. The fee schedule could have a statement in it that the Fair Director has discretion to waive or reduce fees below the max. Perhaps to keep some control over this process, the Fair Director could prepare a report each year or quarter that shows fees that were waived or reduced and provide an explanation for each. Complete Department indicates they will include in the upcoming fee schedule. 9 It is recommended for County management to periodically review Fair & Expo’s assessed fee variance from established fees. Complete Department indicates this will be done. {END OF REPORT}