HomeMy WebLinkAbout1819-1 2018 Global Follow-up report (Final 10-29-18)2018 Global Follow-up Report #18/19-1 October 2018
2018 Global Follow-up Report
Outstanding recommendations –
Community Development, Health benefits trust,
Human Resources, Light fleet, Property & Facilities, Selected
electronic communications
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
County Internal Auditor
1300 NW Wall St
Bend, OR 97703
Audit committee:
Daryl Parrish, Chair - Public member
John Barnett - Public member
Tom Linhares - Public member
Lindsey Lombard – Public member
Wayne Yeatman - Public member
Anthony DeBone, County Commissioner
Nancy Blankenship, County Clerk
Dan Despotopulos, Fair & Expo Director
2018 Global Follow-up Report #18/19-1 October 2018
TABLE OF
CONTENTS:
HIGHLIGHTS
1. INTRODUCTION
1.1. Background on Audit …………..……………………………………………………………. 1
1.2. Objectives and Scope ……………….………………………………….…………………… 1
1.3. Methodology …………………………………….…………………………………………… 1-2
2. FOLLOW-UP RESULTS …………………….………..………………………………………… 2-6
APPENDIX I – Updated workplan for identified outstanding recommendations
(Status as of October 2018) .…….…….…….…………………...................................... 7-16
2018 Global Follow-up Report #18/19-1 October 2018
Page 1
1.
Introduction
1.1 BACKGROUND ON AUDIT
Audit Authority:
The Deschutes County Audit Committee has suggested that follow-ups occur within nine months of the
reports. The Audit Committee’s would like to make sure departments satisfactorily address prior
recommendations that have not been completed at the time of the initial or subsequent follow-ups. This
is the eighth annual global follow-up looking back to unresolved recommendations in prior follow-ups.
1.2 OBJECTIVES and SCOPE
“Audit
objectives” define
the goals of the
audit.
Objectives:
The objective was to follow-up on previously incomplete recommendations.
Scope:
This 2018 Global follow-up included reports with incomplete recommendations that did not have a
follow-up report completed in approximately a year. The audit reports in TABLE I were covered in this
report. There were thirty-eight recommendations included in this follow-up (as compared to forty-seven
in the prior year, down 19%).
Status was determined through information provided by departments from September through October
2018. The original internal reports should be referenced for the full text of recommendations and
associated discussion. All internal audit performance reports are published on the County website at
https://www.deschutes.org/administration/page/internal-audit-reports
1.3 METHODOLOGY
The follow-up report was developed from information provided by appropriate staff in the associated
departments. In cases where recommendations have not been implemented, comments were sought
for the reasons why and the timing for addressing these. The follow-ups are, 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 verify those assertions.
2018 Global Follow-up Report #18/19-1 October 2018
Page 2
TABLE I
Reports and
number of
recommendations
included in follow-
up
{Reports
hyperlinked }
It is understandable that some of these recommendations will take more than one year to be completed.
Departments should be acknowledged for the work and commitment to address the recommendations.
Since no substantive audit work was performed, Government Auditing Standards issued by the
Comptroller General of the United States were not followed.
Department/
Area
Original
Report #
Date
Report
Issued
Last
Follow-
up
Report
Last
Follow-up
Date
# of Original
Recommendations
#
Recommendations
in this
follow-up
% of
Original
Community
Development
06/07-7 Jan-08 17/18-1 Nov-17 11 1 9%
Community
Development (NEW)
15/16-1 Jan-17 17/18-2 Nov-17 20 6 30%
Health Benefits Trust 12/13-11 Oct-13 17/18-1 Nov-17 7 4 57%
Human Resources 08/09-16 Jan-10 17/18-1 Nov-17 26 4 15%
Light Fleet 14/15-10 Jun-15 17/18-1 Nov-17 14 13 93%
Property & Facilities 11/12-12 Sep-12 17/18-1 Nov-17 5 1 20%
Selected electronic
communications
13/14-4 Aug-14 17/18-1 Nov-17 13 9 69%
Totals 96 38 40%
2. Follow-up Results
The follow-up included thirty-eight (38) recommendations made over seven internal audit reports. The
number of recommendations followed up on was down from 2017. The number of outstanding
recommendations represented forty percent (40%) of the original recommendations (as compared to
24% in 2017). For some of the reports, a couple of follow-ups have occurred. There was only one new
audit included in this follow-up with six outstanding recommendations. A number of completed reports
2018 Global Follow-up Report #18/19-1 October 2018
Page 3
Figure I -
How were
recommendations
implemented?
had follow-ups that were completed in the first follow-up which meant they did not require additional
follow-ups.
The follow-up indicates twenty-one of these outstanding recommendations (or 55%) have been
completed. Implementation is expected to take time for some recommendations, but the idea would be
to have these incomplete recommendations resolved as soon as practicable. Figure I provides a
summary of the change in status for these followed up recommendations. Forty-five percent (45%) of
the reviewed recommendations are still underway for implementation. This compares with sixty-eight
percent (68%) of outstanding planned and implemented recommendations in 2017.
A detailed listing of all of the recommendations followed up on and their status is included at the end of
the report in Appendix I. In interpreting the status, the County Internal Auditor may sometimes raise or
lower the status provided by the department based on the communication(s) received from the
department.
2018 Global Follow-up Report #18/19-1 October 2018
Page 4
Figure II -
How were
recommendations
implemented by
department and
report?
Figure II provides a breakdown of the status of these recommendations by department and audit
report.
Generally, there is a natural progression seen as “planned” implementation moves into an “underway”
status and then to “complete”.
2018 Global Follow-up Report #18/19-1 October 2018
Page 5
Figure III -
How has the
status changed for
outstanding
recom-
mendations?
Figure III indicates the beginning status of recommendations coming into this follow-up and whether
they have moved from one category to another. Lack of movement does not necessarily mean that no
work was performed, but that it hasn’t moved from one category to another. Figure III was designed to
identify movement in recommendations.
2018 Global Follow-up Report #18/19-1 October 2018
Page 6
TABLE II
Reports, number
of
recommendations
included in follow-
up and percentage
still outstanding
Table II indicates for these reports 82% of the original recommendations accepted have been deemed
completed. This doesn’t include all of the reports fully completed (over this period) and not part of the
global follow-up. In 2017, the global follow-up completion rate was 84%. After this follow-up, only
eighteen percent (18%) of the original recommendations for these reports are still outstanding.
Department/
Area
Original
Report #
# of Original
Recommenda-
tions
# Recommenda-
tions in this
follow-up
% of
Original
# of
Recommenda-
tions still
Outstanding
%
Outstanding
Community
Development
06/07-7 11 1 9% - 0%
Community
Development (NEW)
15/16-1 20 6 30% - 0%
Health Benefits Trust 12/13-11 7 4 57% 3 43%
Human Resources 08/09-16 26 4 15% 4 15%
Light Fleet 14/15-10 14 13 100% 9 64%
Property & Facilities 11/12-12 5 1 20% 1 20%
Selected electronic
communications
13/14-4 13 9 69% - 0%
TOTALS 96 38 40% 17 18%
2018 Global Follow-up Report #18/19-1 October 2018
Page 7
APPENDIX Appendix I – Updated workplan for identifed outstanding recommendations.
(status as of October 2018)
Included as “completed” were statuses indicating they were complete and had some form of ongoing work; and withdrawn due to
the recommendation no longer being relevant in the current environment. Items that are not complete are grayed out.
Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
1 Community
Development
06/07-
7
10 It is recommended the
department consider developing a
policy on the creation and use of
reserves.
Underway Complete Policy was completed and
implemented at the
department level in 2017.
2 Health Benefits
Trust
12/13-
11
1 It is recommended for
management of the Plan to
develop and implement a
consistent approach to assessing
the performance of the DOC.
Underway Underway August 2018, First
performance report drafted
by a third party in and is
under review by Davidson
Benefit Planning, Medcor, and
Human Resources Staff.
October 2018, First Executive
Summary drafted from the
third party report. Summary
is under review by all parties.
May-19
3 Health Benefits
Trust
12/13-
11
2 It is recommended for County
management to develop an
approach to handling Plan and
DOC staffing and oversight.
Underway Underway Executive oversight group still
to be established.
May-19
2018 Global Follow-up Report #18/19-1 October 2018
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Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
4 Health Benefits
Trust
12/13-
11
3 It is recommended for the County
to identify how to better collect
information on employee DOC
visits. It is suggested all employees
be required to indicate on their
timesheets their use of the DOC.
Underway Complete HR does not recommend
requiring employees to
indicate use of DOC on their
timesheet as it could be an
intrusion of privacy. Instead
utilization review has been
added to the performance
report completed by the third
party.
5 Health Benefits
Trust
12/13-
11
4 It is recommended, after adequate
time sheet information has been
collected, the County assess the
cost to the County and
departments for employee usage
of the DOC on work time and
whether they want to continue the
practice at this level.
Underway Underway Completed collection of the
department DOC utilization.
Suggested policy language
has been provided to
departments to establish a
consistent approach to
recording paid time at the
DOC. Evaluation of the
timekeeping is underway.
May-19
6 Human
Resources
08/09-
16
3 It is recommended for County
Legal Counsel to evaluate whether
the authorization/disclosure forms
currently being utilized comply
with FCRA.
Underway Underway No new progress. On hold
until implementation of new
HR software is complete.
Jun-19
2018 Global Follow-up Report #18/19-1 October 2018
Page 9
Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
7 Human
Resources
08/09-
16
3.1 It is recommended the County
train and work with departments
to establish meaningful
procedures to comply with the
FCRA. This might require some
revision to the current background
policy (HR-3) or personnel rules.
Underway Underway No new progress. On hold
until implementation of new
HR software is complete.
Jun-19
8 Human
Resources
08/09-
16
3.2 It is recommended the County
develop standardized “pre-
adverse action disclosures” and
“adverse action notices” to provide
to candidates whose applications
are denied, in whole or in part, on
the basis of information contained
within a “consumer report.”
Underway Underway No new progress. On hold
until implementation of new
HR software is complete.
Jun-19
9 Human
Resources
08/09-
16
5.1 It is recommended for the County
to implement an authorization
form for a driving history record
check consistent with the
spectrum of job positions. It is
recommended the job application
or authorization form have
candidates identify the state(s)
they have lived in over the prior
five years.
Underway Underway Job description update is
underway. This will identify
which positions require a
driving history record check.
A form/process will be
drafted once process is
complete.
Jun-19
2018 Global Follow-up Report #18/19-1 October 2018
Page 10
Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
10 Light fleet
management
14/15-
10
1 It is recommended the County
[with the assistance of the Fleet
Manager (Road)] develop a fleet
management policy, obtain input
from County management and
departments, and secure approval
of the policy from upper
management/Board.
Underway Underway The draft light fleet policy was
implemented as a pilot
program in FY 18 and
presented to the Budget
Committee/BOCC in the FY 19
budget process. The policy is
being reviewed by BOCC for
questions/approval.
Nov-18
11 Light fleet
management
14/15-
10
2 It is recommended the policy
guidance include associated forms
and materials anticipated to be
used to control and monitor
vehicle fleet decisions.
Underway Underway Included in final draft policy. Nov-18
12 Light fleet
management
14/15-
10
3 It is recommended for the County
to consider policies that support
increasing vehicle utilization.
Underway Underway Included in final draft policy. Nov-18
13 Light fleet
management
14/15-
10
4 It is recommended the County
utilize the Fleet Manager role to
better understand and develop
practices for improving vehicle
utilization.
Underway Underway Included in final draft policy. Nov-18
14 Light fleet
management
14/15-
10
5 It is recommended for the Road
Department to develop a system
for providing a value for transfers
of vehicles between departments.
Underway Underway Included in final draft policy. Nov-18
15 Light fleet
management
14/15-
10
6 It is recommended for the Road
Department to consider whether it
would be beneficial to further
refine the way it accounts for its
costs.
Underway Underway To be addressed with new
data, post implementation.
Oct-19
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Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
16 Light fleet
management
14/15-
10
7 It is recommended for the County
to consider how to establish
motor pools and associated
charges for departments that use
them.
Underway Underway Included in final draft policy. Nov-18
17 Light fleet
management
14/15-
10
8 It is recommended the County
consider implementing an internal
service fund approach for fleet.
Planned Underway To be evaluated, post-
implementation.
Oct-19
18 Light fleet
management
14/15-
10
9 It is recommended for the County
(and Road Department) to
establish performance measures
to assist in assessing the
effectiveness and efficiency of the
light vehicle fleet as well as fleet
services provided.
Underway Complete Included in final draft. To be
refined upon implementation
of new cost accounting
software.
19 Light fleet
management
14/15-
10
10 It is recommended the County
institute a system to identify take
home vehicle usage and evaluate
how to comply with IRS rules.
Underway Complete Road - Departments notified
to work directly with Finance
on identification of
employees with take-home
vehicles.
Finance - Finance will send
out a notice to departments
each quarter explaining the
take home vehicle situations
that result in taxability issues.
20 Light fleet
management
14/15-
10
11 It is recommended for the County
to take steps to inform affected
departments and employees of
potential taxable fringe benefits
resulting from take home vehicle
use.
Underway Complete
2018 Global Follow-up Report #18/19-1 October 2018
Page 12
Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
21 Light fleet
management
14/15-
10
12 It is recommended the County
establish sufficient systems to
gather information that will be
needed to evaluate, calculate and
report the income and payroll tax
for take home vehicles.
Underway Complete Departments will notify the
Finance department if any of
their employees take home
vehicles that meet the
requirements. The Finance
department will by January
2019 determine how it will tax
situations that meet the
requirements.
22 Light fleet
management
14/15-
10
14 It is recommended the County
consider approaches to assure
policies are communicated and
implemented by departments.
Policy GA-19 should be shared
with all departments.
Underway Underway Included in final draft policy. Nov-18
23 Property &
Facilities
11/12-
12
4 Based on the discussions from this
year’s budget committee, it is
further recommended for the
County to consider an accounting
and budgeting process for
building usage costs to assure
transparency, equity and fairness
in costs and sufficiency to meet
debt and future repairs. The
County may also need to address
in the solution the rules under
OMB A-87 for cost allocations.
Underway Underway Facilities will draft a memo
outlining guidelines/options
for future capital
replacements needs.
Dec-18
2018 Global Follow-up Report #18/19-1 October 2018
Page 13
Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
24 Selected
Electronic
Communication
s
13/14-
4
1 It is recommended for the County
Clerk and County Management to
implement a records management
program for electronic public
records consistent with the State’s
requirements.
Underway Complete Policy No. GA-12, Records
Retention and Destruction,
was approved 2-28-18.
25 Selected
Electronic
Communication
s
13/14-
4
3 It is recommended for the County
to complete the development of
policies and procedures over
electronic public records. These
should address the areas in the
draft policy requiring further
development as well as methods
to assess, monitor and enforce the
policies and procedures.
Underway Complete Policy No. GA-12, Records
Retention and Destruction,
was approved 2-28-18.
26 Selected
Electronic
Communication
s
13/14-
4
4 It is recommended for current
Departmental policies to be
revisited and modified to be
consistent with the revised
Countywide policies and
procedures for electronic public
records.
Planned Complete Department heads were
notified via email in October
2018 to review department
policies (if there is one) to
ensure compliance with GA-
12. Admin offered to review
departmental policies.
27 Selected
Electronic
Communication
s
13/14-
4
5 It is recommended the County
provide sufficient new-hire, initial
and ongoing training on County
policies and procedures regarding
public records, retention
categories and County
management of public records to
adhere to County and State
requirements.
Planned Complete GA-12 added to the policies
provided to new employees;
training on Policy GA-12 will
be offered periodically and
upon departmental request.
2018 Global Follow-up Report #18/19-1 October 2018
Page 14
Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
28 Selected
Electronic
Communication
s
13/14-
4
6 It is recommended this training
apply to all County staff and non-
County staff using County systems
unless management has
developed procedures to exempt
them.
Planned Complete Training sessions, open to all
employees, were conducted.
There were also several
training sessions held based
on departmental requests.
29 Selected
Electronic
Communication
s
13/14-
4
7 It is recommended for
Departments to provide retention
specific guidance to staff for
frequently encountered areas of
retention.
Underway Complete Department heads were
notified of this
recommendation and training
offered via email in Oct 2018.
30 Selected
Electronic
Communication
s
13/14-
4
9 It is recommended for IT to assist
in vetting and supporting any
electronic records management
systems contemplated.
Underway Complete County IT maintains the
records management
software "Laserfiche". The
software is available for use
by Departments through the
purchase and maintenance of
additional client software
licenses. The IT Department
is available to review any
additional software products
being considered.
31 Selected
Electronic
Communication
s
13/14-
4
11 To the extent a system is in place,
it is recommended management
develop an approach to meeting
document management
objectives.
Underway Complete Implementation of this
recommendation will vary by
department.
32 Selected
Electronic
Communication
s
13/14-
4
13 It is recommended for the County
to address texts, social media,
website content and usage of
personal devices in its policy for
public records.
Underway Complete Policy No. GA-12, Records
Retention and Destruction,
addresses these records.
2018 Global Follow-up Report #18/19-1 October 2018
Page 15
Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
33 Community
Development
15/16-
1
1 It is recommended that CDD
develop an accounting system and
written procedures to provide
actual segment/division
accounting after application of
indirects and overhead.
Underway Complete Policy was completed and
implemented at the
department level in 2017.
34 Community
Development
15/16-
1
2 It is further recommended for the
Department to consider within
their upcoming reserve policy (see
prior recommendation section) a
process to identify the extent of
carryover funds from the building,
electrical segments that should be
reserved or held in contingency
for the next year.
Underway Complete Policy was completed and
implemented at the
department level in 2017.
35 Community
Development
15/16-
1
3 It is recommended the
department develop written
accounting procedures to identify
to what extent there are
reserve/contingency funds for the
building and electrical segments
as required by statute.
Underway Complete Policy was completed and
implemented at the
department level in 2017.
36 Community
Development
15/16-
1
4 It is recommended the
reserve/contingency funds might
be distinguished between
amounts needed to fulfill
outstanding permits and those
amounts that might cushion
divisional operations in future
economic downturns.
Underway Complete Policy was completed and
implemented at the
department level in 2017.
2018 Global Follow-up Report #18/19-1 October 2018
Page 16
Count
Department or
Audit topic Audit#
Rec
# Recommendation
Prior or
Original
Status
New
Status New Comments
New
Estimated
Date
37 Community
Development
15/16-
1
5 It is recommended the reserve
policy include language indicating
the triggers for evaluating how
much reserves are needed, when
to access and coordination with
fee setting.
Underway Complete Policy was completed and
implemented at the
department level in 2017.
38 Community
Development
15/16-
1
6 It is recommended CDD develop a
written cost allocation plan for
their system for allocating
overhead costs. They should
consider having this allocation
plan follow the “super circular”
guidance.
Underway Complete Policy was completed and
implemented at the
department level in 2017.
{End of Report}