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Home My WebLink About1920-3 2019 Global Follow-up report (Final 11-04-19)2019 Global Follow-up Report #19/20-3 October 2019 2019 Global Follow-up Report Outstanding recommendations – Health benefits trust, Human Resources, Light fleet, Property & Facilities, Solid Waste 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 County Internal Auditor 1300 NW Wall St Bend, OR 97703 Audit committee: Daryl Parrish, Chair - Public member Jodi Burch - Public member Tom Linhares - Public member Scott Reich - Public member Summer Sears - Public member Stan Turel - Public member Patti Adair, County Commissioner Nancy Blankenship, County Clerk James Lewis, Property Manager 2019 Global Follow-up Report #19/20-3 October 2019 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 2019) .…….......................7-15 2019 Global Follow-up Report #19/20-3 October 2019 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 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 ninth 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 2019 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 twenty-two recommendations included in this follow-up (as compared to thirty-eight in the prior year, down 42%). Status was determined through information provided by departments in October 2019. 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. 2019 Global Follow-up Report #19/20-3 October 2019 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 Health Benefits Trust 12/13-11 Oct-13 18/19-1 Oct-18 7 3 43% Human Resources 08/09-16 Jan-10 18/19-1 Oct-18 26 4 15% Light Fleet 14/15-10 Jun-15 18/19-1 Oct-18 14 9 64% Property & Facilities 11/12-12 Sep- 12 18/19-1 Oct-18 5 1 20% Solid Waste (NEW) 16/17-6 Jan-18 18/19-3 Nov-18 18 5 28% Totals 70 22 31% 2. Follow-up Results The follow-up included twenty-two (22) recommendations made over five internal audit reports. The number of recommendations followed up on was down from 2018. The number of outstanding recommendations represented thirty-one percent (31%) of the original recommendations (as compared to 40% in 2018). For some of the reports, a couple of follow- ups have occurred. There was only one new audit included in this follow-up with five outstanding recommendations. A number of completed reports had follow-ups that were completed in the first follow-up which meant they did not require additional follow-ups. 2019 Global Follow-up Report #19/20-3 October 2019 Page 3 Figure I - How were recommendations implemented? The follow-up indicates five of these outstanding recommendations (or 23%) 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. Seventy- seven percent (77%) of the reviewed recommendations are still underway for implementation. This compares with forty-five percent (45%) of outstanding planned and implemented recommendations in 2018. 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. Complete 23%Underway 77% Planned 0% 2019 Global Follow-up Report #19/20-3 October 2019 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”. 1 4 3 3 5 1 5 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 12/13-11 08/09-16 14/15-10 11/12-12 16/17-6 Health Benefits Trust Human resources Light fleet management Property & Facilities Solid Waste Beginning status, Audit#, Department/Area Complete Underway 2019 Global Follow-up Report #19/20-3 October 2019 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. 1 1 3 3 3 5 1 5 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Underway Underway Planned Underway Underway Underway 12/13-11 08/09-16 14/15-10 11/12-12 16/17-6 Health Benefits Trust Human resources Light fleet management Property & Facilities Solid Waste Audit#, Department/Area Complete Underway 2019 Global Follow-up Report #19/20-3 October 2019 Page 6 TABLE II Reports, number of recommendations included in follow- up and percentage still outstanding Table II indicates for these reports 76% 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 2018, the global follow-up completion rate was 82%. After this follow-up, twenty-four (24%) 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 Health Benefits Trust 12/13-11 7 3 43% 3 43% Human Resources 08/09-16 26 4 15% 3 12% Light Fleet 14/15-10 14 9 64% 5 36% Property & Facilities 11/12-12 5 1 20% 1 20% Solid Waste (NEW) 16/17-6 18 5 28% 5 26% TOTALS 70 22 31% 17 24% 2019 Global Follow-up Report #19/20-3 October 2019 Page 7 APPENDIX Appendix I – Updated workplan for identifed outstanding recommendations. (status as of October 2019) 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 Audit # Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 1 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 Executive Summary report has been reviewed and DOC performance assessment plan to be developed. Mar-20 2 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 HR to establish executive oversight group. Jan-20 3 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 HR worked with departments to create department specific Operating Procedures for DOC utilization. Evaluation of timekeeping is underway. Mar-20 2019 Global Follow-up Report #19/20-3 October 2019 Page 8 Count Department Audit # Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 4 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 HR will provide Legal with copies of forms for review. Dec-19 5 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 HR will create a memo outlining recommended procedures for departments to comply with the FCRA and distribute to Department Leadership as well as place in the upcoming Recruitment and Selection Guide for Hiring Managers. Jan-20 6 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 HR has outsourced this process to a third party for general County positions. This third party has standardized "pre-adverse action disclosures" and "adverse action notices." HR will send these standard letters to Legal for review. HR does not oversee the background screening process for Parole & Probation, the Sheriff's Office, and 9-1-1 District. Dec-19 2019 Global Follow-up Report #19/20-3 October 2019 Page 9 Count Department Audit # Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 7 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 Complete This has been added to the background screening authorization form for positions that will drive for the County. 2019 Global Follow-up Report #19/20-3 October 2019 Page 10 Count Department Audit # Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 8 Light fleet manage- ment 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 Department presented the draft policy to the BOCC on October 22, 2018. The draft policy contained the recommendations per Audit 14/15-10. The BOCC declined to approve the policy pending additional internal consideration of a portion of the policy related to replacement criteria. Without a formally adopted policy guiding decision making, fleet replacement and acquisition will continue to occur via the annual budget process as proposed by individual departments. Until such time that the Board approves a policy, the Road Department will assist client departments with justification for acquisition/replacement utilizing the draft policy criteria and the Board will approve or deny acquisitions/replacement of fleet at their discretion (which in reality is the case with or without the guidance of a formally adopted policy). The Road Department will re-initiate adoption of the Light Fleet Policy upon request by the Board or the County Administrator. Subject to BOCC direction, no timetable for approval 2019 Global Follow-up Report #19/20-3 October 2019 Page 11 Count Department Audit # Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 9 Light fleet manage- ment 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. Subject to BOCC direction, no timetable for approval 10 Light fleet manage- ment 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. Subject to BOCC direction, no timetable for approval 11 Light fleet manage- ment 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 Complete The Fleet Manager has developed practices for improving vehicle utilization and provides this information to client departments. This is occurring as a best practice - outside of the direction of an adopted policy and is also contained within the draft policy. 12 Light fleet manage- ment 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 Complete The Road Department requires an interdepartmental transfer of funds for the value of the transferred asset and places the funding within the transferring department's vehicle replacement account. This is occurring as a best practice - outside of the direction of an adopted policy and is also contained within the draft policy. 2019 Global Follow-up Report #19/20-3 October 2019 Page 12 Count Department Audit # Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 13 Light fleet manage- ment 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 The Road Department has installed a new cost accounting system, PubWorks. This system will improve cost accounting practices and will provide data and reports to enable isolation of an overhead rate specific to Fleet (vs that of the entire Department). There are some elements to work out in the Fleet Module and we would like additional time to calculate and evaluate this recommendation. Jun-21 14 Light fleet manage- ment 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. Subject to BOCC direction, no timetable for approval 15 Light fleet manage- ment 14/15 -10 8 It is recommended the County consider implementing an internal service fund approach for fleet. Planned Complete The Department will not pursue implementing an ISF for light fleet. The existing process for fleet maintenance and replacement billing is preferred by Departments. The Departments pay for actual costs of service and replacement. 2019 Global Follow-up Report #19/20-3 October 2019 Page 13 Count Department Audit # Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 16 Light fleet manage- ment 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 Complete Applicable and associated policies have been communicated to client departments through development of the draft light fleet policy. The Road Department has and will be pursuing additional methods to communicate the importance of and adherence to GA-19 (Fuel Purchasing Policy). 17 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 Memo will be sent to County Administrator by 10-31-19 for discussion Nov-19 2019 Global Follow-up Report #19/20-3 October 2019 Page 14 Count Department Audit # Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 18 Solid Waste 16/17 -6 1 It is recommended for written procedures to be continually updated and address their changing account and control environment: identify specific controls; and identify supervision and monitoring. Underway Underway The management analyst is continuing to update and document procedures for incorporation into the policies and procedures. Feb-20 19 Solid Waste 16/17 -6 7 It is recommended the Solid Waste department complete the implementation of its cost accounting system to capture all revenues and expenditures to the extent it will facilitate the needs of the department and the control efforts. Underway Underway Implementation continues and research is being done to find ways to include additional data, such as statistics, and enhance reporting within the cost accounting system. Jun-20 20 Solid Waste 16/17 -6 8 It is recommended for management to periodically reconcile/compare the County Finance and internal accounting systems. Underway Underway Revenues and expenditures are entered into the cost accounting system for comparison to the County Finance accounting system. Further build efforts are underway to assist in preparing management reports. Mar-20 2019 Global Follow-up Report #19/20-3 October 2019 Page 15 Count Department Audit # Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 21 Solid Waste 16/17 -6 11 It is recommended that management identify their needs for cost accounting information from the cost accounting system. Underway Underway Initial expectations have been provided and are factored in the cost accounting build efforts. Jun-20 22 Solid Waste 16/17 -6 19 It is recommended for the County to consider whether the franchise fee rate percentage is at an appropriate level as the department considers implementation of its master plan for the County. Underway Underway The SW Management Plan is under Board review and the franchise fee rate may be a future consideration as plans are further defined. Dec-19 {End of Report}