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Home My WebLink About2021-10 Follow-up Fair & Expo Trending costs (Final 6-7-21)Follow-up Fair & Expo – Trending Costs #20/21-10 June 2021 2020 FOLLOW-UP REPORT Fair & Expo – Trending Costs (Internal audit report #19/20-12 issued August 2020) 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 David.Givans@deschutes.org 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 Nick Lelack, Community Development Director Follow-up Fair & Expo – Trending Costs #20/21-10 June 2021 2020 TABLE OF CONTENTS: HIGHLIGHTS 1. INTRODUCTION 1.1. Background on Audit …………..………………………………………….……….……..…. 1 1.2. Objectives and Scope …………….………………………………….…………….………… 1 1.3. Methodology …………………………………….…..………………………….…………….… 1 2. FOLLOW-UP RESULTS …………………….……….……………………………………….…… 2 APPENDICES Appendix I – Updated workplan (status as of May 2021) …….…............ 3-6 Follow-up Fair & Expo – Trending Costs #20/21-10 June 2021 2020 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 report. The Audit Committee would like to make sure departments satisfactorily address recommendations. 1.2 OBJECTIVES and SCOPE “Audit objectives” define the goals of the audit. Objectives: The objective was to follow-up on recommendations from the original audit. Scope: The follow-up included sixteen (16) recommendations from the internal audit report for Fair & Expo – Trending Costs (#1920-12), issued in August 2020. The original internal audit report should be referenced for the full text of recommendations and associated discussion. The follow-up reflects the status as of May 2021. 1.3 METHODOLOGY The follow-up report was developed from information provided by Geoff Hinds, Fair & Expo Director and Greg Munn, Treasurer and CFO. Comments were sought for the status of the outstanding recommendations. 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. The updates received 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. Follow-up Fair & Expo – Trending Costs #20/21-10 June 2021 2020 Page 2 2. Follow-up Results Figure I - How were recommendations implemented? The follow-up included sixteen (16) outstanding recommendation agreed to by County departments. Figure I provides an overview of the implementation status of the recommendations. With this follow-up, all of the outstanding recommendations have been addressed. The details of the follow-up 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. Follow-up Fair & Expo – Trending Costs #20/21-10 June 2021 2020 Page 3 APPENDIX Appendix I – Updated workplan for identifed outstanding recommendations for #19/20-12 (status as of May 2021) Rec # Recommendations Status Estimated or Actual Date of Completion Updated Follow-up comments 1 It is recommended for the Department to utilize the County accounting system for sponsor receivables to provide better transparency, accounting, and collectability. Completed 1/1/2021 Fair & Expo is utilizing an updated process to account for sponsor receivables, including using the County accounting system for active and future sponsors and receivables 2 It is recommended the department develop an approach for addressing sponsors and collection. Completed 1/1/2021 F&E has developed a comprehensive list of contracts that is managed monthly to keep track of sponsorship contracts, status and revenue collection. 3 It is recommended the department consider posting kitchen repairs to the food and beverage division. Completed 3/26/2021 All future kitchen repairs will be posted to the food and beverage org in Munis. 4 It is recommended that capital purchases not be split into separate transactions. This can be accomplished by using the purchase order or requisition process. Completed 1/1/2021 All current and future capital purchases follow County policies and utilize the Munis accounting system as recommended. 5 It is recommended for the Food & Beverage Manager to establish some additional processes over inventory including: updating pricing to reflect first-in first-out method and establishing additional procedures for the inventory as noted. Completed 4/15/2021 Fair & Expo has established additional process for inventory, including a fully updated pricing list. Food & Beverage has begun to utilize a first-n first-out method for the utilization of inventory to minimize/reduce waste. Follow-up Fair & Expo – Trending Costs #20/21-10 June 2021 2020 Page 4 Rec # Recommendations Status Estimated or Actual Date of Completion Updated Follow-up comments 6 It is recommended for Finance to consider changing some of the information presented for budget for the County Fair fund (Fund 616) in order to properly reflect the Fair results. Completed 3/26/2021 In the monthly financial reports to the Board of County Commissioners, Finance shows the County Fair fiscal activity on both a fiscal year and on a calendar year to better reflect the fiscal cycle of the fair. 7 It is recommended that Fair & Expo management consider budgeting accounts expected to have activity. Completed 3/26/2021 F&E management has thoroughly reviewed their fiscal activity and has developed their FY22 budget based on where they believe activity will occur. 8 It is recommended for staff and Fair Association to work together to manage resources within the expectations of the budget. Completed 3/26/2021 An updated agreement between the County, Fair Board, and the Association was developed and approved; this updated agreement includes language regarding budget specifics. This includes language that any/all fiscal expenditures must be pre-approved by the Director, and language that all expenditures must be in compliance with all Deschutes County purchasing policies or requirements 9 It is recommended for Fair & Expo staff to provide more control over entertainment additional requirements, manage expectations for costs, and stay within the provided budget. Completed 3/26/2021 A full and complete review of entertainment expenses was completed prior to the FY22 budgeting process. RFP's were released for areas of significant expenditures, and all Technical and other entertainment "riders" were reviewed as part of the purchasing of entertainment to assure these costs were appropriate and expected. Follow-up Fair & Expo – Trending Costs #20/21-10 June 2021 2020 Page 5 Rec # Recommendations Status Estimated or Actual Date of Completion Updated Follow-up comments 10 It is recommended for the Director to communicate budget expectations to volunteers and staff. Completed 3/26/2021 An updated agreement between the County, Fair Board, and the Association was developed and approved; this updated agreement includes language regarding budget specifics. This includes language that any/all fiscal expenditures must be pre-approved by the Director, and language that all expenditures must be in compliance with all Deschutes County purchasing policies or requirements. 11 It is recommended for the County Fair to contract individually with concert artists and process those contracts through appropriate legal and approval processes. Completed 3/12/2021 Fair & Expo has worked with legal on the creation of a new standardized agreement form for contracting. This agreement will be utilized as part of any new and future agreements with concert artists 12 It is recommended for Fair & Expo staff to consider using the contract purchasing process in the County’s accounting system (Munis). Completed 3/26/2021 Fair & Expo has and will continue to utilize the County's accounting system, and any/all purchasing process. Fair & Expo will also meet or exceed all purchasing quote or bid requirements for any projects, including obtaining multiple quotes or bids. 13 It is recommended for the County to establish with County Legal Counsel what the process should be to minimize risk for these contracts. Completed 3/12/2021 Fair & Expo has worked with legal on the creation of a new standardized agreement form for contracting. This agreement should minimize current and future risk for contracts to the extent possible. Follow-up Fair & Expo – Trending Costs #20/21-10 June 2021 2020 Page 6 Rec # Recommendations Status Estimated or Actual Date of Completion Updated Follow-up comments 14 It is recommended for transfers out of the County Fair fund be justifiable in the context of the statute (i.e. limited to reasonable share of capital improvements and costs and services not otherwise charged). Completed 3/26/2021 Fair & Expo is adjusting current and future budgets transfers to be justifiable in context of any/all statutes. These include tying any expenditure to a reasonable share of capitol improvements or other costs & services. 15 It is recommended the County Fair fund retain some excess funds as an operating reserve/contingency for future events for use in planning and in case things do not work out as intended. At a minimum, it should develop an operating reserve to the County minimums (8.3%). Completed 3/26/2021 Fair & Expo is beginning to budget contingency in FY22 and will work to build toward County standard 8.3%. Due to the impacts of Covid19 on the Fair Fund 616, this may be a multi-year process to get to the full 8.3%. 16 It is recommended for the Fair & Expo Director to consider what kind of agreement should be used for working with the Fair Association that best outlines the responsibilities of the Fair Association during the County Fair. Completed 5/19/2021 A new agreement between the County, Fair Board and Association was completed and approved by all parties. This new agreement provides a solid framework for the current and future relationship between all parties, and should be a solid operational document for the years to come. {End of Report}