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Home My WebLink About2122-2 2021 Global Follow-up report (Final 10-25-21)2021 Global Follow-up Report #21/22-2 October 2021 2021 Global Follow-up Report Outstanding recommendations – Administration, Health Services, Human Resources, Sheriff’s Office, and Treasurer/Finance 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 Charles Fadeley, Justice of the Peace Lee Randall, Facilities Director 2021 Global Follow-up Report #21/22-2 October 2021 TABLE OF CONTENTS: 1. INTRODUCTION 1.1. Background on Audit …………………..………………………………..………………….. 1 1.2. Objectives and Scope ……………….…………………..…………………..……………… 1 1.3. Methodology …………………………………….………………………………………...… 1-2 2. FOLLOW-UP RESULTS …………………….………………..………………………………… 3-9 APPENDIX I – Updated workplan for identified outstanding recommendations (Status as of October 2021) .…….................................. 10-16 2021 Global Follow-up Report #21/22-2 October 2021 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 tenth 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 2021 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 are covered in this report. There are fifteen recommendations included in this follow-up (as compared to thirty-three recommendations in the prior year, a decline of 55%). Status was determined through information provided by departments in October 2021. 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. 2021 Global Follow-up Report #21/22-2 October 2021 Page 2 Table I Reports and number of recommendations included in follow- up {Original 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 Cellular Costs - Verizon (NEW) 17/18-5 Mar-20 20/21-5 Dec-20 9 5 56% Health Services / Fiscal Revenue Controls 17/18-8 Oct-18 19/20-2 Aug-19 23 4 17% Human Resources /Span of Control 18/19-2 Feb-19 19/20-6 Nov-19 2 1 50% Human Resources - Cash Handling (NEW) 19/20-4 Sep-20 20/21-2 Sep-20 14 2 14% Jail Inmate Health Services (Standards) 17/18-7 Jul-18 18/19-7 Mar-19 1 1 100% Treasurer/Finance Director Transition (NEW) 19/20-1 Dec-19 20/21-1 Sep-20 22 2 9% Totals 71 15 21% 2021 Global Follow-up Report #21/22-2 October 2021 Page 3 2. Follow-up Results Coming into the follow-up The follow-up includes fifteen (15) recommendations made over six internal audit reports. The number of recommendations followed up on was down from thirty-three (33) in 2020. The number of outstanding recommendations represented twenty-one percent (21%) of the original recommendations (down from 31% in 2020). For some of the reports, more than one follow-up has occurred. There are three new follow-up audits included in this Global follow-up with nine outstanding recommendations. A few completed reports had follow-ups that completed all recommendations in the first follow-up, so no additional follow-ups are required. Follow-up results The follow-up indicates that four (4) of these outstanding recommendations (or 27%) have been completed. This compares with eighty-two (82%) percent in 2020. Sixty-seven percent (67%) of the reviewed recommendations are still underway for implementation. This compares with eighteen percent (18%) of the reviewed recommendations still underway for implementation in 2020. Six percent (6%) of the reviewed recommendations were still planned. 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. 2021 Global Follow-up Report #21/22-2 October 2021 Page 4 Figure I - How were recommendations implemented? A detailed listing of all 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. Figure II provides a breakdown of the status of these recommendations by department and audit report. 2021 Global Follow-up Report #21/22-2 October 2021 Page 5 Figure II - How were recommendations implemented by department and report? Generally, there is a natural progression seen as “planned” implementation moves into an “underway” status and then to “completed”. 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 has not moved from one category to another. Figure III was designed to identify movement in recommendations. 2021 Global Follow-up Report #21/22-2 October 2021 Page 6 Figure III - How has the status changed for outstanding recommendations? Table II indicates for these reports 85% of the original recommendations accepted have been deemed completed. This does not include all the reports fully completed (over this period) and not part of the global follow-up. In 2020, the global follow-up completion rate was 94%. After this follow-up, fifteen percent (15%) of the original recommendations for these reports are still outstanding. 2021 Global Follow-up Report #21/22-2 October 2021 Page 7 Table II Reports, number of recommendations included in follow- up and percentage still outstanding Department / Area Original Report # # of Original Recommendations # Recommendations in this follow-up % of Original # of Recommendations Still Outstanding % Outstanding Cellular Costs - Verizon (NEW) 17/18-5 9 5 56% 5 56% Health Services / Fiscal Revenue Controls 17/18-8 23 4 17% 4 17% Human Resources /Span of Control 18/19-2 2 1 50% 0 0% Human Resources - Cash Handling (NEW) 19/20-4 14 2 14% 1 7% Jail Inmate Health Services (Standards) 17/18-7 1 1 100% 0 0% Treasurer/Finance Director Transition (NEW) 19/20-1 22 2 9% 1 5% Totals 71 15 21% 11 15% 2021 Three-Year Implementation Rate Implementation rates are similar to completion rates. However, from an organizational standpoint more than a year is generally accepted for implementing recommendations. The Government Accountability Office (GAO) in their FY 2020 Performance and Accountability report, use a four-year time period and had a 77% implementation rate. The calculations below for Deschutes County for 2021 use a three-year period and come up with a 90% implementation rate for the included audit reports. 2021 Global Follow-up Report #21/22-2 October 2021 Page 8 Figure IV Status of recommendations for reports that have come up for follow-up for the prior three years. Figure IV shows the implementation rate of accepted recommendations for the 12 reports issued in the last three years and that have come up for follow-up. The number of recommendations for this three-year period was 108, with 97 of those recommendations having been completed, and 11 recommendations still outstanding. 2021 Global Follow-up Report #21/22-2 October 2021 Page 9 Footnote on Figure IV While the same six audits with follow-up reports are listed in both Figure III and Figure IV. Figure IV includes six reports not included in Figure III. Yet, both figures illustrate the same conclusion: The implementation rate for audit recommendations by Deschutes County departments is extremely high. 2021 Global Follow-up Report #21/22-2 October 2021 Page 10 APPENDIX Appendix I – Updated workplan for identifed outstanding recommendations. (status as of October 2021) Items that are not complete are grayed out. Count Depart- ment Audit# Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 1 Cellular Costs - Verizon 17/18-5 1 It is recommended for the County to consider updating the Cell Phone Policy to address management and expectations around utilization. This would include monitoring and routine assessment as to whether an employee truly needs the device/phone, what services, and what plan best fits their intended usage. Underway Underway Draft updated policy will be sent to IT and Internal Audit by 10-11-21. Then, the draft policy will be sent to the work group for feedback and finally to department heads for input. Nov-21 2 Cellular Costs - Verizon 17/18-5 6 It is recommended for departments to periodically review their cellular plans by line to align them with plan design, device, availability, usage, and cost. Underway Underway Draft updated policy will be sent to IT and Internal Audit by 10-11-21. Then, the draft policy will be sent to the work group for feedback and finally to department heads for input. Nov-21 2021 Global Follow-up Report #21/22-2 October 2021 Page 11 Count Depart- ment Audit# Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 3 Cellular Costs - Verizon 17/18-5 7 It is recommended for the County to consider updating policies regarding cellular devices to improve adherence to policy, reduce costs, and reduce risks. The policy improvements should consider addressing: • relationship of stipend levels to the cost of cellular phone services to the County; • developing plan selection criteria for business needs aligned with anticipated usage to right size costs; • developing legal and information technology framework to assure that technologies, data, and security are aligned and appropriate given the rise in new technologies and software; • criteria for selecting between employee phone (stipend) and County owned phone; • monitoring and modification of plan levels (including elimination of devices) for actual usage below anticipated; • utilizing free devices and upgrades to maintain the level of technology as well as getting credits for devices sold back. • establishing when devices require mandatory applications and restrictions from modification for protecting data; and • addressing applicability of policy to non-employee users. Underway Underway Draft updated policy will be sent to IT and Internal Audit by 10-11-21. Then, the draft policy will be sent to the work group for feedback and finally to department heads for input. Nov-21 2021 Global Follow-up Report #21/22-2 October 2021 Page 12 Count Depart- ment Audit# Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 4 Cellular Costs - Verizon 17/18-5 8 It is recommended the County consider how to address the risks that come with allowing mobile device access or external computer access to internal County information and who and how the risks will be mitigated. Underway Underway Draft updated policy will be sent to IT and Internal Audit by 10-11-21. Then, the draft policy will be sent to the work group for feedback and finally to department heads for input. Nov-21 5 Cellular Costs - Verizon 17/18-5 9 It is recommended the County provided forms for cell phone allowance be updated to reflect any updated policy language. Underway Underway Draft updated policy will be sent to IT and Internal Audit by 10-11-21. Then, the draft policy will be sent to the work group for feedback and finally to department heads for input. Nov-21 6 Health Services - Fiscal Revenue Controls 17/18-8 4 It is recommended for the billing manager to develop written procedures for staff on billing and collections procedures including how to properly process and apply payments received. Underway Underway Due to COVID-related work, attention was diverted away from this effort for more than six months. Target date for completion is now January 2022 to be finalized, reviewed by Legal, and signed off by Health Services Director. Jan-22 7 Health Services - Fiscal Revenue Controls 17/18-8 13 It is recommended for the Department to develop written policies and procedures over the billing and collection oversight activities. Underway Underway This goal is being included with the activities in recommendation #4 Jan-22 2021 Global Follow-up Report #21/22-2 October 2021 Page 13 Count Depart- ment Audit# Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 8 Health Services - Fiscal Revenue Controls 17/18-8 14 It is recommended for the Administrative Services Division (or selected supervisors) periodically audit gift card accounting in a comprehensive way and periodically check custody logs for completeness and accuracy. Underway Underway Due to COVID-related work, attention was diverted away from refining this effort. We are collecting gift card logs at least annually. Next step is to request a gift card object code to be added to Munis which will assist with reconciliation efforts. Furthermore, a Gift Card Policy and Procedure is drafted and in review. Target date for completion of gift card audit process is January 2022. Jan-22 9 Health Services - Fiscal Revenue Controls 17/18-8 21 It is recommended for the department to update their fiscal policies and procedures. Underway Underway Development of fiscal procedures are in process, and cross training is underway. Expected completion end of Fiscal Year 2022. Jun-22 2021 Global Follow-up Report #21/22-2 October 2021 Page 14 Count Depart- ment Audit# Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 10 Human Resources - Span of Control 18/19-2 2 It is recommended for Human Resources to integrate EEOP recommendations into recruitment/promotion efforts. Underway Completed HR advertises recruitment opportunities with diversity community groups including a variety of diversity job boards. HR has added quarterly tracking of DC workforce demographics compared to the community workforce. Training opportunities available regarding diversity hiring and related topics for staff. HR has included or recommended inclusion of DEI-focused questions in selection process and specifically in director and executive-level selection processes. HR work plan includes adding training in gaining familiarity with EEO considerations in recruitment for hiring managers; application blinding pilot project offered as an optional EEO enhancement for recruitments; publishing a Recruitment & Selection Guide inclusive of EEO content for hiring manager reference. 11 Human Resources - Cash Handling 19/20-4 10 It is recommended for Human Resources to consider using Munis to enter and provide receipts and bill and manage receivables. Underway Underway Project was temporarily paused and will be assigned to the new Business Systems Analyst position when hired. Feb-22 2021 Global Follow-up Report #21/22-2 October 2021 Page 15 Count Depart- ment Audit# Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 12 Human Resources - Cash Handling 19/20-4 11 It is recommended a supervisor periodically review the accounting and receivable systems. Underway Completed HR supervisor reviews the checks received log against Munis accounting system to verify receipt. Task is cumbersome and time consuming as there is not a report from Munis to easily review receivables. 13 Sheriff's Office - Inmate Health Standards 17/18-7 7 It is recommended for the Sheriff’s Office to assess whether and to what extent they want to implement some additional health standards to help them improve the services provided to inmates. Underway Completed We have reviewed all the relevant standards for health services provided to us by the National Commission on Correctional Health. Our medical teammates are also members with the organization, and attend trainings. We have implemented substantially all of the standards that are relevant to our operations, and will routinely review the standards for more opportunities to address best practices as time and resources permit. 14 Treasurer/Fin ance Director Transition 19/20-1 9 It is recommended for the Treasurer to develop a written system of internal control over the investments covering the investment policy requirements and those issues identified above. Planned Planned Current practices will be memorialized in the form of written procedures. Jun-22 2021 Global Follow-up Report #21/22-2 October 2021 Page 16 Count Depart- ment Audit# Rec # Recommendation Prior or Original Status New Status New Comments New Estimated Date 15 Treasurer/Fin ance Director Transition 19/20-1 11 It is recommended the Investment Advisory Committee and Treasurer provide additional policy clarification on what is considered a “competitive” bid and to what extent it is needed by investment type or circumstance. Underway Completed At the September 24, 2020 Investment Advisory Committee meeting, item #11 on the Treasurer Transition Audit regarding clarification of what is considered a competitive bid was discussed by the committee. Munn informed the committee that procedurally he strived for competitiveness in several ways including regular communication with brokers, reviewing daily offering sheets and requesting competitive responses from all brokers on prospective purchases (duration, type). He also keeps notes and correspondence for all transactions in an email folder as documentation and for future reference. IAC members said this sounded reasonable as long as comparable components are noted and an effort asking for bids is shown. They also noted correctly that there generally is not a lot of variance in pricing. {End of Report}