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Home My WebLink About0809-12 Global follow-up report (6-15-09)Global Follow-up report #08/09-12 June 2009 GLOBAL FOLLOW-UP REPORT Outstanding recommendations– Finance, Extension & 4H, CCF, Fair & Expo, ABHA, Adult Parole & Probation Deschutes County, Oregon David Givans, CPA, CIA Deschutes County Internal Auditor 1300 NW Wall St Bend, OR 97701 (541) 330-4674 davidg@co.deschutes.or.us Audit committee: Jade Mayer, Chair James Kerfoot Greg Quesnel Michael Shadrach Dennis Luke Tom Anderson Scot Langton Global Follow-up report #08/09-12 June 2009 TABLE OF CONTENTS: 1. INTRODUCTION 1.1. Background ………………………………………...………………........ 1 1.2. Objectives & Scope ……………………………………..……………… 1 1.3. Methodology ……………………………………………………..……… 2 2. OVERVIEW of FOLLOW-UP RESULTS ………………………….….... 2-3 APPENDIX I – Current status by audit report and recommendation …....… 4-12 Global Follow-up report #08/09-12 June 2009 Page 1 1. Introduction 1.1 BACKGROUND 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 recommendations. This is the first global follow-up looking back to unresolved recommendations in prior follow-ups. 1.2 OBJECTIVES and SCOPE Objectives: The objective was to follow-up on previously incomplete recommendations. Scope: This global follow-up included reports with incomplete recommendations that did not have a follow- up report completed in approximately a year. Status was determined through discussions with departments in April through June 2009. Some delay in issuance was encountered due to this effort being made during budget season. The following audit reports were covered in this report. Department Report # Date Report Issued Initial Follow-up Report# Initial Follow-up Date # Recommendations Followed up Finance 04/05-5 2/2005 05/06-6 1/2006 6 Ext & 4H 04/05-8 7/2005 05/06-8 4/2006 1 CCF 04/05-9 7/2005 05/06-10 7/2006 6 County Fair 05/06-2 11/2005 05/06-9 6/2006 7 ABHA 06/07-2 11/2006 07/08-5 9/2007 7 Fair & Expo 06/07-5 3/2007 07/08-8 1/2008 7 AP&P 06/07-12 6/2008 08/09-6 10/2008 3 Total # of recommendations in follow-up 37 Global Follow-up report #08/09-12 June 2009 Page 2 1.3 METHODOLOGY The follow-up report was developed from information provided by appropriate staff in the associated departments. 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 verify those assertions. Since no substantive audit work was performed, Government Auditing Standards issued by the Comptroller General of the United States were not followed. 2. Overview of Follow-up Results The original reports should be referenced for the findings and associated recommendations. A detailed listing of all of the recommendations followed up on and their status in included at the end of the report in Appendix I. The Audit committee has also recommended that Internal audit categorize and highlight any significant recommendations that have not been addressed. Internal audit does not believe any of these yet incomplete recommendations would be characterized as significant. Internal audit is working on developing a scale for categorizing the level of recommendations made. The follow-up included 37 recommendations made over the various reports. The follow-up indicates 31 of these (or 84%) have been completed. Some of the departments have 1 or 2 recommendations that require additional work. It is not unexpected that implementation takes time, but the idea would be to have these incomplete recommendations resolved as soon as practicable. Figure I provides a breakdown of the status of these recommendations. Global Follow-up report #08/09-12 June 2009 Page 3 Figure I - How were recommendations implemented? 4 1 4 7 7 7 1 2 2 2 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FINANCE / #04/05-5 / Cash controls EXT & 4H / #04/05-8 / Cash controls CCF / #04/05-9 / Organization review County Fair / #05/06-2 / Cash controls ABHA / #06/07- 2 / Internal controls Fair & Expo / #06/07-5 / Cash handling and business practices AP&P / #06/07- 12 / Cash handling Dept / Audit# / Topic % c o m p o s i t i o n Completed Underway Global Follow-up report #08/09-12 June 2009 Page 4 APPENDIX I Current status by audit report and recommendation Status Rec # Recommendation text Completed Underway Planned Auditee - status comments FINANCE #04/05-5 Cash controls (Finance/Tax/Treasury/Investment) (Last Follow-up 1/06) 1 It is recommended that reports be developed which list unusual or exception type transactions. This includes reversals by other users, changes to the tax collection system, utilizing transaction dates other than the current date, etc... These reports along with supporting documentation should be reviewed by the Finance Director. X DONE - This report has been completed. Finance's procedure will be for the accounting manager to be responsible to review these transactions on a quarterly basis. 8 It is recommended Finance develop a sufficient business continuity plan in the event they loose access to computers and software for an extended period of time. This includes obtaining prenumbered forms imprinted with the County’s name and department for use on these occasions. These forms should be in duplicate. X DONE - Finance has provided their business continuity plan, which includes restoring the primary County financial system (HTE). 9 It is recommended Finance staff document its accounting policies and procedures. The procedures should emphasize the areas of monitoring, supervision and segregation of duties. These policies and procedures should be available to all employees and should include, in detail, the responsibilities of each employee. Operating departments should be informed, in writing, of the duties they should perform to provide effective control over their deposits and expenditures. X Project is underway. Some additional documentation is needed from the accounting manager, which is expected to be completed by June 30, 2009. Global Follow-up report #08/09-12 June 2009 Page 5 Status Rec # Recommendation text Completed Underway Planned Auditee - status comments 10 It is recommended non Finance staff should not have routine access to Finance work areas unless specifically approved by Finance. Building services and IT staff access should be limited to a smaller roster of staff. X DONE 11 It is recommended Finance work with Risk management to enhance physical controls over the front desk areas. These might include some combination of glass barrier, surveillance, and/or alarm system. In responding to this recommendation, Finance will have to weigh the benefits of customer access, communication and staff safety to develop a meaningful solution. X Currently working with Risk management to identify how best to address needs for department and facility. 25 It is recommended, based on discussion with County legal counsel, that Finance develop an agreement to be signed by taxing districts and other entities posting monies with the County, authorizing their investments to be subject to County investment policies, which includes assessment of the fee. X DONE - Finance is no longer investing funds for outside taxing districts. Count 4 2 - EXTENSION & 4H #04/05-8 Cash controls (Last Follow-up 4/06) 22 It is recommended a supervisor periodically reconcile deposits to registration information entered. X DONE Count 1 - - Global Follow-up report #08/09-12 June 2009 Page 6 Status Rec # Recommendation text Completed Underway Planned Auditee - status comments CCF (Commission on Children and Families) #04/05-9 Organization review (Last Follow-up 7/06) 1 Deschutes County CCF should consider options in developing a performance measurement system to meet their local Commission's needs. This would allow direct review of accomplishments based on the CCF Commission’s stated priorities. X DONE - a) State outcome measures estab. & implemented July '08; b) Working w/Administration and MH & Scott Johnson to re-write County outcome measures with effort to align with state performance measures 4 Director might want to consider having staff track time by identified areas (such as projects or priorities) with sufficient detail so they may appropriately prioritize and allocate their resources X Need assistance - uncertainties with current org structure due to funding cuts. 7 Does CCF have existing staff with training to comply with A&D70 after the departure of the current program manager? X DONE – Both Staff involved have completed necessary course work and have applied for certification (Jan. 2009) 10 CCF Commission/Governing board should re-visit priorities and how they utilize staff and determine what agencies to fund. Is it possible to do more with volunteers or outsourcing? X DONE – Implementation of Action Team structure has resulted in ~25% or more increase in board/volunteer participation in efforts. Board members taking on more functions historically done by staff (i.e. letters to the editor and other support letters, contacts, researching specific bills or practices, community engagement, etc.) Global Follow-up report #08/09-12 June 2009 Page 7 Status Rec # Recommendation text Completed Underway Planned Auditee - status comments 13 Consider whether other departments could better supervise and manage grants and associated staff. This would shift indirects and operational costs to other departments but would reduce burden of supervision on director of CCF. X Several options have been considered and continue to be discussed but none have been found to be feasible at this time. Currently working with Scott Johnson to explore admin support functions 14 The County should consider developing an indirect costs plan to recover indirect costs from federal grant sources. X Need assistance - something county needs to do as an entity, not something CCF can do on it's own. {IA - County has previously decided to not explore this but that may change down the road -Consider completed} Count 4 2 - Fair & Expo Center #05/06-2 County fair - cash controls (Last Follow-up 6/06) 7 It is recommended for Fair management to consider alternative ticket machines that could control all forms of tickets and utilize tendered money information to provide change amounts. X DONE – Addressed through how season tickets are issued. New practices are working much better, always looking at new technology. 9 It is recommended that Fair management/Finance consider a method to assure monies taken from ticket sellers are controlled until they are counted and deposited. X DONE Global Follow-up report #08/09-12 June 2009 Page 8 Status Rec # Recommendation text Completed Underway Planned Auditee - status comments 9.1 The best form of control is to have dual custody of all receipts from ticket booths and count the monies before they are placed in the safe. X DONE 9.2 Another option is for ticket sellers to maintain a log to account for the tamperproof bags used to transport monies. The log will include the date; time; full name of seller and money taker; tamperproof bag# used in pickup; and sellers and money takers X DONE 12 It is recommended that Fair management (in consultation with Finance prepare an updated resolution for County Fair change funds. It would need to be updated to reflect the appropriate amount (or range of appropriate amounts) of change funds to be used. X DONE 13.1 By utilizing daily funds collected to make change this will reduce the pressure to have additional change funds to handle the needs of the ticket booths. X DONE 14 It is recommended that Finance monitor change fund issuance with approved resolutions. X DONE Count 7 - - Global Follow-up report #08/09-12 June 2009 Page 9 Status Rec # Recommendation text Completed Underway Planned Auditee - status comments ABHA (Accountable Behavioral Health Alliance) #06/07-2 Internal controls (Last Follow-up 9/07) 5 It is recommended that ABHA staff document their accounting policies and procedures. X DONE - We have revised or created a number of policies and procedures per the findings of the DC audit. We are confident that we are in good shape. That said, when the current Financial Manager leaves ABHA in a month or two and hands off the documentation of her procedures to her replacement, we will assess if there any remaining gaps of significance. 7 It is recommended that the account require dual signatures. If dual signatures are not possible, in specific circumstances, a subsequent review and sign-off of the disbursements by one of the authorized co-signers could be done. X DONE - We have done the latter. 9 It is recommended that ABHA consider providing additional object categories to provide useful accounting information for monitoring travel and meals costs. It is recommended that supplies be separated from other type of operating expenses. X DONE 10 It is recommended that ABHA review their chart of accounts to make sure they are gathering appropriate accounting information. X DONE Global Follow-up report #08/09-12 June 2009 Page 10 Status Rec # Recommendation text Completed Underway Planned Auditee - status comments 11 It is recommended that expenditures from the corporate credit card or employee reimbursements include sufficient evidence to support the expenditure. X DONE - The ABHA Expense Reimbursement Policy has been completely rewritten. 12 It is recommended that ABHA consider using a separate trust fund account for these receipts X DONE - We have a completely new credit card set of accounts that accomplish this goal….and more. 13 It is recommended that staff discuss these specific types of expenditures with their accountant or independent auditor to determine the proper matching of the expenditure with the period. X DONE Count 7 - - Fair & Expo #06/07-5 Cash handling and business practices (Last Follow-up 1/08) 11 It is recommended the Concessionaire (as provided for in the contract) provide an annual marketing plan where they identify the anticipated marketing and expenses for attracting events to the Fair & Expo. X DONE - Receive every March 12 It is recommended on a quarterly basis they provide details of the expenses and an accounting, which compares spending to the Plan and 1% of gross revenues. In cases where there is under spending, the amounts under spent should be carried forward to the next years marketing plan. X DONE Global Follow-up report #08/09-12 June 2009 Page 11 Status Rec # Recommendation text Completed Underway Planned Auditee - status comments 13 It is recommended the Department more fully develop their written policies and procedures governing their business operations. X DONE - Ongoing 17 It is recommended the Fair & Expo management develop a replacement reserve plan, which would include assessing the nature, timing and cost of needed replacements and significant maintenance over a span of fifteen or more years. This will allow them to address this in their cost of services or through a separate funding mechanism that will match with those needs. X DONE 19.5 Consider more consistent reporting into the County system to make reconciliation easier. X DONE - Ongoing 21 It is recommended that Fair & Expo management monitor the level of discounts they are giving to make sure they are adequately compensated on the facility and on the kitchen concessions when looking at total revenues. X DONE 27 It is recommended the Department review the amount of petty cash and change cash needed for normal operations and prepare a resolution documenting the amount for each of these and the need for these monies. It is recommended the department round the cash amount needed to the nearest hundred dollars. X DONE Count 7 - Global Follow-up report #08/09-12 June 2009 Page 12 Status Rec # Recommendation text Completed Underway Planned Auditee - status comments Adult Parole & Probation #06/07-12 Cash handling (Last Follow-up 10/08) 3 Develop written policies and procedures addressing cash-handling and billing environment X Working on. 4 Develop a process to make more timely deposits - Investigate sharing the bank deposit duties with nearby departments (Sheriff and Juvenile) and placing monies in tamperproof bank bags to secure while being transported. X DONE 8 Work with County Finance to establish the proper accounting and presentation of receivable balances for the County financial statements. X Working on. Count 1 2 - COUNT TOTAL 31 6 - {END OF REPORT}