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MANATEE COUNTY CLERK OF THE
CIRCUIT COURT
INTERNAL AUDIT DEPARTMENT
PROJECT MANAGEMENT DEPARTMENT
AUDIT
A U D I T R E P O R T
TABLE OF CONTENTS
I. INTERNAL
AUDIT REPORT
A. Background; Purpose/Objectives;……................................................….…...2
B.
Scope; Methodology;
Irregularities, Abuse, or Illegal Acts;
Test of Compliance; ……………………………............................……....…..3
C. Statement of Internal Control Structure; Management Team
and Management Action Plan;
…………...……………………..........…....……4
D. Management Summary............................................….....................……….4
- 5
E. Audit Report Authorization.................................…..........….............……….5
F. Areas of Improvement and Management’s Action Plan…...........……………...6
– 8
MANATEE COUNTY CLERK OF THE
CIRCUIT COURT
INTERNAL AUDIT DEPARTMENT
PROJECT MANAGEMENT DEPARTMENT
AUDIT
A U D I T R E P O R T
The Internal Audit Department conducted an audit of
the Project Management Department for the audit period January 1, 1998
through April 30, 1999. The
audit was performed in accordance with Generally
Accepted Governmental Auditing Standards, issued by the Comptroller
General of the United States; and the Standards
for the Professional Practice of Internal Auditing, issued by the
Institute of Internal Auditors.
BACKGROUND:
The Project Management Department is comprised of the
Project Administration and the Infrastructure Inspection Sections. The responsibilities of each of these sections
are as follows:
The Project Administration
Section
provides direction and control for Public Works/ Transportation/Parks
projects, including responsibility for the coordination, scheduling,
quality control, cost monitoring and contract review of assigned projects.
The Section also prepares and initiates a portion of the Manatee County
Capital Improvement Plan and oversees design, land acquisition and construction
of currently funded projects.
The Infrastructure Inspection
Section
provides for inspection of common and public improvements to infrastructure
for compliance with approved plans and specifications. The Section also maintains inspection reports for public and private
projects, and bills for inspection services as appropriate.
PURPOSE/OBJECTIVE:
The
financial component of the audit consisted of verifying the accuracy
and appropriateness of revenues received, verifying proper approval
for the waiver of fees and/or charges, and verifying the existence of
competition for purchases under $500.
The
compliance component of the audit consisted of verifying compliance
with the following: Personnel
Policies, Rules and Procedures Manual; State record retention requirements;
Florida Statutes 322.36, 322.37, 153.05, 125.01(q), and 117.05; Laws
of Florida Chapter 63-1582, as amended, and 72-611; Board of County
Commissioners’ approved rates for labor, materials and equipment charges;
and contracts with consultants and contractors.
PURPOSE/OBJECTIVE: Continued
The operational component of the audit consisted of verifying an adequate system of internal control exists to safeguard assets, maintain the integrity of reports on operations, and provide adequate security over EDP information. In addition, an evaluation of the Department’s operational efficiency and effectiveness was performed by reviewing organizational charts, Policies and Procedures Manuals, controls over the facility’s access, inspection procedures for infrastructure and development, and the effectiveness of work directives.
SCOPE:
The financial audit scope consisted of a review of
accounts, financial transactions, and reports of the Project Management
Department for the period April 1, 1998 through March 31, 1999.
The compliance audit scope consisted of a review of
compliance to the policies and procedures, Florida Statutes, federal
regulations, ordinances, resolutions, contracts, and agreements related
to the Project Management Department that were in effect during the
period January 1, 1998 through May 18, 1999.
The operational audit scope consisted of a review of
the Project Management Department’s internal controls and the effectiveness
and efficiency of the operations during the audit period January 1,
1998 through April 30, 1999. Management
controls were also reviewed to identify significant weaknesses that
may have contributed to deficient performance.
METHODOLOGY:
Internal control evaluations were accomplished by flow
charting the key operations of this specified area, discussions with
management and staff, observations, and analytical and substantive testing
of individual internal controls. Risk
analysis was used to establish priorities of audit objectives.
IRREGULARITIES,
ABUSE, OR ILLEGAL ACTS:
No indications of irregularities, abuse, or illegal
acts were discovered during the audit that could affect the Project
Management Department for the audit period ending April 30, 1999.
TEST OF COMPLIANCE:
Internal Audit tested compliance with certain laws
and regulations, obtained an understanding of internal controls and
assessed control risk. Tests
performed appeared to provide sufficient evidence that support an opinion
on compliance and internal controls.
Except as noted in our audit report, tested items were
in compliance with ordinances, resolutions, and other policies established
by the Project Management Department.
STATEMENT
ON INTERNAL CONTROL STRUCTURE:
In planning and performing the audit of the Project
Management Department for the period ending May 18, 1999, the internal
control structure was considered in order to determine the auditing
procedures for the purpose of this report.
As a result, we noted in the audit report significant matters
involving the internal control structure and its operations that are
considered reportable conditions under standards established by the
U.S. General Accounting Office, Government Auditing Standards. Reportable conditions involve matters relating
to significant deficiencies in the design or operation of the internal
control structure, that in our judgment, could adversely affect the
organization's ability to record, process, summarize and report on data
consistent with management’s intentions.
Our consideration of the internal control structure
would not necessarily disclose all matters in the internal control structure
that might be reportable conditions, as defined above. In addition, because of the inherent limitations
in any internal control structure, significant deficiencies in the design
or operation of the internal control structure may exist and not be
detected. We believe the conditions
identified in our audit report constitute reportable conditions as previously
defined.
MANAGEMENT TEAM AND MANAGEMENT
ACTION PLAN:
A Management Action Plan will be used for each Area of Improvement reported. Management Action Plans are corrective actions with implementation dates developed in cooperation with the Department’s Director and the Internal Audit Department.
MANAGEMENT
SUMMARY:
The
Project Management Department was established to monitor county construction
projects within Manatee County. The Department serves as a liaison between
the Board of County Commissioners, other county departments and contractors.
The majority of construction project tasks are currently bid out to
independent contractors.
The
Project Management Department developed and implemented a monthly status
report to provide information on construction projects. We noted, however, that this report could be improved by increasing
the documentation of the activity and current status of the projects.
Current information on the status reports will allow better planning,
scheduling and monitoring by County managers. The Management Action
Team plans to increase the level of project detail on the monthly status
report, to include dates of activities, changes in the project, and
reasons for the delays.
(See Area for
Improvement #1 on page 6)
The
County has the authority to recover costs for projects that directly
benefit individual property owners by assessing the property owners
a portion of the costs. The
Board of County Commissioners approves the assessments in two public
hearings based on information supplied by the Project Management Department.
While many projects have been presented for a second public hearing,
approximately $763,500 of assessments have neither had a second public
hearing nor been assessed to individual property owners for assessment
projects that have been completed, in one instance for more than four
years. The Management Action
Team recognizes that improvements need to be made and will work to bring
the required documentation to the Board of County Commissioners so that
assessments and liens can be placed on properties.
(See Area for
Improvement #2 on page 6)
Engineering
consulting contracts require a “Letter of Extension” be approved by
the Project Management Department Director when services are not delivered
according to contract. We noted
that “Letters of Extension” are not being used by the Project Management
Department. The Management Action Team will begin using
“Letters of Extension” when service dates are not met.
(See Area for Improvement #3 on
page 7)
The
Project Management Department is currently maintaining a spreadsheet
of subsidiary financial records that was required prior to the implementation
of the IFAS financial system. Through training on the IFAS financial
system, financial tracking of contracts can be maintained on the IFAS
system. Efficiency of personnel of the Project Management
Department could be improved by increased training and cross-training.
The Management Action Team will increase training and cross-training
of personnel to increase departmental efficiency.
(See Area for
Improvement #4 on page 8)
No
construction projects were closed out on the finance system during the
audit period examined. As a
result, Internal Audit was not able to measure the effectiveness of
project managers in expediting and controlling costs associated with
construction projects for roads, water and sewer, and dredging.
We also were not able to compare the percentage of associated
costs, such as engineering costs, to similar costs incurred by other
counties and municipalities. We anticipate completing these audit objectives
in the future as projects are completed.
We would like to thank the Project Management Department’s
personnel for the cooperation and courtesy afforded to our Auditors
throughout the audit. We believe
through implementation of the Management Action Plans included in this
report, the Department will better meet its goals and objectives.
AUDIT REPORT
AUTHORIZATION:
This audit report has been reviewed and authorized
by:
____________________________________ ___________________________________
Richard
J. Orienti, CIA, CFE
R. B. "Chips"
Shore
Director of Internal Audit Clerk of the
Circuit Court and Comptroller
AREA
FOR IMPROVEMENT #1…………………………………….……..…..………………………
Subject: Monthly Status Reports Enhancements
The Monthly Status Report is the primary source of
information regarding the status of on-going projects. The Project Management
Department meets with management and interested individuals on a monthly
basis to discuss each project. In
its present form, the status report includes the budget, expenditures-to-date,
and remaining balance. In addition,
the report is designed to include bar graphs of planned versus actual
dates of completion, and a column for comments; however, this information
showing timeliness of project events is not always updated. As a result, the users of the reports are not presented with sufficient
information on the project to allow knowledge of its current or historical
status. An enhanced status report
will allow better planning, scheduling and monitoring by County managers
interested in the individual projects.
Management Action Plan:
Ø
The Project Management Department
will enhance the Monthly Status Report with current information, including
charts and a history of work performed on projects. Improvements in this report are anticipated to be completed by June
2000.
AREA FOR IMPROVEMENT #2 ……………………………………………………………………………
Manatee County has the authority
to recover some or all of project costs through assessments to adjacent
property owners that primarily benefit from roads that are paved, sewers
are that are installed, and canals that are dredged. The Laws of Florida, Chapter 63-1582, as amended,
provides the method of assessing the property, as well as for the collection
of the assessment from the benefiting property owners. Repayment of the assessment is accomplished
by placing a lien on the property and collecting a portion of the cost
annually through property tax payments.
The Board of County Commissioners approves assessment projects in two public hearings. In the first public hearing the assessment project is approved. After the project is completed, a second public hearing is held to provide for placement of liens on the benefited property. While many assessment projects have been presented for a second public hearing, a second public hearing has not been held on several completed assessment projects totaling approximately $763,500. The result is that these projects have not been assessed to individual property owners, in one instance for more than four years after completion of the project.
AREA FOR IMPROVEMENT #2 ………………………………………………………………Continued
Management Action Plan:
Ø
The Project Management Department
will bring the completed assessment projects to second public hearings
in a timely manner in order to assure that liens may be properly placed.
This action will enable the county to begin collection of the
assessments on a timely basis for the work completed.
The anticipated compliance date for assessing the completed projects
which have not had a second public hearing is September 30, 2000.
Management anticipates that future assessment projects will be
brought to second public hearings within one year of project completion.
AREA FOR IMPROVEMENT #3 ……………………………………………………………………………
Subject: Consultants' Contracts – Extensions of Time
Engineering consultants enter
into contracts approved by the Purchasing Department and the Board of
County Commissioners. The Project
Management Department, in conjunction with the Purchasing Department,
and with the approval of the Board of County Commissioners issues Work
Assignments to consultants for specific projects.
The contracts require these consultants obtain an approved “Letter
of Extension” from the Project Management Department for any delays
that will affect the Work Assignment's completion date.
The Project Management Department is neither issuing “Letters
of Extension” nor other documentation that supports extensions to the
consultants’ Work Assignments.
Documenting extensions would
provide Project Managers and other interested parties with information
that may be useful in determining the project’s current status, necessary
for planning, monitoring and controlling project related activities.
Management Action Plan:
Ø
The Project
Management Department will begin issuing “Letters of Extensions” as
required in the consultants’ contracts by the end of July 2000.
AREA FOR IMPROVEMENT #4…………………………………………………………………………
Subject: Employee Training and Cross-training
Project Management Department personnel maintain financial records on contract expenditures on a computer spreadsheet that could be produced more efficiently by using the IFAS financial system of the County. This spreadsheet was required prior to the conversion to the IFAS system. The IFAS financial system has the ability to compile various types of financial information either on-line or in a report format, eliminating the current use of independent computer spreadsheets. Project Managers, as well as other key personnel, can be trained on the IFAS system giving them access to financial information more timely. In addition, efficiency of personnel could be improved by cross-training, reducing the impact of changes in key employees, or their absences.
Management Action Plan:
Ø The Project Management Department will train personnel in the use of the IFAS financial system to eliminate duplicate records and will increase cross-training of duties performed by key employees by September 30, 2000.
