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Home My WebLink About04-00905 SEOPW-OMNI EXTERNAL AUDIT1 2003-1 Community Redevelopment Agency SEOPW and Omni CRAs' External Audit Findings and Other Observations Status Report as of 9/20/04 Capital Assets Additions and Disposals Updating the capital assets listing (i.e. updating additiona and disposals) is not performed throughout the year, but instead is performed at the end of the year through a search of invoices paid. We noted several items that were not included on the capital assets listing at year-end. A procedure has been instituted whereby all capital purchases in the amount of $1,000 or more go through the office of the Agencies' Financial Officer to be added to the capital assets listing (current inventory) at the time of delivery, rather than waiting for annual inventory update. March '04 2 2003-2 Line Item Expenditure Classifications On several occasions, we noted expenditures that were recorded in the incorrect line item classification. For example, we noted: (1) A forgivable loan (grant) incorrectly recorded in the membership dues expenditure line item account; (2) A forgivable loan (grant) incorrectly recorded in the promotional activities line item account; (3) Construction in - progress (services performed by HJ Ross) incorrectly recorded in the professional services line item account A procedure has been instituted whereby all expenditures are entered in both the City's GEMS system and in the Agencies' inhouse computerized accounting system. On a monthly basis, the Agencies' system will be reconciled against the City's financial system to capture any inconsistencies and allow for a more accurate recording of all expenditures in the proper line item classification. Page 1 of 5 March '04 3 2003-3 Maintaining Authoritative Accounting Literature The Agencies' Finance Department does not maintain any government accounting literature for reference and guidance. The Agencies' Financial Officer in concert with the Agencies' external CRA consultant will establish an in-house libraryu of appropriate accounting literature, either through printed material or available computerized subscription. Books received July '04. Jul. '04 4 2002-1 Grants Management and Accounting Inadequeate records to allow readily available information with respect to the names of organizations funded along with the amounts grants, purpose, and status of the grant Agencies' CPA (HB&A) to develop policy and procedure to document all grants on an individual basis allowing for selective auditing on a grant by grant basis. Draft policy reviewed by Executive Director on 5/10/04- Amendments Underway. Final draft under review. Aug. '04 5 2002-2 Contract Ageements Several third -party contractors were paid for services in FY '02 with no agreement between the contractor and the Agency found to be executed nor approved by the Board. As of 3rd quarter fo FY '03, all 3rd party invoices are matched to approved resolutions, executed contracts, PO's and/or work orders. Agencies' CPA (HB&A) to formalize into policy and procedure. Draft policy reviewed by the Executive Director on 5/10/04-- Amendments Underway. Final draft under review. Aug. '04 6 2002-3 Improper Use of Tax Increment Funds The Margaret Pace Park project, within the Omni Area was paid from tax increment funds (TIF) collected by and earmarked for SEOPW area Page 2 of 5 Currently, multiple signatory financial approval all funding sources. CRA has requested journal entry to SEOPW; in process with City Finance & Budget. Apr. '03 :,c4;§. L -'- t✓`""� 7 .s? �'}v. "°k' y {': Lk I L tl 9 (( ',7 `a. Y. } xAAa.F.. P'j,; = $ - ® __.. [��`S .:h �0 a2",s a J ° ., S.• { }P Fe w'§c.�' 2^4F .µ`Y ;...1J �' `e a ree .� J:< , d i.J � ea ` 'f9. F.. ,... :s,"" .. ... x �.> d, 4." 1� .'+b �C, Yi .ir j g.hyA+ 3'u='e ® ag,r.P j. a:: f l S ,C k ;4.? r-^`<:Y `` :�, ,nk ,s. S .,< «. ... 4 ...=ria'%'L".' %s,�"i` /per '. 1, 1tio 3 '1� a �. vl 'S -Y YF"j ':?...�5 i 4 iR � , 1 �.... � 2002-4 x Loan Administration Inadequate records on the status of outstanding loans to include complete inventory of all loans CRA has entered into agreement with NDC for Grow Miami Fund to administer all future loans. Sept. '03 8 2001-1 x Level of Staff within the (CRA) Finance Department Agencies' Finance Department is short qualified staff thus delaying financial reporting; most, if all of analysis and reconciliation of general ledger accounts are not performed on a timely basis Agencies' CPA (HB&A) to evaluate current and total financial operations and submit written report of findings and recommended action plan —to be coupled with findings from internal audit. To be further reviewed by Oversight Committee. Jan.'05 9 2001-3 x Encumbrance Accountingencumber Agencies do not use a purchase order system to the purchase of goods and services. CRA plans to partner with City of Miami and implement GEMS procurement and encumbrance computerized system. GEMS Training has taken place for CRA Staff. CRA will be on-line by March 1, 2004. CRA has implemented a comprehensive accounting software package. Jan. '04 10 2001-4 x Payroll File Maintenance Documentation supporting staff salaries and pay rates lacking in employee personnel files Agencies' staff has updated all employee personnel files to include payroll information. Aug. '03 Page 3 of 5 ® 9 _. .. Ykn' , c �:.a�:..2a=.�,v�H�'��4.�`r?taiP "vbAp ' C ��agL't„e ., A" ?,. :fir ,..c awr:.:' ;t "n3 fix � A�"„ n _ i4 1+k .'✓. �d z pki"i to s be �t , �� t a t' a4� 'fit a.' k ��9':�...J 't '.:tt s ?a7,%r "' a. .° �R � sYE;'. �!:" k' 'ter'', te v 9� 11 2001-5 x Project Cost Accounting Agencies lack formal system to account for ongoing capital projects CRA plans to partner with City of Miami and implement GEMS procurement and encumbrance computerized tracking system. GEMS on hold for CRA while software problems are resolved. CRA has implemented a comprehensive accounting software package. Jan. '04 12 2000-1 x Establish Controls over General Ledger Agencies rely only on the general ledger reports prepared by City Finance Department and do not perform independent reconciliation of account balances and activity, including cash balances Agencies' CPA (HB&A) to develop policy and procedures for in-house reconciliation of all accounting transactions to includepool-cash maintained by the City of Miami. Draft policy reviewed by Executive Director on 5/10/04. Amendments Underway. Final draft under review. Aug. '04 13 2000-2 x Timely Preparation of Financial Statements Agencies do not have formalized year-end financial reporting process to facilitate the preparation of their financial statements Agencies' CPA (HB&A) to develop policy and procedure for formalized year-end financial reporting process. Audit binder for FY '03 was prepared by 12/1/03 and presented to External Auditor (SKI) on 1/12/04. Draft policy reviewed by Executive Director on 5/10/04-- Amendments Underway. Final draft under review. Aug. '04 Page 4 of 5 ' A -i;� "3 ;. a 3y1 ,�W`��,,,g :: S,,�c � a s '® a ' �; 'S:i. r'. 6". s e tl' s r� t. 5t ri �i P�' �,�g�� 2h�`k4Sit'Stl" �"Pi bv° f saf �Ya: P9 R•y.,": � o '�i: j .,1,` - �✓7 ^& f� i"��`�,^ i�i .9T?e �`is .�.,�.i Yx�Lcsr�nii'h Rah rfi ^.i._'..:. % '7 .:e G ,1 i, ��sl 4 I 14 2001-6 x Operational Review Present organizational structure does not support the demands on staff to maintain an efficient and effective operation Board appointed permanent Exec. Director on 11/25/02. New Exec. Director hired an Agenda Coordinator on 5/6/03 and a Financial Officer on 11/24/03. Board selected a new external auditing firm on December 8, 2003. To be further reviewed by CRA Oversight Committee Jan. '04 15 2001-8 x Budgetary Accounting Agencies prepare their annual budget on a combined entity- wide basis, as opposed to a fund basis FY '04 Budget was prepared and approved by CRA area and general operating fund tagged to each agency's current accounting structure which will facilitate proper external financial reporting and auditing. Sept. '03 16 1999-1 x Leased Properties Agencies do not have a system that allows for the identification of all properties held for lease. Agencies unable to determine if some properties are leased and nature of lease agreements. Agencies' CPA (HB&A) to develop policy and procedure for formalized leased properties system to include real property inventory and records search. Draft policy reviewed by Executive Director on 5/10/04-- Amendments Underway. City's IT Dept. to run comparative land ownership against the universe of all land in both CRA areas. Final draft under review. Aug. '04 Page 5 of 5