HomeMy WebLinkAbout04-01376 BACKUP DOCUMENTATIONCITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST
REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI
• COMMUNITY REDEVELOPMENT AGENCY
(COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA)
Management Letter in Accordance With the
Rules of the Auditor General of the State of Florida
Year ended September 30, 2004
Executive Summary
Sanson, , Kline, Jacomino Si Company, LLP (SKJ) hereby submits this management letter to the City of
Miami Southeast Overtown Park West Redevelopment Agency and City of Miami Omni Community
Redevelopment Agency (the Agencies), Component Units of the City of Miami, Florida for the fiscal year
ending September 30, 2004. The management letter is presented in accordance with the Rules of the
Auditor General of the State of Florida. In accordance with Government Auditing Standards, we are
required to consider the Agencies' internal control during our planning and performing of our audit of the
financial statements in order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and not to provide assurance on the internal control. In fulfilling this
responsibility, estimates, and judgments made by management are required to assess the expected
benefits and related costs of internal control policies and procedures. The objectives on internal control
are to provide management with reasonable, but not absolute, assurance that assets are safeguarded
against loss from unauthorized use or disposition, and that transactions are executed in accordance with
management's authorization and recorded properly to permit the preparation of its financial statements in
accordance with accounting principles generally accepted in the United States of America.
The management letter is organized in the following manner:
• Executive summary;
• Responses to the Rules of the Auditor General of the State of Florida;
• Current year's observations, recommendations, and management's responses; and
• Status of prior years' observations, recommendations, and management's responses.
We would be pleased to discuss these comments with you and, if desired, to assist you and management
in implementing corrective action steps. SKJ appreciates the cooperation we received from the Agencies'
staff and management, and is honored to serve the Agencies as its external auditors.
Sanson, Kline, Jacomino
& Company, LLP
Certified Public Accountants
LeJeime Centre 782 N.W. LeJeune Road - Suite 650 - Miami, Florida 83126
Management Letter in Accordance with the
Rules of the Auditor General of the State of Florida
Tel. (305) 442-247o
Fax (305) 442-2850
www.skinet.com
To the Board of Directors of the
City of Miami Southeast Overtown Park West
Redevelopment Agency and City of Miami Omni
Community Redevelopment Agency: •
We have audited the financial statements of the City of Miami Southeast Overtown Park West
Redevelopment Agency and City of Miami Omni Community Redevelopment Agency, Component Units
of the City of Miami, Florida (the Agencies), as of and for the fiscal year ended September 30, 2004, and
have issued our report thereon dated November 16, 2004.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing -Standards,
issued by the Comptroller General of the United States. We have issued our Independent Auditors'
Report on Internal Control over Financial Reporting and on Compliance and Other Matters. Disclosures in
that report, which is dated November 16, 2004, should be considered in conjunction with this
management letter.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General.
Those rules (Section 10.554(1 Xg)1.a.) require that we address in the management letter, if not already
addressed in the auditors' report on compliance and internal controls, whether or not inaccuracies,
shortages, defalcations, fraud, and violations of laws, rules, regulations, and contractual provisions
reported in the preceding annual financial audit report have been corrected. We noted no inaccuracies,
irregularities, shortages, defalcations, and violations of laws, rules, regulations, and contractual provisions
disclosed in the preceding annual financial audit.
The Rulesof the Auditor General (Section 10.554(1)(g)1.b.) require that we disclose in the management
letter, if not already disclosed in the auditors' report on compliance and internal controls, whether or not
recommendations made in the preceding annual financial audit report have been followed. The
recommendations made to the preceding annual financial audit report have been corrected; as
reported In Appendix 8, titled "Status of Prior Years' Observations, Recommendations and
Management's Responses."
The Rules of the Auditor General (Section 10.554(1)(g)2.), state that a management letter shall include a
statement as to whether or not a local governmental entity complied with Section 218.415, Florida
Statutes, regarding the investment of public funds. In connection with our audit, we determined that the
Agencies complied with Section 218.415, Florida Statutes, relating to Iotal governmental investment
policies.
The Rules of the Auditor General (Section 10.554(1)(g)3.) state that a management letter shall include
recommendations to improve the Local government entity's present financial management, accounting
procedures and internal accounting controls. The recommendations made in the current year are reported
in Appendix A, titled 'Current Year's Observations, Recommendations, and Management's Responses?
1
The Rules of the Auditor General (Section 10.554(1)(g)4.) require disclosure in the management letter of
the following matters if not already addressed in the auditors' reports on compliance and internal controls
(1) violations of laws, rules, regulations, and contractual provisions that have occurred, or are likely to
have occurred, and were discovered within the scope of the audit; (2) improper or illegal expenditures
discovered within the scope of the audit that may or may not materially affect the financial statements;
(3) improper or inadequate accounting procedures (for example, the omission of required disclosures
from the financial statements); (4) failures to properly record financial transactions; and (5) other
inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that come to the attention
of, the auditor. No such conditions were noted during the audit.
The Rules of the Auditor General Section (Section 10.554(1Xg)5.) state that a management letter shall
include the name or official title and legal authority for the primary government and each component unit
of the reporting entity be disclosed in the management letter, unfess disclosed in the notes to the financial
statements. Such disclosure is made in note 1 to the Agencies' financial statements.
The Rules of the Auditor General (Section 10.554(1)(g)6.a.), state that a management letter shall include
a statement as to whether or not a unit of local government is in a state of financial emergency as a
consequence of conditions described in Section 218.503(1), Florida Statutes. Section 218.503(1) states
that a local governmental entity is in a state of financial emergency when any of the following conditions
occur:
a. Failure, within the same fiscal year in which due, to pay short-term loans from banks or failure to
make bond debt service payments when due.
b. Failure to transfer at the appropriate time, due to lack of funds: (1) taxes withheld on the income of
employees; or (2) employer and employee contributions for a) federal Social Security, or b) any
pension, retirement, or benefit plan of an employee.
c. Failure for any one period to pay, due to lack of funds: (1) wages and salaries owed to employees;
or (2) retirement benefits owed to former employees.
d. An unreserved or total fund balance or retained earnings (deficit) for which sufficient resources of
the local government entity are not available to cover the deficit for two successive years.
e. Noncompliance of the local government retirement system with actuarial conditions provided by
law.
Section 218.503(2) states that local government entity shall notify the Governor and the Legislative
Auditing Committee when one or more of the conditions specified in Section 218.503(1), Florida Statutes
have occurred or will occur if action is not taken to assist the local governmental entity.
Nothing came to our attention that caused us to believe that the Agencies are, or during the fiscal
year, were in a state of financial emergency as a consequence of conditions in Section 218.503(1),
Florida Statutes.
As required by the Rules of the Auditor General (Sections 10.554(g)(6)c. and 10.556(8)), we applied
financial condition assessment .procedures. it is management's responsibility to monitor the Agencies
financial condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
With respect to the financial report for the fiscal year 2004 required to be filed with the State of Florida
Department of Banking and Finance pursuant to Section 218.32 Florida Statutes, the Agencies do not file
a separate report with the State of Florida Department of Banking and Finance. The financial operations
of the Agencies are included in the basic financial statements of the City of Miami, Florida for the year
ended September 30, 2004.
2
This management letter is intended solely for the information and use of the board of directors,
management of the Agencies, the State of Florida Office of the Auditor General, and federal and state
awarding agenciesand pass -through entities, and is not intended to be and should not be used by
anyone other than these specified parties.
November 16, 2004
Appendix A
CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST
REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY
REDEVELOPMENT AGENCY
(COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA)
Management Letter in Accordance With the
Rules of the Auditor General of the State of Florida
Year ended September 30, 2004
Current Year's Observations, Recommendations
and Management's Responses
Summary
No. S Current Year's Observation
2004-1 Payments to Vendors
4
Appendix A
CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST
REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY
REDEVELOPMENT AGENCY
(COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA)
Management Letter in. Accordance With the
Rules of the Auditor General of the State of Florida
Year ended September 30, 2004
2004-1 PAYMENTS TO VENDORS
Criteria/Specific Requirements
Purchases of goods and services and payments to vendors should follow the procurement and accounts
payable policies and procedures of the Agency.
Condition Found
We noted two payments to two separate vendors, one for $7,950 and another for $3,466, that were paid
by the 'Executive Director using his own personal funds, which was subsequently reimbursedto the
Executive Director by the Agency. Based on our discussions with the Executive Director, we noted that
the two payments were payments that needed to be made immediately, which immediate payment could
not have been made through the normal accounts payable process.
Perspective
The condition noted is considered to be isolated in nature.
Effect
Although the payments to the vendors using the Executive Directors personal funds were adequately
substantiated with supporting documentation, the amounts were significant. This could be perceived by
outside parties to be inappropriate, as this is not normal practice.
Recommendation
We recommend that the Agency continue to make a concerted effort to use Agency funds to pay vendors.
However, we understand that there may be situations that may occur whereby emergency payments are
required. Therefore, we recommend that the Agency obtain Board approval for emergency payments
allowing the Executive Director to use his own funding in cases like this. The other alternative would be
to obtain a corporate credit card controlled by the Executive Director and/or the Finance Officer, to be
used only for emergency type payments, and possibly for small purchases outside of the procurement
process.
Whichever alternative the Agency chooses, the Agency should document and implement a formal policy
that would describe the maximum dollar amount allowed for these types of purchases.
Management's Response
Management agrees with this observation and will take the necessary action to secure Board
authorization via a policy that will allow the Executive Director to make such payments on an emergency
basis.
5
Appendix 8
CITY OF MIAMI SOUTHEAST OVERTOWN PARK WEST
REDEVELOPMENT AGENCY AND CITY OF MIAMI OMNI COMMUNITY
REDEVELOPMENT AGENCY
(COMPONENT UNITS OF THE CITY OF MIAMI, FLORIDA)
Management Letter in Accordance With the
Rules of the Auditor General of the State of Florida
No.
Year ended September 30, 2003
Status of Prior Years' Observations, Recommendations,
and Management's Responses
Summary
Comment Is
Comment Has Still Relevant at
Prior Year's Observations Been Resolved 9/30iO4
REPORTABLE CONDITIONS:
99-1 Leased Properties X
OTHER OBSERVATIONS:
2001-8 Budgetary Accounting X
2003-1 Capital Assets Additions and Disposals X
2003-2 Line Item Expenditure Classifications X
2003-3 Maintaining Authoritative Accounting
Literature X