The mission of the Bureau of Internal Audit is to assist the Secretary and other agency managers in discharging their oversight and operational responsibilities through independent audits and consultations. These audits and consultations are designed to evaluate and promote internal controls and to provide assurance that: (1) agency goals are met; (2) resources are used in accordance with applicable laws and policies; (3) resources are safeguarded against waste, fraud, and misuse; and (4) reliable data is collected and reported to management.
Our primary purpose is to take a proactive approach in meeting our agency's needs and protecting its resources. Toward that end, we have established four key goals:
The Bureau of Internal Audit is administered by the Chief Internal Auditor who reports to the agency's Inspector General. The Bureau employs eight professional auditors with oversight from the Bureau Chief who functions as the Director of Auditing. Staff includes one Certified Public Accountant, two Certified Internal Auditors, and a Certified Fraud Examiner.
The Bureau conducts financial, compliance, information technology, and performance audits per Section 20.055 Florida Statutes. These audits are conducted in accordance with the current Standards for the Professional Practice of Internal Auditing published by the Institute of Internal Auditors.
The Bureau views its audit mandate as an opportunity to identify deficiencies and serve as a catalyst for correcting them. Attention is focused both on issues that are site specific and those with a broader impact. Bureau audits which had statewide impact during the last fiscal year included:
We identified deficiencies in the Department's management of property leases to Pride Inc. and related billing and collection efforts. These issues, combined with PRIDE's failure to promptly pay its obligations to the Department, resulted in an unpaid balance of $816,996 for utilities and officer's salaries as of June 30, 2002. Sixty-eight percent (68%) of this amount had gone unpaid for more than six months.
We found the Department failed to provide adequate monitoring and follow-up to ensure collection of monies from PRIDE; PRIDE was not promptly invoiced for some utility and officer salaries; no individual had been designated as contract/lease manager responsible for monitoring the PRIDE lease agreements; lease agreements lacked specific language identifying the utilities and other fees to be invoiced to PRIDE; and accounts receivable transactions were not accurately/timely posted to FLAIR.
Management concurred with our findings. The implementation of recommendations contained in our report should improve internal controls over the accounts receivable process and management of the PRIDE leases, resulting in more timely payment of monies owed DC.
The telephone call data we examined did not suggest that MCI had overcharged inmate families under the current contract. However, MCI failed to provide sufficient data in a format needed to identify the specific types of calls placed. Without this data, we were unable to provide complete assurance that all calls were within limits prescribed by the contract and regulatory agencies.
We found that MCI provides insufficient data to facilitate regular detailed reviews of the accuracy of commissions paid and the rates charged to inmate families; penalties of $415,000 were not assessed for MCI's late payment of commissions; and the project proposal opening was poorly documented.
Although management did not concur with all of our recommendations, they took appropriate action to improve controls over the contract. We believe management assumed an unnecessary risk by relying on the current data obtained from MCI to facilitate detailed reviews of accurate commissions paid and rates charged to inmate families.
During FY 2002-2003, the Financial and Compliance Section completed 14 audits and 20 reviews. The audit reports issued during FY 2002-2003 are summarized in the chart below:
|FY 2002-03 Internal Audit Reports|
|22018||BLM, Inc. Technology Maintenance Contract||08/26/02|
|A03001||Marianna Service Center - Operational Audit||02/04/03|
|A03004||PRIDE - Accounts Receivable||02/17/03|
|A03005||Martin CI - Operational Audit||01/31/03|
|A03006||Jefferson CI - Operational Audit||01/31/03|
|A03007||Wakulla CI - Operational Audit||01/31/03|
|A03008||Walton CI - Operational Audit||01/31/03|
|A03009||Madison CI - Operational Audit||01/31/03|
|A03012||Orlando Service Center - Operational Audit||04/04/03|
|A03034||Lake City Service Center - Operational Audit||06/11/03|
|A03042||MCI WorldCom - Inmate Phone Contract||05/21/03|
|A03043||Ft. Lauderdale Service Center - Operational Audit||04/08/03|
|A03044||Inmate Gratuity Fund||06/12/03|
|A03048||Marianna Service Center - Travel Claims||06/24/03|
This Section was established in July 2001 to enhance accountability over contracting due to the increased privatization of functions in the Department of Corrections. The section's five employees were responsible for reviewing the Department's contracting activities and the performance of both the contractor and the contract manager. During its two years of existence, staff focused much of their efforts on evaluating the agency's two largest contracts - food service and health services - due to their monetary value and impact on agency operations. The Section was dissolved in June 2003 and its responsibilities were transferred to the Bureau of Purchasing.
During FY 2002-2003, the Contract Systems Analysis Section completed 12 evaluations of various contracts. The following table lists the reports issued by this section for FY 2002-2003:
|22518||Terry Yon and Associates Follow-up||09/25/02|
|M03002||Santa Rosa CI - Food Service||08/09/02|
|M03003||Lab Corp of America||01/08/03|
|M03013||Everglades CI - Food Service||12/13/02|
|M03017||Gulf CI - Food Service||12/16/02|
|M03029||Wexford Health Care - Phase I||11/04/02|
|M03032|| Santa Rosa CI - Food Service - Follow-up
|M03036||Wexford Health Care - Phase II||03/14/03|
|M03045||Wexford Health Care - Phase III||05/21/03|
|M03052||Gulf CI - Food Service||05/30/03|