The mission of the Bureau of Internal Audit is to assist the Secretary and the Department in ensuring that: (1) agency goals are met; (2) all resources are used consistent with laws, regulations, and policies; (3) all resources are safeguarded against waste, loss, and misuse; and (4) reliable data is obtained, maintained, and fully disclosed.
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 comprised of three sections: (1) Audit, (2) Information Technology and (3) Contract Review reporting to the Bureau Chief who functions as the Director of Auditing. The Director of Auditing is a Certified Public Accountant (CPA). The Bureau conducts compliance, performance and information technology audits and contract reviews per Section 20.055 Florida Statutes. The audits are conducted in accordance with the current International Standards for the Professional Practice of Internal Auditing published by the Institute of Internal Auditors.
Compliance/Performance Audit Section
The Audit Section employs an Audit Supervisor and six (6) auditors. Staff includes a Certified Internal Auditor (CIA) and a Certified Fraud Examiner (CFE). During FY 2006-07, the Audit Section completed 7 audits, 5 follow-up audits and 7 reviews. The reports issued are summarized in the chart below:
|FY 2006-07 Audit Section|
|Report Number||Project Title||Report Issue Date|
|R06019F||Healthcare – Co-Payments by Inmates||7/18/2006|
|R07004||Risk – Florida Kids Computer Program||7/21/2006|
|A06021||Employee Club – Lancaster CI||7/27/2006|
|A05010||Entering/Exiting DC Facilities||8/14/2006|
|A06015||DC Recycling Program||8/31/2006|
|R07008||Employee Club – Okaloosa CI||10/27/2006|
|A07001||Vending Services Contracts||1/8/2007|
|R07006||ARAMARK – Analysis of Per Diem Costs||1/10/2007|
|A07012F||Entering/Exiting DC Facilities Follow-up||3/7/2007|
|A07003||Tool and Sensitive Item Control||3/7/2007|
|A07015F||OPPAGA Report 06-37 Follow-up||3/15/2007|
|A07013F||DC Recycling Program Follow-up||3/16/2007|
|R07017||Review of Staff Housing||3/26/2007|
|R07019||Operational Review – Hendry CI||4/13/2007|
|A07005||DC Water/Waste Water Contracts||4/24/2007|
|A07009||Jacksonville Memorial Hospital Contract||5/7/2007|
|R07014||Quality Assurance Review – Internal Audit||6/20/2007|
IT Audit Section
The Information Technology Section employs one Audit Supervisor. This individual is a Certified Information Systems Auditor (CISA). This is a newly created section which will conduct IT audits/reviews.
Contract Management Review Section
The Contract Review Section (CMR) employs an Audit Supervisor and two (2) auditors. Staff includes a CIA and a Certified Government Audit Professional (CGAP). During FY 2006-07, the Contract Management Review Section completed 6 contract reviews and 3 follow-up reviews. The reports issued are summarized in the chart below:
|FY 2006-07 Contract Management Review Section|
|CMR06002||Prison Health Services Contract (PHS)Taylor CI||10/18/2006|
|CMR06003||Dr. Schlofman Contract||10/18/2006|
|CMR07001||Bridges of America Contract – St. Petersburg||1/7/2007|
|CMR07002||Bridges of America Contract – Polk||3/29/2007|
|CMR07004F||MCI Contract Follow-up||4/4/2007|
|CMR07008F||PHS Contract Follow-up – Taylor CI||5/19/2007|
|CMR07009F||Dr. Schlofman Contract Follow-up||5/19/2007|
|CMR07003||Non-Secure Inc. Contract – Orlando PRC||6/25/2007|
The Bureau views its audit/contract review mandate as an opportunity to not only identify site specific deficiencies and problems with a statewide impact, but also to identify areas that are well designed and are meeting management's goals. Three of the reports with statewide impact conducted by the Bureau of Internal Audit this fiscal year included:
Our audit indicated that the contractors are generally in compliance with the terms and conditions of the contract. The issues of non-compliance identified during the audit appear to be systemic deficiencies that were previously identified by staff in DC’s Bureau of Institutional Support Services during their contract monitoring process. We identified issues regarding DC’s lack of internal controls to verify the accuracy and completeness of commission revenues and the Bureau of Institutional Support Services’ inability to perform follow-up monitoring due to the limited number of personnel resources. These issues warrant management’s attention and allow us to provide recommendations to improve the effectiveness and efficiency of the contracts.
We conducted this analysis as part of our continuing efforts to identify “problem-opportunity” issues within the Florida Department of Corrections (Department) operational matrix and bring them to management’s attention.
Aramark Contract C1927 was selected for review based on its high dollar amount ($71 million annually) and numerous irregularities brought to our attention involving its operations. When we started the review, we found that most documents related to food service performance prior to 2004 had been purged from Department files; however, during our examination of archives related to the initial 2001 Request for Proposal (RFP), we uncovered documentation that provides a baseline for performance comparisons and conclusions. By comparing that baseline to the results of the contract manager’s recent reviews of Aramark’s performance, we were able to identify two critical issues worthy of management’s attention. They are:
These two dynamic changes in the cost/value balance of the contract suggest that the Department’s needs would be better served either by modifying and re-bidding the contract to address the above issues, or by restoring food service as an in-house operation.
MCI Inmate Telephone System (ITS) Contract Review
Although identifying several issues requiring management’s attention, we determined that overall, MCI has provided an effective ITS which meets the operational and fiscal specifications enumerated in the contract.
We also identified an alternative to the existing collect-call only ITS that could provide cost savings to inmate family and friends and yield adequate revenue to DC and the contractor.
To reduce the cost to inmate families and friends and take advantage of current technology, DC should consider offering an ITS that allows prepaid/debit and collect call capabilities. Rates for prepaid calls are significantly less than a collect call because these calls can eliminate both the surcharge cost and the risk of uncollectible or bad debt to the telephone provider. Currently, telephone provider contracts with the Departments of Corrections in Virginia, Ohio and Missouri offer prepaid discounts ranging from 10 to 20 per cent of the normal collect call rate. It is highly probable that the reduction in cost to the call recipients will cause an increase in the volume of calls made which could increase the net revenue to DC.
Prepaid calls offer a win/win situation for all parties involved. It provides a reduction in cost to inmates and their family and friends, eliminates bad debt to the telephone provider and continues to provide revenue to DC without compromising security. In addition to offering prepaid calls, DC could increase the inmate telephone call list from 10 individuals to 15 individuals and extend calls longer than the now 15 minutes.
We also identified five significant issues in contract performance and oversight which we feel warrant management’s attention. They are as follows:
Finding No. 1: Operations Contract Managers did not monitor and document contractor performance.
Finding No. 2: Management neglected to assess $722,000 in liquidated damages for MCI’s failure to complete routine service repairs within 24-hour time limits.
Finding No. 3: New inmate PIN numbers are not being processed and activated timely.
Finding No. 4: MCI’s CPA firm’s methodology in testing for reliability of the ITS has weaknesses in that the same telephone numbers have been called since the inception of the contract in 2001.
Finding No. 5: MCI has not provided proof of required performance guarantee.