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HomeMy Public PortalAbout02-January 14, 2021 WSCITY OF OPA-LOCICA "The Great City" CLERK'S ACTION SUMMARY MINUTES Workshop Thursday, January 14, 2021 5:30 p.m. 1. WELCOME/OPENING REMARKS: Mayor Matthew Pigatt called the Workshop to order at 5:30 PM on Thursday, January 14, 2021, at Sherbondy Village Auditorium, 215 Perviz Avenue, Opa-locka, Florida. In his opening remarks, Mayor Pigatt stated that the workshop was called to discuss and get an update on the operational audit that was submitted to the Commission in 2019, with this time allowing the Commission to review what has been done so far and move the City's business forward. 2. ROLL CALL: The following members of the City Commission were present: Commissioner Alvin E. Burke, Commissioner John H. Taylor Jr., Vice Mayor Veronica J. Williams and Mayor Matthew Pigatt. Also in attendance were: City Manager John E. Pate (remotely), City Attorney Burnadette Norris - Weeks (remotely), and City Clerk Joanna Flores. Commissioner Chris Davis was not in attendance. 3. INVOCATION: The invocation was delivered by Vice Mayor Williams. 4. PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was recited in unison. 5. PUBLIC COMMENTS: City Clerk Flores announced the protocol for public participation at city commission meetings. City Clerk Flores stated there were no public comments provided. 6. DISCUSSION ITEMS: • City of Opa-locka and Opa-locka Community Redevelopment Agency Operational Audit Mayor Pigatt gave City Manager Pate the floor. 1 Workshop Meeting Minutes — January 14, 2021 City Manager Pate provided a historical background, explaining that an operational audit of the day-to-day operations of the City was conducted in 2019, which developed 99 findings. The City provided a response and was given approximately 18 months to implement policies, procedures and various other remediations to address the 99 fmdings. In December of 2020 the Auditor General's Office contacted the City Manager's Office to schedule the 99 findings review for March of 2021, providing a template for the City to provide preliminary responses to the findings to be submitted in mid -February, and then have an on -site visit in March. Manager Pate turned the floor over to Budget Director Robert Anathan to go over the spreadsheet's format, answer any Commission questions and have an open dialogue with staff. Budget Director Anathan explained that the format for the conversation is the format provided by the State, including the left and center columns that the State provided, while the right-hand column is filled in by the City with actions taken to resolve the findings. He added that the report is being updated daily, and the report they received on Tuesday was updated as of 1:00 PM that aftemoon. Because of the limited time left, that report was not reviewed by the City Manager or the Assistant City Manager. Mr Anathan explained that what the Commissioners have at this point is his commentary based on his work with the various department heads, to be responsive to the operational audit. The report indicates there are sixteen unresolved items, one of which he discovered in his files today that he had received input on in December, bringing the unresolved items down to fifteen. At ten minutes to five this evening, he got updated on nine more, which will have to be folded in and are not reflected in the report, demonstrating the real-time basis in which the document is being updated. The Director asked for guidance on whether the Commission wanted him to review all 99 items, or just answer any questions that might come up. City Manager Pate suggested to provide background for the newly elected officials, by going over highlights of key areas and categories by department, including discussing the CRA and CMO in addition to areas of the report where there will not be a favorable change. The Manager offered as examples the finding regarding the City Manager search, acknowledging that there is nothing that can be stated in the affirmative that is going to change anything that occurred in the past, including potential corruption or policy violations. He added that the Budget Manager may want to touch on finding number one, and the City being in a financial emergency, which will not be resolved in March, when the City will still be in the financial emergency. Manager Pate stated that if Director Anathan touched on those caveats for the newly elected officials, he believes that the Commission can build from there. Budget Director Anathan stated that it is challenging, but he will see what he can do with it and explained that in some areas of the 99 fmdings, the State is looking for documents, policies and procedures while in other areas they are looking for things to be fixed and is more of a position statement. He will try to pick and choose, but if it becomes too laborious, he asked that someone let him know he is getting too much into the weeds, and he will try to take a different direction. 2 Workshop Meeting Minutes — January 14, 2021 Vice Mayor Williams asked Budget Director Anathan to present the findings one by one in order. Mayor Pigatt asked Budget Director Anathan if the newly elected Commissioners were provided the original report packet with the findings and all of the background information. Director Anathan stated that he did not do that and is not aware what was done in terms of the Commissioner briefings. Clerk Flores stated that she asked that same question to Legislative Aide Grice, who said he had provided it to the newly elected officials. Director Anathan presented the 99 findings spreadsheet; a copy is hereby attached to these minutes. Mayor Pigatt opened the floor for questions and comments. Mayor Pigatt asked Director Anathan how many of the findings have to be resolved by the time the auditors arrive in person. Director Anathan stated that he does not have a precise answer, adding that if the standard is perfection then the City won't do as well as it could, but if the standard is how far the City has come in the 18-24 months since the audit, then he thinks the City is going to do very well because this is lightyears of improvement from what the audit identified two years ago. While he was not aware of any number, he said that maybe the Manager has been exposed to a number, but he thinks it is going to be a definition of what the bar is going to be, and he hopes it will be in terms of the improvements implemented. City Manager Pate stated that he has had some conversations about what the measure will be, but has not gotten any clear feedback from the Auditor General's Office. The Manager committed to reaching out to his contact there, who had reached out to him in December, to look at that more closely. While he acknowledged that statute does speak on it, he did not want to quote it because he did not have it in front of him. Mayor Pigatt stated that based on last year's House Bill 1209 on the dissolution of municipalities, one of the criteria was a Grand Jury or Auditor General issuing a report that contains a significant number of findings. The Mayor added that the State would have been able to act had the bill passed, if the municipality failed to resolve five or more of those findings within twelve months of the issuance of the report. He asked how many are in a satisfactory state right now. Director Anathan said he doesn't have a number at his fingertips, but that some like the audit by definition can't be deemed to be satisfied as of this moment. The Director stated that by the time the report goes in on February 28th that the City should be in a position to discuss every one, and where a long-term issue is involved, indicate the progress that has been made so far. Having six 3 Workshop Meeting Minutes — January 14, 2021 weeks from tonight, he asserted that they are mostly all doable, and if the number is five, then that creates the standard for moving forward. Mayor Pigatt stated that's based on the proposed bill, but that he believes the City should shoot way higher than that. He recalled a report that the Commission received from the City Manager's Office on December 4th, which stated that 45 of the 99 findings were satisfactory, which the Mayor acknowledged was a huge accomplishment. The Mayor said he is looking forward to having the auditors coming in and verifying that it is satisfactory for them. He shared that this is extremely important to the Commission, recalling that when it was submitted, it was directed at the Commission including the Mayor's name on the letter, so it must be handled very carefully. Mayor Pigatt expressed that it was one of the most enlightening documents he has ever read about the conditions and state of the City of Opa-locka, helping to formulate a game plan than can be put in place to address a myriad of issues, not just the base -level recommendations that the Auditor General's Office put out, but it gives the Commission and opportunity to look at what the City can do even better. He looks at it as a blessing to have a clear analysis of what needs to be done to make sure that the government operates in the best interest of the people. Mayor Pigatt asked if those that are works in progress or are unresolved, have had a work plan attached to them, including a timeline for their completion. Director Anathan stated that by definition, the work plan is going to cover the next three to four weeks. Of the sixteen unresolved on the page, one clearly has a policy procedure that he had lost track of that he got in December, and he got updates tonight on nine which he has to work through to make sure that they fully identify all of the recommendations that have been put forth by the State. The Director reported that the good news is he doesn't have a budget to worry about at the moment, or much else to worry about, so this is full time employment for him. Mayor Pigatt stated that what he is hearing is that the timeline is by the time the auditors gets here and the work plan is for Mr. Anathan to make sure it gets done. The Mayor pointed out to the Commission that there are a number of categories that have a significant number of findings, including finance, purchasing, budget and the CRA which narrows down what the Commission should take a look at in more detail. He expressed that the audit findings document along with the state of the City report are critical in helping to understand the current challenges that must be addressed first as a City. There are a few that he thinks are significant, including securing an internal auditor so that the City can have a person who can make sure that policies and procedures are being followed. The Mayor noted that over and over in the document, there were policies and procedures that were not in place, or they were not being followed. As he explained, one of the recommendations speaks to how key level staff and the City Manager's Office are critical to making sure that policies and procedures are being followed. Mayor Pigatt asserted that he thinks it is important to look into an internal auditor so that this doesn't happen again within the City. He also asserted the importance of looking into when the City is going to get a person for purchasing, because it is a large part of what the City government does and has direct connections to finance, 4 Workshop Meeting Minutes — January 14, 2021 budget, and the overall movement of the City. What the Commission would like to see as a priority in the budget, needs to be provided to the City Manager, including whether the City is going to get a building & licensing person, a purchasing person, or people to clean up the parks in operations. In concluding his remarks on the operational audit, Mayor Pigatt stated that he really hopes the Commission really goes through the background, because it is extremely enlightening. Vice Mayor Williams remarked that it was nice to know that the Commission's vote on asset management will assist in resolving a few of the findings, which made her feel very comfortable with the decision. The Vice Mayor also wholeheartedly agreed with Mayor Pigatt's statement. She inquired about Finding #72, asking if there is a bid process, including the number of bids that must be turned in for the acceptance of a vendor, and whether or not the lowest bidder is chosen. City Manager Pate said that her inquiry falls under budget/procurement, and that Budget Director Anathan is a subject matter expert, so he will let him answer her. Budget Director Anathan explained that the City's procurement code requires that a more rigorous set of quotes be acquired as the amount of goods and services to be obtained becomes greater. Specifically, anything under $1,000 is just basically a phone call to go for it. Between $1,000 and $2,500, two phone quotes must be obtained and documented as justification. Between $2,500 and $7,500, three phone quotes must be obtained and documented. Between $7,500 and $25,000 three written quotes must be obtained. Anything over $25,000 has to be brought to the Commission for approval and requires a formal bidding process, going out with an RFP and an evaluation committee, unless it falls into an exemption category. Vice Mayor Williams asked for clarification on whether a phone or written quote are needed if a bid is not over $1,000. Budget Director Anathan stated that in essence it is just necessary to pick up the phone, get the price, submit the requisition, get the purchase order, present it to the vendor and get the goods and services. Commissioner Burke thanked City Manager Pate, his staff, and Budget Director Anathan, acknowledging that things look a whole lot better than they did when the Commission was first elected. The Commissioner encouraged them to keep doing the work that they are doing, in hopes that by the time the auditors get to the City in March, that they will be satisfied. Commissioner Taylor asked if the position of the auditor is being advertised. City Manager Pate stated that it has not even been determined if it will be staffed as an internal position or if it will be contracted out, but it will be explored as Mr. Anathan spoke on it earlier. The Manager acknowledged that once the 99 findings have been implemented and the changes have been made, the Commission will want to make sure the policies continue to be adhered to 5 Workshop Meeting Minutes — January 14, 2021 Joao Flores, CMC City Clerk through an internal audit function, to ensure that the City can continue moving forward in a positive direction. Commissioner Taylor asserted that he just wants to ensure that once the audit is passed, that the great City status can be maintained. City Manager Pate thanked Mr. Anathan for his hard work and effort to navigate the City through the process and being the liaison to the staff. He reported that the Auditor General's Office reached out to his office in December, and that he told them that we will see what happens in consideration of the pandemic, but they will be in the City in March. The Manager added that he has been having conversations with the Governor' s designee in regard to the visit, and additional conversations will be had about what will be looked at for a favorable result, to define the measures and goals for the City. Mayor Pigatt closed by stating that he thinks this is a huge step for this City and is extremely important. He thanked all of the staff that has been putting in the work, including Mr. Anathan that has been leading, and Manager Pate for making sure it all gets done in a timely manner, so that when the audit comes around, Opa-locka looks like a City on the move. Mayor Pigatt concluded by thanking the Commission and staff for coming out two nights in a row, in order to handle the people's business. 7. ADJOURNMENT: There being no further business to come before the City Commission, it was moved by Commissioner Burke, seconded by Vice Mayor Williams to adjourn the meeting at 7:06 p.m. ST: Matthew A. Pigatt Mayor 6 Workshop Meeting Minutes — January 14, 2021 City of Opa-Iooka and Opa-Iocka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to RNoIve Finding a 1 Although the City generally complied with the provisions of the State and Local Agreement of Cooperation executed pursuant to the Office of the Governor Executive Order No. 16-135 and the Financial Emergency Board recommendations, the City did not comply with the Agreement provisions pertaining to the 5 -year financial recovery plan and budget or the Board recommendations pertaining to motor vehicle use and tangible personal property accountability. To improve the City's financial condition, the City should ensure timely compliance with Agreement provisions and Financial Emergency Board recommendations. Addressing items in the Summary of Findings, City believes it is either in or will be in compliance with the Agreement: (1) Five-year financial recovery plan submitted on schedule and accepted without modification, (2) FY 21 budget submitted on schedule and accepted without modification. (3) Vehicle policy implemented to ensure only used by appropriate employees under appropriate conditions with no vehicles assigned to elected officials. (4) Asset consultant engaged to meet fiscal audit and operational audit requirements. City is in close and regular communication with State Office of the Inspector General to ensure ongoing progress. 2 Our financial condition assessment procedures disclosed deteriorating City financial conditions. Of 16 key financial indicators, 13 indicated an unfavorable rating. The City should take appropriate and timely actions to address the various control deficiencies discussed in this audit report that affect the City's financial condition and implement the 5 -year financial recovery plan as required by the State and Local Agreement of Cooperation, Five-year recovery plan accepted without modification and implemented. FY 20 very preliminary results reflect substantial surpluses which should translate into an improving financial condition assessment with completion of the FY 20 financial audit. 3 The City did not comply with its General Fund reserve policy and did not establish reserve requirements consistent with Government Finance Officers Association (GFOA) recommendations. The City should ensure that the General Fund reserve amount is maintained in accordance with the City's General Fund reserve policy and document consideration as to whether the policy should be revised to be consistent with GFOA best practices. A General Fund reserve policy has been implemented consistent with GFOA standards and highlighted in the FY 21 budget and five-year recovery plan with the General Fund available fund balance targeted to be $4.5 M vs. a GFOA target of $3.3 M. Although implemented, this policy remains to be codified. 4 The City Commission had not established target amounts of working capital that should be maintained for the City's three enterprise funds. The City Commission should adopt a policy establishing minimum target amounts of working capital funds that should be maintained for the City's three enterprise funds. A policy has been implemented consistent with GFOA standards and highlighted in both the FY 21 budget and five-year recovery plan. Although implemented, this policy remains to be codified. Page 1 City of Opa-Iooka and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find #1 Summary of Finding, J Recommendation Actions Taken to Resolve Flndlnj 5 The City did not timely provide for and submit required annual financial audits and annual financial reports. Consequently, through July 2018, State agencies had withheld from the City approximately $1.2 million. The City should enhance efforts to ensure, in accordance with applicable State law and City ordinances, that annual financial audits are completed and timely presented to the City Commission and timely filed with the Auditor General and that audit reports and AFRs are timely submitted to the Department of Financial Services (DFS). The City has now completed four financial and ancillary audits retroactively through FY 18 and is scheduled to complete FY 19 by March, 2021 and FY 20 by June, 2021 to become fully current and compliant. 6 As of February 2019, the City's strategic plan had not been updated since September 2014 to reflect changing circumstances, impacting management's ability to implement the plan and effectively prioritize the use of City resources. To enhance the efficiency and effectiveness of City operations, the City strategic plan should be monitored and periodically reassessed and updated to address changes in City circumstances. City is in preliminary phases of updating the City's strategic plan. 7 During the period September 2014 through April 2018, the City experienced significant turnover in certain key management positions, which may have contributed to the numerous control deficiencies and instances of noncompliance disclosed in this report. To promote efficient operations, high quality services, and the consistent application of City policies and procedures, the City should strive to provide stability in key management positions. Such efforts should include documented consideration of any City actions that may increase turnover in key management positions and strategies to limit the negative effects of such actions. Unresolved 8 The City had not established an internal audit function or otherwise provided for internal audit activities to assist management in maintaining a comprehensive framework of internal controls. The City should establish an internal audit function to assist management in maintaining a comprehensive framework of internal controls. If it is not feasible to establish a separate internal audit function, the City should consider either assigning Internal audit responsibilities to City employees or obtaining the services of an accounting firm. The five-year plan has limited capacity for additional staffing and an internal auditor is not envisioned at this time. Financial operations should be fully restored to effective operations by the end of FY 21 and it is anticipated that limited outside auditing services will be incorporated into the FY 22 budget. Also see comments in Risk Assessments (Finding #10) Page 2 City of Opa-Iooka and Opa-looka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 9 The City needs to establish policies and procedures for communicating, investigating, and reporting known or suspected fraud. In addition, the City Honor Code needs revising to ensure the provisions specifically pertain to City employees and officials. The City should establish policies and procedures for communicating, investigating, and reporting known or suspected fraud. Such anti -fraud policies and procedures should (1) define fraud and provide examples of acts constituting fraud; (2) require individuals to communicate and report known or suspected fraud; (3) provide for anonymous reporting of Whistle Blower Act or Honor Code violations or known or suspected fraud; (4) require officials to keep accurate records of known or suspected fraud reported; (5) assign responsibility for investigating potential incidents of fraud and for taking appropriate action; and (6) provide guidance for investigating potential and actual incidents of fraud, reporting evidence obtained by the Investigation to the appropriate authorities, and protecting the reputations of persons suspected but determined not guilty of fraud. The City should also revise the Honor Code to ensure the provisions specifically pertain to City employees and officials. Unresolved 10 The City did not perform documented periodic risk assessments to help ensure that adequate internal controls were in place to minimize fraud risks and control deficiencies that could adversely affect City operations. The City should document the performance of periodic risk assessments that identify and analyze fraud risks and control deficiencies and prescribe appropriate responses. The City's financial consultant is developing a high level risk assessment plan to permit cross - department risk assessment teams to assess department risk profiles. Page 3 City of Opa-locka and Opa-look. Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find #( Summary of Finding Recommendation Actions Taken to Resolve Finding 11 City controls over the budgetary process need enhancement. The City should enhance controls over the budgetary process to ensure that (1) budget hearings are advertised and held in accordance with State law, (2) Commission -approved budgeted expenditures are properly recorded in City accounting records; (3) actual expenditures are limited to budgeted amounts as required by State law; (4) City Managers prepare and make public quarterly reports comparing actual to budgeted expenditures; (5) the Finance Department prepares and distributes monthly budget -to -actual reports as required by City ordinances; and (6) budgets are periodically amended to reflect changes in City expectations for revenues and expenditures. In compliance except as noted: (1) TRIM compliance package accepted with one comment - In regard to required budget advertisement, City received permission to modify display of reserves before placing advertisement. In reviewing compliance package, State reversed itself, but indicated not material. (2) Budget amendments promptly posted after State approval, verified through controls and posted promptly on City website. (3) Controls in procurement system blocks purchases exceeding available budgets, precluding exceeding budgets. (4) Quarterly budget / actual reports will occur in latter FY 21. For last several years Accounting, with limited resources, has focused on prior year audits, resulting in recording of current year results not occurring timely, undermining ability to produce meaningful quarterly reports (5) Monthly reports not being produced as noted in prior comment although all divisions have access to the reporting system to regularly review results that have been recorded. These reports will be available in latter portion of FY 21. (6) Budgets are continuously amended as needed with six approved in FY 20 and the third one under development as of the start of January for FY 21, 12 City records did not support the equitable allocation of General Fund administrative costs to City enterprise funds. The City should utilize a documented cost allocation methodology to equitably allocate administrative costs to City enterprise funds. Allocation procedures developed, documented and utilized in development of FY 21 budget and five-year plan. General Fund administrative expense, insurance , IT, vehicle maintenance and municipal complex occupancy expense allocated among six funds. Page 4 City of Opa-looks and Opa-Iooka Community Redevelopment Agency - Operatlonal Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation 1 Actions Taken to Resolve Finding 13 Accountability over resources received by the City for participation in a law enforcement revenue sharing program needs enhancement. The City should: (1) provide separate accountability in the City accounting records for the Federal Sharing Program proceeds; (2) timely record Federal Sharing Program activity in the City accounting records; (3) obtain missing bank statements for the accounts that receive Federal Sharing Program wire transfers and document the reconciliation of those statements to the City accounting records; (4) establish procedures to periodically reconcile the forfeiture logs, Application for Transfer of Federally Forfeited Property (DAG- 71 Forms), Annual Agreement and Certification (Annual Forms), and City accounting records to each other and make necessary adjustments to the applicable records based on the results of the reconciliations; (5) after a seizure, or the Federal adoption of a State or local seizure, timely submit a DAG-71 Form to the United States Department of Justice (USDOJ); (6) timely file Annual Forms with the USDOJ within 60 days after the City's fiscal year end; (7) investigate and resolve the differences in amounts reported on 2015 and 2016 Annual Forms and complete and file corrected Annual Forms; and (8) ensure completion of annual Federal single audits within 9 months after the City's fiscal year end. (1) New accounts being implemented for each of four sources of forfeitures to provide clear identification for reporting purposes. (2) City now timely deposits and records all receipts after all required forfeiture requirements have been satisfied. (3) City now has all bank statements, (4) (5) (6) City is now current in filing of annual report, (7) Sorting out issues related to FY 15 and FY 16 annual reports is a major challenge due to how records were then maintained and is deferred until Finance more caught up (9) Single audit done for FY 16 & FY 18, not required for FY 17 and will be part of FY 19 audit, 14 The City's management of State grants was ineffective as the City did not always ensure that grant expenditures were allowable, records were retained to support the allowability of grant expenditures, reimbursement requests were filed for allowable grant expenditures as soon as practicable, grant moneys were expended during the grant award period, or required grant reports were prepared and timely filed with the grantor. The City should establish grant management policies and procedures to ensure that (1) grant expenditures are allowable, and records are retained to support the allowability of all expenditures for which reimbursement is requested; (2) reimbursement requests are filed for allowable grant expenditures as soon as practicable; (3) grant moneys are expended during the grant award period; and (4) required grant reports are prepared and timely filed with the grantor. Finance -prepared policy and procedures addressing Roles and Responsibilities, Pre - Award Procedures (research, reviews and applications) and Post -Award Procedures (acceptance, accounting set-up, monitoring and report, accounting, procurement, extensions, close outs, annual audit, monitoring site visits and audits, file management and records retention and effective / revision date, CIP/Grants Coordinator (CGC) responsible for indicated steps. Page 5 City of Opa-Iocka and Opa-Iocka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding_ Recommendation J Actions Taken to Resolve Finding 15 The City did not always provide the accountability required by Department of Environmental Protection grant award and loan agreements. In addition, the City did not always promptly record grant and loan receipts in the City accounting records. During the period October 2015 through April 2017, the City received grant and loan proceeds of $2.1 million from the Department of Environmental Protection. The City should enhance procedures to provide separate accountability for grants and loans In accordance with the respective agreements and to ensure and document that all restricted moneys were used for authorized purposes. Additionally, the City should ensure that all grant and loan receipts are promptly posted to the accounting records. (1) Each grant and loan has a separate account.(2) CIP / Grants Coordinator submits authorized expenditures to receive funds associated with the grants and loans with disbursements based on eligible expenditures, (3) All receipts of grants and loans posted as received. 16 Contrary to DFS guidance, the City had not established special revenue funds to maintain separate accountability for fuel tax revenues. The City should establish separate accountability for fuel tax revenues and expenditures by using separate special revenue funds in accordance with the Uniform Accounting System Manual (DFS Manual) . Fuel tax revenue and roadway expenditure related to this revenue are recorded in Safe Neighborhood CIP fund. However, the fund also has limited other funding sources and additional projects. Due to the limited amount of additional activity, the fuel tax revenue and resultant roadway work are easily identifiable, meeting the intent of a Special Revenue fund but not the formal definition of a Special Revenue fund. City's financial consultant is reviewing to determine if a separate fund should be established to further segregate gasoline tax revenue and associated roadway expenditures. 17 The City did not comply with the requirements included in an Interlocal agreement between the City and Miami -Dade County (County) regarding administration and use of discretionary sales surtax proceeds. As a result, the County suspended surtax distributions to the City effective November 2015 and, as of February 2019, the surtax distributions remained suspended due to the City's continued noncompliance. The City should implement policies and procedures to ensure compliance with the Interlocal agreement surtax requirements and take prompt action to fully resolve the issues noted in the County Audit Division's surtax review report. The underlying issue has been the lack of City financial audits and the ancillary audits to be provided to the County Audit Division. Completion of City financial audits for FY 15 thru FY 17 have been accepted by the County, resulting in the release of $901,000. The completed FY 18 audit has been recently approved and City will receive approximately $246,000. It is anticipated City will be in full compliance by the end of FY 21 with completion of FY 20 audit as of June, 2021. Page 6 City of Opa-Iocka and Opa-Iocka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find * Summary of Finding J Recommendation Actions Taken to Resolve Finding 18 City procedures need enhancement to ensure that interfund borrowings and transfers are properly accounted for and comply with City ordinances City procedures should be enhanced to ensure that future interfund borrowings and transfers are properly accounted for and comply with City ordinances. Specifically, the procedures should require (1) the Finance Director to document a determination that any borrowed funds will not be needed during the lending period and that the funds for repayment will be available within a 2 -year period (2) only surplus moneys be transferred from the Water and Sewer Fund; and (3) the City Commission to take official action to approve all interfund borrowings and transfers. It isn't the City practice to loan or transfer resources between funds. This did occur once in the period of FY 13 to FY 15 when $344,972 was transferred from the Water -Sewer fund to the CRA fund. This was rectified in FY 20 when this money was transferred back to the Water -Sewer fund after being approved by both the CRA Board and the City Commission. If in the unlikely possibility the need for this should arise in the future, a policy and procedures will be implemented in accordance with GFOA standards and the guidance provided by this audit. 19 The City had not established controls to provide adequate accountability for special events, including the donations and expenditures for such events. The City should establish policies and procedures to require, for each special event, City Commission approval; periodic evaluations of the economic viability of the event, including determinations of the amount of public funds needed to subsidize the event; specific guidelines for soliciting donations and providing receipts to donors; and separate accountability for donations and expenditures. To be presented at a future Commission meeting. 20 City procedures were not effective to ensure that payments were made from the appropriate bank accounts or that financial transactions were properly accounted for in the City accounting records. The City should enhance procedures to ensure that payments are made from the appropriate bank account and financial transactions are properly accounted for in City accounting records. The enhanced procedures should address training for applicable City employees regarding the use of funds and account codes as prescribed in the DFS Manual. The City's Procurement function reviews all requisitions to ensure proper assignment of account codes so that funds come from the correct bank accounts. The Accounts Payable function further verifies this information. All Finance employees have been provided the updated Uniform Chart of Accounts, 2021 edition and City has purchased the Governmental Accounting, Auditing and Financial Reporting (GAAFR) guide for training purposes. Page 7 City of Opa-Iooka and Opa-looka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Flndlnq Recommendation Actions Taken to Resolve Finding 21 Journal entries to adjust account balances and transactions in the City accounting records were not always adequately supported or reviewed and approved. The City should ensure that journal entries are properly supported by journal entry forms and additional documentation as necessary to support the purpose for and propriety of the amount of the journal entries and that evidence of supervisory review and approval of all journal entries is documented. Policy and procedures in place (1) describing the preparation of journal entry forms and (2) supervisory review and approval 22 City controls over bank account reconciliations need improvement to ensure documented timely performance and review by individuals not assigned cash handling and journal entry duties; reconciling items are accurately identified, promptly and thoroughly investigated, explained, and documented; required adjustments to the general ledger cash account balances, as a result of the reconciliations, are timely made; and online access to electronic bank account statements is granted to appropriate employees. The City should establish effective bank account reconciliation policies and procedures to require and ensure that (1) timely bank account reconciliations are accurately performed, appropriately documented, and reviewed and approved by individuals not assigned cash handling and journal entry responsibilities; (2) reconciling items are accurately identified, promptly and thoroughly investigated, explained, and documented; (3) required adjustments to the general ledger cash account balances, as a result of the bank account reconciliations, are timely made to avoid overdraft fees; and (4) online access to bank account statements is granted to appropriate employees. Finance -prepared policy and procedures adequately addresses this finding including (1) Downloading prior month bank statements and prior month General ledger, (2) Development of deposit spreadsheets, (3) Preparation of reconciliation report, (4) Finance Director review once balanced, (6) Filing instructions. 23 Contrary to State law, the City had not established policies and procedures to ensure adequate integrity, security, confidentiality, and auditability of business transactions conducted using electronic funds transfers (EFTs). In addition, City controls need enhancement to ensure and document that EFTs are only made by authorized personnel and for authorized purposes. The City should establish EFT policies and procedures and enhance controls to ensure (1) the duties of initiating, reviewing, and approving EFTs are appropriately separated from the duties of preparing bank reconciliations and journal entries; (2) the identities of persons initiating, reviewing, and approving EFTs and the authorized purpose for the EFTs are documented in City records; (3) banking agreements for all financial institutions conducting business with the City identify, by name, the employees authorized to initiate EFTs and those authorized to review and approve EFTs, and establish employee EFT dollar limits; and (4) banking agreements are timely updated for City personnel changes and EFT authorization privileges of employees who separate from City employment are promptly revoked. Finance -prepared policy and procedures adequately addresses this finding including (1) establishment of agreements that (a) identify account title, (b) include manual signatures , (c ) documentation retention requirements, (d) timely institution process (e) institution acknowledgment (f) identification of staff permitted to do EFTs and (2) operating activities (a) separation of duties, (b) timely updating of agreements (c) documentation of transactions Page 8 City of Opa-looka and Opa-locka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 24 The City did not timely notify apparent owners of unclaimed property or annually report and remit unclaimed property to the Department of Financial Services, contrary to State law. The City should establish policies and procedures to require and ensure timely notification to owners of unclaimed property and that unclaimed property is annually reported and remitted to the DFS. Such policies and procedures should assign responsibility to a specific position for such notification and reporting. Additionally, the City should file all past due reports and deliver the applicable unclaimed property to the DFS as soon as possible. Unresolved. 25 The City did not timely submit to the State's Chief Financial Officer (CFO) the statutorily required annual reports of the City's public deposit accounts. The City should establish policies and procedures designating to an employee responsibility for annually preparing and submitting the required report of public deposit accounts to the CFO. Additionally, the City should establish procedures to require supervisory personnel to ensure that the report is accurate and timely submitted pursuant to State law. Finance -prepared policy and procedures adequately addresses this finding, including (1) identification of all open public deposit accounts (2) reconciliation of discrepancies (3) submission by November 30th after Finance Director review and approval. 26 City controls over petty cash funds need enhancement to ensure that petty cash disbursements are supported by dated receipts and documentation evidencing the authorized public purpose and that petty cash funds are timely counted and reconciled to receipts. The City should revise petty cash policies to prescribe specific purposes for using the petty cash fund. The City should also enhance controls over petty cash to ensure that (1) City records are maintained in sufficient detail to document the authorized public purpose for all petty cash disbursements, (2) all petty cash fund disbursements are supported by dated receipts and receipts do not exceed $50; and (3) petty cash funds are counted and reconciled to receipts weekly. Policy & procedures implemented - (1) Describes how petty cash funds are maintained. (2) Required supporting documentation, (3) State Sales Tax Exemption. (4) Replenishment Procedures (5) Restrictions, (6) Forms Page 9 City of Opa-locks and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find #i Summary of Finding Recommendation Actions Taken to Resolve Finding 27 City records did not evidence that the City exercised due diligence in determining the fiscal viability of purchasing a $7.9 million building to house its administrative offices and other tenants. Specifically, the City did not ensure the accuracy of reported renter lease information and building operating costs prior to purchasing the building and did not maintain records to support significant assumptions regarding the rental income anticipated to be generated from other tenants. The City should establish policies and procedures that set forth guidelines and procedures to require, prior to the purchase of real property, that due diligence is performed in researching the property by obtaining one or more independent appraisals and inspections, verifying occupancy, obtaining copies of active lease agreements, and evaluating and considering the seller's operating information for the property. Such policies and procedures should clearly assign responsibility for obtaining and retaining records to support the performance of such procedures. In addition, the City should maintain records to support significant assumptions regarding the rental income anticipated to be generated by any City -owned real properties and take prompt and appropriate action to lease vacant Town Center I office space to maximize rental revenue. Procurement policy implemented as follows: (1) Statement to be developed documenting the need for additional real estate. (2) Acquisition price based on three independent appraisals. (3) Professional engineering evaluation required. (4) Three years of certified operating results required. (5) If rental property, three years of certified results required. (6) Property manager engaged for rental properties. (7) Financial options evaluated. (8) City Attorney approval required. (9) Purchasing Officer to coordinate. 28 The City needs to enhance construction administrative policies and procedures to ensure that construction contractors are competitively selected in accordance with State law and City ordinances, construction services and related costs are not duplicated, contract addenda do not provide compensation for work already performed, City Commission approval is obtained for change orders exceeding $25,000, contractors are timely paid to avoid work stoppages, and contractors obtain payment bonds. The City should enhance policies and procedures for construction administration to ensure compliance with applicable laws and City ordinances and that adequate documentation is obtained and maintained to support all phases of construction projects. Specifically, the City should ensure that (1) construction contractors are competitively selected in accordance with State law and City ordinances; (2) construction services and related costs are not duplicated, and contract addenda do not provide compensation for work already performed pursuant to original contracts; (3) change orders exceeding $25,000 are not processed without City Commission approval; (4) contractors are timely paid to avoid work stoppages; and (5) contractors obtain payment bonds to provide assurance that subcontractors and materials suppliers will be paid for construction projects. (1) City adheres to revised procurement code which requires all construction activity $25K or more is competitively bid and lesser amounts in accordance with quote requirements. (2) All invoices are reviewed by PW Director / Staff to ensure accuracy of charges. (3) All change orders have been taken to Commission as budget amendments. (4) Payment procedures have been slowed by having to prepare packages for submission to State. Page 10 City of Opa-Iooka and Opa-Iooka Community Redevelopment Azenoy - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Flndin9 Recommendation Actions Taken to Resolve Finding 29 The City had not established surplus land disposal procedures. Absent such procedures, the City did not always timely collect and deposit land sale proceeds, timely record land sales in City accounting records, or timely correct deed errors. The City should establish and implement policies and procedures that delineate the responsibilities of employees involved in surplus land declarations and the related collection of land sale proceeds. Such policies and procedures should also ensure that land sale proceeds are promptly collected and deposited in the bank and timely recorded in City accounting records. In addition, the City should also take appropriate action to address the deed error related to the Parcel 4 sale. Policy and procedures implemented as follows: City Manager will (1) determine surplus status and advise Commission, (2) have property declared surplus by resolution. (3) Determine most appropriate process to sell and how to advertise. (4) recommend most favor bid or reject all bids. (5) If a bid is deemed acceptable, submit to Commission for approval. City Attorney will (1) Prepare appropriate resolutions, (2) Oversee closing process, (3) Ensure deed recording. Finance Director will (1) Ensure transaction properly recorded in City accounts and proceeds timely deposited. Page 11 City of Opa-Iocka and Opa-locks Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding 1. Recommendation Actions Taken to Resolve Finding 30 The City had not established appropriate accountability for its tangible personal property (TPP) with acquisition values totaling $11.5 million. To establish and maintain appropriate accountability for City TPP, the City should update the Manual to establish TPP accountability and capitalization thresholds and include comprehensive policies and procedures for the acquisition, management, and disposal of TPP items and for maintaining control over attractive and sensitive items with costs below the TPP capitalization threshold. The Finance Department Policies and Procedures Manual (Manual) should also require that employees receive the training necessary to understand and correctly record purchased capital assets consistent with the capitalization threshold. In addition, the City should (1) ensure that all applicable fields for each property item are properly completed in the City's property management system and (2) affix property tags, or otherwise mark, each TPP item with a unique property number. Further, the City should document compliance with the Manual by physically inventorying ail TPP on an annual basis, comparing the inventory to the TPP records, and reconciling any noted discrepancies. Any property items located during the inventory process that meet the established capitalization threshold should be included in the inventory records, and items not located should be promptly reported to the property custodian to cause a thorough investigation to be made. Finally, based on the results of the investigation, the City should file a report with the appropriate law enforcement agency for items not located. City has engaged consulting firm to conduct a complete asset valuation study, including identification and tagging of all tangible personal property, developing insurance valuations and to provide assistance in development of supporting polices and procedures. Scheduled for completion as of the end of March, 2021. City's current fixed asset system is deficient and full and effective implementation is dependent on City obtaining a state-of-the-art ERP which is intended to begin in FY 22. Page 12 City of Opa•looka and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Findln9 Recommendation Actions Taken to Resolve Finding 31 The City had not established policies and procedures to ensure that City property was adequately insured and had not developed a formal contingency plan in the event that uninsured losses are incurred in a catastrophic event. The City should (1) establish policies and procedures that address the level of insurance coverage to be maintained and the method to be used to determine insurable values; (2) enhance procedures to require periodic analyses of the adequacy of property insurance coverages, including a comparison of City -owned property and estimated replacement values to insured property and coverage amounts; and (3) develop a formal contingency plan that identifies financing resources that can be used to cover uninsured losses resulting from a catastrophic event. (1) As noted in Finding # 30 City has engaged consulting firm to conduct a complete asset valuation study including developing insurance valuations. (2) Firm will update annually and will assist in developing policies and procedures to accomplish this. Previously City relied on Florida Municipal Insurance Trust for this service. (3) City's first line of defense for catastrophic loss is the build up of reserves. It isn't believed that the City can obtain an affordable line of emergency credit at this time. 32 City records did not evidence City Manager approval and justification for employee take-home motor vehicle assignments. In addition, neither the City Employee Handbook nor any other City -established policies or manuals addressed elected official's use of City motor vehicles or the preparation and maintenance of motor vehicle usage logs. The City should enhance controls governing the assignment, use, and maintenance of motor vehicles by (1) ensuring that the City Manager documents approval and justification for each employee take-home motor vehicle assignment and (2) addressing the legal authority for elected officials' use of City motor vehicles in City policies and procedures and specifying the authorization documentation and monitoring requirements for such use. In addition, the City should enhance City policies and procedures to require motor vehicle usage logs that document, for example, the vehicle driver, vehicle usage mileage (beginning and ending odometer readings), and purpose for each use. To evidence the reasonableness and propriety of City motor vehicle use, the vehicle usage logs should be reviewed and approved by appropriate supervisory personnel, and retained. HR -developed policy includes the following: (1) Requirements, including City Manager or designee approval, for take home vehicles. (2) Elected officials not assigned City vehicles except on a limited basis for official use only. (3) Monthly vehicle logs to be used. 33 The City did not include the value of personal use of City motor vehicles in the gross income reported to the Internal Revenue Service (IRS) for applicable City officials and employees. City policies and procedures should be enhanced to ensure that the value of personal usage of City -provided motor vehicles is included in the applicable individuals' gross income reported to the IRS. This is now coordinated between HR and Finance resulting in 12 employees with take - home vehicles having this reflected in their gross income for tax purposes for FY 20. Page 13 City of Opa-Iocka and Opa-Iocka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding — _I 34 The City had not established policies and procedures regarding the use of its fuel pumping station. In addition, the City's fuel management system did not provide for adequate accountability of fuel pumping station inventory and fuel distributions to City officials and employees. If the City elects to re -open the fuel pumping station, the City should establish policies and procedures regarding use of the fuel pumping station. Such policies and procedures should provide enhanced measures to ensure that fuel is only pumped into City motor vehicles, provide for accurate tracking of fuel pumped for each City vehicle, and require comparisons of fuel usage with actual vehicle mileage (documented by vehicle usage logs) for reasonableness. (1) City has no plans to open fuel pumping station. City controls fuels usage through the WEX system with fuel cards which require vehicle mileage submitted with each fuel purchase, which precludes using card for private vehicles. Monthly reports distributed to departments for analysis. 35 The City had not established policies and procedures for motor vehicle repairs and maintenance. In addition, the City had not implemented a comprehensive motor vehicle preventative maintenance plan or a system for tracking each motor vehicle's repair and maintenance costs and documenting periodic motor vehicle cost -benefit analyses for vehicle disposition and replacement decisions. The City should (1) establish effective policies and procedures for motor vehicle repairs and maintenance; (2) implement a system for tracking each motor vehicle's repair and maintenance costs; (3) continue efforts to develop a comprehensive motor vehicle preventative maintenance plan; and (4) perform periodic documented assessments of motor vehicles to identify inoperable vehicles and determine whether such vehicles should be repaired, used for spare parts, or otherwise disposed of and replaced. (1) Comprehensive policy and procedure document developed. (2) City is acquiring software for tracking vehicle repair and maintenance costs. (4) Identification and processing of vehicles no longer cost -effective covered in policy. 36 City controls and records did not provide for adequate accountability over the purchase and use of the City's motor vehicle parts inventory. The City should (1) establish policies and procedures regarding the purchase, control, and use of repair and maintenance parts; (2) maintain a record of repair and maintenance parts purchased, used, and on -hand; and (3) implement a work order system or other methodology for documenting the use of repair and maintenance parts for City motor vehicles to associate parts costs with specific motor vehicles. Such information is useful in determining whether to repair or replace a vehicle and provides additional accountability for the use of purchased parts. Policy and procedures implemented covering (1) vehicle maintenance organization, (2) receiving, (3) purchasing parts and services, (4) interfacing with accounting, (5) parts storage (6) inventory control, (7) processing requisitions, (8) issuing parts, (9) stock replenishment, (10) maintenance of records and controls, (11) disposal of obsolete parts, (12) reports 37 Contrary to City ordinances, the City had not established debt management policies and procedures. The City should establish debt management policies and procedures that are consistent with GFOA best practices. Unresolved. Page 14 City of Opa-Iocka and Opa-Tooke Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # summary of Finding_ Recommendation Actions Taken to Resolve Finding 38 Contrary to GFOA best practices, the City contracted with its bond counsel in April 2015 without using a competitive selection process and paid the bond counsel $40,000 for services associated with issuance of the Series 2015A Tax -Exempt Capital Improvement Revenue and Refunding Note and Series 2015B Taxable Capital Improvement Revenue Note. The City should select professionals, such as bond counsel, by employing a competitive selection process whereby requests for proposals (RFPs) or requests for qualifications are solicited from a reasonable number of professionals. Selection of professionals such as bond counsel is covered within the procurement code. 39 The City did not always timely record and deposit cash collections or consecutively use prenumbered receipts for non -utility cash collections. The City should enhance controls over cash collections to ensure that (1) prenumbered receipts are used in consecutive order for all non -utility cash collections at all City cash collection points; (2) a control record is maintained for prenumbered receipts; and (3) cash collections are promptly recorded and deposited. Policy and procedures implemented: (1) Cashiers must account for numbered receipts, including voided receipts, (2) Current City finance system doesn't permit connection electronic connection between deposits and numbered receipts. (3) Cash receipts are normally recorded and deposited daily (Brinks) 40 The City had not established policies and procedures for properly and consistently calculating, approving, and recording permit fees or for maintaining permit applications and other documentation supporting the permits issued. The City should establish policies and procedures to ensure, among other things, that permit fees are properly and consistently calculated and approved and that permit applications and other documentation supporting the permit issuance are retained in City records. In addition, the City should refund to applicants the $132 over assessed permit fees and seek to collect from applicants the $492 under assessed permit fees. Policy and procedures implemented: (1) IT automated department. (2) Building Official ensures correct rates being used. (3) Building Official to review all calculations before permits issued. (4) Major applications require electronic submission. (5) Prior over and under charges too old to correct, 41 Contrary to State law, as of August 2018, the City had failed to remit to the Department of Revenue (DOR) approximately $3 million in collected traffic signal penalties for red-light violations. The City should weekly remit to the DOR the traffic signal penalties collected as required by State law. Additionally, the City should continue to transfer to the DOR the past due amounts and contact the DOR about establishing a structured payment plan. (1) City is forwarding current -year State fees to State on regular basis. (2) State fees received by City prior to October 1, 2019 being discussed at State level Page 15 City of Opa-looka and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find #' Summary of Finding Recommendation Actions Taken to Resolve Finding 42 The City needs to revise City ordinances to specify how to account for utility services customer deposits and the time frame for refunding deposits to customers. In addition, City controls need enhancement to require that the customer deposits payable account balance be periodically reconciled to the customer deposits subsidiary ledger balance and to ensure that customer deposits are timely refunded. The City should revise the City ordinances to specify how to account for utility services customer deposits and the time frame for refunding deposits to customers. The City should also enhance controls to require and ensure that (1) the customer deposits payable account balance is periodically reconciled to the customer deposits subsidiary ledger balance and the customer deposits bank account balance and that any differences are promptly resolved and (2) customer utility services deposits are promptly refunded after utilities are disconnected. Policy and procedures have been implemented as follows: (1) Outlining steps to be taken in closing accounts (2) indicating periodic reconciliation of customer deposits subsidiary ledger balance and customer deposits bank account balance (annually at a minimum) and (3) target of returning deposits within four to six weeks. 43 The City needs to establish policies and procedures to provide for the prompt billing of utility services customers, progressive strengthening of collection efforts for delinquent accounts, and reconciliation of the amount of water purchased from the County to the amount of water billed to City utility service customers to identify water loss so that timely actions can be taken to prevent such loss. The City should establish policies and procedures and enhance controls to provide for (1) the prompt billing of utility services until the County takes over responsibility for billing all City utility services customers; (2) progressive strengthening of collection efforts for delinquent accounts; and (3) reconciliation of the amount of water purchased from the County to the water billed to City utility services customers to assist with identifying and remedying water loss. Policy and procedure implemented: (2) Provides guidance on progressive steps to be taken in the collection of delinquent accounts. (3) The Budget Administrator prepares monthly reports on water loss and inflow and infiltration (I&I) performance. 44 The City needs to establish policies and procedures for the calculation, review, and approval of utility account adjustments. The City should continue efforts to establish policies and procedures addressing utility account adjustments. Such policies and procedures should Include a standardized methodology for determining adjustment amounts and specific guidelines for documenting the calculation, review, and appropriate approval of utility account adjustments. Policy and procedures have been implemented as follows: (1) Describes circumstances under which an adjustment will be considered (2) establishing the basis for making adjustments based on either the correct usage, or estimated usage if the correct usage can't be established (3) the review and approval process. Page 16 City of Opa-Iooka and Opa-Tooke Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find di Summapc of Finding Recommendation Actions Taken to Resolve Finding 45 During the period October 2015 through April 2017, water and sewer service charges were not always assessed in accordance with rates prescribed by City ordinances and, consequently, the City under assessed a significant amount of water and sewer service charges. The City should enhance controls to ensure that water and sewer service charges are assessed in accordance with rates prescribed by City ordinances. In addition, the City should, to the extent practical, take appropriate actions to collect the under assessed water and sewer service charges. Policy and procedures have been implemented as follows: (1) PW Director is responsible for communicating all rate changes to the County Billing Director and City Utility Billing Manager for incorporating new rates into their respective billing systems. (2) Annually the PW Director will have the County Billing Director and the City Utility Billing Manager confirm in writing the rates used in their respective billing systems are consistent with the current adopted rates. 46 City personnel administrative regulations and procedures were not always followed when hiring City employees and City hiring practices need improvement. The City should establish policies and procedures to ensure that (1) prospective employees submit a completed employment application; (2) prior to offering employment, City personnel document verification that prospective employees met the minimum education and work experience requirements established for the positions for which they are being hired; (3) prospective employees receive drug tests near the anticipated start of employment and City personnel document acceptable test results in the applicable personnel files prior to offering employment; and (4) the City provide each prospective employee a conditional job offer letter that includes the conditions and terms of employment. A copy of the conditional job offer letter should be maintained in City personnel files. Policy and procedures implements (1) If candidate applied for position online, must complete employment application prior to interview (2) Offer of employment is contingent on candidate's successful completion of screening for drugs, background and employment and work history. (3) Drug test immediately prior to employment. (4) Selected candidate is sent offer letter conditional on satisfactory completion of various screenings. Letter includes conditions and terms of employment. Page 17 City of Opa-looka and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 47 City controls over background screenings for employees and certain volunteers and vendor employees need enhancement. The City should ensure that background screenings are timely obtained and continue efforts to enhance established regulations to (1) clarify the type of background screening required for the various City departments and activities; (2) define what constitutes an acceptable background screening result, including identification of the types of offenses that would be considered disquallfiers or potential disqualifiers for employment; (3) describe the process for evaluating, and documenting in the personnel records consideration of, any offenses disclosed by a background screening; and (4) require background screenings to be initially and periodically obtained for City employees in executive -level positions and positions of special trust, as well as employees, volunteers, and vendor employees who work with vulnerable populations. Policy and procedures implemented (1) Identifies the different categories of employees and those working or volunteering for the City and the types and frequency of screening required. (2) Identifies screening results categories that may or will be disqualifying. (3) Describes the evaluation process when questionable issues arise and the need to protect all results of screenings. (4) identifies the need for all employees and those working or volunteering for the City to be initially screened and those categories requiring repeat periodic screening. 48 Contrary to City ordinances, the City did not establish a search committee to conduct a local and nationwide search for candidates for the City Manager position. In addition, the City provided a City Manager with a rental car without documented City Commission approval. For future City Manager selections, the City should comply with City ordinances and establish a search committee to conduct a thorough local and nationwide search for candidates, evaluate candidates' qualifications, and recommend candidates for City Commission consideration. In addition, the City should limit City Manager compensation to that established by the City Commission. Unresolved 49 Severance pay provisions in City employment agreements were not consistent with State law, and the City paid post- employment extra compensation to a City Manager contrary to State law. The City should ensure that severance pay provisions in employment agreements prohibit severance pay when the employee has been fired for misconduct and that extra compensation is not paid after the service has been rendered or the contract made. In addition, the City should take appropriate action to recover from the former City Manager the extra salary compensation and applicable automobile costs. Unresolved Page 18 City of Opa-looka and Opa-Iocka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Flndlna Recommendation Actions Taken to Resolve Finding 50 The City, with no apparent legal authority, provided automobiles for the Mayor and City Commissioners' use. Also, contrary to City ordinances, which provide that the Mayor and City Commissioners may be reimbursed up to $200 per month for documented expenses associated with their official duties, the City made monthly $200 payments to the Mayor and City Commissioners without documentation of any expenses incurred. In addition, although the City treated the payments like expense allowances, the City did not include the payments in the Mayor and City Commissioners' earnings reported to the IRS and did not document a determination that the payments were exempt from such reporting. The City should (1) discontinue providing automobiles to the Mayor and City Commissioners; (2) for any future reimbursement payments to the Mayor and City Commissioners, require the Mayor and City Commissioners to provide, prior to payment, documentation detailing the nature and purpose for the expenses for which they are seeking reimbursement; and (3) consult with the IRS to determine the extent to which the value of any personal usage of automobiles and payments made to the Mayor and City Commissioners should have been reported as earnings to the IRS. (1) Elected officials are no longer assigned City vehicles. (2) Policy and procedures implemented to define allowable and prohibited costs and the manner in which expense reimbursement forms are processed. (3) The City now ensures that personal use of City vehicles is reflected in employee gross income for IRS purposes; however, the City hasn't contacted the IRS in regard to the past use of City vehicles by Commissioners due to the period of time that has passed. 51 The City had not established policies and procedures for determining whether workers should be classified as employees or independent contractors and we noted instances in which the City did not consistently classify workers. The City should establish policies and procedures for determining whether workers should be classified as employees or independent contractors. In addition, the City should contact the IRS to officially determine the appropriate classification for the two workers. Policy and procedures have been implemented to permit differentiation between employees and contractors based on IRS guidance. The IRS hasn't been contacted in regard to prior issues due to their no longer being current issues. 52 The City pay plan had not been updated to include certain employee positions. In addition, our examination of selected pay increases disclosed several increases that resulted in annual salaries that were not consistent with the pay plan. The City should ensure that the City pay plan includes all City positions with the associated pay ranges and timely update the pay plan when new positions are created and enhance controls to require the Human Resources Department to verify that salary increases are consistent with the pay plan. A pay plan had been developed based on information now deemed to be obsolete and is being redone, Page 19 City of Opa-Iooka and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 53 The City had not established policies and procedures requiring all employee timecards to be reviewed and approved by supervisory personnel and did not always pay employees in accordance with its pay plan. The City should establish policies and procedures regarding approval of employee time worked and ensure documented supervisory review and approval of employee time worked and payment of employees in accordance with the established City pay plan. Policy and procedure implemented describing the mechanical process for time keeping, the differentiation between exempt and non-exempt employees for overtime consideration, approval responsibilities and the resolution of disputes relating to the number of hours worked. 54 The City's personnel action form used to document personnel actions, such as appointments, salary changes, and promotions, were not always retained or signed by the required individuals prior to the effective date of the personnel action. The City should establish policies and procedures regarding the preparation and approval of personal action forms (PAFs) and ensure that PAFs are timely prepared and signed by the required individuals. Policy and procedures implemented indicating purpose of the Personnel Action Form (PAF), when it used and approval procedures. 55 The City did not always timely perform employee performance reviews required by City regulations. The City should timely perform employee reviews as required by City regulations. Implemented but not documented 56 The City needs to enhance its policies and procedures to ensure that all pay increases are appropriately supported. The City should enhance policies and procedures to ensure that ail pay increases are supported by records evidencing the reason and basis for the pay increases. For promotions, a determination that the employee met the education and work experience requirements for the position to which they are being promoted should also be documented Policy and procedures implemented addressing compensation on hire, promotion and demotion, including ensuring that staff promotions meet the education and work experience required by the position. Policy describes circumstances and limits for compensation increases. 57 The City incurred penalties totaling $12,887 for incorrectly reporting and not timely remitting employee and employer Florida Retirement System (FRS) contributions to the Department of Management Services, Division of Retirement. To ensure that employer and employee retirement contributions and the accompanying payroll data are accurately prepared and timely submitted to the Division as required by State law, the City should establish policies and procedures for the preparation, review, and submittal of FRS contributions and the associated data. Unresolved Page 20 City of Opa-Iocka and Opa-locka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 58 Contrary to City regulations, overtime was not always authorized in advance. In addition, the City paid $1,177 for overtime to employees not entitled to overtime pay. The City should comply with City regulations and ensure that all overtime is authorized in writing before the overtime is worked, overtime payments are supported by Overtime Authorization Forms, and only eligible nonexempt employees receive payments for overtime. Policy and procedures implemented which indicates who is qualified to receive overtime, how it is computed, how it is approved and how it is processed. 59 The City had not established policies and procedures requiring, at the time of enrollment, verification of dependent eligibility to participate in the City's health insurance plan or periodic verifications that participating dependents continued to be eligible for plan services. The City should require, upon enrollment of a dependent into the City health insurance plan, employees to provide applicable documentation, such as birth or marriage certificates, evidencing the dependent's eligibility. In addition, the City should establish policies and procedures requiring documented verifications of the documentation supporting each dependent's eligibility at the time of enrollment, and periodically thereafter, to ensure participating dependents continue to be eligible for plan services. Unresolved 60 Contrary to State law, the City did not always timely pay group insurance premiums. As a result, coverage was temporarily suspended for certain individuals. The City should take appropriate measures to ensure that insurance providers are promptly paid within 45 days of the date the invoice is received in accordance with State law. Unresolved 61 City employees accumulated annual leave balances in excess of limits established in City regulations and the collective bargaining agreement. The City should enhance procedures to appropriately limit accumulated annual leave balances maintained in employee leave accounts to the amounts established in City regulations and the collective bargaining agreement. Unresolved 62 City leave payments to six City employees exceeded by $42,261 the amounts allowed by City regulations and leave payments were not always supported by City records evidencing authorization for the payments. The City should ensure that annual leave payments to employees are in accordance with City regulations. In addition, the City should take action to recover the leave overpayments totaling $42,261. Unresolved 63 City terminal leave payouts made to City employees upon separation from City employment exceeded by $72,466 the amounts provided by City regulations or the applicable union contracts. The City should ensure that terminal leave payouts are made in accordance with City regulations or the applicable union contract. In addition, the City should, as appropriate, seek to recover the net overpayments totaling $72,466 from the applicable individuals. Unresolved Page 21 City of Opa-Iooka and Opa-Iocka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 64 Contrary to City ordinances, the City contracted with two former employees within 2 years of their separation from City employment. City personnel should comply with established ordinances and not contract or transact business with former City officers, officials, or employees within 2 years of their separation from City employment. A policy has been implemented that all contracts will be reviewed by the City's Procurement function to ensure compliance with this Code requirement. 65 Contrary to a City Commission resolution in January 2016, the City Manager did not perform an employee necessity study and report the study results to the City Commission. Absent a completed necessity study, the City Commission had limited assurance that staff reductions and position revisions promoted better functionality of the City. For future considerations of staff reductions, the City Manager should follow City Commission directives or otherwise collaborate with the City Commission. In addition, future staff reductions should be supported by documented consideration of the potential negative effects of such reductions on the delivery of City services and City functionality and strategies to mitigate such effects. Unresolved Page 22 City of Opa-Iooka and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding J Recommendation Actions Taken to Resolve Finding 66 City controls did not ensure that City records evidenced that all travel served a public purpose, travelers were reimbursed in accordance with City ordinances and State law, and travel advances did not exceed actual expenses. The City should establish policies and procedures that provide for the effective administration of travel advances, travel reimbursements, and other travel -related expenditures. The City should also enhance controls over travel expenditures to ensure that (1) travel vouchers and other supporting documentation clearly evidence the actual travel expenses incurred and the public purpose served for all travel expenditures; (2) all travelers sign travel vouchers certifying that the expenses were actually incurred by the traveler as necessary travel expenses in the performance of official City duties; (3) all travel vouchers indicate the traveler's time of departure and return, and travelers are paid per diem or subsistence allowances based on time of departure and return in accordance with State law and City ordinances; (4) copies of conference or convention agenda or programs are retained for such travel, and per diem or subsistence allowances paid to the traveler are reduced for any meals included in the conference or convention registration fee; and (5) travel advance payments are compared to the actual travel expenses shown on travel vouchers prepared after the traveler's return date to verify that the advance payments did not exceed the actual travel expenses. If travel advance payments exceed the actual travel expenses incurred, the City should seek to recover the excess amount from the traveler. A policy and procedures have been implemented which in addition to other information, incorporates all of the indicated recommendations for this finding. Page 23 City of Opa-Iooka and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 67 Requirements established in City ordinances regarding the procurement of commodities and contractual services need improvement to clarify the City Commission intent for and promote compliance with the requirements. We recommend that City ordinances be amended to clarify the City Commission intent for the ordinance requirements and to help City personnel and others understand and comply with requirements in the City ordinances. Specifically, City ordinances should be amended to require that the City Commission employ, except in specified circumstances such as emergency purchases or sole source procurements, a competitive process for purchases of commodities that exceed $5,000 and for procurements of contractual services of $3,500 or more. In addition, City ordinances should be amended to explicitly require City Commission approval for purchases exceeding $25,000 and specify how the City Manager is to use negotiations and informal bids for purchases not exceeding $25,000. For example, specific procedures should address (1) the manner in which the informal bids may be solicited and the minimum number of informal bids to be obtained; (2) whether the informal bids should be used as the basis for the negotiations, specifically, whether the informal bids should be ranked and negotiations started with the highest -ranked firm; and (3) appropriate documentation of the negotiation and informal bid activities. The City should also explicitly identify and explain the basis for exceptions to the required competitive bid process. Further, City ordinances should be amended to correctly reference where the qualifications for the City Manager, City Attorney, and City Clerk positions are described. Alternatively, Articles I, 111, and V, respectively, of the City Charter could be amended to prescribe the qualifications for thnco nncitinnc Finflllu C`ihi nrriinnnrcc chnulrl hn �ninnrinrl The Procurement Code has been replaced as follows: (1) City Manager must approve all purchases over $1,000. (2) Between $1,000 and $25,000 there is a set of quote requirements which become progressively more rigorous as the cost increases. (3) $25,000 and above requires formal competitive bidding unless a codified exemption exists, (4) Commission approval is always required at $25,000 and above. (5) City Manager informal negotiations under $25,000 has been eliminated. (6) Currently neither the Code nor the Charter define minimum requirements for the City Manager, Clerk and Attorney. No action will be taken on correcting the references until a decision is made as to whether these requirements will be incorporated into the Code. (7) Insurance services are to be competitively bid, consistent with all other services.(8) City has adopted Resolution 20-9778 establishing an audit committee, This wasn't incorporated into the charter as recommended since it would require a referendum. Page 24 City of Opa-Iooka and Opa-locka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 68 City disbursement processing procedures were not up-to-date or sufficient to ensure the validity and completeness of vendor file information, preapproval of all purchases by appropriate City personnel, adequate supporting documentation for all expenditures, or proper distribution of checks to vendors. In addition, City procedures did not prevent the use of duplicate check numbers. The City should update the Finance Department Policies and Procedures Manual to reflect current processes and enhance its disbursement processing procedures by (1) ensuring the validity and completeness of vendor file information by removing inaccurate, duplicative, or obsolete information; ensuring future vendor entries include pertinent, complete, and no duplicative information: and providing for periodic supervisory reviews of the vendors included in the vendor file; (2) requiring documented preapprovals and adequate supporting documentation for all expenditures; (3) modifying the City accounting system or taking other measures to prevent the use of duplicate check numbers; and (4) requiring that checks be mailed directly to vendors. Unresolved 69 The City had not established procedures to promote compliance with the Local Government Prompt Payment Act and did not always timely pay vendors, resulting in late fees of $5,007. In addition, as of March 15, 2017, the City owed Miami -Dade County approximately $7 million for delinquent fees and charges. The City should establish procedures that require and ensure invoice receipt dates are documented and invoices are promptly paid in accordance with State law. City is current in its obligations in regard to the $6 million owed to Miami -Dade related to water - sewer issues. Timeliness of payment is impeded by the additional step of taking approved invoices, which normally go directly to accounts payable, and instead batching them and prepare supporting documentation which first goes through two levels of State review before being returned to the City for payment. The City Purchasing function is working with AP to minimize the delay as possible. 70 City records did not clearly evidence the authorized public purpose served for expenditures totaling $51,405. These expenditures included, for example, the purchase of items for giveaway events, food and beverage items, bowling, movies, and gift cards. The City should document in its public records the authorized public purpose for the questioned costs totaling $51,405. The City should also establish appropriate monitoring and pre- audit procedures to require and ensure that the public purpose for anticipated expenditures is appropriately documented before the expenditures are made. (1) Due to the period of time that has elapsed, it isn't believed productive to investigate the public purpose of items in question. (2) The public purpose of all purchases, if not completely clear, will be required as a note on the requisition and carried to the purchase order. Page 25 City of Opa-Iooka and Opa-looks Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find #1 Summary of Finding Recommendation 1 J Actions Taken to Resolve Finding 71 Controls over City -assigned credit cards need improving to ensure that credit card assignments are properly approved, user agreements are signed and maintained, credit limits do not exceed those established in City policies, all credit card charges are verified and approved, the City's sales tax exemption is properly utilized, credit card receipts are retained as required by the State records retention policy, and evidence of canceled credit cards is maintained. As City personnel are still utilizing store credlt cards, and the City Commission may decide to utilize bank credit cards in the future, City policies should be revised to (1) specify who is responsible for approving credit card assignments, maintaining a record of credit card assignments, and retaining signed user agreements; (2) require the retention of credit card receipts, signed user agreements, and other documentation pertaining to credit card usage for the period specified by the State records retention schedule; and (3) require cardholders be provided a copy of the City's sales tax exemption certificate and ensure that cardholders present the certificate copy to vendors so sales tax is not collected on purchases for the City. In addition, the City should also enhance controls over credit cards to ensure that (1) cardholder credit limits are consistent with City policies; (2) documentation is retained to evidence the assignment, including signed user agreements, and cancellation of credit cards and verification and approval of credit card charges by the cardholder and supervisory personnel; and (3) credit card receipts are obtained and retained. City no longer uses credit cards. At such time that Purchase Cards may be introduced in the future, the City will review the controls implemented by other cities and ensure policies and procedures are Implemented maximizing control and minimizing opportunities for fraud and abuse. 988LS' OC OD 72 When purchasing commodities, the City did not always competitively select vendors in accordance with City ordinances. City policies and procedures should be enhanced to ensure commodities are competitively procured in accordance with City ordinances. As indicated in Finding #87, the Procurement Code has been completely replaced to ensure competitive bidding for all commodities and services, including quote requirements which become increasingly rigorous as the amount increase, culminating in a requirement for formal competitive bidding for amounts over $25,000 unless an exemption applies, including utilization of an evaluation committee adhering to prescribed procedures.. As noted, procurement over $25,000 requires Commission approval to ensure full transparency. Page 26 City of Opa-looka and Opa-looka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding _ Recommendation I Actions Taken to Resolve Finding 73 Contrary to City ordinances, the City did not always use a competitive selection process to procure vendor services and City controls over the competitive procurement of services need enhancement. In addition, City records did not always demonstrate that the City Commission selected the vendor whose proposal was most advantageous to the City or that the City Commission approved purchased services costing over $25,000. The City should enhance policies and procedures to ensure (1) competitive procurement of services in accordance with City ordinances; maintenance of records evidencing procurements of services, including quotes or proposals submitted in response to RFPs and evaluations of such proposals; (2) use of detailed descriptions of evaluation criteria and written evaluation committee instructions for reviewing and scoring RFP responses using those criteria; (3) documented explanations when individual evaluator scores vary significantly for a specific criterion; (4) maintenance of records justifying procurement decisions that deviate from evaluation committee recommendations; and documented City Commission approval for purchased services costing over $25,000. As indicated in Finding #67, the Procurement Code has been completely replaced to ensure competitive bidding for all commodities and services, including quote requirements which become increasingly rigorous as the amount increase, culminating in a requirement for formal competitive bidding for amounts over $25,000 unless an exemption applies, including utilization of an evaluation committee adhering to prescribed procedures.. As noted, procurement over $25,000 requires Commission approval to ensure full transparency. 74 City contractual services procurements were not always supported by a written contract that included the provisions and conditions required by City ordinances. The City should enhance policies and procedures to ensure that every contractual services procurement is evidenced by a written contract that includes the provisions and conditions required by City ordinances, including specified deliverables and a requirement for the vendor to provide sufficiently detailed invoices evidencing services performed at agreed -upon rates. Policy and procedures have been implemented as follows: (1) All contracts will be signed by the City Manager or Mayor as appropriate with contracts of $25,000 or greater requiring Commission approval. (2) All contracts shall contain the provisions enumerated in the City Code, Section 2-321. (3) Services won't be started until approved by both parties. (3) Department heads will be educated to return invoices not reflecting the required detail. (4) The City's Laserfiche imaging system has been updated to serve as a contract management system. The City's Procurement function will oversee the process to ensure compliance. Page 27 City of Opa-Iooka and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 75 City controls for monitoring purchased services and franchise fee collections need enhancement. The City should enhance policies and procedures to ensure that, prior to payment for contractual services, City personnel document verification that services were satisfactorily received in accordance with the contract or other agreed -upon terms and franchise fees are collected from vendors providing commercial solid waste collection and disposal services. In addition, we recommend that the City, in consultation with the City Attorney, take appropriate actions to collect unpaid franchise fees. (1) The City's Procurement function is obtaining invoice stamps by which invoice approvers certify that goods and services have been satisfactorily received in accordance with contracts or other agreed terms. The City's Purchasing function will be sampling invoices to ensure compliance. (2) In regard to no identified record of having collected solid waste franchise fees in 2015, the City believes that too much time has passed and records at that time weren't sufficiently accurate to justify the dedication of resources to determine whether an underpayment had occurred. Currently franchise payments from FPL and commercial solid waste haulers are received monthly and promptly deposited and recorded. Code Enforcement receives monthly reports in regard to commercial customers with suspended service due to unpaid bills. Page 28 City of Opa-Iooka and Opa-Iooka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 76 The City did not follow City ordinances when selecting four consultants to assist with preparing a 5 -year financial recovery plan and did not execute contracts with two of the consultants prior to payment for services. In addition, the City executed a contract with one consultant that included compensation terms differing from those approved by the City Commission and, based on the contract and submitted invoices, the City overpaid the consultant $14,500. The City should ensure that (1) City personnel adhere to ordinances when procuring contractual services, including consultant services; (2) RFPs provide sufficient time for respondents to provide proposals; (3) the terms of executed contracts are consistent with the related RFP terms; and (4) monitoring procedures are effective to ensure that, prior to payment, billings are adequately supported and comply with the contract terms. We also recommend that the City request Consultant 2 to provide explanations or additional documentation regarding the invoice discrepancies and take appropriate action to recover any overpayment. Procurement policy and procedures has been implemented as follows: (1) Procurement of all services will be in accordance with the City's procurement code, including formal bidding requirements when the cost is anticipated to exceed $25,000 and in compliance with the State Consultants Competitive Negotiations Act where relevant. (2) A minimum of three weeks will be provided between issuance of a bid solicitation and response due date.(3) City Procurement function will ensure consistency between terms reflected in bid solicitation document and resulting agreement. (4) City Procurement function will educate Department heads of responsibility to ensure that invoices are presented consistent with the terms of underlying contract. 77 Contrary to State law, the City did not establish an audit committee to select auditors to conduct its 2014-15 and 2015-16 fiscal year financial audits. In addition, although the City utilized an evaluation committee to score proposals received pursuant to a request for proposals for the 2014-15 fiscal year financial audit and rank the respondents, the City Commission did not select, and did not document justification for not selecting, the highest -ranked respondent. The City should establish policies and procedures, consistent with State law, requiring (1) the establishment and use of an audit committee to select auditors; (2) use of detailed descriptions of evaluation criteria and written evaluation committee instructions for reviewing and scoring RFP responses using those criteria; (3) documented explanations when individual evaluator scores vary significantly for a specific criterion; and (4) maintenance of records justifying procurement decisions that deviate from audit committee rankings and management recommendations. In addition, we recommend that the City ensure that contracts for audit services include provisions required by State law and that, prior to payment, City personnel verify that invoices for audit services provide sufficient detail to demonstrate compliance with the terms of the audit services contract. Policy and procedures established to (1) make recommendations in regard to engaging an auditor, (2) utilize and satisfy the same evaluation criteria and requirements as required in a regular evaluation committee for acquisition of goods and services and (3) the Finance Director will ensure that auditor bills are fully consistent with terms of the auditor's contract. Page 29 City of Opa-locka and Opa-locka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find 0 Summary of Finding, Recommendation Actions Taken to Resolve Finding 78 The City did not follow City ordinances when selecting a law firm to act as City Attorney and the contract executed with the selected firm contained several deficiencies. In addition, City controls for monitoring payments to the City Attorney were inadequate, For future selections of a law firm to serve as City Attorney, the City should (1) ensure compliance with City ordinances is documented; (2) execute a contract with the selected firm only after the proposed contract has been approved by the City Commission; and (3) ensure that contract provisions are consistent with State law and good business practices. In addition, we recommend that the City amend the City Attorney contract to address the above -noted deficiencies and those noted by the Chief Inspector General and enhance controls over contract monitoring to ensure payments to the City Attorney are made in accordance with the contract. Procurement policy & procedures implemented. (1) A selection committee will be established to conduct a thorough search. (2) As requested, a RFQ will be broadly issued. (3) the selection committee will serve as an evaluation committee, observing all requirements of a standard evaluation committee. (4) The City Commission will be provided a short list of up to five recommended applicants (5) Resultant contract terms and conditions will be consistent the solicitation document. (6) All legal service invoices will be approved by the City Manager after the Procurement function has confirmed invoices are consistent with contractual requirements 79 Contrary to City ordinances, the City did not use a competitive process to procure insurance. The City should periodically procure insurance pursuant to competitive bids or through negotiations with potential insurance providers. Procurement policy & procedures, overseen by the City's Procurement function, requires that where the City has maintained long-term relationship with contractors, these services be periodically subject to competitive bidding procedures. 80 The City did not procure wireless communication devices and related services in accordance with City ordinances. In addition, the City needed to enhance controls over the acquisition, assignment, and use of wireless communication devices. The City should establish policies and procedures regarding the acquisition, assignment, and use of wireless devices, Such policies and procedures should require (1) in accordance with City ordinances, City personnel to periodically use a competitive selection process for acquiring wireless devices and the associated communication services; (2) that a master list of all devices assigned to City officials and employees be maintained; (3) the performance of a documented comparison of devices per the master list to devices shown on billing statements; and (4) City officials and employees assigned devices, or their supervisors, to evaluate device activity detailed on monthly billing statements and report any non -business use. IT Policy 19 - IT Department responsibilities (19.7) include (1) Periodic competitive selection of devices and services, (2) Maintenance of detailed master list which identifies all city -owner mobile devices and to whom assigned. (3) Documented comparison of devices as reflected on the master list to the billing statements, (4) Evaluate monthly billing statement and report suspected irregularities to Department head. Page 30 City of Opa-locka and Opa-Iocka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 81 The City had not estabiished policies and procedures regarding the retention of public records, including records created or maintained in electronic format such as e- mails and text messages. In addition, the City did not always comply with State records retention requirements and did not archive text messages sent or received using wireless communication devices. The City should establish public records retention policies and procedures and ensure that all City officials and employees are aware of the policy. The policy should be consistent with the Department of State, Division of Library and Information Services, records retention schedule and address retention requirements for records created or maintained in electronic format. City Clerk policy and procedures (1) Defines responsibilities. (2) Cites State requirements (3) Defines types of records covered.(4) Establishes public record request procedures (5) Establishes training and compliance procedures (6) Defines violations and potential repercussions. 82 City Commission meeting minutes were not always timely recorded, approved, and maintained on the City Web site, contrary to State law and the City Charter. The City should ensure that minutes for all City Commission meetings are timely approved and posted to the City Web site. City Clerk policy and procedures (1) Defines Minutes contents, (2( Defines responsibilities (3) Identifies posting requirements. (4) Defines approval process 83 The City had not established policies and procedures to ensure compliance with financial disclosure filings required by State law, Miami -Dade County ordinances, and the City Charter. In addition, neither Finance Department personnel nor other City employees responsible for approving purchases routinely reviewed and considered those disclosures. The City should establish policies and procedures to ensure that the designated officers and employees make the required financial disclosures. Such policies and procedures should require the City Clerk to monitor and verify that the required financial disclosures are timely completed and documented in the City records. In addition, Finance Department or other City personnel responsible for approving purchases should routinely review and consider financial disclosures to avoid potential conflicts of interest when procuring goods and services. City Clerk policy and procedures (1) Identifies who policy applies to, (2) steps taken to ensure appropriate officials and employees complete the form, (3) City Clerk responsibility to monitor to ensure forms are completed and (4) forwarding of relevant information to the Procurement function to monitor for possible conflict of interest 84 Contrary to City ordinances, the City did not separately account for lobbyist registration fees or ensure that required annual statements of lobbying expenditures were filed with the City Clerk and required logs of filed lobbyist registrations were provided to the City Commission. The City should establish policies and procedures that require and ensure (1) City personnel establish a separate account or otherwise separately identify lobbyist registration fees and expenditures of those fees so that the fee revenue is only expended to administer lobbyist registration provisions; (2) Lobbyists annually file statements of lobbying expenditures from the prior calendar year as requited; and (3) City personnel publish and provide the required quarterly and annually lobbyist registration logs of filed lobbyists registrations to the City Commission. City Clerk policy and procedures (1) Limitations as to who is required to register. (2) Identification of who is required to register. (3) Registration format. (4) Clerk responsibilities including quarterly and annual reports. (5) Separate revenue and expenditure accounts have been established. Page 31 City of Opa-Iooka and Opa-loaka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 85 Contrary to State law, the City Commission adopted a resolution creating the Opa-locka Community Redevelopment Agency (CRA) nearly 18 months before the Miami -Dade County Board of County Commissioners (BOCC) granted the City Commission authority to create the CRA. In addition, City records did not evidence the necessity for creating the CRA and incurring CRA expenditures of approximately $86,000 before the Miami -Dade County BOCC authorized creation of the CRA. The City should document of record the public purpose served by the CRA expenditures totaling $86,000 incurred prior to the Miami -Dade County BOCC's authorization to create the CRA or reimburse the $86,000 to the CRA. Additionally, the CRA should seek clarification from Miami- Dade County regarding the legality of CRA Board actions taken, and the related costs incurred, prior to the County BOCC authorizing the CRA's creation on December 4, 2012. For any future CRAB, the City should ensure that the County BOCC authorizes the CRA before the City adopts the CRA resolution. (1) The $86,000 spent prior to County official approval was spent to create all of the information required to obtain County approval. The County has confirmed (E-mail from J. Fernandez {County} to R. Anathan {City) - Oct 28, 2020) that it was normal practice for these creation expenses to be charged to the CRA. (2) The six resolutions adopted prior to the official creation date are being evaluated by the CRA Attorney to determine if any further action is required. (3) Although the City has no intention to create additional CRAs, the City now understands the correct sequence of adoptions. 86 City records did not evidence that the City Commission published the State -required notice of intent to consider adopting a CRA Plan and the adopted CRA Plan did not always comply with State law or include accurate information. The CRA should ensure that future modifications of the CRA Plan are publicly noticed and include all required information. Additionally, the CRA should amend the CRA Plan to include detailed descriptions of proposed redevelopment projects, estimated project costs, time frames for completing projects, and a certain date for completing all redevelopment projects and to correctly specify the CRA's 20 -year existence period. (1) The CRA provides public notice whenever the Board is to make decisions. (2) Updating of the CRA plan has been deferred until the seating of a the new Board after the November, 2020 elections. Board approval is to be sought in FY 21 to update the CRA plan. 87 The CRA did not prepare annual reports of activities for the City the County for the 2011-12, 2013-14, and 2014-15 fiscal years, contrary to State law and the City and CRA interlocal agreement with the County. The CRA should ensure that the required annual reports of activities are timely completed and submitted to the City and the County. (1) A CRA calendar of recurring events has been established to ensure that required activities such as the submission of annual reports aren't missed in the future. 88 The City and the CRA did not always provide for audits required by State law and the interlocal agreement. The CRA should ensure that timely annual audits of the CRA, including the CRA trust fund, are conducted in accordance with State law and the interlocal agreement. (1) CRA audits are a by-product of City audits and can't occur without completion of City audits. City anticipates that audit requirements will be current as of June, 2021, at which time CRA will also be current, and will continue to be so with the City back on track in regard to audits. Page 32 City of Opa-Iooka and Opa-locka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation Actions Taken to Resolve Finding 89 As of July 1, 2018, the City had not made required annual contributions of tax increment financing (TIF) revenues to the CRA totaling $484,000, including late fees and interest. The City, in accordance with State law, should immediately pay the CRA the required TIF contributions and, unless waived by the CRA, the related late fees and interest as adjusted for any authorized payments by the City to, or on behalf of, the CRA. (1) This requirement is included on CRA calendar of recurring events and the City and County TIF contributions for FY 21 were made in December, 2020. (2) CRA has not yet made a determination as to whether to waive penalties and interest associated with late depositing of City and County TIF contributions, 90 City accounting records did not always provide for adequate accountability of CRA financial transactions. The CRA and the City should continue efforts to establish a separate bank account or otherwise establish accountability for CRA financial transactions and ensure that CRA financial transactions are properly recorded and reported. CRA has a separate bank account. City pays bills through regular City bank accounts and then periodically transfers funds from CRA account to compensate for bills paid through City accounts. 91 Through September 2017, the CRA exceeded the interlocal agreement administrative expense limitation of $200,000 by at least $311,754 and had not paid the administrative fees to Miami -Dade County required by the interlocal agreement. The CRA should ensure that administrative expenses do not exceed the $200,000 limit specified in the interlocal agreement. In addition, the CRA should seek and follow guidance from Miami -Dade County to remedy the excessive CRA administrative expenses totaling $311,754. Also, the CRA should pay the County the administrative fees of $1,891 billed to the CRA in accordance with the interiocal agreement. (1) The County has confirmed that the $200,000 limitation on administrative fees for the first seven years is an annual limitation rather than a cumulative amount over the seven-year period (E - mail from J. Fernandez {County} to R. Anathan {City) - Oct 28, 2020) (2) The annual payment of the County administrative fee is on the CRA calendar of recurring events and the CRA is current. 92 The CRA did not timely provide to the Department of Economic Opportunity (DEO) a copy of the document that created the CRA and had not paid the DEO the annual fee required by State law. The CRA should ensure that any future amendments, modifications, or updates to the resolution creating the CRA are timely provided to the DEO. In addition, the CRA should ensure that the annual fee is timely paid to the DEO. (1) The CRA is aware of DEO reporting requirements and will ensure the updated CRA Plan, if approved to be done the Board, will be forwarded to DEO. (2) The annual payment of the DEO administrative fee is on the CRA calendar of recurring events and the CRA is current. Page 33 City of Opa-looka and Opa-Iocka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # SummaDr of Finding - Recommendation 1 Actions Taken to Resolve Finding 93 Contrary to State law, the CRA did not adopt budgets for the 2012-13 or 2013-14 fiscal years; CRA Board -adopted budgets for the 2011-12, 2014-15, 2015-16, and 2016-17 fiscal years did not include budgeted revenues and transfers or prior fiscal year ending fund equity balances; and the CRA did not limit actual CRA expenditures to budgeted amounts for the 2014-15 fiscal year. Also, CRA Board -approved budgeted expenditures were not properly recorded in the accounting records for the 2016.17 fiscal year. The CRA Board should (1) adopt a budget for each fiscal year; (2) ensure that such budgets include all relevant information including revenues and transfers in and prior fiscal year ending fund equity balances; and (3) enhance controls to limit actual CRA expenditures to budgeted amounts as required by State law and ensure that CRA Board. approved budgeted expenditures are properly recorded in the accounting records. (1) The CRA Board and the City Commission have adopted budget annually. However, the FY 21 budget was the first budget to reflect fund (equity) balances (2) CRA procurement is accomplished through the use of the City procurement processing system which prevents creation of purchase orders that exceed budgets. (3) CRA is now current in submission of CRA budgets to the County in the approved County format. 94 ea The City Web site did not prominently display the CRA and include certain CRA information required to be included on the Web site, Berry to State law. To comply with State law and provide essential information to interested parties, the CRA and the City should ensure that the CRA either establishes a Web site that includes all required CRA information or includes the information on the City Web site. In addition, the CRA should be prominently displayed on the City Web site home page. (1) CRA has a link on front page of City website home page which goes directly to the CRA page which provides the following information: (a) CRA area definition,F93 (b) CRA documents, (c) reports, (d) budgets and (e) minutes. 12/7 - 12/12/2020 Page 34 City of Opa-locka and Opa-locka Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of FindInq Recommendation Actions Taken to Resolve Finding 95 The CRA had not clearly established the terms of County BOCC-appointed CRA Board members. The CRA Board, in consultation with the County BOCC, should amend its bylaws to clarify terms of County BOCC- appointed CRA Board members. (1) By -Law 1.4 " The members of the CRA shall be composed of the members of the City Commission and two representatives from the residential and business communities with the City by each Miami -Dade Commissioner whose Districts are located within the City of Opa- locka The terms of the Board members nominated by the Miami -Dad County Commissioners shall also be concurrent and coterminous with their official term of office." No modification of the By -Law appears necessary since it appears clear that the Board members appointed by the respective County Commissioners have terms consistent with the terms of the Commissioners who appointed them. 96 CRA records did not evidence that decisions made in adopting the CRA bylaws were made in accordance with State law requirements that official decisions be made in public only after full and open discussion by board members. In addition, CRA Board meeting minutes were not always timely recorded, approved, and maintained on the City Web site, contrary to State law. To avoid violations of the Sunshine Law, promote CRA transparency, and encourage public interest, the CRA Board should ensure that all significant topics impacting CRA operations are openly discussed at public CRA Board meetings, and minutes for all CRA Board meetings are timely recorded, approved, and maintained on the City Web site. (1) The CRA is fully aware of and continually adheres to Sunshine Law requirements.(2) Virtual meetings are made available to public observation through Zoom and YouTube, (3) Minutes are promptly prepared and posted on the CRA webpage reachable through the link on the home page of the City's website. 97 The CRA had not established a position description for the Executive Director position, did not advertise an Executive Director position vacancy, and did not document consideration of applicant qualifications prior to hiring an Executive The CRA Board, should (1) establish position descriptions that include minimum training and experience requirements for the Executive Director and any future CRA positions; (2) ensure position vacancies are properly advertised; and (3) use a documented process for considering applicant qualifications. Unresolved Page 35 City of Opa-locks and Opa-locks Community Redevelopment Agency - Operational Audit Follow -Up on Report No. 2019-221 Find # Summary of Finding Recommendation 1 Actions Taken to Resolve FIndln 98 The CRA did not always comply with requirements applicable to severance pay for two former CRA Executive Directors. Consequently, these former Executive Directors received excess compensation of $25,754 and $3,610, respectively, after their last day of employment. The CRA should ensure that future employment agreements contain severance pay provisions that are consistent with State law and that severance payments do not exceed the limits established by employment or separation agreements. In addition, the CRA Board should consider taking action to recover the $25,754 and $3,610 of severance compensation received by the former Executive Directors, respectively, in excess of what was specified in their employment or separation agreements. Unresolved 99 CRA policies and procedures for selecting firms to provide legal services and developing and monitoring legal services contracts could be improved. The CRA should revise the bylaws to require (1) the use of a documented competitive selection process for procuring legal and other contractual services and (2) the use of written contracts for the procurement of legal and other contractual services and ensure that such contracts include severance pay and other provisions that are consistent with good business practices and State law. In addition, the City and CRA should enhance controls over contract monitoring to ensure services are received before payments are made and either document that the second firm provided legal services for the period March 5 through March 24, 2015, or request a $1,613 refund from the firm for the overpayment. (1) All CRA procurement is accomplished through the City's procurement processes and requirements, including progressively more rigorous quote requirements for increasingly more expensive goods and services, formal competitive bidding for goods and services, evaluation committees adhering to all evaluation committee requirements and properly structured contracts. (2) Due to the time that has passed, it isn't believed productive to attempt prior over payments. Page 36