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Audit Findings Not Corrected

The Joint Legislative Auditing Committee (Committee) has the authority to enforce certain provisions of law against educational and local governmental entities that have failed to correct audit findings reported in three successive audit reports. In accordance with ss. 11.45(7)(i)¹ and 218.39(8)² F.S., the Auditor General is required to notify the Committee when an audit report of a state university, Florida College System institution, school district, charter school, charter technical career center, county, municipality, or special district indicates that the entity has failed to correct these findings.

Initially, the Committee may request a written statement from the entity to obtain a status update. If a finding has not been corrected, the entity will be requested to explain: (1) why corrective action has not been taken, and (2) the details of any corrective action planned.

If the Committee determines that the statement provided is not sufficient, it may require an official of the entity to appear before the Committee to discuss the finding(s). If, after the official’s appearance and explanation, the Committee is still not satisfied with the entity’s effort to correct the audit finding(s), it may proceed with the provisions of ss. 11.40(2) or 11.45(7), F.S., which authorize the following actions:

Type of Entity

Applicable Florida Statute

Action Authorized

Charter School or Charter Technical Career Center

11.40(2)(c)

Notify the appropriate sponsoring entity which may terminate the school’s charter.

District School Board

11.40(2)(a)

Direct the Department of Financial Services and the Department of Revenue to withhold selected state revenue.

State University

11.45(7)(i)

Refer the university to the Board of Governors to proceed in accordance with s. 1008.322, F.S.

Florida College System Institution

11.45(7)(i)

Refer the college to the State Board of Education to proceed in accordance with s. 1008.32, F.S.

County

11.40(2)(a)

Direct the Department of Financial Services and the Department of Revenue to withhold selected state revenue.

Municipality

11.40(2)(a)

Direct the Department of Financial Services and the Department of Revenue to withhold selected state revenue.

Special District

11.40(2)(b)

Direct the Department of Economic Opportunity to proceed with s. 189.062, F.S. (to declare the district inactive) or s. 189.067, F.S. (to take legal action); public hearings are authorized for certain special districts in accordance with s. 189.034(3), and s. 189.035(3),F.S.



¹Chapter 2012-134, Laws of Florida.
²Chapter 2011-144, Laws of Florida.

What is the status of implementation of these laws (ss. 11.45(7)(j) and 218.39(8), F.S.)?

The Committee received the fifth series of notifications from the Auditor General in 2016. The notifications were based on the Auditor General’s review of 2014-15 fiscal year audit reports.

The following is a breakdown of the number of entities, by type, with one or more audit findings included in the 2014-15 fiscal year audit report that were also included in the two previous audit reports. These were reported to the Committee by February 2017:

Type of Entity

Number with
Repeat Audit Findings

Total Number of
Repeat Findings

Charter School or Charter Technical Career Center

15

17

District School Board

31

67

State University

2

3

Florida College System Institution

6

7

County Office
(Board of County Commissioners, Clerk of Circuit Court, Property Appraiser, Supervisor of Elections, Sheriff, and Tax Collector)

55

93

Municipality

104

193

Special District

112

167

Total

325

547

On February 23, 2017, the Committee took action to request a written statement from all of the entities included on the notifications from the Auditor General. See the Committee’s meeting packet for the specific entities (beginning on page 136 of 385). The Committee approved the recommendations included in the meeting packet.

How are the entities notified that a written response is required?

A hard copy of a letter from the Committee’s Chairs will be sent by U.S. mail to the top elected or appointed official of each entity. Also, an electronic copy of this letter will be sent to the same individual and appropriate staff members or other individuals as follows:

Type of Entity

Hard and Electronic Copy Recipient

Electronic Copy Recipient

Charter School or
Charter Technical
Career Center

Directors

School Board; Adam Emerson, Charter Schools Director at the Department of Education (DOE)

District School Board

Chair of the District School Board (DSB)

Superintendent of Schools; Finance Director or equivalent of DSB; Alricky Smith, Administrator, Funding and Financial Reporting, DOE

Florida College System Institution

Chair of the College’s Board of Trustees

President of College; Vice President of Finance, Administrative Services, or equivalent; Scott Kittel, Associate Vice Chancellor for Fiscal Policy, DOE

State University

Chair of University’s Board of Trustees

President of University; CFO, Vice President of Financial Affairs, or equivalent; Tim Jones, CFO, Board of Governors; Joseph Maleszewski, Inspector General, Board of Governors

County Office

Chair of Board of County Commissioners (BCC), Clerk of Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections, or Tax Collector, as appropriate

BCC letters: County manager or administrator; Finance Director or equivalent Other County Constitutional Officers: electronic copies were not sent

Municipality

Mayor or equivalent

City manager or administrator; CFO, Finance Director, or Clerk

Special District

Generally sent to the Chair of the Governing Board. In some cases the District recommended another individual, such as the Controller or District Accountant, to be the recipient.

Electronic copies were sent to individuals for most districts, but not all. Recipients included: Registered Agent, Executive Director or similar staff, and finance staff.

A response deadline will be provided in the letter. Any entity that fails to provide a written response will likely be considered by the Committee to be required to appear before the Committee to: (1) explain its failure to respond, and (2) provide the status of its action to correct the relevant audit finding(s).

Where should we send our response?

You may respond by email, fax, or mail as follows:

 

Email:

jlac@leg.state.fl.us

 

Fax:

850-922-5667

 

Mail:

The Honorable Debbie Mayfield, Chair
Joint Legislative Auditing Committee
111 West Madison St., Rm. 876
Tallahassee, FL 32399-1400

Please note, responses are posted on the Committee's website.

If we send a written response by email or fax, should we also send a hard copy response by U.S. mail or another carrier?

No, it is not necessary. We only require one response. When we receive an email response, we will reply to you that it has been received. If you do not receive an acknowledgement, you may wish to phone our office (850-487-4110) to verify that we have received your email. If you send by fax or U.S. mail, you may wish to request that we acknowledge receipt. If so, please provide an email address or phone number of the person we should contact.

How can electronic copies of audit reports be accessed?

Audit reports are available on the Auditor General’s website as follows:

  • Audits conducted by the Auditor General
     (includes audits of all State Universities and Florida College System Institutions, many
     District School Boards, some County Offices, Municipalities and Special Districts)

    • Begin on the Auditor General’s website (www.myflorida.com/audgen);
    • In the left column, under the heading ’Auditor General Released Reports’ hover over by ’Entity Audited;’
    • Select the type of entity (District School Boards, Colleges, Universities, or Local Government / Nonprofit); and
    • Select the entity and type of audit report. [Note: The findings reported to the Committee pursuant to ss. 11.45(7)(j) and 218.39(8), F.S., are those included in either financial or operational audit reports. The findings included in other types of audit reports issued by the Auditor General, such as the Florida Education Finance Program audits, are not required to be reported.]
  • Audits conducted by private CPAs/CPA firms
     (includes audits of all Charter Schools, some District School Boards, most County Offices, Municipalities, and Special Districts
    • Begin on the Auditor General’s website (www.myflorida.com/audgen);
    • In the left column, under the heading ’Reports Filed with the Auditor General’ hover over by ’Filed Reports;’
    • Select the type of entity (Charter Schools and Centers, Counties, District School Boards, Municipalities, or Special Districts; Note: County audits contain the audits of all County Constitutional Officers); and
    • o Select the entity and then the fiscal year.

What should we do if our entity has corrected the audit finding(s) since the audit period?

Please state in writing that the finding has been corrected. A brief email message is sufficient. Please ensure that you indicate the name of your entity and the finding number(s) that has been corrected. If your next audit report has been released and it includes a statement by the auditor that the finding has been corrected, it would be helpful if you provide a copy of that page. Please do not submit your entire audit report to the Committee. Once available, Committee staff will review the audit report you are required submit to the Auditor General pursuant to s. 218.39, F.S., if applicable.

We provided a response to our audit finding(s) to our auditor and it was included in the audit report. Can we send a copy of it as our response?

No. Please expand on the response and provide the current status of any corrective action that you have taken or plan to take to address the finding(s). By the time you receive a letter from the Committee, generally a substantial period of time has passed since your audit report was issued.

Can our auditor provide the written statement to the Committee?

Yes. Many entities are consulting with their auditor before submitting a response. If you and your auditor make an arrangement for him or her to respond on your entity’s behalf, that is acceptable.

We are a small entity and do not have the resources needed to hire additional staff in order to correct certain audit findings. What should we do?

We understand it may not be possible or cost effective to hire additional staff in order to correct certain audit findings, such as a lack of segregation of duties. Although resources may not be available to fully resolve an audit finding, there may be compensating controls that can be implemented to address findings more common in smaller entities. If you are in this situation, please ensure that your entity has reviewed and revised policies and procedures, as appropriate, to mitigate the risk associated with a limited number of staff handling financial transactions. For example, some small county offices have made arrangements for an individual in another county office to open the bank statements and perform the required reconciliations. Other entities have elected official(s) or citizen(s) perform a review of expenditures, journal entries, or other transaction documentation as a compensating control. You may wish to discuss options with your auditor. Your written response should include a brief description of the steps your entity is taking or is planning to take to reduce the risk that fraudulent activity could occur and not be detected in a timely manner.

What is the purpose of this law?

It is the Committee staff’s understanding that this law stemmed from complaints from citizens and other stakeholders that certain governing officials were not addressing audit findings that they believe should have been corrected.

Who should we contact if we have further questions?

Send an email to jlac@leg.state.fl.us or call the Committee’s office at 850-487-4110.

Last Updated: May 2017