FY 2012 - Florida Inspectors General

Office of the Inspector General

ANNUAL REPORT

September 25, 2012

Joseph K. Maleszewski, MBA, CIG, CIA, CISA Inspector General

Rick Scott GOVERNOR

Hunting F. Deutsch EXECUTIVE DIRECTOR

September 25, 2012

Mr. Hunting F. Deutsch, Executive Director Suite 212, Caldwell Building 107 East Madison Street Tallahassee, Florida 32399-4120 Dear Director Deutsch:

I am pleased to submit our Annual Report on the activities of the Office of Inspector General (OIG). Section 20.055(7), Florida Statutes requires the OIG submit an annual report outlining the work and activities performed which fulfill our mission to promote accountability, integrity and efficiency by providing quality audits, investigations, management reviews and technical assistance. This report covers the 9-month period from October 1, 2011 through June 30, 2012, to provide coverage since the creation of the Department of Economic Opportunity through the end of the fiscal year. Our prior annual report covered the 15 month period from July 1, 2010 through September 30, 2011.

The value of OIG services can never be fully reflected in an annual report. The tangible results such as cost covered, dollar impact and number of reports can be readily reported. However, our intangible services and deterrent effect are not evident in an annual report. As you read this report, I hope you will recall the broad spectrum of services we provided the Department and the professionalism of the OIG team.

As you know, my predecessor, James F. Mathews retired this year after serving as Inspector General in three state agencies (the Departments of Labor, Economic Opportunity and the Agency for Workforce Innovation) for over 20 consecutive years, which makes him the longest continuously serving Inspector General in State of Florida Government. He contributed greatly to the contents of this annual report and will be greatly missed.

Our efforts for the period are summarized in the “Highlights” section which follows and include investigative, audit-related and other oversight activities designed to promote economy and efficiency in the administration of the Department’s programs and operations.

We look forward to working with you and our fellow employees in meeting the challenges and opportunities that face the Department. Thank you for your continued support.

Sincerely,

Joseph K. Maleszewski, MBA, CIG, CIA, CISA Inspector General JKM/sm

Florida Department of Economic Opportunity | The Caldwell Building | 107 E. Madison Street | Tallahassee, FL | 32399-4120

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HIGHLIGHTS

The OIG completed a wide variety of projects to promote economy and efficiency in

the administration of Department programs and operations. The following

summarizes these efforts “by the numbers.”

Investigations:

Conducted 10 investigative inquiries

Made 83 investigative referrals to either management, law enforcement or other parties with appropriate jurisdiction to investigate

Coordinated over 250 calls for management resolution (related primarily to Reemployment Assistance Benefits Claims)

Audit:

Conducted 8 significant audit projects and 29 audit-related projects

Performed liaison and coordination for with 7 external audits

Conducted monthly follow-up for 11 audits containing 30 outstanding findings

Track and monitor the completion of corrective action for 9 significant recommendations for which corrective action had not been completed in prior years

Single Audit:

Received and reviewed 24 Regional Workforce Board independent single audit - Issued 9 management decisions related to the workforce boards

Received and reviewed 153 independent single audits related to Division of Community Development - issued 1 management decision related to these matters

Received 53 certifications that recipients of financial assistance had not expended enough to require an independent audit

Coordinated updates for the Department’s 28 Catalog of State Financial Assistance projects

Other:

Conducted two Department-wide risk assessments

Prepared two OIG audit work plans

Provided technical assistance to Department managers as needed

Worked to develop the Director’s vision for a Regional Workforce Board Internal Control Compliance Program (ICCP), which is to be implemented in the current fiscal year

Transitioned to a new Inspector General

TABLE OF CONTENTS

INTRODUCTION ............................................................................................................. 1 Mission, Vision and Priorities Partnership with the Governor’s Chief Inspector General Investigative Services

Complaint Assessment and Referral The Whistle-Blower’s Act

Audit Services Single Audit Services Catalog of State Financial Services Audit Liaison and Resolution Other Audit Section Responsibilities

ORGANIZATIONAL PROFILE ..................................................................................... 18

OIG Leadership Team Organizational Structure OIG Staff Professional Certifications Professional Affiliations Training Accomplishments

INVESTIGATIVE SECTION .......................................................................................... 28

Investigations and Inquiries AUDIT SECTION .......................................................................................................... 35

Annual Risk Assessment and Work Plan Development Summary of Audit Recommendations and Follow-up Single Audit Act Activities Catalog of State Financial Assistance ARRA-Related Oversight Activities Significant Audit Projects

APPENDIX I – Investigations and Referrals .............................................................. 46 APPENDIX II – Audit Projects ..................................................................................... 60 APPENDIX III – Corrective Actions ............................................................................ 64

OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012

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INTRODUCTION

The role of the OIG is to provide a central point for coordination of, and responsibility

for, activities that promote accountability, integrity, and efficiency in the Department.

Section 20.055, Florida Statutes (F.S.), defines the duties and responsibilities of

agency inspectors’ general. The Statute requires that each inspector general shall

submit to the Department head an annual report, not later than September 30 of each

year, summarizing its activities during the preceding state fiscal year.

This report includes activities in the following areas, but is not limited to the OIG

statutorily assigned duties:

Inform the Department of fraud, abuses and deficiencies relating to programs

and operations administered or financed by the Department;

Recommend corrective action concerning fraud, abuses and deficiencies and

report on the progress made in implementing corrective action;

Ensure effective coordination and cooperation with the Auditor General, federal

auditors and other governmental entities to avoid duplication;

Conduct, supervise, or coordinate other activities carried out or financed by the

Department for the purpose of promoting economy and efficiency in program

administration and preventing and detecting fraud and abuse in all operations;

Assess information provided by the Department on performance measures and

standards and make recommendations for improvement, if necessary;

Review the actions taken by the Department to improve program performance

and meet program standards and make recommendations for improvement, if

necessary;

Provide direction for, supervise and coordinate audits, investigations and

appropriate management reviews relating to the programs and operations of

the Department; and

Ensure that an appropriate balance is maintained between audit, investigative

and other accountability activities.

This document is presented to the Executive Director of the Florida Department of

Economic Opportunity in accordance with the statutory requirements and to describe

how the OIG accomplishes its mission.


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MISSION, VISION AND PRIORITIES

Mission - The mission of the Office of Inspector General (OIG) is:

To promote accountability, integrity and efficiency

by providing quality audits, investigations,

management reviews and technical assistance.

Vision – Our vision is to be:

Championed by our customers,

Benchmarked by our counterparts and

Dedicated to quality in our products and services.

Priorities – The OIG has established the following priorities to help ensure success

in fulfilling our mission:

Sufficiency – Provide quality audits, investigations, reviews, and other services in accordance with professional standards and, where applicable, federal and state rules and regulations.

Timeliness – Perform audits, recipients and sub-recipients audit resolutions, investigations and reviews and other oversight services in a timely manner.

Added Value – Perform activities designed to add value and improve the Department’s operations.

Awareness – Promote awareness regarding the OIG roles and responsibilities as well as awareness regarding the duty to report fraud, waste and abuse.

The primary goal of the OIG is to provide independent and objective information in a

timely manner to assist the Department’s Director and management team in fulfilling

their duties and responsibilities. One of its major goals is to encourage a proactive

approach by OIG staff and support efforts to deliver Department services in the most

efficient and effective ways possible.


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PARTNERSHIP WITH THE

GOVERNOR’S CHIEF INSPECTOR GENERAL

The DEO’s Office of Inspector General is an active partner with

the Governor’s Office of Chief Inspector General. The OIG, in

cooperation with the Chief Inspector General’s Office, seeks to

promote the vision of the inspectors general community:

Enhancing Public Trust

in Government.

The Mission of the Governor’s team of Inspectors General is to:

Provide leadership in the promotion

of accountability and integrity

of State Government.


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INVESTIGATIVE SERVICES

The Investigative Section receives complaints, initiates,

conducts, supervises and coordinates investigations designed

to detect, deter, prevent and eradicate fraud, waste,

mismanagement, misconduct and other abuses in state

government. They do this through: Investigations, Inquiries,

Incident Reports, Management Referrals and Law Enforcement

Referrals.

Investigations: The OIG conducts investigations designed to provide Department

management objective, fact-based assessments to help ensure the integrity and

efficiency of both management and operations. These can include contract

procurement violations, conflict of interest, gross mismanagement, disruptive or

threatening behavior, falsification of records, data manipulation and failure to follow

laws, rules or Department polices. Investigations also encompass misconduct by

workforce service providers and other vendors who offer products and services under

contract with the Department.

Inquiries: Inquiry cases are opened when the OIG is not certain whether a full

investigation is warranted. In these type cases, some fact-gathering is conducted and

a determination is made whether to proceed with a substantive investigation. Inquiries

are used to report findings related to complaints or other issues to the executive

director and Department managers where no specific wrongdoing by any one person

is implied. Inquiries concentrate on Department and/or partner processes rather than

allegations against a specific subject. Inquiries can result in a written report, which

summarizes the issue, any involvement by law enforcement and provides

recommendations for correction, if necessary.

Incident Reports: Federal Incident Reports relate to information and complaints

about fraud, abuse or suspected criminal activity involving the use or misuse of federal

funds. The OIG receives and coordinates Incident Reports as prescribed by federal

law in Title 20 Code of Federal Regulations, Section 629.55. The OIG is responsible

for directing certain investigations of entities, when appropriate, as well as assisting

with federal investigative activities. The OIG conducts necessary fact finding and

investigative activities to identify and document these instances. Incident Reports are

generally referred to the United States Department of Labor Office of Inspector

General. Department managers and partners are responsible for reporting actual or


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suspected violations to the OIG and appropriate management. The Incident Report

process enables the OIG to maintain oversight responsibilities for matters concerning

federally funded programs that have the potential for misapplication of funds, gross

mismanagement and associate misconduct.

Management Referrals: Management Referral cases are opened when the Office of

Inspector General receives complaints which do not rise to the level of significance

that warrant a substantive investigation. These complaints are referred to

management and are monitored until an outcome report is received and reviewed by

the OIG.

Law Enforcement Referrals: Law Enforcement Referral cases are those reported to

the Florida Department of Law Enforcement or other law enforcement agencies, as

appropriate, whenever the Inspector General has reasonable grounds to believe there

has been a violation of criminal law. Our partners most often are the US Department

of Labor Office of Inspector General, the Florida Department of Law Enforcement as

well as federal and state prosecutors.


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COMPLAINT ASSESSMENT AND REFERRAL

The OIG is statutorily charged to receive and consider complaints related to the

Department’s programs processes and functions. Such complaints can be about

Department employees, programs, various services or the manner in which services

are delivered. The importance of such complaints is that they can help expose issues

with service delivery and can even help detect, deter and prevent waste, fraud,

mismanagement, misconduct and other abuses.

Complaints originate from many sources and can be made directly or referred from

other entities, such as the Governor’s Chief Inspector General or other agency

inspector general.

The OIG assesses, assigns and tracks complaints to ensure allegations are fully

addressed, either through investigation, inquiry or referral to management. Tracking

also assists with preparing various reports, including this annual year-end report and

quarterly reports to the Chief Inspector General.

The inspector general or director of investigations reviews the contents of each

complaint. All complaints are required to have a project number for tracking from the

complaint’s origination thorough final disposition. Occasionally, complaints are

received that are not within the jurisdiction of the OIG (such as Wage and Hour issues

that are handled by United States Department of Labor). In those instances, the OIG

refers the complaints to the agency that would have jurisdiction over the matters

presented.

If a complaint concerns a clear or potential violation of the law, it is immediately

referred to the appropriate law enforcement agency.


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THE WHISTLE-BLOWER’S ACT

Whistle-blower complaints must meet the prescribed

criteria as outlined in Section 112.3187, F.S. After

careful review, investigations are completed within the

time frames established by statute. The information

disclosed under this section must include:

(a) any violation or suspected violation of federal,

state or local law, rule or regulation committed

by an employee or agent of an entity or independent contractor which creates

and presents a substantial and specific danger to the public’s health, safety or

welfare;

(b) any act or suspected act of gross mismanagement, malfeasance, misfeasance,

gross waste of public funds or gross neglect of duty committed by an employee

or agent of an agency or independent contractor.

The Office of the Chief Inspector General in the Governor’s Office receives a variety of

complaints lodged by persons via the Whistle-blower Hotline, a toll free number [(800)

543-5353] equipped to handle, record and process incoming complaints and via

electronic submission. The Chief Inspector General then assigns those projects to the

respective agencies for inquiry and response.

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AUDIT SERVICES

The Audit Section provides a variety of advisory and assurance

services to a variety of customers.

ADVISORY SERVICES

Advisory Services are consultative and related client service

activities, the nature and scope of which are agreed upon with the

client, and that are intended to add value and improve the

Department’s operations. Examples include counsel, advice,

facilitation, process design and training.

Advisory Service activities occur prior to or concurrent with Department activities

ensuring timely management information. With timely information, management can

make better informed decisions and avoid costly mistakes, which may expose the

Department to additional risks (financial, legal, public perception, etc.).

Audit standards prohibit advisory services which constitute performing management

functions, making management decisions, auditing our own work or providing non-

audit services in situations where the amounts or services involved would be

significant/material to the subject matter of an audit.

ASSURANCE SERVICES

Assurance Services are performance audits, compliance audits, financial audits and

attestations. Assurance services contribute to government accountability for the use

of public resources and the delivery of services.

Compliance Audits:

Compliance audits are independent reports that measure the Department’s

compliance with applicable laws, rules and regulations and adherence to best

practices.

Financial Audits:

Financial audits promote government accountability for the use of public resources.

Financial audits assess the reliability of information and provide an independent report

on whether the Department’s financial information is fairly presented.

Financial audits provide information about internal controls and compliance (with laws

and regulations and provisions of contracts and grant agreements) related to financial

transactions, systems and processes.


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Information Technology Audits:

Information Technology audits are designed to:

Evaluate the integrity, availability and confidentiality of information technology

resources;

Measure the quality of the department’s information technology services;

Evaluate implementation of information technology resource statutes, rules,

policies, procedures and industry standards;

Evaluate internal controls and recommend improvements as appropriate; and

Perform limited-scope reviews to assist management in identifying and resolving

problematic issues.

Attestations:

An attestation is any declaration or set of declarations about whether the subject

matter is based on or in conformity with the criteria selected. Attestation

engagements can cover a broad range of financial or nonfinancial objectives about the

subject matter or assertion depending on the users’ needs. The subject matter of an

attestation engagement may take many forms, including historical or prospective

performance or condition, physical characteristics, historical events, analyses,

systems and processes or behavior. According to professional audit standards, there

are three types of attestation engagements: Examination, Review and Agreed-Upon-

Procedures.

Examination - In an examination engagement, we apply tests sufficient to reduce

the risk of an undetected material misstatement to an appropriately low level.

Accordingly, the level of testing is similar to an audit of financial statements.

Review - A review engagement provides a moderate level of assurance on the

subject matter. We perform procedures sufficient for us to report that we are not

aware of any material modifications that need to be made for either (a) the

assertion about the subject matter to be fairly stated, in all material respects,

based on the criteria or (b) the subject matter to be in conformity with the criteria,

in all material respects.

Agreed-upon procedures - Agreed-upon procedure engagements are a unique

attestation engagement because we report procedures and findings rather than a

conclusion. These engagements involve applying procedures, agreed-upon by

specified users, to information and issuing a report that enumerates the

procedures performed, states our findings and restricts the use of the report to the

parties that agreed to the procedures.


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Attestation engagements are performed under the AICPA’s attestation standards, as

well as the related AICPA Statements on Standards for Attestation Engagements.

Risk Assessment:

Risk assessment aids management in determining the appropriate balance between

control and risks. The Audit Section conducts risk assessments and facilitates control

self assessments. Risk assessments ensure that risk exposures are understood and

managed appropriately. Risk assessment activities also identify the need for and

scheduling of assurance services (audits) through the development of the OIG Annual

Work Plan.

Control self assessments are a class of techniques used in an audit or in place of an

audit to assess risk and control strength and weaknesses against a control framework.

The “self” assessment refers to management and staff involvement in the assessment

process, facilitated by internal auditors.

Performance Measure Assessment:

Performance measure assessments are designed to assess the reliability and validity

of information on performance measures and standards and recommends

improvements, if necessary. Section 216.013, F.S., requires state agencies to

develop long range program plans to achieve goals, provide the framework for

development of budget requests and identify and update program outcomes and

standards to measure progress toward program objectives. Section 20.055(2), F.S.,

requires that the OIG perform a validity and reliability assessment of their agency

performance measures and, if needed, make recommendations for improvements.

Policy and Procedure Review:

The Department expects the OIG to review policies and procedures to help ensure

accountability, efficiency and effectiveness of the Department's programs. In addition,

this review considers the control environment of state government, such as Florida

Statutes, Florida Administrative Code, Directives and Comptroller Memorandums.

OIG reviews are limited in nature and do not constitute audits. A properly conducted

review helps provide management assurance that:

The intent of the document has been clearly identified;

The procedure is complete, clear, concise, well-written and functional;

Associated documents are appropriately referenced;

The policies and procedure addresses findings from previous audits/reviews;

and

The policies and procedure identifies, communicates and prioritizes desired

process outcomes.


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SINGLE AUDIT SERVICES

The OIG provides oversight for the Department’s

compliance with state statutes and federal circulars for

recipients of federal and state financial assistance. The

Department’s predominant sub-recipients are the 24

regional workforce boards and over 200 towns, cities,

counties, community action agencies and housing

authorities.

Federal and state financial assistance provided by the Department, as the “pass-

through” entity, to local governments, nonprofit organizations and for profit

organizations normally require an annual CPA audit to help ensure these funds are

spent as intended. These audits must be performed in accordance with U.S. Office of

Management and Budget (OMB) Circular A-133 or Section 215.97, F.S. The audit

reports are submitted to the Department for review and evaluation as to content and

timeliness.

The OIG has the responsibility for ensuring that the Department’s recipients and sub-

recipients comply with Federal and State Single Audit Acts. Compliance is ensured

by:

Reviewing the recipients’/sub-recipients single audit reports;

Coordinating the Department reporting of projects;

Reviewing recipients’/sub-recipients’ annual Audit Plans;

Providing technical assistance to recipients/sub-recipients and independent

auditors (Certified Public Accountants).

The OIG reviews the audit reports submitted by entities to ascertain if there are any

reported questioned costs or material findings that need to be resolved by Department

program managers.

Department Pass-through Responsibilities: OMB Circular A-133 outlines audit

requirements for federal agencies and pass-through entities. The Department is a

pass-through entity with responsibilities to:


12

Inform sub-recipients of the amount of federal funds awarded by Catalog of

Federal Domestic Assistance (CFDA) title and number, award name and

number, award year and name of federal agency.

Advise sub-recipients of requirements imposed on them by federal laws,

regulations and the provisions of contracts or grant agreements as well as any

supplemental requirements imposed by the pass-through entity.

Monitor the activities of the sub-recipients as necessary to ensure that federal

awards are used for authorized purposes.

Issue Management Decisions on audit findings within six months after receipt

of the sub-recipients’ audit reports and ensure that the subrecipient takes

appropriate and timely corrective action.

Adjust the Department’s fiscal and programmatic records, as necessary, in

response to sub-recipients’ audit findings.

Department Awarding Agency Responsibilities: Section 215.97, F.S., details the

Department’s responsibilities under the Florida Single Audit Act. DEO as a state

awarding agency is responsible to:

Review the recipient's financial reporting package, including the management

letters and corrective action plans, to the extent necessary to determine

whether timely and appropriate corrective action has been taken with respect to

audit findings and recommendations pertaining to state financial assistance that

are specific to the state awarding agency.

Designate an organizational unit within the Department to be responsible for

reviewing financial reporting packages. If the state awarding agency is not the

coordinating agency, it must communicate to the coordinating agency its

approval of the recipient’s corrective action plan.

Determine which unit within the state awarding agency will be responsible for

coordinating with the Department of Financial Services revisions to the Catalog

and Compliance Supplement.


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Catalog of State Financial Assistance

The OIG coordinates the Department’s efforts to maintain the Catalog of State

Financial Assistance (CSFA) in accordance with the Department of Financial Services’

Division of Accounting and Auditing Memorandum # 49, 2011-12. The CSFA is a

comprehensive listing of state projects.

To maintain the Catalog, the Department is required to identify any state projects that

provide state financial assistance to non-state entities. The OIG coordinates for the

preparation and submission of the Department’s Florida Single Audit Act Annual

Certification Update. Currently, the Department has 28 CSFA numbers/projects.

In addition, the Department is responsible for Compliance Supplement preparation

which identifies the significant compliance requirements, eligibility requirements,

matching requirements, suggested audit procedures and other relevant information for

each state project in the Catalog.


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AUDIT LIAISON AND RESOLUTION

The Audit Section provides liaison to external agencies and

coordinates for audit resolution activities.

In addition to receiving state funding, the Department receives

substantial federal funding. As a result, the Department

experiences audits, reviews and other forms of oversight from

many different entities. The findings and recommendations

that result from this external oversight must be recorded and

tracked to ensure that appropriate attention is given to

correcting findings in a timely manner. The Audit Section tracks and monitors

management efforts to correct audit findings.

Florida Statutes require the OIG to ensure effective coordination and cooperation

between the Auditor General (AG), federal auditors and other governmental bodies

with a view toward avoiding duplication. The Audit Section provides a single point of

contact for external agencies auditing the Department.

The AG performs at least two major audits of the Department annually: Statewide

Federal Awards and Unemployment Compensation Information Technology. The AG

also performs an operational audit at least every three years as required by applicable

state law. The Office of Program Policy and Government Accountability (OPPAGA)

conducts a varying number of projects each fiscal year. Federal Grantors, such as the

U.S. Department of Labor and the U.S. Department of Health and Human Services,

from time to time send auditors to perform audits of the Department.

The OIG maintains steady interaction with the external auditors and Department

management during the course of external audits. Coordination activities: arranging

meetings; compiling documentation required by the auditors; preparation of official

responses to all audit findings; and negotiation of revisions to the responses and the

reports.

OIG involvement continues well past the time the audit reports are issued. For all

reports issued by the AG and OPPAGA, the OIG prepares a statutorily required six-

month follow-up status report of corrective actions for the Department’s executive

director and the Joint Legislative Auditing Committee.


15

The OIG coordinates the resolution of AG Federal Awards audit findings with each

federal grantor. This usually requires the collection and submittal of additional

documentation to support the Department’s corrective actions as well as meetings

and/or discussions with federal officials at the grantor Department’s regional offices in

Atlanta, Georgia and/or the national offices in Washington, D.C.

After external auditors issue their final reports, the Department is contacted by

program or grants management officials from federal grantors1 who may require

additional information in order to resolve audit findings. This is a complex process

that involves coordination and negotiation with numerous entities, including regional

workforce boards, the Florida Department of Children and Families, the Florida

Department of Revenue, the Executive Office of the Governor and Workforce Florida,

Inc. (WFI).

Under the terms of the Department/WFI Performance Contract, the OIG is responsible

to “Ensure the Agency properly manages its audit resolution responsibilities pursuant

to the requirements of state and federal law.” As a result, at least annually, the OIG

provides a written and verbal report to the WFI Finance Committee on the status of all

outstanding audit issues and liabilities. The OIG also provides quarterly updates to

this annual status report.

Section 20.055(7)(c)4., F.S., requires the OIG to report on outstanding corrective

actions as part of the annual report. This includes the identification of each significant

recommendation described in previous annual reports on which corrective action has

not been completed.

1 Federal grantors are most typically the U.S. Department of Labor, the U.S. Department of Health and


16

OTHER AUDIT SECTION RESPONSIBILITIES

To ensure the compliance with statutory mandates and professional

audit standards, the Audit Section performs quality assurance

activities and prepares an annual report of OIG activities. The Audit

Section is also involved in the preparation of the Legislative Budget

Request; the Summary Schedule of Prior Audit Findings; the Agency

for Enterprise Information Technology’s risk assessment survey; and

the Florida Housing Finance Corporation’s quarterly performance

report. These activities are described below:

Quality Assurance Activities

Florida Statutes require audits to be conducted in accordance with professional

standards. The Audit Section performs periodic assessments to ensure the

engagement process is performed in compliance with Government Auditing Standards

and the International Professional Practice Framework, published by the Institute of

Internal Auditors. Quality assurance activities consist of reviews of cross-referenced

draft reports and reviews of completed engagements.

Lastly, all draft and final reports, whether audit or investigation, are reviewed to ensure

adherence to standards for report writing, clarity, consistency and use of proper

grammar and tone.

Annual Report

Florida Statutes require each inspector general to prepare an annual report

summarizing the activities of the office during the immediate preceding fiscal year no

later than September 30th of each year. The final report is to be furnished to the

executive director. The Audit and Investigations Sections are responsible for

compiling and producing the annual report. The report includes statistics regarding

cost coverage and cost avoidance; summaries of significant audits and investigations;

and identifies each significant recommendation described in previous annual reports,

in which corrective action has yet to be completed.

Legislative Budget Request The OIG prepares Schedule IX of the Department’s Legislative Budget Request.

Schedule IX, Major Audit Findings and Recommendations, is designed to inform

decision makers on recent major findings and recommendations found in AG and OIG

audit reports. This Schedule summarizes major findings and recommendations from

audit reports issued during the current and previous fiscal years.


17

Summary Schedule of Prior Audit Findings The OIG prepares the Summary Schedule of Prior Audit Findings for Auditor General,

as part for their annual Federal Awards Audit. This schedule provides an update of

prior audit findings in accordance with the Office of Management and Budget (OMB)

Circular A-133.

Agency for Enterprise Information Technology, Department Risk

Assessment Survey Review

The Agency for Enterprise Information Technology (AEIT), is responsible for

conducting and updating every 3 years, a comprehensive risk analysis to determine

security threats to data, information and information technology resources in

accordance with Section 282,318, F.S. The OIG is responsible for reviewing the

Department Risk Assessment Survey associated with this analysis to determine the

accuracy and completeness of Department responses.

Florida Housing Finance Corporation Quarterly Performance

Reports

In accordance with Section 420.0006, F.S., the Department is required to contract with

the Florida Housing Finance Corporation (FHFC) to address Florida’s affordable

housing needs. This contract includes specific performance measure consistent with

FHFC’s business plan. Quarterly deposits of funds appropriated for FHFC activities,

paid in advance, are conditioned upon certification by the executive director that

FHFC met the required performance measures. If the executive director determines

that FHFC has failed to perform as required then the matter must be referred to the

Department’s OIG to determine whether FHFC’s failure resulted from external forces

or inadequate management.

The FHFC’s Inspector General performs a review of the FHFC quarterly performance

measures to ensure its accuracy prior to submission of this report to the Department’s

executive director.

The OIG reviews the FHFC quarterly performance reports and performs any additional

evaluation as deemed necessary by the executive director.


18

ORGANIZATIONAL PROFILE

OIG Leadership Team

Joseph K. Maleszewski, MBA, CIG, CIA, CISA

Inspector General

Joe has 21 years of progressively responsible

audit, management and information technology

experience with the State of Florida. He has

served in various audit and management

positions including serving as interim Inspector

General for the Department of State and the

Department of Transportation. Joe is a graduate

of the Florida State University with a Master in

Business Administration. He is a Certified

Inspector General, Certified Information Systems Auditor and Certified Internal Auditor.

Joe is active in his profession serving on the board for the Institute of Internal Auditors

local chapter and the Florida Audit Forum.

Carolyn McGriff, MBA, CPA, CGFM

Director of Audit

Carolyn has devoted her career to work in the field of

governmental accounting and auditing. Her more than 30 years

of professional service includes seven years as an Internal

Revenue Agent for the Internal Revenue Service, nine years as

an auditor with the State of Florida’s Auditor General Office, and

four years as the Director of Financial Services for the State of

Florida’s Department of Education Community College Budget

Office.

Carolyn received her degree in Accounting from Florida

Agricultural and Mechanical University, where she graduated with honors. Carolyn

received her Master in Business Administration from the Florida State University. She

is a Certified Public Accountant, Certified Government Financial Manager, and has


19

received the Advanced Communicator Bronze certification with Toastmasters

International. Currently, Carolyn is the President-Elect of the Tallahassee Chapter of

the Association of Government Accountants.

Philip Wilcox

Director of Investigations

Philip Wilcox is a 30 year veteran of State government.

Philip attended Florida State University and graduated in

1985 with a Bachelor of Science in Social Work degree.

Philip worked for the Florida Department of Health &

Rehabilitative Services and when the Florida Abuse Hotline

was formed in the late 1980’s, Philip was hired as a

Protective Investigator, and conducted investigations of

allegations of elder abuse. In the early 1990’s, Philip

worked as a Compliance Officer at Emergency Medical

Services (EMS)—a state office in Tallahassee that licenses and regulates EMS

paramedics and technicians statewide.

Philip’s first experience in an Office of Inspector General came in the late 1990’s when

he became the first Inspector Specialist hired at the newly formed Florida Department of

Juvenile Justice. Philip progressed to lead investigator and acted, when needed, as

chief of investigations.

Philip has since served as director of investigations at the Department of Financial

Services, Division of Workers’ Compensation Compliance; the Department of Children

& Families Office of Inspector General. He continues to apply his knowledge and skills

to serve the Department.


20

James F. Mathews, CIG

Inspector General (Retired)

James F. Mathews retired this year after serving as

inspector general of the Florida Department of Economic

Opportunity. He held the titled of inspector general in

three Florida state agencies for over 20 consecutive

years, which makes him the longest continuously serving

inspector general in State of Florida Government.

During his career, he served as an agency program

division executive, director of administration, bureau chief

of independent monitoring and a specialist for planning,

policy development and contract management in the

former Florida state Department of Labor and the

Department of Community Affairs, respectively. He spent one year, early in his career,

as an intern with the Senate Appropriations Committee of the Florida Legislature. He

has also served as a private consultant for management assessment centers.

James graduated from Florida A & M University with a Bachelors Degree in Political

Science/Public Management and from the Florida State University with a Masters in

Public Administration. He has received many commendations and awards from various

organizations and agencies for exemplary service during his 35 year governmental

career.

James is a Certified Inspector General and served as President of the Tallahassee

Chapter of the Association of Inspectors General. He was appointed by the then

Governor as one of five members of the Florida Council on State Agency Inspectors

General. He was a founding member of the Association of Inspectors General (National)

having attended the organizational meeting held in 1996. He served as the first

Chairman of the Professional Certification Board. He was elected President of the

National Association of Inspectors General in 2005.

James is very active in his community. He is married to the former Joyce Long of

Marianna and has one son, James III.


21

ORGANIZATIONAL STRUCTURE

The inspector general reports to the executive director as prescribed by Section 20.055,

F.S. The OIG office structure is comprised of two main operational units that work

together to fulfill its mission: Audit and Investigations.


22

OFFICE OF INSPECTOR GENERAL STAFF

FROM LEFT: Philip Wilcox, Lyndon Rodgers, Everett Condry, Shirley Moore, Bob

Montpellier, Valerie Fitzpatrick, Sherita Keys-Addison, Joe Maleszewski, and John

Smith. Carolyn McGriff (not pictured)


23

PROFESSIONAL CERTIFICATIONS

Expertise within the OIG covers a variety of disciplines. Employees are technically

qualified in auditing, accounting, investigations and information technology. Staff

members continually seek to augment their credentials, further enhancing their abilities

and contributions to the OIG and the Department. The accomplishments of staff

members obtaining certifications represent significant time and effort, reflecting

positively on the individual as well as the Department. The list below summarizes the

most recognized professional certifications maintained by OIG staff.

Certified Inspector General (CIG)

Certified Internal Auditor (CIA)

Certified Public Accountant (CPA)

Certified Government Auditing Professional (CGAP)

Certified Inspector General Investigator (CIGI)

National Certified Investigator (NCI)

Certified Information Systems Auditor (CISA)

Certified Government Financial Manager (CGFM)


24

PROFESSIONAL AFFILIATIONS

Office of Inspector General staff members participate in a number of professional

organizations to maintain proficiency in their areas of expertise and certification. These

associations allow them to maintain currency, establish and advance professional

networks and participate in professional community activities. OIG staff members serve

in active leadership roles in a number of these associations. The OIG professional

affiliations include:

National Association of Inspectors General (AIG)

Florida Chapter of the Association of Inspector General – (FCAIG)

Institute of Internal Auditors – (IIA)

Tallahassee Chapter – (IIA)

Information Systems Audit and Control Association – (ISACA)

ISACA Tallahassee Chapter – (ISACA)

Association of Government Accountants (AGA)

Tallahassee Chapter (AGA)

Association of Certified Fraud Examiners (ACFE)

Florida Audit Forum

Toastmasters International


25

TRAINING ACCOMPLISHMENTS

Section 20.055, F.S., requires offices of inspector general to conduct audits and

investigations in accordance with professional standards. Specifically, the statute

requires that we comply with the General Principles and Standards for Offices of

Inspector General as published and revised by the Association of Inspectors General,

and that audits are conducted in accordance with the current International Standards for

the Professional Practice of Internal Auditing as published by the Institute of Internal

Auditors, Inc., or, where appropriate, in accordance with Government Auditing

Standards issued by the Comptroller General of the United States. These standards

have specific training requirements.

The Association of Inspectors General specifies that each staff person who performs

investigations, audits, investigations, evaluations, or reviews should receive at least 40

hours of continuing professional education every two years that directly enhances the

person’s professional proficiency.

In addition, the International Standards for the Professional Practice of Internal Auditing

and Government Auditing Standards require internal audit unit staff to maintain their

professional proficiency through continuing education and training. Each auditor must

receive at least 80 hours of continuing education every two years.

To ensure staff members are prepared to meet OIG mission requirements and comply

with requirements specified in Section 20.055, F.S., we utilize training resources from

various professional organizations and associations, agencies and individuals to fulfill

training needs.


26

OIG Training Activities for Fiscal Year 2011-12

Ethics for Government Employees – This one-hour course, sponsored by the Association of

Government Accountants, provided information on how to address the types of activities and

principles each person in Government service should strive for such as loyalty, upholding laws

and rules, job performance and seeking better ways to get tasks accomplished.

Continuous Monitoring – This two-hour course, sponsored by the Association of Government

Accountants, provided information on critical payment systems and other risks. In addition, it

identified ways organizations are moving from traditional retrospective and detective activities that

result in “pay and chase” systems to proactive and preventive activities and controls.

Advanced Investigation Technique – This seven-hour course, sponsored Associated of

Inspector General, provided information on investigative techniques and current case law and

engaged in discussions regarding Ethics, employee rights, workplace searches and use of Global

Positioning System (GPS) tracking as well as forfeiture of retirement benefits and official

misconduct in internal investigations.

Florida Single Audit – This four-hour course sponsored by the Florida Department of Financial

Services provided the latest information regarding the Florida Single Audit requirements.

2012 Government Accounting Conference – This two-day conference, sponsored by the

Association of Government Accountants, provided a comprehensive, in-depth review of various

topics including Government Auditing Standards, Fraud Prevention, Consolidating State

Information Technology Resources, Microsoft Suite and Risk from Intergovernmental Financial

Dependency.

Tallahassee Chapter of Association of Government Accountants – This monthly meeting of

accounting and auditing professionals from state and local governments provided key

presentations and relevant discussions that affect the profession.

Tallahassee Chapter of the Institute of Internal Auditors – This monthly meeting of internal

audit professionals from the Tallahassee area provided timely and relevant presentations.

Florida Chapter of the Association of Inspectors General – This bi-monthly meeting of

associates of the Inspectors General Community in the Tallahassee Area offered important

presentations of appropriate topics.

Florida Inspectors General Practical Skills for Auditors – This two-day and a half training

sponsored by the Governor’s Chief Inspector General’s Office, in conjunction with the Florida

Chapter of the Association of Inspectors General (FCAIG) especially designed for auditors

new to the Inspector General community. This training covered 21 topic areas, and was

presented by 27 of the “best of the best” in the state inspector general, accounting and ethics

communities. The inspector general was instrumental in the planning and execution of this

course. This significant training even was the subject matter of a press release (see

following page) and a Davis Productivity Award nomination for significant cost savings:

$136,500.


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PRESS RELEASE –

The Governor’s Chief Inspector General’s Office, in conjunction with The Florida Chapter of the

Association of Inspectors General (FCAIG) recently sponsored “Florida Inspectors General

Practical Skills for Auditors” training, especially designed for auditors new to the Inspector

General community. Over 100 auditors and other inspector general team members from state

and county government agencies attended the 2 ½ day training, held at the Florida Department

of Law Enforcement in Tallahassee, July 31- August 2, 2012.

The customized training session for the Florida Inspector General environment covered 21 topic

areas, and was presented by 27 of the “best of the best” in the state inspector general,

accounting and ethics communities. Inspector General audit staff are required to undergo

periodic training, including 80 Continuing Professional Education (CPE) hours every two years.

The ‘Basic Skills’ training CPEs, sponsored by the FLAIG through the National Association of

Inspectors General, provided 20 of these training hours.

“This was the first training session ever of this kind held for Florida auditors” said Chief

Inspector General Melinda M. Miguel. “This collaborative effort provided very beneficial, cost

effective training for the members of the IG community”, added Bob Clift, Florida Department

of Transportation Inspector General and President of the FCAIG. IG Clift continued, “The cost

of comparable training delivered by professional associations and private organizations

averages approximately $1,400 dollars for each registration. We delivered this training for only

$35 per attendee.” Clift added “Our overall cost to the taxpayers for this training was

approximately $3,500 as compared to an average of $140,000 if otherwise provided. This

means that we saved taxpayers approximately $136,500 or almost 98% of the cost of

delivering this necessary training by using our own highly skilled and experienced presenters

as well as existing state resources and facilities. ”

Chief Inspector General Miguel and IG Clift also noted that the evaluations completed by 90% of the

attendees overwhelmingly reflected top ratings and an overall ‘excellent’ rating for the training as a

whole. Additionally, over 90% stated they “strongly agreed” or “agreed” that the training and

instructors were of a high quality and that the material covered was relevant to their jobs.

In light of the current economic climate a major effort was made to hold down the cost of the

training. “Prudent spending is a key goal at the OIG these days, as it is across state

government,” said Chief Inspector General Miguel. “And, since this office is charged with

oversight of state government, it’s especially important that we set a good fiscal example.”

Based on the success of this initial effort, plans are being made to continue to deliver high value

training to the Inspector General community at low cost to the taxpayers we all serve.


28

INVESTIGATIVE SECTION

The mission of the Investigations Section is to deter, detect and investigate internal and

external fraud or employee misconduct impacting the Florida Department of Economic

Opportunity.

The authority and charge of the investigative team is outlined in Section 20.055(6), F.S.

Investigative activities are intended to deter, detect and eradicate fraud, waste,

mismanagement, misconduct and other abuses within programs administered by the

Department.

The investigative duties and responsibilities of the Inspector General include:

Receiving complaints and coordinating activities of the Department as required

by the Whistle-blower’s Act pursuant to Sections 112.3187 – 112.31895, Florida

Statutes.

Receiving and considering complaints, which do not meet the criteria for an

investigation under the Whistle-blower’s Act, and conducting, supervising or

coordinating such inquiries, investigations or reviews as the Inspector General

deems appropriate.

Reporting expeditiously to the Florida Department of Law Enforcement or other

law enforcement agencies, as appropriate, whenever the inspector general has

reasonable grounds to believe there has been a violation of criminal law.


29

Conducting investigations and other inquiries free of actual or perceived

impairment to the independence of the inspector general or the OIG. This

includes freedom from any interference with investigations and timely access to

records and other sources of information.

Submitting in timely fashion final reports on investigations conducted by the OIG

to the Department head, except for Whistle-blower’s investigations, which are

conducted and reported pursuant to Section 112.3189, F.S.

The OIG follows the Council of the Inspectors General on Integrity and Efficiency

(CIGIE), Quality Standards for Investigation (QSI) to ensure consistency in its approach

to all investigative activities. The QSI categorize investigative standards as General

and Qualitative. General Standards address qualifications, independence and due

professional care. Qualitative Standards focus on investigative planning, execution,

reporting and information management.


30

INVESTIGATIONS AND INQUIRIES

Investigative Activity Summary FY 2011-2012

Cases

Substantive Investigations Closed 10

Allegations Referred 83

TOTAL 93

In accordance with s. 20.055(7)(b), F.S., the OIG investigated the following significant

abuses and deficiencies during the reporting period (October 1, 2011-June 30, 2012).

Refer to Appendix I for a summary of the 10 substantive investigations and 83 referrals

performed by the Investigative Section during this reporting period.

2011/12-0022:

Unfair Hiring and Promotional Practices – Unemployment Compensation

An unemployment compensation employee alleged multiple occurrences of unfair hiring

practices and promotions based on favoritism. The complainant also alleged that

promotional vacancies within the unit were not made available to all employees within

the unit but had been filled from a select “pool” of applicants without being advertised.

Determination: We found there were no violations of statutes or rules related to the complainant’s allegations. All applicants whose selection was questioned by the complainant met the qualifications advertised for the positions awarded them. However, the advertisements were not the same for similar positions and interview criteria was not adhered to in a consistent manner. In general, the implementation of the pool hiring concept for Unemployment Compensation vacancies was identified as one area for improvement. Result: DEO’s Unemployment Compensation program office agreed that the minimum qualifications should be consistent for advertised positions in which the duties and responsibilities of job openings are the same, and agreed to ensure interview criteria are consistent for positions that have the same duties and responsibilities.


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2011/12-0035: Favoritism and Unfair Hiring Practices – Regional Workforce Board

An anonymous complaint was sent to a Florida legislator alleging unfair hiring practices

at a workforce board in that several job openings were not advertised and were

awarded to friends and family of board employees. Shortly afterwards, a second

complaint was emailed to the Governor’s Chief Inspector General alleging favoritism in

hiring and promotions and other irregularities by staff at that same workforce board.

Determination: We determined the job placements were not for job openings at the board, but rather listings in Employ Florida Marketplace that resulted from employers submitting job orders to be offered to qualified one stop participants. The OIG examined several instances of friends and family of board employees being placed in job openings. Result: We determined that the friends and family members were eligible for services and specialized treatment by the board could not be substantiated in all cases. In one instance, it was determined the one stop manager was interceding with an employer on behalf of her daughter. When the employer questioned the behavior a conflict of interest was determined and the one stop manager’s employment was terminated by the workforce board.

2011/12-0093: Questionable Regional Workforce Board Expenditures

Former regional workforce board executives entered into a $50,000 sponsorship

contract with a Chamber of Commerce to conduct a survey among employers to

determine perceived barriers for expansion, growth and future success. According to

the contract, the regional workforce board was going to be billed every other week at a

sum of $4,000, for a total contribution of $50,000.

This billing convention was not the regional workforce board’s normal business practice

and created the appearance that former executives circumvented a directive that all

non-payroll expenditure exceeding $5,000 be reviewed by DEO. The regional

workforce board was aware that these invoice payments were subject to prior approval

by DEO, yet prior approval was not sought.

Determination: The purpose of the sponsorship was to help fund a survey of 900 businesses about various roadblocks to improving the business climate in Florida. The survey was conducted and the results provided as specified in the scope of work. The regional workforce board program managers interviewed (1 current and 2 former) could not say how the survey results were used. Therefore, the OIG was unable to determine the value of the expenditure.


32

Result: We recommended that the workforce board review the survey results, determine how it could be utilized to enhance programs and promote jobs, and implement any uses accordingly.


A former regional workforce board Chief Financial Officer (CFO) entered into a lease arrangement for 950 Gateway computers in 2008. The Gateway computers were subsequently placed in a storage unit rather than returned to the equipment leasing company, as originally optioned by the lease. One thousand, 1,000, new Hewlett Packard computers were purchased in 2010 to replace the Gateway computers which remained in storage.

The CFO agreed to lease 950 Gateway Profile 6 computers for 36 months. He then subsequently altered the lease to a lease/purchase (buyback) arrangement that resulted in higher procurement costs. The regional workforce board originally spent a total of $1,538,337.50 for the lease of the Gateway computers, less a buyback of $194,512.50, which (if returned as originally optioned) would have reduced the total lease cost to $1,343,825. For 950 units, the regional workforce board paid $95,285.00 ($100.30 x 950) more than what it would have cost to buy them and $194,512.50 ($204.75 x 950 computers) more than if the regional workforce board had stuck with the original lease terms. Further, according to the regional workforce board, between August 2010 and April 2012, it spent $21,832.00 for storage of the Gateway computers.

The CFO agreed to lease Gazelle software and purchase it for estimated fair market value (EFMV) at the end of the lease. The leasing company is now asserting that the fair market value of Gazelle software according to an appraisal was $196,000 (80% of its original selling price). However, the evidence suggests that it is currently worth much less than that. There is a dispute between the leasing company and the Board relative to payment for the software.

Prior to leaving his job, the CFO purchased one of the new HP computers at the Board cost which was $1,100. Although the CFO originally purchased one of the HP computers, he later returned the computer (unopened and in original condition) to the regional workforce board. The funds used to purchase the computer were originally withheld from the CFO’s final salary and compensation payout. After the computer was returned, the funds were released to the CFO. As a result, the regional workforce board did not experience any loss in this transaction.


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Determination: We found the Board’s leasing decisions resulted in higher costs than if it had purchased the computers. In addition to the final costs of the lease/purchase being higher than if the Board had purchased the computers, management’s decision to alter the lease and remove the option to return the computers resulted in the Board incurring $21,832.00 to store the previously leased computers. However, we also determined there was no intentional fraud, waste or abuse; and when faced with a decision to either purchase the computers for $194,512.50 or extend the lease for another year at a cost of $395,940.00, the board chose the most economical option at that point in time. As a result, no demand for repayment was necessary.

Result: We recommended that prior to embarking on any major purchase or lease, the Board should conduct a cost benefit analysis. A structured planning process should be developed and followed when considering large procurements of this nature so that such cost analyses are required. We also recommended that a procurement process be established and followed when securing the services of a vendor such as the one utilized in this case.


All permanent regional workforce board employees (including DEO employees) were

offered membership cards at one of three wholesale clubs (BJ’s, COSTCO and SAM’s

Club).

Determination: The regional workforce board purchased wholesale memberships for Board and DEO staff with BJ’s, COSTCO and SAM’s Club totaling $4,520. These membership cards represented a service for personal use, that constitutes an unallowable expense under OMB Circular A-122 regardless of whether the cost is reported as taxable income for the employees. The 54 SAM’s Club memberships each included a $10 SAM’s Club gift card. These gift cards having a total value of $540 were also unallowable. However, because the gift cards were never distributed, no violation of any law, rule or policy could be determined. Result: We recommended that the total amount of $4,520 be disallowed and recovered from the Board. In addition, we suggested that the DEO Office of Financial Management review the contents of the report and take other appropriate action, as deemed necessary.


34

2011/12-0160: Breach of confidential information

On June 23, 2012, the OIG received information that the DEO inadvertently included

confidential material in a Microsoft Excel file sent to Integrity Florida, a new nonprofit

research group on June 4, 2012. The file contained information related to the economic

development incentives managed by the Division of Strategic Business Development.

Section 288.075(7), F.S., addresses the confidentiality of information held by an

economic development agency pursuant to the administration of an economic incentive

program for qualified businesses. Such information is confidential and exempt from

Section 119.07(1), F.S. and Section 24(a), Article I of the State Constitution for a

specified period.

Determination: We determined the Excel spreadsheet provided contained a

number of worksheets tabs that when selected appeared to be empty. However,

if a user scrolled using arrows on the lower left hand side of the spreadsheet,

additional worksheets would come into view. The data included on the additional

spreadsheets was determined to be the confidential data that was disclosed.

However, our review of the incident determined the release was inadvertent and

not intentional.

Result: We found that management timely responded to the incident and quickly

implemented corrective measures to identify the cause and mitigate the chances

of another unintended disclosure. The case was closed with no further action.


35

AUDIT SECTION

The mission of the Audit Section is to promote integrity, accountability and process

improvement by providing objective, timely and value-added audit services.

Internal auditing is an independent, objective assurance and consulting activity

designed to add value and improve an organization’s operations. It helps an

organization accomplish its objectives by bringing a systematic, disciplined approach to

evaluate and improve the effectiveness of risk management, internal control and

governance processes. Although conducting internal audits is the primary mission of

the audit section, substantial benefit is provided to the Department through several

other critical functions that are discussed on the following pages.


36

Annual Risk Assessment and Work Plan Development

Section 20.055 F.S., requires the inspector general to conduct

and analyze the results of an annual risk assessment and assist in

the development of an annual Audit Work Plan.

This year, we sent a Risk Assessment Questionnaires to 63 key

managers, which included directors and process managers from

Strategic Business Development, General Services, Equal

Employment Opportunity, Chief of Staff, Workforce Services,

Community Development, Finance and Administration and

Information Systems. We received 57 (or 90%) responses to our Risk Assessment

Questionnaire, and gave substantial consideration to any areas that managers rated as

high or moderate risks.

Our work plan for fiscal years 2012-13 and 2013-14 was based on the results of the risk

assessment, prior OIG audit and investigative findings, monitoring information, external

audits, independent audit reports of subrecipients, special assignments/requests from

management and input from Auditor General Staff.

The Chief Inspector General’s Office along with the State of Florida Inspectors General

submitted to Governor Scott an enterprise-wide risk assessment and audit plan. This

risk assessment was compiled with input from Florida’s state agencies and the plan will

be used to guide an enterprise-wide focus on accountability related to activities that are

common to state agencies. The OIG has set aside 20 % of its audit hours for Enterprise

Projects.

We summarized the narrative responses provided by the respondents as well as those

areas identified by Executive Director Deutsch. Below are the areas of risks ranked

from highest to lowest risk, which are also considered in our list of planned audits,

reviews and special projects.


37

RISK AREAS RANKED FROM HIGHEST TO LOWEST

AREA OF RISK DESCRIPTION

Strategic Business Development - Business Incentives

Tracking/Reporting

Transparency/Confidentiality

Procurement Contracting – monitoring; deliverables (measurable); pricing; close out

Contracting – too complex, workload extreme

What services and are the cost appropriate?

Centralized purchasing – office supplies

Leasing – right amount of space?

Workforce Boards Fiscal and Programmatic Monitoring

Single Audits

Information Technology (IT) E-mail Conversion

Electronic Document Management – Housing and Community Development

Systems Access Controls – Workforce Development

Project CONNECT – Unemployment Compensation (UC)

Aging Online Interfaces – Community Planning

Department of Financial Services (DFS) – Florida Accountability Contract Tracking System (FACTS)

Statewide Shared Resource Center (SSRC) – Cost and Business Continuity Planning

FLAIR (Florida Accounting Information Resource)

IT Staff Augmentation – year-end spending

SharePoint – explore use for efficiencies

Awareness – Computer Security Threats

UC Identity Theft

Fraud processes – are they effective?

Overpayments to claimants

Postal/Mail Services

How Unemployment Insurance (UI) information is used

Decrease in Federal Funding

Benefit Payment Control (BPC) system – Data Integrity

F&A Cell Phone Usage

P-Cards

Payroll overpayments

Travel approval and reimbursement process

Property Inventory

Organizational Assessment – Structure and supervisor to staff ratio

Budget/Funding Community Planning

Unemployment Compensation

Labor Market Statistics Early release of embargoed data – release of confidential data


38

Summary of Audit Recommendations and Follow-up

During the period, the OIG performed monitoring and follow-up activity on 11 external

audits and 30 audit findings.

In accordance with Section 20.055(7)(c)4., F.S., the OIG is responsible for reporting

each significant recommendation described in previous annual reports on which

corrective action has not been completed. In total, there are 9such issues: six related

to Regional Workforce Boards and three related to Department program operations.

We will continue to follow-up on outstanding items identified in Appendix III until all

corrective actions have been completed.

Entity Finding Source Description Workforce Board 17- Polk Works Independent Audit – FY 2008-

09 Procurement Disallowed - $123,480

Workforce Board 17- Polk Works Independent Audit – FY 2008-09

Capital Expenditures Disallowed - $24,579

Workforce Board 17- Polk Works Independent Audit – FY 2008-09

Contributions Disallowed - $7,500

Workforce Board 17- Polk Works OIG Investigations -2009/2010-0123

Facilities Expenditures Disallowed - $310,421

Workforce Board 7 – Florida Crown

Independent Audit – FY 2009-10 and 2010-11

Adjusting Journal Entries (Repeat Finding)

Workforce Board 15 – Workforce Alliance

OIG Investigations -2009/10-0068 & 0088

Unallowable expenditures and food Disallowed - $147,128

Division of Workforce Services AG Operational Audit 2011-021

Unemployment Compensation System Security Plan

Division of Community Development – Weatherization Assistance Program

AG Federal Awards Audits – FA 2011-023 FA 2010-018

Costs charged to fix priced contracts with State Universities

Division of Community Development – Weatherization Assistance Program

AG Federal Awards Audits – FA 2011-022 FA 2010-017

Cost monitoring procedures


39

SINGLE AUDIT ACTIVITIES

The OIG has the responsibility for ensuring that the Department’s

recipients and sub-recipients comply with both Federal and State

Single Audit Acts. Compliance is ensured by:

Reviewing the recipients’/sub-recipients single audit reports;

Coordinating the Department reporting of projects;

Reviewing recipients’/sub-recipients’ annual Audit Plans;

Providing technical assistance to recipients/sub-recipients and independent auditors (Certified Public Accountant).

The OIG issued 8 Management Decisions for Regional Workforce Boards and 2

Management Decisions for other entities.

Single Audit Management Decisions October 1, 2011 – June 30, 2012

Fiscal Year

Date Issued

Regional Workforce Board 6 – North Florida 2010-11 4/27/2012

Regional Workforce Board 11 – Flagler/ Volusia 2010-11 5/25/2012

Regional Workforce Board 17 – Polk 2010-11 5/25/2012

Regional Workforce Board 18 – Suncoast 2010-11 5/25/2012

Regional Workforce Board 14 – WorkNet Pinellas 2010-11 5/30/2012

Regional Workforce Board 19 – Heartland 2010-11 6/8/2012

Regional Workforce Board 9 – Alachua/Bradford 2010-11 6/25/2012

Regional Workforce Board 20 – Treasure Coast 2010-11 6/25/2012

Florida's Great Northwest, Inc. 2009-10 5/8/2012

Workforce Florida, Inc. 2010-11 2/20/2012

Management Decisions Issued 10

With regard to the Division of Community Development, we received 153 audit reports,

one of which will require a Management Decision and received 51 certification

statements that the entity did not require an independent audit under either state or

federal single audit requirements.


40

CATALOG OF STATE FINANCIAL ASSISTANCE

The OIG coordinated the Department efforts to identify programs that meet the criteria

of a state project and ensure that the proper documentation was developed. This

continues to be an area of ongoing technical assistance to Department management to

ensure that changes are communicated for inclusion in the Catalog of State Financial

Assistance (CSFA).

In accordance with the Department of Financial Services’ Division of Accounting and

Auditing Memorandum # 49, 2011-12, we submitted the Department’s FY 2011-12

Florida Single Audit Act Annual Certification Update. There were 28 Department CSFA

numbers (programs) with a program detail and compliance supplement for each.

CSFA

NO. DESCRIPTION GRANT

40.001 Florida Black Business Assistance FBBAB

40.002 Economic Development Transportation Program FEDTP

40.003 Enterprise Florida, Inc FETFI

40.004 Space Florida FSPFI

40.005 Florida Sports Foundation FSPTF

40.006 Visit Florida FCOTV

40.007 Rural Community Development FRCDP

40.008 Quick Action Closing Fund FQACF

40.009 Brownfield Redevelopment Bonus FBRBR

40.010 Qualified Defense Contractor and Space Flight Business Tax Refund FQDCP

40.011 Qualified Target Industry Tax Refund FQTIT

40.012 Local Economic Development Initiatives FLEDP

40.013 Rural Infrastructure Fund FRISP

40.014 Military Base Protection FMBPD

40.015 Entertainment Industry Financial No Grant - Tax Credit

40.016 Advocating International Relationships FAINR

40.017 Innovation Incentive Program FINIP

40.018 Economic Gardening Technical Assistance Pilot Inactive

40.019 Economic Gardening Business Loan Pilot Program FEGBL

40.020 New Markets Development Program FNMDP

40.021 Local Government Distressed Area Matching Grant FLDMG

40.022 Regional Planning Councils Inactive

40.023 Civil Legal Assistance Inactive

40.024 Growth Management Implementation FGMTA

40.025 Displaced Homemaker Project DPLHM

40.026 Quick Response Training FQRTP

40.027 Florida Goodwill Association Training Program FGA12

40.028 FL Ready to Work Credential - Business Outreach RTWCP


41

ARRA-RELATED OVERSIGHT ACTIVITIES

Conducting Surveys, Assessments and Reviews for Compliance with the

American Recovery and Reinvestment Act of 2009 (ARRA) Funding: Various

ARRA-related oversight and review activities have been performed during fiscal year

2011-12 by the OIG as follows:

All risk assessment surveys used to develop audit work plans including questions

regarding ARRA funding. In addition, the risk assessment survey included questions

regarding the potential for losses from fraud, significant violations, inappropriate

activities or work duplication.

OIG staff coordinated the on-site audits of ARRA funding of by representatives from

the United States Department of Labor-Office of Inspector General (USDOL-OIG).

The State Auditor General issued an audit on the Department that contained ARRA

findings. OIG staff performed procedures to ensure that corrective actions were

implemented.

The review of subrecipients’ (subgrantees) independent audit reports as part of the

OIG Management Decisions process (which are OIG written reviews of audit reports

submitted by independent certified public accountants) included checks to ensure

that ARRA funds are reported in the Schedule of Expenditures of Federal Awards

and that the independent auditor’s reconcile the entity’s financial records to the

Department data and reporting system.


42

SIGNIFICANT AUDIT PROJECTS

Presented below are summaries of 8 significant audit projects completed during the year. See Appendix II for a summary of 29 audit-related projects. Report #2011/12-0067: Internal Audit of Pinellas County Urban League's

Weatherization Assistance Program ARRA Subgrant Agreement

The purpose of our audit of Pinellas County Urban League, Inc.’s (PCUL)

Weatherization Assistance Program, ARRA Subgrant Agreement was: 1) to determine

whether the subgrantee complied with applicable rules, regulations and Subgrant

Agreement terms and conditions; and 2) to evaluate the subgrantees’ performance with

the subgrant agreement terms and conditions, including requests for reimbursement,

submission of documents, and performance of outcomes.

In general, our audit determined that PCUL complied with applicable rules, regulations and the Subgrantee Agreement terms and conditions with the following exceptions:

PCUL billed more than the documented amount in program support costs (Fee for Service) to the grant. PCUL billed DEO an accumulated total of $1.3 million for Fee for Service Costs for period January 1, 2010 to December 31, 2011, which was based on the 30% maximum allowable amount; however, the PCUL’s actual documented amount totaled approximately $1.2 million, which is a difference of $100,000.

PCUL did not always document photographs, utility bills and energy audits as required by the terms and conditions of their subgrant agreement.

PCUL concurred with our findings, but noted the Department’s eGrants system required the billings be submitted at the maximum percentage.

Report #2011/12-0096: Internal Audit of DEO’s Security of Highway Safety and

Motor Vehicles Cross-Match Data

The purpose of this audit was to review the controls over the cross-match data obtained

from the Department of Highway Safety and Motor Vehicles (HSMV) and determine

their adequacy in ensuring the security and integrity of this data.

In general, our audit determined that the processes maintained within the Office of

Unemployment Compensation (UC) were adequate to ensure the security and integrity


43

of the data obtained from the HSMV. We also determined that the processes

maintained within the Office of Unemployment Compensation could be improved to help

ensure the integrity of the data obtained from the HSMV. We noted the following:

Audit tests indicated that the position descriptions for the employees with cross-match system access did not reflect this requirement of their job duties.

Audit test indicated that a completed Form ISU 27-B was not available for all employees with access to the cross-match system. This form provides documentation that the employee’s supervisor has authorized access to the system as well as an indication that the employee has been instructed as to the consequences of the inappropriate use of the system’s data.

We recommended that the Office of Unemployment Compensation:

Revise the position descriptions for those employees who access the data from the cross-match system to reflect the use of the system and the data within the system.

Ensure that an up-to-date Form ISU 27-B is available for all employees with access to the HSMV cross-match system.

Weatherization Assistance Program - ARRA

1. Report #2011/12-0146: Suwannee River Subgrant Agreement

2. Report #2011/12-0147: Tri-County Subgrant Agreement

3. Report #2011/12-0148: Pinellas County Urban League Subgrant Agreement

The Office of Inspector General completed three audits of the Division of Community

Development’s (Division) monitoring and oversight of three Weatherization Assistance

Program – ARRA Subgrant Agreements: Tri-County Community Council; Suwannee

River Economic Council and Pinellas County Urban League.

The purpose of these audits was: 1) to determine whether the Division complied with

applicable rules and regulations supporting its Weatherization Assistance Program

Subgrant Agreement with subgrantees; and 2) to evaluate the Division’s effectiveness in

monitoring the subgrantee’s performance.

These audits determined that the Division complied with applicable rules and

regulations supporting the Subgrant Agreements and the Division’s monitoring of the

subgrantee was generally effective. However, we noted issues with the eGrants file

system which calculated the maximum allowable amount for Fees for Services (30%)

and Administration (5.25%) rather than the lower actual allowable amounts. In some


44

cases, the Division’s field monitors did not follow program guidance during their

monitoring visits.

Management concurred with our findings and has timely initiated corrective actions to

address these issues for the three audited entities as well as for the program as a

whole.

Economic Development Incentive Programs – Strategic Business Development

1. Report # 2011/12-0079: Phase I – Contracted Services

2. Report # 2011/12-0085: Phase II – Operations

3. Report # 2011/12-0086: Customer Satisfaction Survey

The OIG completed two reviews and a survey related to Economic Development

Incentive Programs managed by the Department’s Division of Strategic Business

Development.

Phase I – Contracted Services (Project No. 2011/12-0079): The purpose of the first

review, titled Management Review of Processes Associated with Tracking and

Reporting Economic Development Incentive Programs’ Performance Phase One -

Contracted Services, was to document and evaluate the processes used to monitor the

performance of incentive program fund recipients to ensure accountability in the

incentive programs.

This review was designed to document the Sharpton, Brunson & Company (SBC), P.A.

process to determine how errors are detected, how confidentiality is ensured, what

controls are in place to ensure program integrity and accountability and to make

recommendations for improvement in the incentive program process.

This review resulted in 14 recommendations. SBC concurred with the findings and

indicated in their response that they were working to address the issues noted.

Phase II – Operations (Project No. 2011/12-0085):

The purpose of the second review, titled Management Review of Processes Associated

with Tracking and Reporting Economic Development Incentive Programs Phase Two –

Division of Strategic Business Development, was to assess the management controls

associated with the processes that verify the accuracy of data and compliance with

provisions of the incentive agreements. The organizational structure and processes

used to receive, review and approve or reject applications and other processes used to

ensure compliance with the rules governing the incentive programs were reviewed.


45

This review also examined the Division’s financial processes and those interrelated to

the Department’s Bureau of Financial Management, which are necessary in the overall

accountability structure.

This review resulted in 20 recommendations to the Division. The Division generally

agreed with the reported results and indicated that they had already begun corrective

actions on some noted items and other recommendations were under review.

Customer Satisfaction Survey (Project No. 2011/12-0086):

The third project, titled Report Monitoring and Tracking Economic Development

Incentive Programs – Business Client Survey Economic Development Incentives, was

to report the results of a survey emailed to 734 client business’ contacts. These

surveys were used to aid in improving the Department’s processes and assist the

Department in assessing the services provided to the clients. The percentage of

responses to the survey was 15 percent (110 business respondents completed the

survey/734 total surveys emailed).

The survey consisted of a total of 10 questions; 6 questions related specifically to SBC,

1 general information question and 3 questions related to both SBC and the Division.

SBC overall average score was 4.1, which based on the scoring guidelines specified in

the contract (the scale ranged from 1, which contract defined as Very Poor to 5, which

the contract defined as Very Good). Based on these results, SBC’s performance was

considered good.


46

APPENDIX I – INVESTIGATIONS AND REFERALS

During the period from October 1, 2011 – June 30, 2012, the Investigation’s Section

concluded 10 substantive investigations, which are summarized below. Of these, one

investigation included sustained findings.

The Investigation’s Section also made 83 referrals to various entities including the:

United States Department of Labor

o Office of Inspector General

o Wage and Hour Division

Department of Economic Opportunity

o Office of Civil Rights

o Customer Advocacy Call Center

o Unemployment Compensation – Benefit Payment Control

o Other Department Business areas

Local Law Enforcement

Florida Department of Law Enforcement

United States Secret Service

Other State of Florida Agency Office of Inspector General

Summary of Investigated Projects October 1, 2011 – June 30, 2012

PROJECT SUMMARY

2010/11-0173 A school readiness provider alleged an early learning coalition assessor failed to accurately

record the assessment date, failed to review the results with the center Director, and used an

assessment tool which the coalition was not authorized to use. The investigation determined

that the Department did not require submission of a monitoring tool as part of the Coalition's

plan, so there was no required assessment tool. The Director's signature was inadvertently

not obtained, but the Coalition granted an additional 60 days to the provider to make up for

the error. No intentional policy or rule violations were found.

FINDING – Not Substantiated

2010/11-0178 A former Department employee alleged his employment was terminated after he reported that

a team leader instructed him to enter work hours on his timesheet for a day he did not

actually work. The investigation did not substantiate the allegations that the complainant's

separation was based on retaliation.



47


PROJECT SUMMARY

2011/12-0022 An employee of the unemployment compensation program alleged unfair hiring practices

such as favoritism and discrimination. The complainant alleged that promotional vacancies

within the unit are filled without being advertised and are only offered to a few select people

from a "pool" of applicants--most of whom are friends or church members of the supervisor.

The investigation found no violations of statues, rules or policies; however, OIG did find that

hiring practices could be improved. Management concurred with OIG recommendations and

indicated they will review the use of hiring pools when filling a small number of vacancies.

Management also indicated that they will work closely with HR to ensure consistency when

filling all vacant UC positions and will apply the “best practices” model.


2011/12-0028 An anonymous complainant wrote a lengthy letter to a Senator alleging wrongdoing by a

regional workforce board, including the Board contracting with companies of Board members

and staff members; hiring consultants that are friends; supervisors fraternizing with staff;

favoritism in hiring and general overall hostile working conditions. An investigation of the

allegations was conducted and there were insufficient evidence to support the alleged

wrongdoing. See also 2011/12-0035.


2011/12-0035 A complainant sent material to the Office of Chief Inspector General alleging unfair hiring

practices at a workforce board. An investigation of the allegations was conducted and there

were was insufficient evidence to support the alleged wrongdoing. See also 2011/12-0035.


2011/12-0057 A complainant alleged that an employee in the unemployment compensation program is

using his state computer to prepare court filings and other documents to reduce child support,

increase visitation and other documents related to a child custody dispute. The complainant

alleges these activities are being done on state time using state resources. Since DEO policy

allows limited personal use of information resources if it does not result in a loss of associate

productivity, the matter was referred to the employee's supervisor and UC program manager.

A review determined the employee's use was not affecting his productivity and no violation of

policy was substantiated.


2011/12-0093 This investigation resulted from reports of elaborate spending by a workforce board for

sponsorships for Chamber events. In particular, the Board spent $50K on an initiative called

"Let's Get to Work" and altered the original agreement so payments to the Chamber could be

broken down into payments under $5K each so prior approval by the Department could be

circumvented. The OIG concluded that the Board did not likely follow the prior approval

procedure as directed WFI.



48


PROJECT SUMMARY


computers. The investigation examined a computer rental agreement worth thousands of

dollars that eventually resulted in the computers being purchased, and then replaced one

year later with more new computers, leaving the rented ones stored on pallets in rented

storage units. The investigation found that the Board’s decision to sign an addendum to its

computer lease that would result in $194,512.50 higher expenditure at the end of the lease.

However, no violation of federal guidelines could be found, and given a set of circumstances

at the end of the lease period, it appeared the Board chose the most economical option at the

time. No repayment was required.



employee recognition in the form of memberships to wholesale clubs. An investigation

concluded that the warehouse membership cards were an unallowable expense. The Board

was ordered to repay the unallowable amount ($4,250) from nonfederal sources.

FINDING – Substantiated

2011/12-0160 A DEO employee inadvertently released confidential economic development business

incentive data imbedded in tabs on a template spreadsheet that is used to report such data to

the Governor. The breach was reported to Florida Department of Law Enforcement, which

reviewed and determined a criminal offense was unlikely, and a criminal investigation would

not be conducted. The DEO OIG conducted a review of the release and provided a

chronology of the events surrounding the release of confidential information to the DEO

Director and reviewed subsequent management actions. An intentional breach was not

substantiated.



49

Investigative Referrals October 1, 2011 – June 30, 2012

PROJECT SUMMARY

2010/11-0042 An employer participating in the Florida Back to Work Program allegedly paid fifteen

FBWP participant employees a much lower salary than what was reported for

reimbursement. Although the Workforce Board did not lose any funds, the fact that the

employer may have not paid the participants properly disqualified them from the

program. The information was referred to the USDOL Office of Inspector General. A

review of the documentation.

2010/11-0096 A complainant contacted the Unemployment Compensation Call Center and alleged that

a former UC employee used their position to alter the mailing addresses of several UC

checks and sent them to various addresses in Orlando so they could be intercepted,

altered, and fraudulently cashed. The matter was referred to the United States

Department of Labor Office of Inspector General for criminal fraud investigation. The

investigation resulted in arrest of several individuals, charged with fraud by the United

States Attorney.

2010/11-0099 An agency contracted by the Department to provide call center communications to

Unemployment Compensation claimants received anonymous complaints that unnamed

employees were changing claimant PINs and addresses in order to fraudulently

intercept payments. After receiving the complaints, managers of the contracted agency

discovered one employee with a notebook in her desk containing 150+ names, dates of

birth, and partial and full social security numbers of UC claimants. The matter was

referred to the United States Department of Labor Office of Inspector General for

criminal fraud investigation. The investigation resulted in the arrest of several

individuals, charged with fraud by the United States Attorney.

2010/11-0122 Two youth participants reported not receiving check payments issued by the Board. A

subsequent inquiry found the checks had been endorsed by an employee of a Board

contractor and deposited into a bank account. The matter was referred to local law

enforcement and the employee was eventually arrested and charged with theft. The

funds were part of Able Trust, which is non federal and non state funds, so repayment

was not an issue for the Department, although the state attorney ordered restitution to

the trust.

2010/11-0157 A Department employee complained of a coworker selling items at work and misusing

his computer to sell items to coworkers. An inquiry by his supervisor did not support the

allegation, but did establish enough concern to move the employee to a location where

he can be directly viewed by his supervisor.

2011/12-0009 A complainant contacted the Chief Inspector General and expressed concerns about

oversight of grant funds intended for green job creation. The OIG referred the matter to

the United States Department of Labor Office of Inspector General who was already

familiar with the complaint and the complainant. Since the Department had nothing to

do with the grants funds, this project was closed for no jurisdiction.


50


PROJECT SUMMARY

2011/12-0011 A complainant wrote the OIG to inquire about a restaurant that is docking the pay of all

of the servers each night for payment for silverware replacements. The matter was

referred to the United States Department of Labor Wage and Hour Division.

2011/12-0015 It was reported to the Department by law enforcement that an Unemployment

Compensation telecommuter reportedly committed suicide after receiving an eviction

notice from his landlord. Law Enforcement on the scene considered it an active crime

scene and notified the Department that the employee's state owned computer was being

seized so it could be analyzed for a possible suicide note. The computer was later

returned to the Department as no note was found on it.

2011/12-0018 The Governor's Chief Inspector General received information suggesting an employer

was committing Unemployment Compensation fraud by failing to accurately report gross

wages paid to two employees. The form was sent to the employer by Benefit Payment

Control with regard to two of his employees. The employer returned the form to the

wrong place. This was part of Benefit Payment Control’s quarterly wage audit.

2011/12-0032 An applicant for a Department vacancy alleged that he and four others who claimed

veteran’s preference that appeared to have the minimum qualifications were not

afforded an interview. The Chief Inspector General requested review for whistleblower,

but upon research, it was determined that Veteran's Preference complaints against

agencies falls under the jurisdiction of the Florida Department of Veterans Affairs. The

complainant was referred to the agency that has proper jurisdiction.

2011/12-0036 A complainant alleged a check he wrote to Allstate Insurance was inadvertently sent to

the Department and deposited into the agency's account. The complainant had an

overpayment in Unemployment Compensation. While paying bills, his spouse

mistakenly put the Department check in the Allstate envelope and the Allstate check in

the Department envelope. When received, the Department deposited it by mistake. A

report was made to Financial Management, and a refund was expedited to the claimant.

Benefit Payment Control advised staff to be more careful to review payee information

before depositing overpayment checks.

2011/12-0037 A complainant wrote the OIG to report safety issues related to a licensed child daycare

center. The matter was referred to the Child Care licensing offices at Department of

Children & Families, with a copy of the complaint also sent to DCF inspector general's

office.

2011/12-0038 A recipient of Individual Training Account (ITA) funds for college contacted the OIG and

reported he was getting billed for the college courses he was taking through the ITA.

The Board researched and determined that the college experienced a problem with

accounts payable and inadvertently billed both the Board and the participant. The Board

had already paid the bill by the time the complainant contacted the OIG.

2011/12-0039 A claimant called the Unemployment Appeals Commission regarding the status of his

case, and during the call made threatening remarks to the Unemployment Appeals

Commission representative. The threats were reported to local law enforcement, which

came out and took a report.


51


PROJECT SUMMARY

2011/12-0040 A training provider notified the OIG that upon terminating the employment of one of its

trainers, it was discovered the trainer had been invoicing the regional workforce board

for training that had never occurred. Once brought to the attention of the training

provider, the board was reimbursed for the full price of the training which was

$11,940.00. The money was returned by the Board to the Department.

2011/12-0042 A complainant sent an email stating the services of a Workforce Board were "of no help"

because one stop staff assists with letters and resumes, but does not give patrons one-

on-one face time with potential employers. The matter was referred to Workforce

Services and then to the Regional Workforce Board to contact the complainant and

provide assistance.

2011/12-0043 An employer complained to the Chief Inspector General after a Regional Workforce

Board hired one of the employer's staff. The employer believes that Workforce Boards

should be enjoined from recruiting personnel from employers they do business with.

Upon review of the complainant's issues, it was determined the OIG had no jurisdiction

in the hire/fire decisions of a regional workforce board. This project is closed as "no

jurisdiction."

2011/12-0044 A recipient of Unemployment Compensation Benefits wrote the Chief Inspector General

and said the recent law changes concerning job searches encourages claimants to

misrepresent by applying for jobs for which they do not qualify just the reach the

required 5 per week. The claimant was referred to the Unemployment Compensation

program office for review and response. The claimant was given a full explanation of the

new rules and requirements and how to meet those requirements.

2011/12-0045 A claimant for Unemployment Compensation Benefits wrote the Department to complain

about the automated phone system for claiming weeks. An Unemployment

Compensation representative contacted the claimant, informed her there were no issues

on the claim, and that she would need to file an additional claim every time she earned

over her weekly benefit amount. The claimant was given the representatives contact

information in case she had other questions.

2011/12-0048 It was reported by an accounting department employee at a Workforce Board that after

the resignation of its senior vice president (VP), the VP ordered the Board's accounting

department to issue a check made payable to the VP for $5,000. The matter was

referred to the United States Department of Labor Office of Inspector General for

investigation and further action.

2011/12-0049 A complainant alleged a one stop employee at a Workforce Board contacted her

employer for information by submitting a forged authorization which falsely stated she

was a Workforce Investment Act participant. The Regional Workforce Board conducted

an investigation and determined an employee of a company the Board contracts with for

one stop services had committed an act of "phishing" to obtain the complainant's

personal information. This was done so the employee could take credit for a falsified

placement. The person's employment was terminated, and several corrective actions

were imposed on employees of the contractor.


52


PROJECT SUMMARY

2011/12-0051 A claimant received an unsolicited advertisement from an attorney after he filed for an

appeal with the Unemployment Appeals Commission. The matter was referred to the

DEO General Counsel's Office, which replied that under Florida law administrative

hearings to determine entitlements to unemployment benefits are open to the public.

The Department makes available upon requests a list of the previous week's appeals

decisions.

2011/12-0055 Three claimants wrote individually to the Office of the Governor to request assistance in

getting approved for Unemployment Compensation Benefits. The complaints were sent

to an Unemployment Compensation program manager for assignment and response to

the claimants.

2011/12-0056 A user of Employ Florida Marketplace notified the helpdesk that she had been contacted

by a bogus employer who tried to lure her into a check cashing scam by asking her to

conduct surveys of MoneyGram in her area. The bogus employer sent the user a

counterfeit check for $3,000 and instructed her to keep $300 and send the remaining

$2,700 via MoneyGram to the scammer. The user sent the counterfeit check to a

helpdesk employee. All was turned over to Florida Department of Law Enforcement

Computer Crime Laboratory. Yahoo was notified and disabled the account. The Florida

Department of Law Enforcement advised that user should report to

http://www.ic3.gov/default.aspx. This website is home to the Internet Crime Complaint

Center (IC3), which is a partnership between the Federal Bureau of Investigation (FBI)

and the National White Collar Crime Center (NW3C), funded in part by the Bureau of

Justice Assistance (BJA).

2011/12-0062 The Governor's Chief Inspector General and Office of the Attorney General received

letters from claimants for Unemployment Compensation Benefits requesting assistance

and information regarding their claims. The claimant’s letters were referred to the OIG.

All were referred to the Unemployment Compensation Program Office for research and

response to the claimants.

2011/12-0063 An Unemployment Compensation claimant made threatening remarks during an angry

rant in a voicemail left on an adjudicator's telephone. The call was referred to local law

enforcement, which responded and took an affidavit from the adjudicator.

2011/12-0065 An anonymous child care provider wrote a state senator and complained about the

intrusiveness of oversight by the local Early Learning Coalition. The matter was referred

to the Office of Early Learning, which was transitioned out of the Department in October

2011, and is now under Department of Education.

2011/12-0066 A claimant for Unemployment Compensation wrote the Governor's Chief Inspector

General to report fraudulent misuse of his/her Unemployment Compensation debit card.

The matter was referred to the Unemployment Compensation Program Office which

contacted the claimant and referred the claimant to The Florida Debit Card for filing a

charge dispute.

http://www.ic3.gov/default.aspx


53


PROJECT SUMMARY

2011/12-0071 An appellant whose unemployment claim was in appeal contacted the Governor's Office

and suggested she might "kill" herself because she had no one to talk to about her dire

financial condition and needs her unemployment back. The matter was referred to local

law enforcement to conduct a wellness check on the claimant.

2011/12-0072 A complainant alleged that a one stop employee inappropriately threatened her with

sanctions for insisting she be present when her son (who is enrolled for services) signs

documentation required for participation. The matter was referred to Workforce Services

which contacted the complainant and addressed each concern.

2011/12-0073 A complainant wrote the Governor's Chief Inspector General and alleged that a claimant

collecting Unemployment Compensation Benefits was also working. The matter was

referred to the Unemployment Compensation Benefit Payment Control Unit, which

attempted to contact the complainant because they were unable to locate a claim under

the name given. The complainant never called back and so the referral was dismissed

for insufficient information.

2011/12-0074 A claimant for Unemployment Compensation wrote the Governor's Office and

complained about the debit card option and a disputed charge. Several attempts were

made to contact the complainant to address his/her concerns, but were unsuccessful.

Project closed after failed attempts to contact.

2011/12-0075 An anonymous complainant alleged an Unemployment Compensation executive in the

Ft. Lauderdale office was not qualified to perform her job, hired unqualified friends and

acquaintances in Other Personal Services (OPS) jobs, and overlooked internal qualified

staff when hiring for new vacancies. A review by management did not substantiate the

allegations.

2011/12-0076 A claimant's husband wrote the Governor regarding a delay in getting his wife's

Unemployment Compensation Benefits approved and paid. The matter was referred to

the Unemployment Compensation Program Office for research and response.

2011/12-0077 A complainant alleged that Suwannee River Economic Council's (SREC's)

weatherization program refused to replace her 17 year old central air conditioning unit.

The matter was referred to Community Development program office that worked with the

local community action agency which in turn worked with client and eventually met the

client's needs by fixing her air conditioning unit.

2011/12-0078 A one stop customer alleged he was treated rudely by one stop staff regarding his use of

a cell phone and a computer printer. The matter was referred to the Workforce Board

for research and response.

2011/12-0080 An anonymous complainant wrote the Office of the Governor to express concerns that a

Workforce Board provided more assistance than usual to former employees of a space

contractor simply because they were technicians and engineers with skills too critical to

lose. The matter was referred to the Workforce Board for response. The Board

provided an explanation of its coordinated efforts with the space contractor to obtain

accelerated learning to provide competitive skills to employees after layoffs.


54


PROJECT SUMMARY

2011/12-0081 A jobless college graduate wrote the Office of the Governor and mentioned suicide

"because of everything that I am going through." The matter was promptly referred to

the Orange County Sheriff's Office and they sent a deputy for a wellness check.

2011/12-0082 A claimant wrote the Office of the Governor to complain about job search requirements

for the program, the vague rules regarding appeals and the fact the filing website is not

user friendly. The complaints were referred to the Unemployment Compensation

Program Office for research and response.

2011/12-0083 A claimant wrote to complain that a call center employee "used abusive language" and

could not help with accepting documents and scanning to a claims agent. The complaint

was referred to the Unemployment Compensation Program Office for research and

response.

2011/12-0088 A former workforce board employee made various allegations of wrong doing during the

period of employment in 2009. The employee was referred to the Board's new interim

director who contacted the employee to hear the complaints, which were management

issues.

2011/12-0089 A former employee of a staffing agency contracted by a Regional Workforce Board

alleged in an email to the Governor's Office that the Board does not care about the

accuracy or truthfulness of job placement data, but rather only cares about "numbers."

The former employee alleged his employment was terminated because his job

placement numbers were low. An inquiry by the Board and report to the OIG revealed

the complainant's allegations were not substantiated. The complainant is an employee

of a Board subcontractor. The complainant was fired for cause with multiple

performance issues.

2011/12-0090 An anonymous complainant alleged that an employee in the Ft. Lauderdale Hub is

disrespectful to supervisors and coworkers alike. The complaint was originally sent to

Unemployment Compensation Program Administration and copied to the OIG. The

matter was referred to Unemployment Compensation Administration, since it was a

personnel issue more than a fraud, waste and abuse issue.

2011/12-0091 A one stop customer reported to management that three one stop employees were

overheard talking about committing insurance fraud in front of one stop customers. The

matter was referred to the Regional Workforce Board for inquiry, which found the

customer overheard another customer discussing something she heard on the nightly

news regarding a national sports star's engagement. The determination was

inappropriate conversation at the front desk. Staff were disciplined and retrained.

2011/12-0092 A Unemployment Compensation claimant sent a distraught email to the Governor's

Office with the subject "Good bye” saying "I've done everything the world has asked of

me, followed blindly driven to Orlando and Virginia for interviews, YES I'M Crazy, nuts

and I'm done…. I'm sorry for the mess I left… But I did try…" The matter was referred to

local police and requested a wellness check under the Baker Act.

2011/12-0099 A Workforce Board reported that it had discovered that a former counselor may have

committed fraud by creating false vendors to generate checks. The counselor allegedly


55


PROJECT SUMMARY

completed paperwork to obtain rent payments for participants; and it was later

discovered the participants did not request rent payments and the landlord names and

addresses did not match records in Employ Florida Marketplace (EFM). OIG confirmed

that the counselor was arrested and charged with four felony counts in eleven different

instances of fraud.

2011/12-0100 A one stop customer contacted the Office of Inspector General to complain about lack of

services and inappropriate comments and responses from one stop staff. The matter

was referred by the inspector general to the director of the Workforce Board.

2011/12-0102 The OIG was requested to assist a federal agency in determining if any federal funds

were disbursed through the Community Development Block Grant to a construction firm

building low income housing in the Miami area. The matter was referred to the assistant

director of Housing and Community Development who contacted the agency and

provided the needed assistance.

2011/12-0103 An anonymous writer alleged that workforce board staff share system logons and

passwords with volunteers, misuse their positions, engage in loafing and sell products

while at work. The letter was referred to the Regional Workforce Board for review and

response. Although no policy violations were found, the Region did make some policy

changes in regards to staff referrals of family members.

2011/12-0105 A former employee of the Unemployment Compensation program visited the Caldwell

Building to request legal representation about an unknown issue. Due to his bizarre

behavior, the local police were called. The incident ended without an arrest. The

employee was turned over to family members by local police. No further OIG action was

required.

2011/12-0106 A claimant who lost his appeal for Unemployment Compensation mailed biohazard

waste to the Unemployment Compensation Program Office. The matter was referred to

the local police department and reported as harassment.

2011/12-0107 A complainant wrote the OIG and alleged a participant in a one stop center is committing

fraud by accepting $11,000 in tuition by using her maiden name to shield considerable

assets, including the fact her husband owns a successful trucking business. A review by

the Workforce Board did not substantiate the allegations, using tax information, income

reporting, food stamp database and home foreclosure information.

2011/12-0108 A vacationer wrote the Office of the Governor to report an alleged scam between a

property owner, a towing service and a cab company to increase towing instances and

profits at the expense of unsuspecting senior tourists. The complaint was forwarded to

the OIG for handling, which in turn determined the county with jurisdiction over the

matter and subsequently referred the matter to the county.

2011/12-0110 An anonymous writer to the Governor's Office alleged managers at a Regional

Workforce Board were hostile and disrespectful of staff, provide little or no guidance,

and create "a high level of tension in the office." The complaint was referred to the

executive director of the Workforce Board who conducted an inquiry and addressed

each allegation in writing.


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PROJECT SUMMARY

2011/12-0111 A claimant for Unemployment Compensation Benefits wrote the Governor's Office to

complain about the decision of an adjudicator. The matter was referred to the program

for review. The issue involved self employment, and the Department had to determine

through DOR records if the claimant could be considered an employee. This

complicated issue was referred to a program supervisor for sorting out. No further OIG

action was required.

2011/12-0112 A mother and daughter wrote to the Attorney General about the Unemployment

Compensation Office sharing social security numbers and other personal information

with their former employer. A supervisor from the Unemployment Compensation Office

attempted to contact the claimant and left detailed messages and contact information.

No reply from the claimant was received. The project was closed due to insufficient

information.

2011/12-0114 An anonymous complainant wrote the Governor's Office and alleged a one stop staff

member had threatened to shoot one stop staff and customers. The employee was

evaluated by a psychiatrist and while not judged to be a threat, his employment in the

one stop center was terminated. Workforce Board management felt staff overreacted on

this and subsequently met with staff at the one stop centers to talk about not spreading

rumors and the proper way to handle such issues. The IG advised this project could be

closed since corrective action was taken by the Board.

2011/12-0115 An Unemployment Compensation claimant wrote the Governor's Office to complaint

about not being able to get through on the telephones to check the status of his/her

claim. The complaint was referred to the Unemployment Compensation Program Office

for handling and response to the claimant.

2011/12-0116 An employee of a one stop center in South Florida wrote the Governor's Office to

express concerns over the safety and security of staff due to irate one stop customers

and unarmed security guards. The matter was referred to the Regional Workforce

Board for review and any action deemed appropriate. The Board said additional training

would be provided, and security had been expanded to full time.

2011/12-0117 A Workforce Board notified the OIG of a Temporary Assistance for Needy Families

(TANF) client that allegedly committed participant fraud by forging a doctor's signature

on a medical verification form in order to receive assistance without performing the

required 35 hours of weekly activities. The alleged fraud was referred to the Benefit

Fraud Unit at the Department of Children and Families for investigation.

2011/12-0118 An attorney for a claimant ruled eligible for Unemployment Compensation Benefits

reported that the claimant's employer engaged in witness tampering by ordering another

employee not to testify during the claimant's appeal hearing. The complaint was

directed to the Unemployment Compensation Appeals Office which contacted the

attorney and advised that this matter would have to be pursued through the court system

and that it was out of the jurisdiction of both the Department and OIG.

2011/12-0119 A proclaimed veteran wrote a letter addressed to President Obama and Governor Scott

with a possible underlying veiled threat. The letter was scanned and sent to the United


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PROJECT SUMMARY

States Secret Service and Florida Department of Law Enforcement.

2011/12-0120 A complainant reported that a one stop caseworker told her daughter (who is receiving

cash assistance) that a certain amount of money must be withheld from the check each

month for "odds and ends." The complainant was referred to Workforce Program staff

who researched the file and determined the reduced amount was failure to report rent

and utility obligations which reduced the benefits. No fraud was indicated.

2011/12-0121 A complainant alleged a heavy equipment course he took at a local community college

was inferior, in that few that completed the course got jobs and several failed the skills

test. An OIG inquiry determined the college was not paid with workforce funds, and that

the complainant had actually demonstrated non-compliance with the program on

numerous occasions. The project was closed as non-jurisdictional.

2011/12-0122 An employee of an employee leasing company assigned to a one stop center sent an

email to a coworker that she interpreted as a threat because in it the employee said he

might "go postal and shoot all of my co-workers." The matter was referred to local police

who conducted an investigation for assessment under the Baker Act. Although the

employee was not Baker Acted, his employment with the temporary agency was

terminated.

2011/12-0123 An anonymous complainant wrote the Governor's Office and alleged supervisors in the

Unemployment Office were rude to OPS workers, practice racism and failed to follow

claims rules by refusing to verify claimants' employment separation. An in-house review

was conducted and there was no evidence to support the allegations. However, since

there were references to race relations, the responses and findings were sent to the

Department’s Office of Civil Rights for review.

2011/12-0126 A complainant wrote the OIG to inquire if her employer could randomly change her work

schedule at a group home for disabled adults. The OIG advised the complainant DEO

has no jurisdiction, but encouraged her to contact United States Department of Labor

Wage and Hour Division if she had questions about hours and wages.

2011/12-0127 A businesses owner, referred to the OIG by his local State Attorney, called to report that

he had made nine calls to the Unemployment Compensation Program Office, left nine

separate messages, and after over one week of waiting had not received one call back.

The OIG referred the complaint to the Unemployment Compensation Program Office for

handling and response.

2011/12-0128 A former employee of an Unemployment Compensation Office alleged nepotism and

favoritism by the Office's current supervisor. The director of Workforce Services called

the complainant personally to discuss his/her concerns. The Department did not find a

basis for any further action on the complainant's issues. No further action is required.

2011/12-0129 A complainant with a wage and hour issue contacted the Department of Agriculture &

Consumer Services which referred the matter to the OIG. The OIG referred the

complaint to the United States Department of Labor Wage and Hour Division.

2011/12-0130 An appellant for Unemployment Compensation wrote the Office of Attorney General to


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PROJECT SUMMARY

complain about being notified by the Department that he was being charged by the

Unemployment Compensation Benefit Payment Control Unit for benefits overpaid in the

month of December 2011. The matter was referred to the program office for handling

and response to the claimant.

2011/12-0132 An employee reported to the Department’s Office of Civil Rights that she felt her recent

demotion was because she reported a coworker who was not reporting hours spent out

of the office on her timesheet. The matter was referred to the Unemployment

Compensation Program for review of the employee's timesheets compared with

attendance logs. Although there was some discrepancy found, it could not be proven

the employee had falsified her timesheet.

2011/12-0133 A claimant for Unemployment Compensation wrote the Florida Attorney General's Office

to complain about a bill he received from the Department for overpayment on his claim.

The matter was referred to the Benefit Payment Control Unit.

2011/12-0134 A claimant for Unemployment Compensation contacted the OIG to register his

disapproval at the Workforce Board's sanctions for reduced benefits for non-compliance

with required job searches and other required job search activities. The complaint was

referred to the local one stop operator and Workforce Board for handling.

2011/12-0137 An employer in the work experience program failed to report termination of employment

for one participant. Timesheets were faxed to the Workforce Board's Finance

Department by the employer for payment, although it is uncertain where the fax

originated. A review by the Board determined problems in the manner in which

timesheets were reported. Several corrective measures were taken to ensure an

incident of this nature does not occur again.

2011/12-0140 An employee of an Unemployment Compensation field office reportedly was retaliated

against after reporting that a fellow employee was not accurately reporting time away

from the office on a timesheet. The matter was referred to the supervisor who

conducted a review and found some timesheet discrepancies that were addressed with

the employee.

2011/12-0141 A claimant for Unemployment Compensation wrote the Governor's Office and

threatened to commit workplace violence at his former employer for firing him. The OIG

scanned the letter and sent it to the Orlando Police Department for action deemed

necessary.

2011/12-0144 A claimant for Unemployment Compensation told an Unemployment Compensation

representative that he sits in the dark 24 hours a day and sometimes wants to "blow his

brains out." The matter was referred to local law enforcement for a wellness check.

2011/12-0145 A former employee of a Workforce Board alleged the Board was making false negative

claims about his prior work history to block him from getting a job, using the one stop

center services and from receiving unemployment. A review by the OIG found no

evidence to support the claims.

2011/12-0153 A complainant wrote the Chief Inspector General and reported a possible breach of


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PROJECT SUMMARY

personal and confidential data that was inadvertently exposed to the Internet. After

talking to the complainant, it was reported there was no evidence the information was

viewed by anyone else, and more than a year had passed with no consequence. As a

result, a breach as defined by law was not suspected.

2011/12-0154 An appellant for Unemployment Compensation Benefits wrote the OIG for help resolving

an appeal and benefit overpayment issue. The complaint was referred to the

Unemployment Compensation Appeals program manager for review and response. No

further action required.

2011/12-0155 An employer wrote the OIG to inform the Department of a former employee fired for

misconduct (business interference and extortion against the company), presumably to

intercede or preempt any filing for Unemployment Compensation by the former

employee. The matter was referred to the Unemployment Compensation Program and

was routed to the appropriate adjudicator.

2011/12-0157 A complainant wrote the OIG to report a former employer for failing to pay net profit and

consignment commissions as originally promised, as well as the title to a car he

purchased while working there. The complaint was referred to the United States

Department of Labor Wage and Hour Division which accepted the complaint and agreed

to contact the complainant and provide assistance.


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APPENDIX II – AUDIT PROJECTS

During the period from October 1, 2011 – June 30, 2012, the Audit Section conducted

8 comprehensive internal audit projects and 29 audit-related projects which resulted in

various recommendations for improvement in operations. The following table

summarizes the audit-related activities.

Summary of Audit-Related Activities October 1, 2011 – June 30, 2012

PROJECT DESCRIPTION

2010/11-0058 Reviewed fiscal year 2009-10 Federal Single Audit, Office of Management and Budget A-

133, and Florida Single Audit (if applicable) reports performed by the

recipients/subrecipients contracted audit firms (CPAs), which included all regional

workforce boards. The review process included tracking the receipt of each recipients and

subrecipients, audit reports, reviewing the audit reports for compliance with reporting

guidelines, reviewing the auditee’s corrective action plan, and obtaining additional

information and documentation as necessary to determine if corrective actions were

sufficient. After completion of these tasks, Management Decision Letters were issued by

the OIG.

2010/11-0066 Provided liaison between DEO and the Auditor General in the operational audit of Labor

Market Statistics and the Workforce Investment Act (WIA) programs. The final audit

included four findings, which the Department has worked to correct. The coordination of

both entrance and exit conferences as well as helping to ensure that the audit activity

continued with minimal interruptions was part of the liaison process.

2010/11-0090 Coordinated audit of training provided and outcomes achieved under the WIA for Adult and

Dislocated Workers programs to be performed by USDOL-OIG. There were no findings in

the final report that required a response.

2010/11-0093 Coordinated audit of ARRA Reemployment Services to be performed by USDOL-OIG. The

actual work was performed by Foxx & Co. who was under contract with USDOL-OIG. The

final report had no findings relating to the Department of Economic Opportunity.

2010/11-0143 Provided liaison between DEO and the Auditor General in the annual Unemployment

Compensation - Information Technology audit of selected information technology (IT)

controls applicable to the UC system for fiscal year 2010-11. The final audit included five

findings, which the Department has worked to correct. The coordination of both entrance

and exit conferences as well as helping to ensure that the audit activity continued with

minimal interruptions was part of the liaison process.


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PROJECT DESCRIPTION

2010/11-0166 Provided liaison in connection with Auditor General for their audit of Early Learning

Coalitions and the Office of Early Learning. This audit was being performed pursuant to

Section 2, Senate Bill 2156 passed by the 2011 Legislature. Responsibility for this audit

was transferred to the Office of Early Learning as of October 1, 2011; however, DEO

continued to assist with this project.

2010/11-0174 Responded to a USDOL request in connection with the Governors Resolution Report letter

for the Auditor General’s fiscal year 2009-10 federal awards audit. The USDOL requested

additional information to be used in determining that appropriate correction actions had

been taken as a result of the audit. This was part of the process of following up on audit

findings by the awarding federal agency.

2010/11-0175 Provided liaison between DEO (previously AWI) and the USDOL-OIG in connection with

their audit of Unemployment Compensation, Administrative Costs. The Department

responded to a statement of facts received from the auditors; however, a final report was

never received.

2010/11-0177 Prepared response to U.S. Department of Health and Human Services (DHHS) in response

to request for the status of findings pertaining to the 2009-10 federal awards audit.

2011/12-0006 Performed 6-month follow-up to the Internal Audit of the DEO Security of the Department of

Highway Safety and Motor Vehicles’ Cross-Match Data. The original report was released

in April 2011 and had five findings that the Department took steps to address.

2011/12-0007 Performed 6-month follow-up to internal audit of the DEO’s Implementation of Ethics

Requirements. The audit report had two findings that have been corrected.

2011/12-0010 Prepared on a monthly basis, four monthly tracking reports to record and trace corrected

audit findings from audits performed by external audit entities and that resulted in potential

audit liability for DEO from these audits and audit activities from the outside entities. The

reports were titled: Potential Liability from Prior Audit Findings, Summary of Audit Findings

Being Tracked by the OIG (State) Summary of Audit Findings Being Tracked by the OIG

(Federal) and Audits/Reviews conducted by External Entities.

2011/12-0020 Performed attestation of access security of Highway Safety and Motor Vehicles (HSMV)

cross match data in accordance with the requirements of the Memorandum of

Understanding between the Department of Economic Opportunity and Highway Safety

(HSMV) and Motor Vehicles. The overall controls were in place to protect the integrity of

the data that is received from HSMV. This attestation was submitted to HSMV in February

2012.


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PROJECT DESCRIPTION

2011/12-0029 At the request of executive director, the OIG performed a risk assessment for the newly

created Department of Economic Opportunity prior to October 1, 2011 launch date. This

process had a two-fold purpose: 1) to identify potential risks to the Department’s

operational and programmatic activities; and 2) to assists the Office of Inspector General in

identifying planned audit projects for the coming months. In order to comply with this

request, a risk assessment of senior management was performed and proposed audit

projects presented to and approved by the executive director.

2011/12-0046 Prepared Schedule IX for the Department’s Budget office regarding major audit findings for

fiscal year 2010-11. This schedule was included in the Legislative Budget Request for

fiscal year 2012-13.

2011/12-0047 Coordinated preparation of Summary Schedule of Prior Audit Findings for Auditor General,

that was included as part of the federal awards audit for the 2010-11 fiscal year.

2011/12-0054 Developed a Work Plan for DEO to cover the period of October 1, 2011 through June 30,

2012. This plan was presented to and approved by the interim executive director.

2011/12-0058 Provided liaison between DEO and the Auditor General in their audit of Federal Awards

and Financial Reporting for fiscal year 2010-11. There were fourteen findings relating to

federal awards that were included in the audit report which the Department has been

working to correct. The coordination of both entrance and exit conferences as well as

helping to ensure that the audit activity continued with minimal interruptions was part of the

liaison process.

2011/12-0059 Performed an Agency for Enterprise Information Technology (AEIT), Department Risk

Assessment Survey Review. This Risk Assessment is to be performed every three years.

There were no significant findings that resulted from this review.

2011/12-0060 Completed the review of Florida Housing Finance Corporation quarterly performance

reports as provided by Chapter 420, Florida Statutes. There were no significant findings

that resulted from this review.

2011/12-0068 Provided status of 2009-10 audit findings from Auditor General federal awards audit report

to the US Department of Energy in connection with findings concerning Weatherization

program. There were five findings that DEO is working to correct.

2011/12-0113 Performed a second follow-up to the Department of Economic Opportunity’s Employees

and Contractors Background Screenings internal audit. The report had nine

recommendations which the Department took steps to address.


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PROJECT DESCRIPTION

2011/12-0124 Conducted an assessment of the reliability and validity of the information provided by the

Department for performance measures and standards as part of the Long Range Program

Plan (LRPP) reported for the fiscal years 2012-13 through 2016-17. In addition, we

reviewed the actions taken by the Department to improve program performance and meet

program standards. No recommendations were made.

2011/12-0125 The OIG's Internal Audit Charter was revised to address the newly created Department of

Economic Opportunity.

2011/12-0131 Performed six-month follow-up to the UC-IT audit issued by the Auditor General for fiscal

year 2010-11. The audit was originally issued in September 2010 and contained five

findings and recommendations, which the Department is in the process of implementing

corrective actions.

2011/12-0135 DEO's OIG long-term Work Plan was prepared for fiscal years 2012-2013 and 2013-2014

in accordance with Section 20.55, Florida Statutes. An integral part of this work plan

included a risk assessment that was sent to DEO's senior management.

2011/12-0138 Prepared a presentation and a written report on audit activities for WFI Finance and

Administration Council. This task was to aid in fulfilling OIG’s annual reporting obligation to

WFI Finance Committee on the status of all outstanding audit issues and liabilities.


reports as provided by Chapter 420, Florida Statutes. This review assessed the validity and

reliability of the data included in the 2011 annual report. There were no significant findings

that resulted from this review.


reports as provided by Chapter 420, Florida Statutes. This review assessed the validity and

reliability of the data included in the 1st quarter 2012 report. There were no significant

findings that resulted from this review.


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APPENDIX III – CORRECTIVE ACTION

Section 20.055(7)(c)4., F.S., requires the identification of each significant

recommendation described in previous annual reports on which corrective action has

not been completed. In total, there are 9 such issues: six related to regional workforce

boards and three related to Department program operations.

REPORT/ FINDING

DESCRIPTION OF ISSUE STATUS

Auditor General Federal Awards Audit Report FA 2011-022 Report FA 2010-017

Weatherization Assistance for Low-Income Persons (WAP)

CFDA 81.042 Management had not implemented procedures to monitor whether certain types of costs incurred by subgrantees were supported by subgrantees’ records, such as vendor invoices, time and attendance records, and appropriate cost allocation methods.

The Department contracted with a Certified Public Accounting firm in April 2011, to develop an expenditure tracking system with all subgrantees that includes documenting costs of providing services allowing DEO staff to review those costs periodically as appropriate. DEO has implemented the new Monthly Expenditures Tracking System (METS) with all subgrantees. DEO has requested that all subgrantees submit a completed Monthly Expenditure Tracking Sheet (METS) for every month of each of their American Recovery and Reinvestment Act (ARRA) WAP Agreements (Capacity, Single Family, and when applicable, Multi-Family) from the beginning of any ARRA activities back to 2009. The METS provides “actual costs” amounts incurred by subgrantees for the three categories. To ensure the validity of the data reported, DEO staff will perform a random audit of three months worth of support documentation for each subgrantee. The random audits of the support documentation will be performed on-site with each subgrantee. In cases where subgrantees were reimbursed for amounts greater than costs actually incurred, subgrantees will be given the opportunity to either repay the amounts identified or perform additional weatherization activities in an amount commensurate with the questioned costs identified in the reconciliation.

Auditor General Federal Awards Audit Report FA 2011-023 Report FA 2010-018

Weatherization Assistance for Low-Income Persons

CFDA 81.042 Management did not fully demonstrate the appropriateness of the

DEO program staff has contacted both universities to secure additional documentation. Documentation has been received and DEO is confident that all actual costs will be accounted for and that any necessary reconciliation will be accomplished to resolve this finding. A letter was sent on June 8, 2012, to the University


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REPORT/ FINDING


costs charged for fixed price contracts entered into with State universities. Additionally, procedures did not provide for periodic reconciliations of payments made to costs incurred by the universities or provide for the return of excess funds.

of Central Florida requesting the repayment of $53,816. A letter was sent on the same date requesting additional information that must be provided before a closeout can be performed. The division is currently awaiting responses from both universities.

Auditor General Operational Audit Report 2011-021 October 2010 Finding No. 6

Southwood Shared Resource Center - Unemployment Insurance Program - Information Technology Operational The Department’s Operational Security Plan for the Florida Unemployment Compensation Program contained outdated and inaccurate information related to the UC System security environment. Additionally, there was no evidence of a periodic review of the Plan by Department management. It was recommended that the Agency update the Operational Security Plan for the Florida Unemployment Compensation Program to reflect the current system environment and periodically review the Plan to ensure its ongoing effectiveness.

The Department will review the Operational Security Plan for Florida Unemployment Compensation Program to reflect the current system environment and develop an on-going plan for ensuring its effectiveness through periodic reviews. The Department has received a Supplemental Budget Request (SBR) from the United States Department of Labor (USDOL) to hire a vendor to assist in performing a review and subsequent update of the Operational Security Plan.

2009/10-0068 and 2009/10-0088 Tampa Bay Workforce Alliance

The OIG investigation determined that in addition to $34,028.29 in unallowable food expenditures in project #2009/10-0068, the Board must repay another $113,099.89 for unallowable expenditures identified in this

A DOAH hearing was held and this matter is currently in litigation.


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REPORT/ FINDING


investigation for a total disallowance of $147,128.18.

2009/10-0123 Polk Works

It was recommended that the amount of $310,421 representing costs relating to 2007/2008 expenditures for building changes/furnishings be disallowed and repaid to DEO.

Settlement is being discussed between the DEO and Polk Works, but not yet resolved.

RWB 7 Florida Crown Fiscal year audit reports: 2009-10 and 2010-11

Procedures are not in place to identify and make auditor’s recommendation adjusting journal entries. The Board should gain an understanding of the adjustments made and should consider whether to revise it procedures on an ongoing basis and especially as part of year-end closing procedures.

Based on the Board’s response, subsequent communication and documentation, steps have been taken toward addressing this finding. The Board has continued to retain training services to assist accounting personnel in understanding year-ending closing entries and to ensure that the entries closes or adjust the appropriate accounts. Also, the Board included in their year-end closing procedures a step to review prior year audit adjustments to ensure all similar type entries are posted. We are unable to determine whether similar adjusting journal entries will be made as part of the year-end closing. As of September 5, 2012, the Board’s staff had not completed the year-ending closing entries. We believe that the Board’s action to fully correct this finding is essential to preventing similar future audit findings. Review of the June 30, 2012, audit report will disclose whether the finding has been resolved or not. The audit report must be submitted pursuant to the OMB A-133 Circular, which is the earlier of 30 days from the date the report is provided to the Board or nine (9) months from the end of the period audited.

RWB 17 Polk Works Fiscal year audit report: 2008-09

Procurement procedures for certain purchases did not conform to standards identified in OMB Circular A-110 and to the Organization’s internal procurement policies. Procurement policies and procedures should be followed for all items. Costs disallowed: $123,480

Total costs disallowed related to the fiscal year audit was $155,559 and is pending resolution.


Prior approval for purchases (capital expenditures) with a unit cost greater than $5,000 was not obtained from the



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REPORT/ FINDING


funding source, DEO (formerly Agency for Workforce Innovation) which is required in DEO’s “Financial Guidance on Prior Approval Procedures for selected costs and Administrative Requirements.” Prior approval of the funding agency is also required by the OMB Circular A-122. Costs disallowed: $24,579


A contribution was given to an organization. Attachment B. Sec. 12 of OMB Circular A-122 does not allow donations or contributions. Costs disallowed: $7,500


An equal opportunity employer/program. Auxiliary aids and services are available upon request to individuals with disabilitie s. All voice

telephone numbers on this document may be reached by persons using TTY/TDD equipment via the Florida Relay Service at 711.

FY 2012 - Florida Inspectors General

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