Summary

This audit focused primarily on expenditures and related activities for the period October 1, 1995, through September 30, 1996, and selected District actions taken during the period October 1, 1992, through September 30, 1995. Matters coming to our attention relating to noncompliance with various guidelines and those relating to significant deficiencies in the design or operation of the system of internal control for those operations audited are as follows:

Board Members

Two individuals served as members of the Hillsborough River Basin Board although they had failed to qualify for membership as provided for in Section 114.01(1)(h), Florida Statutes, and as a result were not eligible for confirmation by the Senate pursuant to Sections 114.05(1)(a) and 373.0693(4), Florida Statutes. (See paragraphs 39 through 42.)

Budgetary Controls

Our comparison of the District's expenditures and commitments with approved budgetary authority for the fiscal year ended September 30, 1996, disclosed that, although total expenditures and commitments for each of the District's funds did not exceed approved budgetary authority, reported expenditures and commitments classified by object within funds exceeded approved budgetary authority in several instances totaling approximately $718,000 during the 1995-96 fiscal year. (See paragraphs 43 through 47.)

Contrary to Section 373.536(4), Florida Statutes, District procedures do not require Governing Board approval for all budget transfers. In addition, although the District has implemented procedures which require that budget transfers be approved by designated District staff, our examination of budget transfers disclosed seven budget transfers totaling $413,470.40 which had not been approved by the appropriate District staff. (See paragraphs 48 through 52.)

Termination Pay

A District employee who terminated on September 28, 1996, was paid $5,881.92 for 176 hours of annual leave credited for the 1996-97 fiscal year (October 1, 1996, through September 30, 1997). (See paragraphs 53 through 57.)

Travel Related Expenditures

Contrary to District Procedure Number 13-5, Travel, the District made travel payments to employment candidates although the candidates did not always sign the travel authorization forms and travel vouchers and the travel authorization forms for the employment candidates were completed subsequent to the period of travel. (See paragraphs 60 through 62.)

As similarly noted in audit report No. 12299, District records for travel related disbursements were not adequate to demonstrate the necessity of the expenditures as to the number of individuals attending the 20th Annual Conference on Water Management held in Tallahassee, Florida, on November 12-14, 1995, or the 21st Annual Conference on Water Management held in Ft. Lauderdale, Florida, on September 25-27, 1996. (See paragraphs 63 through 67.)

Utilization of Resources

Vehicles assigned to three District employees were used to commute from home to work although District procedures prohibited personal use of the vehicles. In addition, the commuting value of the vehicles was not included in the gross income reported for these employees, contrary to applicable United States Treasury Regulations. (See paragraphs 68 through 71.)

Capital Outlay

Our review disclosed seven capital improvement projects for which funds were expended but which were not included in the District's Fiscal Year 1995 Fiscal Report and Fiscal Year 1996 Five Year Capital Improvement Plan (Plan). The contract amounts of these projects ranged from $205,575 to $1,045,000. In the absence of all capital improvement projects being included in the Plan, the District has not demonstrated compliance with Section 373.079(4)(b)3., Florida Statutes. In addition, the effectiveness of the Plan is limited in that policy makers may not have the necessary information to make informed decisions regarding the funding of the District's capital improvement projects. (See paragraphs 72 through 75.)

Land Acquisitions

The District utilized sales to governments as comparables for estimating property values or stated that the highest and best use of the property being appraised was preservation and conservation. Highest and best use such as preservation and conservation are limited almost exclusively to government and conservation groups. As a result, the value used by the District to negotiate the purchase price for these land acquisitions may not have been based on their value in the competitive and open market. (See paragraphs 78 through 84.)

The District's records for the Pruitt land acquisition did not demonstrate that appraised value estimates properly considered significant changes to the original purchase and appraisal assumptions regarding the extent of road frontage. As a result, the District had limited assurance that the appraisals relied upon for negotiating the purchase price provided an appropriate basis for negotiation. The District negotiated a purchase agreement on August 5, 1994, with the owner to purchase the final surveyed acres of 5,793.46 at $1,550 per acre, including approximately 100 feet of State Road 200 frontage, rather than the 1.3 miles of frontage considered in the market analyses. (See paragraphs 85 through 90.)

The Southwest Florida Water Management District Executive Director's written response to the audit findings and recommendations included in audit report No. 13056 is presented as Exhibit E.