Summary

This audit of the Office of the State Attorney, Seventh Judicial Circuit, focused primarily on assets, liabilities, fund equities, revenues and cash receipts, expenditures and disbursements, budgetary controls, management reporting, motor vehicle assignment and use, public assistance fraud cases, workers' compensation fraud cases, and Forfeiture and Investigative Support Trust Fund activities for the period January 1, 1996, through February 28, 1997, and selected Office actions taken through June 30, 1997. Matters coming to our attention relating to noncompliance with various guidelines and those relating to significant deficiencies in the design or operation of the internal control for those operations audited are as follows:

Financial Management

Office of the State Attorney operations are to be funded by legislative appropriations of the State's General Revenue Fund and the Office's trust funds. However, the Office, in June 1996, had to acquire additional resources to supplement appropriated and available funding so that financial obligations existing at June 30, 1996, could be satisfied. The Office's funding problems continued to exist as of December 31, 1996. Audit tests of the Office of the State Attorney's financial management processes and records disclosed several deficiencies that may have contributed to the creation or continuation of fiscal difficulties. Those deficiencies included the overstatement of certain trust fund revenue estimates, the absence of sufficiently detailed budgetary accounts to track the extent to which budgeted trust fund revenues were being realized, the failure to include in the operating budgets the amounts needed for the repayment of loans, the failure to properly record some expenditure transactions as expenditures, and the absence of analyses supporting the appropriateness of the salaries and benefits expenditures transferred and charged to particular restricted resources. During the last half of the 1996-97 fiscal year, steps were taken to address the Office's fiscal difficulties, including, among other things, the layoff of a number of employees. (See paragraphs 18 through 21.)

Loan Transactions

In June 1996, the State Attorney, Seventh Judicial Circuit, and the State Attorney, Fourteenth Judicial Circuit, entered into an agreement for the loan of a total of $75,000 to the Seventh Judicial Circuit. The Office's authority for borrowing operating resources was not clear. Also, our tests of the $75,000 loan disclosed that the transactions relating to the loan were incorrectly recorded in the State Automated Management Accounting Subsystem. In addition, we were unable to determine the extent to which the loan repayment made from restricted resources actually represented an expenditure, or reimbursement of an expenditure, properly chargeable as a use of the restricted resources. (See paragraphs 22 through 24.)

Boot Camp Contract

Section 39.057, Florida Statutes (1995), authorizes the Florida Department of Juvenile Justice (Department) or, contingent upon local funding, a county or municipal government, to implement and operate a boot camp for appropriate children. Alternatively, Section 39.057(11), Florida Statutes (1995), provides that the Department, a county, or municipality may contract with a private organization for the operation of its boot camp. In connection with the Department’s boot camp program, the Office of the State Attorney, on June 30, 1995, entered into a contract with the Department under which the Office of the State Attorney agreed to operate, during the period July 1, 1995, through June 30, 1996, a boot camp for the Department’s Northeast Commitment Service Area (Department Districts 3, 4, 12, and 13). Subsequent amendments to the contract extended the contract period to February 28, 1997.

As Section 39.057, Florida Statutes (1995), authorizes only a county government, municipal government, the Department, or a private organization under contract to the county government, municipal government, or the Department to operate a boot camp, the authority for the Office's involvement in the boot camp contract was not clear. Also, although the Office engaged the Volusia County Sheriff's Office to staff and manage the boot camp, the Office did not negotiate a written contract with the Sheriff's Office and did not always timely pay amounts due to the Sheriff's Office upon receipt of applicable resources from the Department. In addition, the Office had not timely refunded a duplicate payment of $60,450 received from the Department. We have been advised that the Office is no longer involved in the boot camp program. (See paragraphs 25 through 30.)

Aftercare Contract

Section 39.057(6), Florida Statutes, requires that time spent in a boot camp be followed by a period of time in aftercare. Section 39.057(11), Florida Statutes, provides that the Department, a county, or a municipality may contract with a private organization for the operation of its aftercare program. Our review disclosed that the Office of the State Attorney, on June 29, 1996, entered into a contract with the Department under which the Office of the State Attorney agreed to provide, during the period July 1, 1996, through June 30, 1997, aftercare services for those children leaving the State Attorney’s boot camp facility.

As Section 39.057, Florida Statutes, authorizes only a county government, municipal government, or the Department to contract with a private organization for the provision of aftercare services, the authority for the Office's involvement in the aftercare contract was not clear. Also, although the Office made arrangements for a private organization to begin providing aftercare services on July 1, 1996, the Office did not negotiate a written contract with the private organization for the period July 1, 1996, through June 30, 1997, until December 4, 1996, and did not always timely pay amounts due to the private organization upon receipt of applicable resources from the Department. We have been advised that the Office is no longer involved in the aftercare program. (See paragraphs 31 through 36.)

Personnel Administration

The Classification and Pay Plan for the Employees of the Offices of the State Attorneys of the State of Florida (Classification and Pay Plan) provides that, subject to availability of funds, the State Attorney or designee may pay an employee for all annual leave hours in excess of the maximum of 360 hours (480 hours for management employees) on December 31 or, in the absence of necessary funds, may convert all unused annual leave hours in excess of the maximum to sick leave on an hour-per-hour basis or, under certain justifiable conditions for management employees only, may grant approval to retain these hours for a specified period. The Classification and Pay Plan also provides that an employee may be paid for unused leave balances upon terminal separation from a State Attorney's Office. Chapter 96-424, Laws of Florida, provided that during the 1996-97 fiscal year, agencies which have established or approved personnel policies for employees relating to the payment of accumulated and unused annual leave were prohibited from providing payment which exceeded a maximum of 480 hours of actual payment to each employee for accumulated and unused annual leave.

As indicated by the following, the Office of the State Attorney did not always comply with applicable laws, administrative rules, and other guidelines governing payments for excess accumulated annual leave and leave payments to terminating employees:

• The Office paid amounts totaling $22,793.58 to four employees for accumulated annual leave in excess of the maximum as of December 31, 1996. In response to our inquiries, the former State Attorney advised us that Office staff had verbally notified him that funds were available to make the excess leave payments. However, although requested, documentation was not provided to demonstrate that the Office had made an analysis of funds availability prior to making these payments. In a calculation prepared in December 1996 to facilitate discussions of items relating to the transition from the former State Attorney to the current State Attorney, Office personnel had projected that Office expenses would exceed revenues for the 1996-97 fiscal year. Given the Office's funding problems, it is not apparent that payments for excess annual leave should have been made.
   
• Contrary to Chapter 96-424, Laws of Florida, the Office paid three employees for more than 480 hours each of accumulated annual leave. The total number of hours of accumulated annual leave paid to each of the three employees ranged from 527 hours to 660 hours and resulted in payments totaling $13,412.78 in excess of that allowed by Chapter 96-424, Laws of Florida.
   
• The Office overpaid 3 former employees a total of $1,947.76 as a result of the use of incorrect leave balances in calculating the termination leave payments to these employees. (See paragraphs 37 through 40.)

Cash Controls and Administration

During the audit period, the Office of the State Attorney utilized one Information and Evidence Revolving Fund with an approved imprest amount of $1,000. The purpose of this bank account is to expedite the gathering of information and evidence in the investigation and prosecution of criminal cases. The Office had not properly separated the duties relating to the custody of assets and the independent verification of bank account activities. In addition, documentation relating to bank reconciliations did not always identify the preparer and the date prepared or contain evidence of supervisory review and approval. (See paragraphs 41 through 44.)

Federal Forfeiture Activities

Office records indicate that the Office received Federal forfeiture moneys totaling $34,549.57 during the period December 19, 1995, through November 25, 1996. Included in that amount was an award of $18,712.65 received on May 7, 1996, from the United States Department of Justice, Drug Enforcement Administration. Office records did not facilitate a demonstration that the $18,712.65 award was used in accordance with Federal guidelines. (See paragraphs 45 through 48.)

Travel Expenditures

Section 112.061, Florida Statutes, requires that travel expenses be limited to those expenses necessarily incurred by travelers in the performance of a public purpose and that the agency head designate the most economical method of travel for each trip. Office of the State Attorney records did not fully demonstrate the necessary public purpose served by some travel expenditures incurred in connection with Office employees’ attendance of the Florida Prosecuting Attorney’s Association Annual Conference Education Program in Marco Island, Florida, from November 17 through 20, 1996. (See paragraphs 49 through 52.)

Public Assistance Fraud Cases

Office records did not demonstrate, in some instances, that public assistance fraud cases were processed as required by governing contracts with responsible State agencies. (See paragraphs 53 through 55.)

Workers' Compensation Fraud Cases

Office records did not demonstrate that, for one of the two workers' compensation fraud cases disposed during the audit period, a Notice of Case Disposition had been timely prepared and submitted. (See paragraphs 56 through 59.)

Other Matters

At the close of audit field work, the Office of the State Attorney was continuing its investigation of the theft of moneys from the Office's Worthless Check Diversion Program. During our next audit, we will review the Office's disposition of this matter. (See paragraph 60.)

The State Attorney's written response to the audit findings and recommendations included in audit report No. 13109 is presented as Exhibit B.