Summary

Finding No. 1: The District continued to experience a lower than average financial position during the 2001-02 fiscal year. The District’s unreserved fund balance at June 30, 2002, was approximately 2 percent of General Fund revenues for the fiscal year. In these circumstances, the District has minimal resources available for emergencies and unforeseen situations.

Finding No. 2: Improvements were needed in the financial information presented to the Board. The monthly financial statements submitted to the Board did not include balance sheets nor did they include the internal service fund used to account for the District’s self-insurance programs which currently had a net asset deficiency at June 30, 2002.

Finding No. 3: The District continued to experience a net asset deficit totaling $11,893,634 at June 30, 2002, for its workers’ compensation and automobile and general liability self insurance programs. District personnel indicated that the District had not implemented a formal plan for funding the remaining deficit.

Finding No. 4: Timely financial information was not always received from the District’s charter schools. Five of 15 charter schools did not provide the District any quarterly financial statements and 8 other charter schools did not submit some of the quarterly financial statements. In addition, 8 of the 15 charter schools’ audited financial statements were provided to the District two to four months after the deadline provided in the contract.

Finding No. 5: Improvement was needed in the District’s management of Federal cash advances. For example, Federal programs funded by the cash advance systems were operated in a deficit cash position for seven months during the 2001-02 fiscal year, necessitating the use of other District funds to temporarily pay Federal costs.

Finding No. 6: Improvements were needed in the District’s attendance records. Our review disclosed that attendance records were not always maintained for Grounds Department employees and that supervisory reviews of attendance records were not performed.

Finding No. 7: Improvements were needed regarding the District’s monitoring of purchase orders. Our tests of 40 blanket purchase orders disclosed 23 purchase orders, issued in amounts ranging from $600 to $500,000, against which purchases were charged in excess of the purchase order limits, ranging from $465 to $152,939. In addition, we noted that authorization of four blanket purchase order increases were not available for audit.

Finding No. 8: Improvements were needed in the District’s bid procedures. Our review disclosed that the District did not require bid tabulations to be signed and dated by the bid opener and did not require someone to witness the opening nor sign and date the tabulation. Our review further disclosed that purchases exceeding the bid limit were not acquired through the competitive bid process. In addition, we noted deficiencies in the bid process over a minor roof repairs bid.

Finding No. 9: Improvements were needed in the Purchasing Department’s review procedures to ensure that vendor information forms are submitted and reviewed, and that any indicated conflicts are appropriately followed up prior to hiring vendors interested in providing goods and services to the District. In the absence of adequate procedures to ensure that all potential District vendors submit the required vendor information forms and the proper review and follow-up of the submitted forms, District management’s ability to ensure compliance with its conflict of interest policy is limited.

Finding No. 10: Improvements were needed in the District’s preaudit payment procedures. Our review disclosed that the District had not implemented procedures to avoid duplicate payments to vendors and that payments were made to vendors without signatures of District staff evidencing receipt of the goods or services. In addition, bid references were not always included on purchase orders.

Finding No. 11: The District did not timely correct safety and maintenance deficiencies disclosed by annual facility inspections. Our review of annual facility inspection reports indicated many instances in which previously cited maintenance and safety deficiencies remained unresolved for at least seven years. Failure to timely correct facility deficiencies results in an increased risk that facilities could become unsafe for occupancy and could result in additional costs in the future due to further deterioration.

Finding No. 12: Improvements were needed in the maintenance of vehicle utilization records. The District did not have a written policy addressing the use and operation of District owned and leased vehicles or the preparation of vehicle logs.

Finding No. 13: Improvements could be made in the District’s procedures over inventories. We noted there was inadequate segregation of duties over the maintenance of inventories at the Central Maintenance and Grounds Departments. In addition, physical inventory counts were not always conducted at fiscal year-end and the value of the inventories was not reported on the District’s financial statements. Under the current system of asset custody and record keeping responsibilities, errors or irregularities, should they occur, may not be detected in a timely manner.

Finding No. 14: The District’s review of construction progress payments did not include the review and retention of documentation to ensure that sub-contractor payments were properly supported. In the absence of adequate construction progress payment reviews, the District has limited assurance of realizing potential costs savings as there is an increased risk that overpayments could be made and not be timely detected.

Finding No. 15: Subsequent to a former employee’s allegations of the misuse of District funds, the District commissioned a consultant report, and formed a community-based committee to review the report and provide recommendations for operational improvements. The committee recommended the implementation of numerous improvements through specific action plans.

Finding No. 16: The District disbursed $315,000 of restricted capital outlay funds to pay for an investigative report resulting from allegations of the misuse of District funds. Restricted capital outlay funds are required to be expended on specific construction and maintenance projects, rather than reviews of District operations.

Finding No. 17: Improvements were needed in the District’s procedures over maintenance work orders. Maintenance work orders demonstrating the need for, and completion of, services provided to District departments were not always certified by an employee independent of the maintenance function. In addition, work orders were not always supported by invoices or other documentation supporting amounts charged. In the absence of supporting documentation and confirmation by someone independent of the maintenance function, the use of District services, materials, and supplies for unauthorized purposes could occur and not be detected in a timely manner.

Finding No. 18: Improvements were needed in the District’s security controls over its information technology resources.

Finding No. 19: Technical and staffing problems surrounding a new information technology software system have delayed the District’s implementation and go-live timeframes. The District, to date, has taken positive steps to enforce contract provisions relating to software implementation. However, further project slippage and staff shortages could jeopardize a timely implementation of the software and delay the project’s intended objectives.

Finding No. 20: On November 21, 2002, the District was served with a United States District Court, Middle District of Florida Grand Jury Subpoena. The subpoena requested the District to provide certified copies of any and all documents associated with seven companies as it pertains to the Hillsborough County School District Grounds Department during the tenure of the former landscape unit manager. As of the end of December 2002, the requested information had been submitted to the United States District Court, Middle District of Florida for potential consideration of a grand jury investigation. This matter was still subject to consideration by a grand jury as of the end of our fieldwork in May 2003.

The Superintendent's written response to the audit findings for audit report No. 2004-018 can be viewed in its entirety on the Auditor General’s Web site.