Summary

The objectives of our audit of the Parole Commission (Commission) included a follow-up on prior audit findings and a review of general expenditures related to payroll, personnel, and leave; purchasing card transactions; travel; tangible personal property; and cellular telephone usage.  Our audit also included a review of the Commission’s transfer of administrative functions to the Department of Corrections pursuant to law.  As part of our audit, we examined management controls to determine if Commission expenditures were properly authorized and served an authorized public purpose.  Our audit disclosed numerous instances in which the Commission had not established the controls necessary to ensure the safeguard of State resources or compliance with applicable legal requirements and had not established adequate records systems to demonstrate compliance with such requirements.  In addition, our audit disclosed circumvention of established controls by the former Commission Chair and some Commission employees.  These findings are identified below.

Mr. Jimmie L. Henry served as the Commission Chair from December 1998 and during the audit period (July 1, 2001, through February 28, 2003) until his resignation on May 9, 2003.  On May 13, 2003, the Governor and Cabinet appointed Ms. Monica David as the Commission Chair.  The current Commission Chair is aware of the findings included in this audit report as well as the lack of controls and circumvention of controls and has stated that the necessary corrective actions will be taken to ensure that State resources are properly safeguarded and used only to serve an authorized public purpose.

Current Investigation

During our audit, we discovered the following significant deficiencies regarding expenditures and actions related to the former Commission Chair:

• Use of the Purchasing Card by the former Commission Chair that was for personal charges at various stores and for private attorney, cellular telephone, and cable television services, etc., that resulted in questionable and improper Purchasing Card expenditures.
• Travel reimbursement vouchers for the former Commission Chair that were inconsistent (points and times of departure and return) with cellular telephone records that resulted in questionable and improper travel expenditures.
• Attendance records for the former Commission Chair that contained discrepancies in work hours reported when compared with travel itineraries (points and times of departure and return) and cellular telephone records that resulted in questionable and improper salary expenditures.
• Personal use by the former Commission Chair of his State-assigned cellular telephone that was not reimbursed that resulted in questionable and improper cellular telephone expenditures.

These questioned and improper expenditures exceeded $24,000.  The improper expenditures noted above relating to travel and salary expenditures only address expenditures incurred between April 2002 and July 2003 because certain records were not available for the entire audit period.  Therefore, because of the lack of records, it was not practicable for us to perform those analytical procedures necessary to reasonably identify any additional improper expenditures.  Because of the nature of those transactions, we referred these significant deficiencies to the Department of Law Enforcement (DLE).   These matters were investigated by DLE for a determination of whether any criminal violations of law occurred.  On August 21, 2003, the former Commission Chair was charged with 21 misdemeanor counts of fraudulent travel expense claims and 3 felony counts of grand theft.  Our report findings relating to these improper expenditures do not identify specific transactions and inconsistencies.  The details of these improper expenditures are specifically identified in the SUMMARY OF OFFENSE(S) AND PROBABLE CAUSE AFFIDAVIT filed by DLE.  It should be noted that the lack of controls and circumvention of established controls by the former Commission Chair and some Commission employees contributed to many of the findings noted throughout this report.

Commission Vulnerabilities to Fraud

Finding No. 1:  The Commission had not implemented adequate pre-audit procedures to ensure that expenditures serve an authorized public purpose and are in compliance with applicable legal requirements.

Finding No. 2:  Although the Commission’s organizational structure and assignment of responsibilities appeared to provide for an adequate separation of duties, some employees performing administrative and accounting functions for the former Commission Chair did not properly conduct Commission business to effectively safeguard State resources and did not provide reliable information necessary for oversight.  This greatly increased the possibility that illegal acts, fraud, abuse, and other noncompliance could occur and not be timely detected.

Payroll, Personnel, and Leave

Finding No. 3:  The Commission had not established adequate management controls to ensure compliance with Section 112.3135(2)(a), Florida Statutes, and Commission Procedure Directive 2.02.11 regarding the employment of relatives.

Finding No. 4: Commission policies and procedures need to be enhanced to ensure that background investigations are performed as a condition for employment and documentation is retained.

Finding No. 5:  The Commission reimbursed the Finance and Accounting Administrator for tuition totaling $1,967.28.  However, because the classes taken primarily benefited the employee rather than the Commission and because documentation required by the Department of Financial Services guidelines was not available, it is not apparent how these payments constituted a proper expenditure of public funds.

Finding No. 6:  The Finance and Accounting Administrator performed duties for a secondary employer during Commission work hours and used State resources to perform non-Commission activities.

Finding No. 7:  Commission procedures were not followed for an alleged sexual harassment complaint filed by a former employee with the Commission on Human Relations.  The complaint resulted in a settlement payment totaling $50,000 and attorney fees totaling $3,964 for representation of the State.

Finding No. 8:  The propriety of pay increases awarded to some Commission employees by the former Commission Chair were questionable.

Purchasing Card

Finding No. 9:  Controls over the Purchasing Card Program were not adequate to ensure Purchasing Card transactions were properly authorized and recorded.  These control deficiencies resulted in the purchase of many goods and services that served no authorized public purpose.

Travel

Finding No. 10:  Mileage claimed on travel reimbursement vouchers was not always adequately documented or claimed in the appropriate amounts and paid in accordance with Florida Statutes.

Finding No. 11:  The Commission did not timely cancel the Avis credit card assigned to the former Commission Chair.

Cellular Telephone Usage

Finding No. 12:  The Commission did not follow established procedures to ensure that cellular telephone invoices were properly reviewed and reimbursements for personal use were properly and promptly remitted.

Tangible Personal Property

Finding No. 13:  Commission procedures relating to the administration of tangible personal property have not been updated since January 1, 1997.

Finding No. 14:  Commission property records were not always adequately maintained.

Finding No. 15:  Commission controls over the disposition of surplus property were not adequate to ensure that property disposals were appropriate and in compliance with applicable legal requirements.

Finding No. 16: The Commission did not demonstrate how the practice of providing employees State-owned computer equipment at personal residences served an authorized public purpose.  In addition, back up copies of Commission electronic records and data were maintained at two of the residences.

Finding No. 17:  Information technology-related purchases totaling approximately $17,000 did not appear to be reasonable and necessary.

Transitional Issues

Finding No. 18:  The Commission did not fully transfer administrative functions to the Department of Corrections, contrary to law.

The Commission’s written response to the audit findings and recommendations can be viewed as a part of the complete report filed on this Auditor General web site.