Summary

Our audit of certain administrative processes relating to the Department’s ability to properly account for Department-administered State trust funds disclosed:

Finding No. 1:  Contrary to the requirements of Section 20.04(7)(b), Florida Statutes, the Department  did not, prior to the establishment of the Division of Service Operations, obtain from the Department of Management Services and the Executive Office of the Governor approval for the establishment of the new organizational unit or, alternatively, obtain from the Legislature specific statutory enactment.  Absent Executive Office of the Governor approval, or specific statutory enactment, and the approval of the associated budget and accounting system revisions, the Department, particularly during the 2001-02 fiscal year, may have lacked the legal authority necessary to support the reorganization and establish budgetary control for the affected Department organizational units.

Finding No. 2:  A total of 260.5 full-time equivalent positions had been transferred as part of the first two stages of the Department’s reorganization.  Our review of the documentation applicable to 70 of these transfers disclosed that 29 of the transferred positions were not timely recorded in the applicable financial and budget records, for periods ranging from 3 to 5 months.  During these delays, employees transferred to positions responsible for multiple programs continued to be paid from organizational codes and trust funds applicable to their previously assigned positions.

Finding No. 3:  During the audit period, the Department used a personnel action request (PAR) form to document the approval process for various personnel actions, including the transfer of positions from one part of the Department to another.  We reviewed 30 PAR forms used to authorize the transfer of positions in connection with the Department’s reorganization and found that 24 lacked one or more required approvals, and in some instances, the justification for the action and the salary rate impact.

Finding No. 4:  The Department uses the Administrative Trust Fund to account for the administrative services costs of the Department.  In addition, effective July 1, 2002, the operating costs of centralized processes, such as the Customer Contact Center, are also accounted for within the Administrative Trust Fund.  Our audit of the Department’s cost allocation processes disclosed the need for improvements in the documentation of plan methodology and management approval.

Finding No. 5:  The Department’s Bureau of Finance and Accounting is, among other functions, responsible for preparing and recording transactions, such as those involving, for example, correcting entries, the creation of payables and receivables, and the redistribution of costs between organization codes.  The absence of a review of these types of transactions may have contributed to the failure of transaction source documents and the attachments thereto to adequately explain and justify several transactions.  During our tests of 117 trust fund transactions, we found deficiencies in the documentation for 18 transactions, or approximately 15 percent of the transactions tested.

Finding No. 6:  The Department’s financial reports disclosed deficit cash balances for certain accounts within the Professional Regulation Trust Fund and the Division of Florida Land Sales, Condominiums, and Mobile Homes Trust Fund.  The Department and the applicable Boards should continue to take actions to improve the financial condition of all accounts recorded within the Professional Regulation Trust Fund and the Division of Florida Land Sales, Condominiums, and Mobile Homes Trust Fund.

The Secretary's complete response to the audit findings and recommendations is included in its' entirety in the audit report and may be viewed on the Auditor General Web site.