Summary

Our performance audit of the State of Florida local government financial reporting system (System) disclosed the following:

Finding No. 1:  Several taxing authorities did not timely pay tax increment funding to CRAs and CRAs did not bill the taxing authorities for additional moneys and interest, contrary to Section 163.387(2)(b), Florida Statutes.

Finding No. 2:  Two CRAs could not demonstrate that redevelopment trust fund expenditures were in compliance with the CRA Plan and Sections 163.387(6) and 163.370(2), Florida Statutes, or that all expenditures were properly authorized.

Finding No. 3:  Five CRAs did not maintain documentation, such as time records, to demonstrate that employees whose salaries and benefits were partially paid from CRA funds were paid commensurate with the percentage of time spent on CRA-related activities.

Finding No. 4:  Two CRAs made contributions to private, nonprofit organizations without the use of a formal agreement that clearly identified and demonstrated a public purpose that benefited the CRA, and did not exercise sufficient control over the disbursement of funds by the nonprofit organizations.

Finding No. 5:  Four CRAs did not adopt budgets by resolution, contrary to Section 189.418(3), Florida Statutes.

Finding No. 6:  Three CRAs overexpended their budgets for the 2002-03 or 2003-04 fiscal years, contrary to Section 189.418(3), Florida Statutes.

Finding No. 7:  CRAs are not obtaining the financial audits required by Section 163.387(8), Florida Statutes.

Finding No. 8:  The information required to be included in the report of activities required by Section 163.356(3)(c), Florida Statutes, has been inconsistently interpreted by the CRAs.

Finding No. 9:  DFS should continue its efforts to enhance the local government database and electronic filing system to increase local government participation. 

Finding No. 10:  Procedures for monitoring the timely submission and completeness of the AFRs from unaudited local governments could be improved.  Although procedures were established to identify local governments that did not meet the audit requirement in the prior year and provide them with the necessary reporting package and instructions, procedures were not established to identify and notify local governments that did not file the AFR by April 30 as required by law.

Finding No. 11:  Our examination of the records of local governments that did not file required balance sheet information with DFS disclosed significant misstatements in the amounts reported.  As a result of these significant misstatements, we did not have sufficient, reliable data upon which to identify significant financial trends for many of these local governments. 

Finding No. 12:  The Division of Bond Finance report on special districts that are not in compliance with the requirements of Section 218.38, Florida Statutes, could be improved to better meet the needs of the Department of Community Affairs.

Finding No. 13:  The Division of Retirement had not adopted written procedures covering its review of actuarial reports and impact statements.  The Division’s status report of reviews of actuarial reports and impact statements received did not accurately indicate the number of plans received and subject to be reviewed. 

Finding No. 14:  The Division of Retirement had not established procedures to implement notifications to pension plan administrators of incomplete filings of pension plan information and withholding of certain funds for failure to provide the needed information. 

The community redevelopment agencies; State Board of Administration, Division of Bond Finance; Department of Financial Services; and Department of Management Services, Division of Retirement provided the responses included as Appendix A.