Summary

This section of our report summarizes the results of our operational audit of the Town of Cedar Grove, Florida, for the period October 1, 2004, through December 31, 2005, and selected actions taken prior and subsequent thereto.

Finding No. 1:  The Town experienced a high turnover rate of key administrative employees in a short period of time, reducing its ability to provide consistent application of its policies and procedures.

Finding No. 2:  The Town’s population has been increasing due to Town annexations, while at the same time the staff of the public works and police departments has been decreasing.  Additionally, the administrative personnel appeared to be understaffed, had difficulties in using the accounting software, and had inadequate training which, in many instances, contributed toward improper account balances being reported in the accounting records.

Finding No. 3:  Written policies and procedures necessary to assure the efficient and consistent conduct of accounting and business-related functions were not established in all cases.  Additionally, the limited policies and procedures that the Town did have, were never formally adopted.

Finding No. 4:  The Town did not adequately separate duties regarding disbursement processing, cash controls, payroll and personnel processing, water and sewer fee collections, mail receipts, and other collections.

Finding No. 5:  The Town did not record all transactions in its accounting records in a timely manner.

Finding No. 6:  The Town did not formally adopt its 2004-05 budget and did not consider the effects of beginning fund balances and net asset balances during the 2004-05 and 2005-06 budget process, contrary to Section 166.241, Florida Statutes.

Finding No. 7:  The Town did not perform bank reconciliations for any of its 20 bank accounts during the entire 2004-05 fiscal year, and had not done so for the months subsequent to November 2005, as of August 3, 2006.

Finding No. 8:  Checks recorded in the Town’s accounting records did not always reflect the correct check number, were frequently issued out of sequence and, in several instances, were postdated.

Finding No. 9:  Contrary to the requirements of Chapter 717, Florida Statutes, the Town had not reported stale-dated checks, or remitted the appropriate money, to the Florida Department of Financial Services for the past three years.

Finding No. 10:  The Town did not have on file the agreements with the banks with which it conducts business that addressed transfers to and from Town bank accounts.

Finding No. 11:  The Town had not updated its signature cards with the various financial institutions to remove former employees from check signing, or other authority.

Finding No. 12:  The Town could have earned additional interest of approximately $24,000, or 45 percent more, had it invested surplus funds with the State Board of Administration.

Finding No. 13:  The Town had not established general ledger control accounts, or subsidiary records for all tangible personal property; did not mark all property as property of the Town; had not performed a physical inventory since prior to September 2003; and did not have titles to all vehicles it owned.

Finding No. 14:  The Town Commission authorized the borrowing of $1,261,000 without enacting an ordinance or resolution, as required by law.

Finding No. 15:  The Town did not appropriately manage its long-term debt by seeking to obtain more favorable terms.

Finding No. 16:  The Town advance-paid interest on a $1,261,000 loan, and did not strictly adhere to the payment terms set forth in the loan document.

Finding No. 17:  The Town could not demonstrate that it expended moneys received for local option and municipal fuel taxes in accordance with specific provisions in law.

Finding No. 18:  The Town lacked adequate controls over receipting, recording, securing, and timely processing cash collections.

Finding No. 19:  The Town did not reconcile the accounts receivable accounts to its subsidiary records, or enforce its collection procedures for past due accounts.

Finding No. 20:  The Town did not amend its Resolution No. 2003-9 to officially set water rates at amounts currently being charged pursuant to the bond agreement.

Finding No. 21:  The Town charged twice the amount allowed under Ordinance No. 267 for water reconnection fees, and did not charge reconnection fees to business customers.

Finding No. 22:  The Town did not reconcile its water and sewer deposit liability accounts to the water and sewer deposit bank accounts, or maintain subsidiary records of customer deposits.

Finding No. 23:  The Town did not implement or enforce all requirements of Ordinance No. 317 regarding garbage franchise fees.

Finding No. 24:  The Town was inconsistent in its methodology used to record occupational licenses issued, did not use prenumbered license forms, and did not ensure that fictitious name registrations were on file for all licensees.

Finding No. 25:  The Town did not use prenumbered forms for permits or plat review applications and was not able to demonstrate that all permit and review activity was accounted for.

Finding No. 26:  The Town had no officially adopted position descriptions, minimum requirements or pay grade or range for its staff; and did not adequately document, verify, or maintain information about applicants or new hires.

Finding No. 27:  Contrary to Section 409.2576, Florida Statutes, the Town did not report each new, or rehired, employee to the State Directory of New Hires.

Finding No. 28:  The Town did not pay the Mayor and Commissioners as employees, pursuant to Section 3401 of the Internal Revenue Code, and Chapter 4 of Internal Revenue Service Publication 963.

Finding No. 29:  It appears that the Town did not submit wage reporting Forms W-2 and W-3 for the 2004 calendar year to the Social Security Administration.

Finding No. 30:  The Town had incomplete purchase orders; had purchase orders that predated the invoices; and paid numerous expenditures that lacked adequate supporting documentation or authorization.  In addition, the Town did not solicit bids for one purchase in excess of $1,000, contrary to Ordinance No. 90.

Finding No. 31:  The Town paid for employee Christmas bonuses for which it did not clearly document that a public purpose was served or that the expenditures were legally authorized or benefited the Town.

Finding No. 32:  The Town had not included the value of cellular telephone services that were not substantiated as business use in income reported for employees with cellular telephones to the Internal Revenue Service.  In addition, the Town did not have policies and procedures for cellular telephone usage by employees; did not ensure that all telecommunication charges paid were authorized or served a public purpose; did not require employees to reimburse the Town for personal calls; and incurred late fees and interest charges for untimely payments to its service providers. 

Finding No. 33:  The Town paid taxes on telephone billings from which it was exempt.

Finding No. 34:  The Town did not maintain copies of all cellular telephone agreements and, thus, did not ensure billing amounts were in accordance with the terms of the agreements.

Finding No. 35:  The Town did not restrict access to the postage meter, and did not reconcile the usage logged to the amount remaining in the meter and the amount of postage drafted from the Town’s bank account.

Finding No. 36:  The Town did not have an adopted travel policy; did not require sufficient documentation in support of travel expenditures, and did not always adhere to the requirements of Chapter 112.061, Florida Statutes.

Finding No. 37:  The Town did not comply with Section 218.391, Florida Statutes, and Ordinance No. 90 when acquiring certain professional services, did not always enter into written contracts for services, and did not properly monitor contracts for services to ensure contractors performed in accordance with terms of the contract.

Finding No. 38:  The Town did not require the use of vehicle maintenance or usage logs.

Finding No. 39:  The Town had no written policies and procedures for the assignment of vehicles on a 24-hour basis, and did not report personal usage to the Internal Revenue Service.

Finding No. 40:  The Town did not comply with Section 100.361, Florida Statutes, governing the appointment of commission members during recall proceedings in 2002.

Finding No. 41:  Contrary to the Town’s personnel policy and Section 112.313(3), Florida Statutes, the Town contracted with an employee to provide cleaning services to the Town.

Finding No. 42:  The Town did not timely transcribe, review, or approve all commission meeting minutes.

Finding No. 43:  The Town held an emergency meeting but did not adhere to the provisions of the Florida Statutes regarding emergency meetings.

Finding No. 44:  The Town did not properly maintain, preserve, or account for all of its resolutions and ordinances.

Finding No. 45:  One commission member refrained from voting at a commission meeting, apparently contrary to Section 286.012, Florida Statutes.

Finding No. 46:  The Town did not timely adopt or submit all of its comprehensive or small scale plan amendments, contrary to Section 163.3184(7)(a), Florida Statutes, and Department of Community Affairs Rule 9J-11.011(3), Florida Administrative Code. 

The Mayor’s response to our findings and recommendations is included in this report as Appendix A.