Summary

The Auditor General is authorized by State law to perform independent audits of governmental entities in Florida.  Pursuant to Section 11.45(2)(l), Florida Statutes, the Legislative Auditing Committee, at its March 5, 2007, meeting, directed us to conduct an audit of the Daytona Beach Community Redevelopment Agency (CRA).  The summary of our findings for the period October 1, 2004, through March 31, 2007, and selected actions taken prior and subsequent thereto, is as follows:

Finding No. 1:     We noted several expenditures that were either not authorized by Chapter 163, Part III, Florida Statutes, or not in accordance with CRA Plans.

Finding No. 2:     CRA Plans were not in sufficient detail to provide for a determination that CRA expenditures were in accordance with the Plans.

Finding No. 3:     Contrary to Section 163.356(3)(c), Florida Statutes, the City Commission did not designate a Chair and Vice Chair of the CRA Board.

Finding No. 4:     Contrary to Section 286.011(1), Florida Statutes, the meetings of the CRA Board were not always noticed.

Finding No. 5:     The minutes, for the jointly held City Commission and CRA Board meetings, did not indicate, for each official action taken, whether the action was by the City Commission or the CRA Board.  Additionally, several minutes were not timely approved.

Finding No. 6:     Although the CRA followed City policies and procedures, the CRA Board did not take formal action to adopt the City’s policies and procedures for CRA use.

Finding No. 7:     The CRA did not always use the appropriate property values to calculate tax increment revenues due from taxing authorities.

Finding No. 8:     Tax increment revenue contributions by taxing authorities reported in the City’s Comprehensive Annual Financial Report differed from the CRA’s receipt records.

Finding No. 9:     Amounts due to the CRA from Volusia County for late tax increment contributions were used to offset amounts due by the City to the County.

Finding No. 10: Tax increment revenues received by the CRA were not always timely deposited.  Additionally, investment earnings on funds advanced to the City’s capital project fund were not recorded to the credit of the CRA.

Finding No. 11: Salaries and benefits charged to the CRA trust fund were not always supported by time records or appropriately allocated.

Finding No. 12: CRA personnel records did not contain documentation that the educational background of a former redevelopment director was verified.

Finding No. 13: Contrary to City policy, severance pay was provided to the former redevelopment director.

Finding No. 14: Vehicle allowances and cellular telephone stipends were granted to employees without documentation justifying the amount of the benefits granted. 

Finding No. 15: Disbursement processing procedures could be improved to ensure that purchases are properly approved, the goods or services are received, and invoices are paid only once to vendors.

Finding No. 16: Contributions to other entities were made without the use of written agreements specifying the purpose of the contributions and providing a mechanism whereby the CRA can monitor the use of the moneys.  Additionally, CRA Board approval of the contributions was not always documented.

Finding No. 17: Real property was acquired without the use of appraisals or the purchase price exceeded the highest appraisal obtained.  Additionally, CRA Board approval was not always documented for the purchase of the property.

Finding No. 18: Competitive selection procedures could be improved to provide for better recordkeeping.  Additionally, the contractor utilized for one CRA project was obtained through another entity even though a bid was received by the City for the CRA project.

Finding No. 19: Amounts were billed and paid on contracts for services rendered prior to the date on which the notice to proceed was issued.  Contracts did not always require sufficient documentation to be submitted by contractors to provide a basis for payment.  Documentation to support one contract amendment and one change order providing for fee increases, and CRA Board approval thereof, could not be provided.

Finding No. 20: The City awarded a large contract to a developer, the only respondent to a request for qualifications and proposals (RFQP), notwithstanding the fact that the developer failed to provide key elements in its response to the RFQP.

Finding No. 21: The CRA’s report of activities for the 2004-05 and 2005-06 fiscal years included only the required financial statements, but did not include nonfinancial information that may be of interest to taxing authorities.

Finding No. 22: The City’s Internal Auditor reports to management responsible for the activities under review.  Additionally, an internal audit of the CRA, issued March 20, 2007, had not been presented to the CRA Board as of July 31, 2007.

The Redevelopment Director's response is included in this report as Appendix B.