Summary

This operational audit of the State Board of Administration (SBA), for the period March 2005 through June 2007, focused on selected core administrative activities of the Florida Hurricane Catastrophe Fund (FHCF) and the monitoring of the FHCF Records Administrator.  As summarized below, our audit disclosed opportunities for improvement in controls:

Records Administrator Monitoring

Finding No. 1:        The FHCF had not established contract provisions to require the Records Administrator to provide an independent auditor’s report describing relevant Records Administrator internal controls and their effectiveness.

Finding No. 2:        FHCF procedures did not require FHCF authorization of transfers of moneys to the Records Administrator for the payment of advances, loss reimbursements, and premium refunds.

Finding No. 3:        FHCF’s contact request form, which provided the insurer names and addresses to be used for FHCF correspondence and payment remittances, did not require the signature of two insurance company officers.  In addition, our tests disclosed one instance in which a payment was sent to an address other than the address shown on the contact request form. 

FHCF Examiners and Examinations

Finding No. 4:        FHCF staff did not confirm with licensing authorities the professional designations of the examiners contracted to perform loss examinations.

Finding No. 5:        The FHCF had not finalized procedures for evaluating corrected proof of loss reports.

The Interim Executive Director's response is included at the end of this report as Appendix A.