Highlands County Board of County Commissioners

Transcription

1 Highlands County Board of County Commissioners ROAD AND BRIDGE INTERNAL AUDIT REPORT NO October 29, 2009 Prepared by: Robert W. Germaine Highlands County Clerk of Courts

2 ROAD & BRIDGE INTERNAL AUDIT TABLE OF CONTENTS EXECUTIVE SUMMARY Background...1 Statement of Standards...3 Audit Objectives...3 Scope & Methodology...3 Audit Summary...4 Audit Conclusion...5 FINDINGS, RECOMMENDATIONS, AND MANAGEMENT RESPONSES Finding 1: Missing Control - There is no process in place to monitor and revise approved project budgets...6 Finding 2: Duplicate payment Invoice totaling $4,300 was double paid...6 Finding 3: Missing Control: No process in place to ensure the purchase of equipment (with a value less than $1,000) is inventoried and tracked...7 Finding 4: Inconsistency in Transportation Trust Fund Activity...8 Opportunity for Improvement 1: Contract management of outsourced road projects by the Engineering Department...9 Opportunity for Improvement 2: Lack of formal written hauling/disposal policy...10 Opportunity for Improvement 3: Inadequate segregation of duties Purchasing and receiving..11 Opportunity for Improvement 4: Equipment breakeven rate...11 Opportunity for Improvement 5: Incorrect supporting documentation for invoice payment...12 ADDITIONAL ISSUES REQUIRING FURTHER CONSIDERATION BY THE BOARD...13 AUDIT REPORT APPROVAL...15 i

3 BACKGROUND As part of the Highlands County Clerk of Courts (Clerk) s Audit Plan, a was completed. This audit was authorized and initiated under the direction of former Clerk of Courts, L.E. Luke Brooker and completed and approved for release under the direction of the current Clerk of Courts, Robert W. Germaine. During the course of the audit, concerns were identified by the, Road & Bridge Department Management, and County Administration related to potential missing equipment. Board Management communicated the identified concerns to the Highlands County Sheriff s Office and an investigation was initiated. The release of this report was delayed, upon the request of the Highlands County Sheriff s Office, pending the completion of the investigation into missing equipment and inventory. The Road & Bridge Department is responsible for maintenance and repair of the County road and bridge 1 system, which consists off F: miles of paved roads miles of unpaved roads 32 bridges Numerous drainage structures, retention ponds, canals, and over 3,000 drainage culverts Mowing of approximately 13,000 miles of county rights-of-ways Maintenance of the County s fleet vehicles and equipment (mechanic shop crew) Operation of the County s 184 acre shell pit and 80 acre marl pit Joint operation of the County s Asphalt Plant. Daily production, product testing, and handling of asphalt are performed by the Road & Bridge Department. Costing, bidding, material ordering, and regulatory compliance are performed by the Solid Waste Department (funded by the Energy Recovery Fund - 420). Road & Bridge operations are primarily funded by fuel tax revenues. The Highlands County Board of County Commissioners (Board) has established two (2) special revenue funds to account for these revenues. Transportation Trust Fund (fund 110) Local Government Infrastructure Surtax Fund (fund 151) Transportation Trust Fund (fund 110) The Transportation Trust Fund is utilized to account for state and local gas tax revenues. Per Florida Statutes, counties are authorized to levy up to 12 cents of local option gas taxes in the form of three (3) separate levies. Expenditure of these funds is restricted to transportation-related expenditures as defined by applicable statutes. Gasoline tax revenues for fiscal year totaled $6,852,638 and are detailed belowf F: 1 Information was obtained from the Popular Annual Financial Report for Highlands County, available online at: Executive Summary 1 2

4 State Gas Taxes Collected Fifth and sixth-cents $ 1,701,961 Seventh-cent 741,690 $ 2,443,651 Local Option Gas Taxes Collected Sixth-cent local option $ 3,894,863 Ninth-cent local option 514,124 $ 4,408,987 Total Gas Taxes $ 6,852,638 Local Government Infrastructure Surtax Fund (fund 151) The Local Government Infrastructure Surtax Fund is utilized to account for an approved one-cent discretionary sales surtax. Florida Statutes (2) provides that the governing authority in each county may levy a discretionary sales surtax upon referendum vote. Generally, the proceeds must be expended to finance, plan, and construct infrastructure; to acquire land for public recreation, conservation, or protection of natural resources; and to finance the closure of local government-owned solid waste landfills that are already closed or are required to close by order of the Department of Environmental Protection. The surtax was approved for continuance during a July 20, 1999 special election. Per the County Referendum, the one-cent sales tax is to be used for Local Governmental Projects, including: Road system upgrade and expansion. Parks and recreations. Lake and waterway improvements. Governmental facilities upgrade, expansion, construction, and acquisition. Municipal improvement projects. Construction or acquisition of satellite offices. 2 Information was obtained from the Comprehensive Annual Financial Report for Highlands County, available online at: Executive Summary 2

5 STATEMENT OF STANDARDS This audit was conducted in accordance with applicable standards as published in the International Standards for the Professional Practice of Internal Auditing, issued by the Institute of Internal Auditors. We believe that our audit provides a reasonable basis for the conclusions and recommendations presented herein. AUDIT OBJECTIVES The objectives of this audit, specifically, were to: 1) Assess areas of risk: Planning, budgeting, management and billing of projects Disposition of fill dirt/spoiled material 2) Assess internal controls: Planning, budgeting, management, and billing of projects Disposition of fill dirt/spoiled material 3) Assess efficiency, effectiveness and compliance with policies and procedures Planning, budgeting, management, and billing of projects Disposition of fill dirt/spoiled material SCOPE & METHODOLOGY The audit included a review and evaluation of policies, procedures and internal controls over planning, budgeting, management, and billing of projects. The audit also included an evaluation of policies, procedures and internal controls related to the disposition of fill dirt/spoiled material. As a result of improper segregation of duties discovered during the course of the audit and concerns expressed by Board Management, the audit scope was expanded to include a review of Road & Bridge purchases; including purchases made through the formal procurement process and on County purchasing cards. Audit procedures performed included observations, testing of transactions, safeguards, inventory reviews, system controls, documented procedures, and efficiency and effectiveness of policies and procedures. The scope of this audit did not include a review of activities performed by the Road & Bridge Maintenance Shop, Mowing Crews, Shell Pit, or Asphalt Plant. Executive Summary 3

6 AUDIT SUMMARY The audit identified four (4) Findings attributed to weak or missing internal controls that are considered significant in nature, five (5) Opportunities for Improvement and two (2) issues which warrant further consideration. The four (4) findings pertain to two (2) missing controls and two (2) weak controls which are noted below. No process in place to monitor and revise approved budgets Duplicate vendor payment No process in place to ensure the purchase of equipment (with a value less than $1,000) is inventoried and tracked. Inconsistency in Transportation Trust Fund activity The five (5) Opportunities for Improvement relate to the management of contracted road projects by the Engineering Department, lack of formal hauling/disposal policy, inadequate segregation of duties, equipment breakeven rate, and incorrect supporting documentation for invoice payment. The two (2) issues warranting further consideration relate to competitive bidding requirements outlined in the Florida Statutes. Other minor findings, not included in this report, were communicated to Management and/or corrected during the audit process. Management s response to each finding has been inserted after the respective finding and recommendation. Responses were received in a memorandum dated October 27, Executive Summary 4

7 AUDIT CONCLUSION Overall, the Road & Bridge Department has performed project related activities as intended. Implementation of new processes and controls could further assist the Department in the efficient and effective delivery of services. The Road & Bridge Department recently had a change in administration and management methodology. As a result, management is proactively identifying opportunities and adjusting processes. It should be noted the findings and opportunities identified are a result of processes which have not been evaluated or modified for several years. To improve controls, Internal Audit recommends: Evaluating Transportation Fund (fund 110) activity to ensure expenditures are statutorily authorized and the competitive bidding requirements are satisfied Ongoing monitoring of project budgets Providing detailed back-up for transfers between funds Developing and adopting a formal written policy for the hauling and disposal of spoiled materials Evaluating equipment hours utilized for equipment breakeven rate calculations Ensuring adequate segregation of duties between the purchasing and receiving functions Emphasizing the importance of the review and approval process of vendor invoices Implementing a process to track and inventory equipment purchases with a value less than $1,000. Management concurred with all findings and they have taken or are in the process of taking adequate corrective actions to remediate all findings. The corrections are intended to improve operations and strengthen internal controls. The recommendations included in this report will serve as a basis for a followup audit within the next year. The Compliance and Internal Audit Department would sincerely like to thank the Road & Bridge Department, County Administration, the Clerk s Accounting Department, the Clerk s Payables / Receivables Department, and the Clerk s Information Technology Department for their cooperation throughout this audit. Executive Summary 5

8 FINDINGS, RECOMMENDATIONS, AND MANAGEMENT RESPONSES Finding 1: Missing Control - There is no process in place to monitor and revise approved project budgets. Cost estimates for road projects (resurfacing, reconstruction, and dirt road construction) are developed 2-5 years prior to actual initiation of the road project. The Road & Bridge Department budgets a 15% contingency to allow for fluctuations in costs. Once the cost estimate is finalized and approved by the Board, additional funds are not available to apply to the projects. This creates the potential for incomplete funding when work is initiated on the project. Project budgets should be monitored on an ongoing basis to ensure fluctuations in resources and industry pricing does not adversely impact the viability of planned and ongoing projects. A process should be developed to revise/amend project budgets as needed. Road & Bridge Department and County Administration Management Response: Management concurs with the finding and the change has been implemented: Road Projects are now being budgeted at the beginning of each fiscal year with current cost estimates. Finding 2: Duplicate Payment Invoice totaling $4,300 was double paid. On June 28, 2006 the Road & Bridge Department entered into an agreement with GS Equipment, Inc. (PO 61968) for the rental of a vibratory roller at a monthly cost of $4, The rental was related to road work performed on the Orange Blossom Estates project (#02102). During our review, it was noted that invoice (for equipment rental during the period of 10/18/06 thru 11/14/06) was paid on two (2) separate PO's. The first payment of $4, was made on 11/7/06 (check #229394) under PO (fund 128 / cost center 7975). The second payment of $4, was made on 11/21/06 (check #229703) under PO (fund 110 / cost center 4102). Both payments were on the same invoice: Invoice # , Date 10/24/06, Period 10/18/06 thru 11/14/06, ID# SW , Serial #VSW , Model SW850. The Road & Bridge Department, in coordination with the Clerk's Payable/Receivable Department, should review the payments and determine whether a reimbursement should be requested from the vendor. All invoices should be adequately reviewed to ensure that proper payment is made. Road & Bridge Department and County Administration Management Response: Management concurs with the finding and invoices presented for payment are now reviewed by more than one person in the operating department. The vendor was contacted and a credit has been issued. Findings, Recommendations and Management Responses 6

9 Clerk s Payable/Receivable Department Management Response: The Clerk s Accounts Payables/Receivables Department concurs with the finding. Payments will be more closely monitored to ensure that duplicate payments do not occur. Finding 3: Missing Control No process in place to ensure the purchase of equipment (with a value less than $1,000) is inventoried and tracked. During the course of the audit an impairment to segregation of duties was noted in the purchasing / receiving process (see Opportunity for Improvement 3: Inadequate segregation of duties Purchasing and receiving below). Following this discovery and concerns expressed by management, the audit scope was expanded to include a review of Road & Bridge Department purchases. The review included purchases made through the formal procurement process and a sample of Road & Bridge purchasing cards. Purchasing cards of six (6) Road & Bridge employees and all purchase orders for fiscal years (October 1 to May 14 for fiscal year 2009) were reviewed. The review resulted in the identification of several items (i.e. chain saws, binoculars, digital cameras, etc.) which could not be located and numerous items that were not initially identified. The Road & Bridge Department should develop a process to ensure county assets are tracked and inventoried on an ongoing basis. A minimum dollar threshold, for the inventory of purchased items, should be established. Items with a purchase value greater than the minimum and less than $1,000 (county assets with a value of $1,000 or greater are tracked and inventoried annually) should be inventoried and maintained on a current inventory list. When items are surplused/disposed or cannibalized (i.e. using a broken/damaged item for parts and repair of other county assets) they should be removed from the current inventory list and placed on a surplus/disposal list. It should be noted the Road & Bridge Department and County Administration responded immediately to the concerns identified in this finding and a formal investigation was conducted. A full inventory of current items (with an estimated value of greater than $200 and less than $1,000) was performed and a process was implemented to remediate this finding. Road & Bridge Department and County Administration Management Response: Management concurs with the recommendation and the following procedures have been implemented: 1. An inventory procedure has been established for items valued at $ or more whereby two employees have access to the inventory files, and 2. Inventory spot checks will be performed periodically. Finding 4: Inconsistency in Transportation Trust Fund Activity (fund 110) Unallowable Expenditures. Findings, Recommendations and Management Responses 7

10 The Board has established a Transportation Trust Fund (fund 110) in accordance with F.S (1) to account for fuel tax revenues received from the State. The use of fuel tax revenues is statutorily restricted to transportation-related expenditures as defined by s (7), F.S. In addition to various fuel tax revenues, the Transportation Trust Fund (fund 110) is being utilized to account for additional revenues including the Communication Services Tax, Driveway Permits, and Inspections. The process noted below, relates to Road & Bridge activity in fund 110, and identifies several issues of potential concern. All Road & Bridge activity (i.e. labor, equipment, and materials) is initially funded through fund 110. All project work is not statutorily allowable under the Transportation Trust Fund. o During the testing of special projects it was noted unallowable expenses (totaling $152,286.90) incurred by the Road & Bridge Department, while working on the Sports Complex, were funded by the Transportation Trust Fund. Each project is budgeted and approved by the Board. Project budgets are not revised on an ongoing basis. Reimbursements to the Transportation Trust Fund are only for the budgeted amounts. When the cost of the project exceeds the planned approved budget, funds are not reimbursed. Several departments are funded from the Transportation Trust Fund (fund 110). This creates difficulty in associating fund activity to a specific department. Annually, an interfund transfer is made to the Transportation Trust fund (fund 110) from the General fund (fund 005) to ensure the fund (fund 110) budget is sufficient; however, there is not sufficient detail to ensure the transfer covers the unallowable activity performed by the Road & Bridge Department. o In fiscal year 07/08 a transfer of $2 million dollars was made from the General Fund (fund 005) into the Transportation Trust Fund (fund 110) for various unallowable expenses incurred by the Transportation Trust Fund. This transfer may have reimbursed the unallowable expenses incurred by the Road & Bridge Department while working on the Sports Complex (noted above). Sufficient detail of the reimbursement was not available to determine whether the $2 million dollar transfer covered the $152, unallowable expense. U In accordance with statutory requirements, the Transportation Trust Fund (fund 110) should only be used to fund allowable transportation-related expenditures; therefore, Road & Bridge cost center 4102 should only be used to account for transportation-related expenditures. Activities performed by the Road & Bridge Department which are not transportation-related should be funded from another source. The Road & Bridge Department, Office of Management and Budget (OMB), and the Clerk s Accounting Department should review the current fund structure and consider options to ensure compliance with statutory requirements. An option for consideration would be to establish a new cost center within the General Fund (fund 005) to account for all Road & Bridge activity up-front. Allowable transportation-related expenditures (fund 110) or infrastructure expenditures (fund 151) could be reimbursed to the General Fund. If this method is chosen, Findings, Recommendations and Management Responses 8

11 reimbursement from the Transportation Trust Fund (fund 110) or the Infrastructure Surtax Fund (fund 151) should be made to the expenditure account rather than a revenue account to prevent the "doubling-up effect" within the Governmental Funds. Road & Bridge Department, Office of Management and Budget, and County Administration Management Response: Management concurs with the finding. The overwhelming majority of Road & Bridge functions are transportation-related and are properly funded from the Transportation Trust Fund (110). In addition, multiple Board departments perform transportation-related functions that fall within F.S Established procedures require that any non-transportation project work completed by Road & Bridge be directly reimbursed to the Transportation Trust Fund. Future identifiable indirectly reimbursed General Fund projects performed by the Road & Bridge Department will be noted in the budgeted Interfund Transfers. Future transportation project budgets will be revised during the budget and Capital Financial Strategy preparation. A follow-up procedure will be added to verify that the reimbursement has occurred. Clerk s Accounting Department Management Response: The specific and restricted funds, such as the restricted state and local gas revenues, are accounted for in specific revenue accounts within the County Transportation Trust Fund as derived from the State of Florida Uniform Accounting Manual. Other revenues from various sources are received into the County Transportation Trust Fund and separately accounted for within that fund. The County is obligated to expend all restricted funds in accordance with statutory limitations. When Board management limits the scope of the County Transportation Trust Fund to account for only the restricted state and local gas revenues and related statutorily authorized expenditures, then the Clerk s Accounting Department will implement the appropriate accounting system and reporting changes. Opportunity for Improvement 1: Contract management of outsourced road projects by the Engineering Department Expenses reported under activity of the Road & Bridge Department (fund 151 / cost center 4102A). The Local Government Infrastructure Surtax Fund (fund 151) accounts for revenues and expenditures from discretionary sales surtax. Surtax proceeds are statutorily restricted to finance, plan and construct infrastructure and acquire land for public recreation, conservation, or protection of natural resources. The Road & Bridge Department (cost center 4102A) utilizes this fund to account for road related activity. During a review of Road & Bridge (cost center 4102A) expenditures, it was noted that several Engineering projects were being funded from and reported for financial statement purposes under activity of the Road & Bridge Department (fund 151 / cost center 4102A). Using this reporting method, activity/expenditures of the Road & Bridge Department appear overstated; while activity/expenditures of the Engineering Department appear understated. It should be noted that the net effect to the Local Government Findings, Recommendations and Management Responses 9

12 Infrastructure Surtax Fund (fund 151) is zero. The Road & Bridge Department, Office of Management and Budget, and the Clerk s Accounting Departments should evaluate the reporting structure for outsourced road projects which are managed by the Engineering Department but funded by the Road & Bridge Department to ensure that the current reporting method accurately reflects the activity in both the Road & Bridge Department and Engineering Department cost centers. If the current method of managing/funding these projects is continued the Road & Bridge Department should be cognizant of the activity (i.e. revenues/expenditures) impacting the Road & Bridge Department cost centers (4102 & 4102A) on an ongoing basis. Road & Bridge Department, Office of Management and Budget, County Administration, and the Clerk s Accounting Department Management Response: Management is aware that Road and Bridge continues to work in conjunction with Engineering on contracted projects. The renaming of the cost center to more accurately reflect the purpose that the cost center serves would be in order. Clerk s Accounting Department Management Response: When Board management restructures the management and funding of the referenced projects, then the Clerk s Accounting Department will implement the appropriate accounting system and reporting changes. Opportunity for Improvement 2: Lack of formal written hauling/disposal policy The Board has not developed a written policy or procedure detailing the hauling and disposal of spoiled materials. As of early 2008, the County established a policy to limit hauling and use of clean/spoiled material for County related functions. This policy has been communicated to all impacted departments and employees, but is currently not a written Board approved policy. Formalized policies and procedures help ensure consistency in day-to-day operations and provide clarity to employees when dealing with accountability issues or activities that are of critical importance to the organization. The Board's position on the hauling and disposal of spoiled materials should be formalized into a written policy and presented to the Board of County Commissioner's for review and approval. A copy of the approved policy should be provided to employees of the Road & Bridge Department and any other impacted departments. Road & Bridge Department and County Administration Management Response: Findings, Recommendations and Management Responses 10

13 Management concurs with the recommendation and will develop and implement a written Hauling/Disposal Policy and/or procedures to supersede the verbal policy already in place. Opportunity for Improvement 3: Inadequate segregation of duties Purchasing and receiving. During a review of Road & Bridge expenditures (cost centers 4102 & 4102A) instances were noted where adequate segregation of duties did not exist. On several occasions, one individual completed a requisition, signed a receiving report, received an invoice, approved an invoice for payment, and initiated changes (increases) to the same purchase order. There was no documented evidence that a second individual validated or performed any portion of the above process. The purpose of segregation of duties is to reduce the likelihood that an error or omission (whether accidental or intentional) will occur. One individual should not have the ability to order, receive, approve payment, and initiate changes. When duties cannot be separated, compensating controls should be established to reduce potential risks. A process should be developed to ensure one individual is not performing the entire ordering, receiving and payment approval function. The individual completing the requisition and receiving the goods/services should not receive the invoice and approve it for payment. Road & Bridge Department and County Administration Management Response: Management concurs with the finding and has already implemented segregation of duties pertaining to requisitions, issuing, receiving goods and payment processing. This practice is still in use within the Road and Bridge Department. Procedures for use and payment authorization related to the Purchasing Cards (Pcard) are identified in the adopted purchasing policy. The authorization process for the P-card payment requires the review and authorization of the immediate supervisor for goods or services purchased. Opportunity for Improvement 4: Equipment breakeven rate Evaluate the breakeven rate calculation used by the Road & Bridge Department to charge-out vehicle and equipment usage. The Road & Bridge Department utilizes a breakeven rate to charge-out vehicle and equipment usage to various projects. The breakeven rate is calculated by the Workorder System on an annual basis using data maintained in the Workorder System (labor, parts, fuel, etc.) and data input (insurance cost, replacement cost, hours operated) by staff. During a review of the calculation, it was noted that vehicles/equipment are assumed to operate without experiencing any downtime throughout the fiscal year (2,080 hours). This assumption may not be reflective of actual usage and has the potential to result in an understated breakeven rate for vehicles/equipment which operates less then 2,080 hours during a fiscal year. Findings, Recommendations and Management Responses 11

14 The Road & Bridge Department is commended for establishing and utilizing a breakeven rate to charge-out vehicle/equipment usage to various projects. Although the current calculation may not provide the most accurate rate, it has allowed the Department to charge-out the operation of vehicles/equipment to specific projects. To ensure a more realistic and accurate project cost, it is recommended that the current breakeven calculation be reviewed and evaluated. Road & Bridge Department and County Administration Management Response: Management concurs with the Recommendation that the methodology for calculating breakeven rates should be reviewed. Staff will work with the Clerk s Information Technology and Audit Staff on the calculation of revised equipment breakeven rates. Equipment rates and the rate calculations including the fuel costs, already included, will be reviewed. Opportunity for Improvement 5: Incorrect supporting documentation for invoice payment. The incorrect invoice (SP ) totaling $7, was used as supporting documentation for payments. On December 30, 2008 a payment (check #247078) was made to a vendor totaling $44,956.16, on four (4) invoices. During a review of the invoices and supporting documentation, it was determined that one of the invoices was paid twice on the check. The invoice (#SP ) totaled $7, Further review revealed that the incorrect invoice was submitted and used to support payment. Invoice #SP totaling $7, should have been submitted. The Road and Bridge Department, in coordination with the Clerk's Payable/Receivable Department, should ensure that proper documentation is submitted for payment. All invoices should be adequately reviewed to ensure that proper payment is made. Clerk s Payables/Receivables Department Management Response: The Accounts Payables/Receivables Department concurs with the finding. Invoices and supporting documentation will be more closely reviewed prior to posting for payment. Findings, Recommendations and Management Responses 12

15 ADDITIONAL ISSUES REQUIRING FURTHER CONSIDERATION BY THE BOARD During the course of the audit, two (2) Statutes were identified which directly relate to the activities of the Road & Bridge Department. Each Statute limits the counties ability to complete work utilizing County resources and address competitive bidding requirements. Further attention and consideration of these Statutes is warranted to ensure that the County is meeting the requirements outlined in the Statutes. Florida Statutes Counties; employing labor and providing road equipment; accounting; when competitive bidding is required. Chapter 336 of the Florida Statutes relate to the County Road System. Section , specifically relates to the County s ability to employ labor and provide equipment on road and bridge projects and competitive bidding requirements. According to the Statue, the commissioners may employ labor and provide equipment as may be necessary, except as provided in subsection (4), for constructing and opening new roads or bridges and repair and maintenance of any existing roads and bridges. Subsection (4) requires that construction and reconstruction (including resurfacing) of roads and bridges performed utilizing the proceeds of the 80-percent portion of the surplus constitutional gas tax be competitively bid and awarded to the lowest bidder. The exception to this requirement is if the cumulative annual value does not exceed five-percent (5%) of the 80-percent portion of the constitutional gas tax or $400,000, whichever is greater. Florida Statutes Local bids and contracts for public construction works; specification of stateproduced lumber. Chapter 255 of the Florida Statutes relates to Public Property and Publicly Owned Buildings. Section states that: A county, municipality, special district as defined in chapter 189, or other political subdivision of the state seeking to construct or improve a public building, structure, or other public construction works must competitively award to an appropriately licensed contractor each project that is estimated in accordance with generally accepted cost-accounting principles to cost more that $300,000. It should be noted that section was revised during the 2009 legislative sessions; the revisions became effective October 1, The revisions increased the limit from $200,000 to $300,000. The Clerk s recommends Road and Bridge management, OMB, County Administration, and the Board Attorney review the statutes noted above and evaluate whether current processes ensure compliance. Findings, Recommendations and Management Responses 13

16 Road & Bridge Department, Office of Management and Budget, and County Administration Management Response: Management is aware of the changes to the threshold for road project bid requirements and the changes to the in-house labor that may be used for completion of road work. Staff will work closely with the appropriate agencies and legal to insure compliance. Findings, Recommendations and Management Responses 14

17 AUDIT REPORT APPROVAL Highlands County Board ofcounty Commissioners Report No Issuance Date: October 29, 2009 Approved for Issuance By: