INTERNAL AUDIT DIVISION CLERK OF THE CIRCUIT COURT

Transcription

1 INTERNAL AUDIT DIVISION CLERK OF THE CIRCUIT COURT AUDIT OF MEDICAL EXAMINER OFFICE AND FORENSIC LABORATORY Karleen F. De Blaker Clerk of the Circuit Court Ex officio County Auditor Robert W. Melton, CPA*, CIA, CFE Chief Deputy Director Internal Audit Division Prepared by: David C. Williams, CIA, CFE, CBM, CGFM Internal Auditor Supervised by: Ronald Peters, CIA, CISA, Senior Internal Auditor MAY 22, 2003 REPORT NO *Regulated by the State of Florida

2 May 22, 2003 The Honorable Chairman and Members of the Board of County Commissioners We have conducted an audit of the Medical Examiner Office and Forensic Laboratory. The objectives of our audit were to determine if the Medial Examiner s Office is complying with Florida Statutes and the terms of the Service Contract with Pinellas County; that expenditures paid by the County on behalf of the Medical Examiner s Office comply with County policies and are for a medical examiner service; that the expenses paid by the Medical Examiner s Office are for services rendered for Pinellas and Pasco County; that adequate internal controls are in place for cash receipts, cash disbursements and any other financial operations of the Medical Examiner s Office; and that personnel policies and procedures are adequate, being complied with, and functioning for the Medical Examiner s Office staff. We conclude that the Medial Examiner s Office is in compliance with legal requirements and the terms of the Service Contract with the County. There are proper internal controls over financial transactions, and expenditures were reasonable and for a County purpose. Opportunities for improvement are presented in this report. We appreciate the cooperation shown by the staff of the Medical Examiner s Office and Forensics Laboratory during the course of this review. Respectfully Submitted, Approved: Robert W. Melton, CPA*, CIA, CFE Chief Deputy Director Internal Audit Division Karleen F. De Blaker Clerk of the Circuit Court Ex Officio County Auditor *Regulated by the State of Florida

3 Scope and Methodology We have conducted an audit of the Pinellas County Medical Examiner and the Forensics Laboratory (Medical Examiner s Office) as an independent contractor for Pinellas County. The audit involved a review of financial transactions processed by the County and the Medical Examiner s Office, compliance with the Services Contracts with Pinellas and Pasco County and adherence to laws, regulations and other professional standards. The objectives of our audit were to: 1) determine if the Medical Examiner s Office is complying with Florida Statutes and the terms of the Service Contracts with Pinellas County, 2) determine that expenditures paid by the County on behalf of the Medical Examiner s Office comply with County policies and are for a medical examiner service, 3) determine that the expenses paid by the Medical Examiner s Office are for services rendered for Pinellas and Pasco County, 4) determine that adequate internal controls are in place for cash receipts, cash disbursements and any other financial operations of the Medical Examiner s Office, and 5) determine that personnel policies and procedures are adequate, being complied with, and functioning for the Medical Examiner s Office staff. In order to meet these objectives, we interviewed Medical Examiner s Office staff and management to obtain a clear understanding of the processes and related procedures covering the services rendered by the Office. To test financial transactions, samples were obtained from the County and the Medical Examiner s Office accounting records and predetermined criteria were applied against the sample items. We reviewed and tested service related processes to ensure accurate reporting and timely performance. We performed such other audit procedures as we considered necessary in the circumstance. The audit period was October 1, 2001 through November 30, However, transactions and processes reviewed were not limited by the audit period. Overall Conclusion We conclude that the Medical Examiner s Office is in compliance with legal requirements and the terms of the Service Contracts with the County. There are proper internal controls over financial transactions and expenditures were reasonable and for a County purpose. Our audit disclosed some opportunities for improvement. These opportunities are presented in this report. Background The Medical Examiner functions as an independent contractor for District VI of the State Of Florida that includes Pinellas and Pasco Counties. Yearly service contracts with the two Counties govern the contractor deliverables, funding by the County and a fee schedule for

4 services provided to other agencies. The Pinellas County Department Of Justice Coordination provides oversight for the contracts. The current Medical Examiner, Jon Thogmartin, M.D., was appointed by the Governor of the State of Florida in December The medical examiner services to be provided is detailed in Chapter 406, Florida Statutes, and the requirement for Pinellas County responsibility for the payment of Medical Examiner s fees, salaries and expenses is pursuant to Section (3) and (1), Florida Statutes. The Office is divided into two entities, medical examiner functions and forensic laboratory services. The medical examiner functions include: autopsy and related tasks, investigative section and the toxicology laboratory service that is fee based for outside agencies (i.e., law enforcement). The forensic laboratory performs analysis related to controlled substance cases for the Medical Examiner and testing for fire cases. The Medical Examiner s Office has several other responsibilities that include: reporting of statistics, maintaining case records, responding to the media and the public inquiries and supplying Expert Witness testimony. As an independent contractor, the Office maintains its own accounting department and general ledger. The yearly budgeting process for the Medical Examiner s Office, that includes the service contract price and other expenditures paid directly by Pinellas County, is part of the County s yearly budget cycle.

5 Our audit disclosed certain policies, procedures, and practices that could be improved. Our audit was neither designed nor intended to be a detailed study of every relevant system, procedure or transaction. Accordingly, the opportunities for improvement presented in this report may not be all-inclusive of areas where improvement may be needed. 1. The Clerk s Finance Department Signature Authorization Card That Controls The Authority For the Approval of Expenditures for The Medical Examiner s Office Cost Centers Was Not Current And Approved By The Justice Coordination Office. The Finance expenditure authorization card for the Medical Examiner s Office cost center contained a Medical Examiner staff member no longer employed by that Office. In addition, the card was approved by the Medical Examiner, not a County employee of the Justice Coordination Office. The Medical Examiner and his staff are independent contractors and not County employees. As oversight for the Medical Examiner s Office, the Justice Coordination Office should ensure that the proper level of Medical Examiner employees are authorized to approve expenditures for the County s cost center. The approval of invoices by an authorized person is a key control relied on by the Clerk s pre-audit internal control process to ensure the expense is for a proper County purpose. Not having a current signature card approved by the Justice Coordination Office mitigates the control and increases the risk of an inappropriate staff member having the authority to approve the disbursement of County funds. We Recommend the Justice Coordination Office review and approve the Authorization Card for use by the County Finance Department. 2. Internal Controls Over Bank Reconciliations Need Improvement. The Medical Examiner s Office Accounting Department has not effectively segregated duties for the performance of the bank account reconciliation. With a two person accounting staff, the employee performing the reconciliation is not restricted from performing other related accounting functions. Currently, the person that performs the bank reconciliation does not post the payable transactions to the general ledger and does not have access to the blank check stock and the signature stamp. However, that person posts receivable transactions to the general ledger and, therefore, has access to all the general

6 ledger application screen options (application security only offers total access to the application function or no access at all). Normally, adequate internal control would be achieved by the person performing the bank reconciliation being totally independent of the cash and general ledger transaction posting process. With the staff limitation and the performance of the bank reconciliation requiring access to the general ledger application, this condition cannot be met. As part of the current internal control process, the Medical Examiner reviews the bank reconciliation and the cancelled checks after the reconciliation has been performed by the Accounting Department. To strengthen the internal controls and ensure that the Medical Examiner reviews all checks paid by the bank prior to the Accounting Department access, the bank statement should be delivered unopened to the Medical Examiner for his review. We Recommend the monthly bank statement be delivered unopened to the Medical Examiner for his review of the cancelled checks prior to reconciliation by the Accounting Department. The reviews of the completed reconciliation should continue. Management s General Response: On behalf of my staff at the Medical Examiner Office and the Pinellas County Forensic Laboratory, I would like to thank the Internal Audit Division for their thorough and professional evaluation of the office. Regarding the areas where opportunities for improvement were detected, I would have no reservations with their immediate correction and/or implementation. Considering the volume and complexity of the work we do in our Medical Examiner and Forensic Laboratory sections, I must say that I am quite pleased with our audit.