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Office of the Inspector General
ANNUAL REPORT
September 25, 2012
Joseph K. Maleszewski, MBA, CIG, CIA, CISA Inspector General
Rick Scott GOVERNOR
Hunting F. Deutsch EXECUTIVE DIRECTOR
September 25, 2012
Mr. Hunting F. Deutsch, Executive Director Suite 212, Caldwell Building 107 East Madison Street Tallahassee, Florida 32399-4120 Dear Director Deutsch:
I am pleased to submit our Annual Report on the activities of the Office of Inspector General (OIG). Section 20.055(7), Florida Statutes requires the OIG submit an annual report outlining the work and activities performed which fulfill our mission to promote accountability, integrity and efficiency by providing quality audits, investigations, management reviews and technical assistance. This report covers the 9-month period from October 1, 2011 through June 30, 2012, to provide coverage since the creation of the Department of Economic Opportunity through the end of the fiscal year. Our prior annual report covered the 15 month period from July 1, 2010 through September 30, 2011.
The value of OIG services can never be fully reflected in an annual report. The tangible results such as cost covered, dollar impact and number of reports can be readily reported. However, our intangible services and deterrent effect are not evident in an annual report. As you read this report, I hope you will recall the broad spectrum of services we provided the Department and the professionalism of the OIG team.
As you know, my predecessor, James F. Mathews retired this year after serving as Inspector General in three state agencies (the Departments of Labor, Economic Opportunity and the Agency for Workforce Innovation) for over 20 consecutive years, which makes him the longest continuously serving Inspector General in State of Florida Government. He contributed greatly to the contents of this annual report and will be greatly missed.
Our efforts for the period are summarized in the “Highlights” section which follows and include investigative, audit-related and other oversight activities designed to promote economy and efficiency in the administration of the Department’s programs and operations.
We look forward to working with you and our fellow employees in meeting the challenges and opportunities that face the Department. Thank you for your continued support.
Sincerely,
Joseph K. Maleszewski, MBA, CIG, CIA, CISA Inspector General JKM/sm
Florida Department of Economic Opportunity | The Caldwell Building | 107 E. Madison Street | Tallahassee, FL | 32399-4120
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An equal opportunity employer/program. Auxiliary aids and services are available upon request to individuals with disabilities. All voice
telephone numbers on this document may be reached by persons using TTY/TDD equipment via the Florida Relay Service at 711.
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HIGHLIGHTS
The OIG completed a wide variety of projects to promote economy and efficiency in
the administration of Department programs and operations. The following
summarizes these efforts “by the numbers.”
Investigations:
Conducted 10 investigative inquiries
Made 83 investigative referrals to either management, law enforcement or other parties with appropriate jurisdiction to investigate
Coordinated over 250 calls for management resolution (related primarily to Reemployment Assistance Benefits Claims)
Audit:
Conducted 8 significant audit projects and 29 audit-related projects
Performed liaison and coordination for with 7 external audits
Conducted monthly follow-up for 11 audits containing 30 outstanding findings
Track and monitor the completion of corrective action for 9 significant recommendations for which corrective action had not been completed in prior years
Single Audit:
Received and reviewed 24 Regional Workforce Board independent single audit - Issued 9 management decisions related to the workforce boards
Received and reviewed 153 independent single audits related to Division of Community Development - issued 1 management decision related to these matters
Received 53 certifications that recipients of financial assistance had not expended enough to require an independent audit
Coordinated updates for the Department’s 28 Catalog of State Financial Assistance projects
Other:
Conducted two Department-wide risk assessments
Prepared two OIG audit work plans
Provided technical assistance to Department managers as needed
Worked to develop the Director’s vision for a Regional Workforce Board Internal Control Compliance Program (ICCP), which is to be implemented in the current fiscal year
Transitioned to a new Inspector General
TABLE OF CONTENTS
INTRODUCTION ............................................................................................................. 1 Mission, Vision and Priorities Partnership with the Governor’s Chief Inspector General Investigative Services
Complaint Assessment and Referral The Whistle-Blower’s Act
Audit Services Single Audit Services Catalog of State Financial Services Audit Liaison and Resolution Other Audit Section Responsibilities
ORGANIZATIONAL PROFILE ..................................................................................... 18
OIG Leadership Team Organizational Structure OIG Staff Professional Certifications Professional Affiliations Training Accomplishments
INVESTIGATIVE SECTION .......................................................................................... 28
Investigations and Inquiries AUDIT SECTION .......................................................................................................... 35
Annual Risk Assessment and Work Plan Development Summary of Audit Recommendations and Follow-up Single Audit Act Activities Catalog of State Financial Assistance ARRA-Related Oversight Activities Significant Audit Projects
APPENDIX I – Investigations and Referrals .............................................................. 46 APPENDIX II – Audit Projects ..................................................................................... 60 APPENDIX III – Corrective Actions ............................................................................ 64
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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INTRODUCTION
The role of the OIG is to provide a central point for coordination of, and responsibility
for, activities that promote accountability, integrity, and efficiency in the Department.
Section 20.055, Florida Statutes (F.S.), defines the duties and responsibilities of
agency inspectors’ general. The Statute requires that each inspector general shall
submit to the Department head an annual report, not later than September 30 of each
year, summarizing its activities during the preceding state fiscal year.
This report includes activities in the following areas, but is not limited to the OIG
statutorily assigned duties:
Inform the Department of fraud, abuses and deficiencies relating to programs
and operations administered or financed by the Department;
Recommend corrective action concerning fraud, abuses and deficiencies and
report on the progress made in implementing corrective action;
Ensure effective coordination and cooperation with the Auditor General, federal
auditors and other governmental entities to avoid duplication;
Conduct, supervise, or coordinate other activities carried out or financed by the
Department for the purpose of promoting economy and efficiency in program
administration and preventing and detecting fraud and abuse in all operations;
Assess information provided by the Department on performance measures and
standards and make recommendations for improvement, if necessary;
Review the actions taken by the Department to improve program performance
and meet program standards and make recommendations for improvement, if
necessary;
Provide direction for, supervise and coordinate audits, investigations and
appropriate management reviews relating to the programs and operations of
the Department; and
Ensure that an appropriate balance is maintained between audit, investigative
and other accountability activities.
This document is presented to the Executive Director of the Florida Department of
Economic Opportunity in accordance with the statutory requirements and to describe
how the OIG accomplishes its mission.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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MISSION, VISION AND PRIORITIES
Mission - The mission of the Office of Inspector General (OIG) is:
To promote accountability, integrity and efficiency
by providing quality audits, investigations,
management reviews and technical assistance.
Vision – Our vision is to be:
Championed by our customers,
Benchmarked by our counterparts and
Dedicated to quality in our products and services.
Priorities – The OIG has established the following priorities to help ensure success
in fulfilling our mission:
Sufficiency – Provide quality audits, investigations, reviews, and other services in accordance with professional standards and, where applicable, federal and state rules and regulations.
Timeliness – Perform audits, recipients and sub-recipients audit resolutions, investigations and reviews and other oversight services in a timely manner.
Added Value – Perform activities designed to add value and improve the Department’s operations.
Awareness – Promote awareness regarding the OIG roles and responsibilities as well as awareness regarding the duty to report fraud, waste and abuse.
The primary goal of the OIG is to provide independent and objective information in a
timely manner to assist the Department’s Director and management team in fulfilling
their duties and responsibilities. One of its major goals is to encourage a proactive
approach by OIG staff and support efforts to deliver Department services in the most
efficient and effective ways possible.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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PARTNERSHIP WITH THE
GOVERNOR’S CHIEF INSPECTOR GENERAL
The DEO’s Office of Inspector General is an active partner with
the Governor’s Office of Chief Inspector General. The OIG, in
cooperation with the Chief Inspector General’s Office, seeks to
promote the vision of the inspectors general community:
Enhancing Public Trust
in Government.
The Mission of the Governor’s team of Inspectors General is to:
Provide leadership in the promotion
of accountability and integrity
of State Government.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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INVESTIGATIVE SERVICES
The Investigative Section receives complaints, initiates,
conducts, supervises and coordinates investigations designed
to detect, deter, prevent and eradicate fraud, waste,
mismanagement, misconduct and other abuses in state
government. They do this through: Investigations, Inquiries,
Incident Reports, Management Referrals and Law Enforcement
Referrals.
Investigations: The OIG conducts investigations designed to provide Department
management objective, fact-based assessments to help ensure the integrity and
efficiency of both management and operations. These can include contract
procurement violations, conflict of interest, gross mismanagement, disruptive or
threatening behavior, falsification of records, data manipulation and failure to follow
laws, rules or Department polices. Investigations also encompass misconduct by
workforce service providers and other vendors who offer products and services under
contract with the Department.
Inquiries: Inquiry cases are opened when the OIG is not certain whether a full
investigation is warranted. In these type cases, some fact-gathering is conducted and
a determination is made whether to proceed with a substantive investigation. Inquiries
are used to report findings related to complaints or other issues to the executive
director and Department managers where no specific wrongdoing by any one person
is implied. Inquiries concentrate on Department and/or partner processes rather than
allegations against a specific subject. Inquiries can result in a written report, which
summarizes the issue, any involvement by law enforcement and provides
recommendations for correction, if necessary.
Incident Reports: Federal Incident Reports relate to information and complaints
about fraud, abuse or suspected criminal activity involving the use or misuse of federal
funds. The OIG receives and coordinates Incident Reports as prescribed by federal
law in Title 20 Code of Federal Regulations, Section 629.55. The OIG is responsible
for directing certain investigations of entities, when appropriate, as well as assisting
with federal investigative activities. The OIG conducts necessary fact finding and
investigative activities to identify and document these instances. Incident Reports are
generally referred to the United States Department of Labor Office of Inspector
General. Department managers and partners are responsible for reporting actual or
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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suspected violations to the OIG and appropriate management. The Incident Report
process enables the OIG to maintain oversight responsibilities for matters concerning
federally funded programs that have the potential for misapplication of funds, gross
mismanagement and associate misconduct.
Management Referrals: Management Referral cases are opened when the Office of
Inspector General receives complaints which do not rise to the level of significance
that warrant a substantive investigation. These complaints are referred to
management and are monitored until an outcome report is received and reviewed by
the OIG.
Law Enforcement Referrals: Law Enforcement Referral cases are those reported to
the Florida Department of Law Enforcement or other law enforcement agencies, as
appropriate, whenever the Inspector General has reasonable grounds to believe there
has been a violation of criminal law. Our partners most often are the US Department
of Labor Office of Inspector General, the Florida Department of Law Enforcement as
well as federal and state prosecutors.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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COMPLAINT ASSESSMENT AND REFERRAL
The OIG is statutorily charged to receive and consider complaints related to the
Department’s programs processes and functions. Such complaints can be about
Department employees, programs, various services or the manner in which services
are delivered. The importance of such complaints is that they can help expose issues
with service delivery and can even help detect, deter and prevent waste, fraud,
mismanagement, misconduct and other abuses.
Complaints originate from many sources and can be made directly or referred from
other entities, such as the Governor’s Chief Inspector General or other agency
inspector general.
The OIG assesses, assigns and tracks complaints to ensure allegations are fully
addressed, either through investigation, inquiry or referral to management. Tracking
also assists with preparing various reports, including this annual year-end report and
quarterly reports to the Chief Inspector General.
The inspector general or director of investigations reviews the contents of each
complaint. All complaints are required to have a project number for tracking from the
complaint’s origination thorough final disposition. Occasionally, complaints are
received that are not within the jurisdiction of the OIG (such as Wage and Hour issues
that are handled by United States Department of Labor). In those instances, the OIG
refers the complaints to the agency that would have jurisdiction over the matters
presented.
If a complaint concerns a clear or potential violation of the law, it is immediately
referred to the appropriate law enforcement agency.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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THE WHISTLE-BLOWER’S ACT
Whistle-blower complaints must meet the prescribed
criteria as outlined in Section 112.3187, F.S. After
careful review, investigations are completed within the
time frames established by statute. The information
disclosed under this section must include:
(a) any violation or suspected violation of federal,
state or local law, rule or regulation committed
by an employee or agent of an entity or independent contractor which creates
and presents a substantial and specific danger to the public’s health, safety or
welfare;
(b) any act or suspected act of gross mismanagement, malfeasance, misfeasance,
gross waste of public funds or gross neglect of duty committed by an employee
or agent of an agency or independent contractor.
The Office of the Chief Inspector General in the Governor’s Office receives a variety of
complaints lodged by persons via the Whistle-blower Hotline, a toll free number [(800)
543-5353] equipped to handle, record and process incoming complaints and via
electronic submission. The Chief Inspector General then assigns those projects to the
respective agencies for inquiry and response.
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OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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AUDIT SERVICES
The Audit Section provides a variety of advisory and assurance
services to a variety of customers.
ADVISORY SERVICES
Advisory Services are consultative and related client service
activities, the nature and scope of which are agreed upon with the
client, and that are intended to add value and improve the
Department’s operations. Examples include counsel, advice,
facilitation, process design and training.
Advisory Service activities occur prior to or concurrent with Department activities
ensuring timely management information. With timely information, management can
make better informed decisions and avoid costly mistakes, which may expose the
Department to additional risks (financial, legal, public perception, etc.).
Audit standards prohibit advisory services which constitute performing management
functions, making management decisions, auditing our own work or providing non-
audit services in situations where the amounts or services involved would be
significant/material to the subject matter of an audit.
ASSURANCE SERVICES
Assurance Services are performance audits, compliance audits, financial audits and
attestations. Assurance services contribute to government accountability for the use
of public resources and the delivery of services.
Compliance Audits:
Compliance audits are independent reports that measure the Department’s
compliance with applicable laws, rules and regulations and adherence to best
practices.
Financial Audits:
Financial audits promote government accountability for the use of public resources.
Financial audits assess the reliability of information and provide an independent report
on whether the Department’s financial information is fairly presented.
Financial audits provide information about internal controls and compliance (with laws
and regulations and provisions of contracts and grant agreements) related to financial
transactions, systems and processes.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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Information Technology Audits:
Information Technology audits are designed to:
Evaluate the integrity, availability and confidentiality of information technology
resources;
Measure the quality of the department’s information technology services;
Evaluate implementation of information technology resource statutes, rules,
policies, procedures and industry standards;
Evaluate internal controls and recommend improvements as appropriate; and
Perform limited-scope reviews to assist management in identifying and resolving
problematic issues.
Attestations:
An attestation is any declaration or set of declarations about whether the subject
matter is based on or in conformity with the criteria selected. Attestation
engagements can cover a broad range of financial or nonfinancial objectives about the
subject matter or assertion depending on the users’ needs. The subject matter of an
attestation engagement may take many forms, including historical or prospective
performance or condition, physical characteristics, historical events, analyses,
systems and processes or behavior. According to professional audit standards, there
are three types of attestation engagements: Examination, Review and Agreed-Upon-
Procedures.
Examination - In an examination engagement, we apply tests sufficient to reduce
the risk of an undetected material misstatement to an appropriately low level.
Accordingly, the level of testing is similar to an audit of financial statements.
Review - A review engagement provides a moderate level of assurance on the
subject matter. We perform procedures sufficient for us to report that we are not
aware of any material modifications that need to be made for either (a) the
assertion about the subject matter to be fairly stated, in all material respects,
based on the criteria or (b) the subject matter to be in conformity with the criteria,
in all material respects.
Agreed-upon procedures - Agreed-upon procedure engagements are a unique
attestation engagement because we report procedures and findings rather than a
conclusion. These engagements involve applying procedures, agreed-upon by
specified users, to information and issuing a report that enumerates the
procedures performed, states our findings and restricts the use of the report to the
parties that agreed to the procedures.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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Attestation engagements are performed under the AICPA’s attestation standards, as
well as the related AICPA Statements on Standards for Attestation Engagements.
Risk Assessment:
Risk assessment aids management in determining the appropriate balance between
control and risks. The Audit Section conducts risk assessments and facilitates control
self assessments. Risk assessments ensure that risk exposures are understood and
managed appropriately. Risk assessment activities also identify the need for and
scheduling of assurance services (audits) through the development of the OIG Annual
Work Plan.
Control self assessments are a class of techniques used in an audit or in place of an
audit to assess risk and control strength and weaknesses against a control framework.
The “self” assessment refers to management and staff involvement in the assessment
process, facilitated by internal auditors.
Performance Measure Assessment:
Performance measure assessments are designed to assess the reliability and validity
of information on performance measures and standards and recommends
improvements, if necessary. Section 216.013, F.S., requires state agencies to
develop long range program plans to achieve goals, provide the framework for
development of budget requests and identify and update program outcomes and
standards to measure progress toward program objectives. Section 20.055(2), F.S.,
requires that the OIG perform a validity and reliability assessment of their agency
performance measures and, if needed, make recommendations for improvements.
Policy and Procedure Review:
The Department expects the OIG to review policies and procedures to help ensure
accountability, efficiency and effectiveness of the Department's programs. In addition,
this review considers the control environment of state government, such as Florida
Statutes, Florida Administrative Code, Directives and Comptroller Memorandums.
OIG reviews are limited in nature and do not constitute audits. A properly conducted
review helps provide management assurance that:
The intent of the document has been clearly identified;
The procedure is complete, clear, concise, well-written and functional;
Associated documents are appropriately referenced;
The policies and procedure addresses findings from previous audits/reviews;
and
The policies and procedure identifies, communicates and prioritizes desired
process outcomes.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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SINGLE AUDIT SERVICES
The OIG provides oversight for the Department’s
compliance with state statutes and federal circulars for
recipients of federal and state financial assistance. The
Department’s predominant sub-recipients are the 24
regional workforce boards and over 200 towns, cities,
counties, community action agencies and housing
authorities.
Federal and state financial assistance provided by the Department, as the “pass-
through” entity, to local governments, nonprofit organizations and for profit
organizations normally require an annual CPA audit to help ensure these funds are
spent as intended. These audits must be performed in accordance with U.S. Office of
Management and Budget (OMB) Circular A-133 or Section 215.97, F.S. The audit
reports are submitted to the Department for review and evaluation as to content and
timeliness.
The OIG has the responsibility for ensuring that the Department’s recipients and sub-
recipients comply with Federal and State Single Audit Acts. Compliance is ensured
by:
Reviewing the recipients’/sub-recipients single audit reports;
Coordinating the Department reporting of projects;
Reviewing recipients’/sub-recipients’ annual Audit Plans;
Providing technical assistance to recipients/sub-recipients and independent
auditors (Certified Public Accountants).
The OIG reviews the audit reports submitted by entities to ascertain if there are any
reported questioned costs or material findings that need to be resolved by Department
program managers.
Department Pass-through Responsibilities: OMB Circular A-133 outlines audit
requirements for federal agencies and pass-through entities. The Department is a
pass-through entity with responsibilities to:
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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Inform sub-recipients of the amount of federal funds awarded by Catalog of
Federal Domestic Assistance (CFDA) title and number, award name and
number, award year and name of federal agency.
Advise sub-recipients of requirements imposed on them by federal laws,
regulations and the provisions of contracts or grant agreements as well as any
supplemental requirements imposed by the pass-through entity.
Monitor the activities of the sub-recipients as necessary to ensure that federal
awards are used for authorized purposes.
Issue Management Decisions on audit findings within six months after receipt
of the sub-recipients’ audit reports and ensure that the subrecipient takes
appropriate and timely corrective action.
Adjust the Department’s fiscal and programmatic records, as necessary, in
response to sub-recipients’ audit findings.
Department Awarding Agency Responsibilities: Section 215.97, F.S., details the
Department’s responsibilities under the Florida Single Audit Act. DEO as a state
awarding agency is responsible to:
Review the recipient's financial reporting package, including the management
letters and corrective action plans, to the extent necessary to determine
whether timely and appropriate corrective action has been taken with respect to
audit findings and recommendations pertaining to state financial assistance that
are specific to the state awarding agency.
Designate an organizational unit within the Department to be responsible for
reviewing financial reporting packages. If the state awarding agency is not the
coordinating agency, it must communicate to the coordinating agency its
approval of the recipient’s corrective action plan.
Determine which unit within the state awarding agency will be responsible for
coordinating with the Department of Financial Services revisions to the Catalog
and Compliance Supplement.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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Catalog of State Financial Assistance
The OIG coordinates the Department’s efforts to maintain the Catalog of State
Financial Assistance (CSFA) in accordance with the Department of Financial Services’
Division of Accounting and Auditing Memorandum # 49, 2011-12. The CSFA is a
comprehensive listing of state projects.
To maintain the Catalog, the Department is required to identify any state projects that
provide state financial assistance to non-state entities. The OIG coordinates for the
preparation and submission of the Department’s Florida Single Audit Act Annual
Certification Update. Currently, the Department has 28 CSFA numbers/projects.
In addition, the Department is responsible for Compliance Supplement preparation
which identifies the significant compliance requirements, eligibility requirements,
matching requirements, suggested audit procedures and other relevant information for
each state project in the Catalog.
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AUDIT LIAISON AND RESOLUTION
The Audit Section provides liaison to external agencies and
coordinates for audit resolution activities.
In addition to receiving state funding, the Department receives
substantial federal funding. As a result, the Department
experiences audits, reviews and other forms of oversight from
many different entities. The findings and recommendations
that result from this external oversight must be recorded and
tracked to ensure that appropriate attention is given to
correcting findings in a timely manner. The Audit Section tracks and monitors
management efforts to correct audit findings.
Florida Statutes require the OIG to ensure effective coordination and cooperation
between the Auditor General (AG), federal auditors and other governmental bodies
with a view toward avoiding duplication. The Audit Section provides a single point of
contact for external agencies auditing the Department.
The AG performs at least two major audits of the Department annually: Statewide
Federal Awards and Unemployment Compensation Information Technology. The AG
also performs an operational audit at least every three years as required by applicable
state law. The Office of Program Policy and Government Accountability (OPPAGA)
conducts a varying number of projects each fiscal year. Federal Grantors, such as the
U.S. Department of Labor and the U.S. Department of Health and Human Services,
from time to time send auditors to perform audits of the Department.
The OIG maintains steady interaction with the external auditors and Department
management during the course of external audits. Coordination activities: arranging
meetings; compiling documentation required by the auditors; preparation of official
responses to all audit findings; and negotiation of revisions to the responses and the
reports.
OIG involvement continues well past the time the audit reports are issued. For all
reports issued by the AG and OPPAGA, the OIG prepares a statutorily required six-
month follow-up status report of corrective actions for the Department’s executive
director and the Joint Legislative Auditing Committee.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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The OIG coordinates the resolution of AG Federal Awards audit findings with each
federal grantor. This usually requires the collection and submittal of additional
documentation to support the Department’s corrective actions as well as meetings
and/or discussions with federal officials at the grantor Department’s regional offices in
Atlanta, Georgia and/or the national offices in Washington, D.C.
After external auditors issue their final reports, the Department is contacted by
program or grants management officials from federal grantors1 who may require
additional information in order to resolve audit findings. This is a complex process
that involves coordination and negotiation with numerous entities, including regional
workforce boards, the Florida Department of Children and Families, the Florida
Department of Revenue, the Executive Office of the Governor and Workforce Florida,
Inc. (WFI).
Under the terms of the Department/WFI Performance Contract, the OIG is responsible
to “Ensure the Agency properly manages its audit resolution responsibilities pursuant
to the requirements of state and federal law.” As a result, at least annually, the OIG
provides a written and verbal report to the WFI Finance Committee on the status of all
outstanding audit issues and liabilities. The OIG also provides quarterly updates to
this annual status report.
Section 20.055(7)(c)4., F.S., requires the OIG to report on outstanding corrective
actions as part of the annual report. This includes the identification of each significant
recommendation described in previous annual reports on which corrective action has
not been completed.
1 Federal grantors are most typically the U.S. Department of Labor, the U.S. Department of Health and
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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OTHER AUDIT SECTION RESPONSIBILITIES
To ensure the compliance with statutory mandates and professional
audit standards, the Audit Section performs quality assurance
activities and prepares an annual report of OIG activities. The Audit
Section is also involved in the preparation of the Legislative Budget
Request; the Summary Schedule of Prior Audit Findings; the Agency
for Enterprise Information Technology’s risk assessment survey; and
the Florida Housing Finance Corporation’s quarterly performance
report. These activities are described below:
Quality Assurance Activities
Florida Statutes require audits to be conducted in accordance with professional
standards. The Audit Section performs periodic assessments to ensure the
engagement process is performed in compliance with Government Auditing Standards
and the International Professional Practice Framework, published by the Institute of
Internal Auditors. Quality assurance activities consist of reviews of cross-referenced
draft reports and reviews of completed engagements.
Lastly, all draft and final reports, whether audit or investigation, are reviewed to ensure
adherence to standards for report writing, clarity, consistency and use of proper
grammar and tone.
Annual Report
Florida Statutes require each inspector general to prepare an annual report
summarizing the activities of the office during the immediate preceding fiscal year no
later than September 30th of each year. The final report is to be furnished to the
executive director. The Audit and Investigations Sections are responsible for
compiling and producing the annual report. The report includes statistics regarding
cost coverage and cost avoidance; summaries of significant audits and investigations;
and identifies each significant recommendation described in previous annual reports,
in which corrective action has yet to be completed.
Legislative Budget Request The OIG prepares Schedule IX of the Department’s Legislative Budget Request.
Schedule IX, Major Audit Findings and Recommendations, is designed to inform
decision makers on recent major findings and recommendations found in AG and OIG
audit reports. This Schedule summarizes major findings and recommendations from
audit reports issued during the current and previous fiscal years.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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Summary Schedule of Prior Audit Findings The OIG prepares the Summary Schedule of Prior Audit Findings for Auditor General,
as part for their annual Federal Awards Audit. This schedule provides an update of
prior audit findings in accordance with the Office of Management and Budget (OMB)
Circular A-133.
Agency for Enterprise Information Technology, Department Risk
Assessment Survey Review
The Agency for Enterprise Information Technology (AEIT), is responsible for
conducting and updating every 3 years, a comprehensive risk analysis to determine
security threats to data, information and information technology resources in
accordance with Section 282,318, F.S. The OIG is responsible for reviewing the
Department Risk Assessment Survey associated with this analysis to determine the
accuracy and completeness of Department responses.
Florida Housing Finance Corporation Quarterly Performance
Reports
In accordance with Section 420.0006, F.S., the Department is required to contract with
the Florida Housing Finance Corporation (FHFC) to address Florida’s affordable
housing needs. This contract includes specific performance measure consistent with
FHFC’s business plan. Quarterly deposits of funds appropriated for FHFC activities,
paid in advance, are conditioned upon certification by the executive director that
FHFC met the required performance measures. If the executive director determines
that FHFC has failed to perform as required then the matter must be referred to the
Department’s OIG to determine whether FHFC’s failure resulted from external forces
or inadequate management.
The FHFC’s Inspector General performs a review of the FHFC quarterly performance
measures to ensure its accuracy prior to submission of this report to the Department’s
executive director.
The OIG reviews the FHFC quarterly performance reports and performs any additional
evaluation as deemed necessary by the executive director.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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ORGANIZATIONAL PROFILE
OIG Leadership Team
Joseph K. Maleszewski, MBA, CIG, CIA, CISA
Inspector General
Joe has 21 years of progressively responsible
audit, management and information technology
experience with the State of Florida. He has
served in various audit and management
positions including serving as interim Inspector
General for the Department of State and the
Department of Transportation. Joe is a graduate
of the Florida State University with a Master in
Business Administration. He is a Certified
Inspector General, Certified Information Systems Auditor and Certified Internal Auditor.
Joe is active in his profession serving on the board for the Institute of Internal Auditors
local chapter and the Florida Audit Forum.
Carolyn McGriff, MBA, CPA, CGFM
Director of Audit
Carolyn has devoted her career to work in the field of
governmental accounting and auditing. Her more than 30 years
of professional service includes seven years as an Internal
Revenue Agent for the Internal Revenue Service, nine years as
an auditor with the State of Florida’s Auditor General Office, and
four years as the Director of Financial Services for the State of
Florida’s Department of Education Community College Budget
Office.
Carolyn received her degree in Accounting from Florida
Agricultural and Mechanical University, where she graduated with honors. Carolyn
received her Master in Business Administration from the Florida State University. She
is a Certified Public Accountant, Certified Government Financial Manager, and has
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received the Advanced Communicator Bronze certification with Toastmasters
International. Currently, Carolyn is the President-Elect of the Tallahassee Chapter of
the Association of Government Accountants.
Philip Wilcox
Director of Investigations
Philip Wilcox is a 30 year veteran of State government.
Philip attended Florida State University and graduated in
1985 with a Bachelor of Science in Social Work degree.
Philip worked for the Florida Department of Health &
Rehabilitative Services and when the Florida Abuse Hotline
was formed in the late 1980’s, Philip was hired as a
Protective Investigator, and conducted investigations of
allegations of elder abuse. In the early 1990’s, Philip
worked as a Compliance Officer at Emergency Medical
Services (EMS)—a state office in Tallahassee that licenses and regulates EMS
paramedics and technicians statewide.
Philip’s first experience in an Office of Inspector General came in the late 1990’s when
he became the first Inspector Specialist hired at the newly formed Florida Department of
Juvenile Justice. Philip progressed to lead investigator and acted, when needed, as
chief of investigations.
Philip has since served as director of investigations at the Department of Financial
Services, Division of Workers’ Compensation Compliance; the Department of Children
& Families Office of Inspector General. He continues to apply his knowledge and skills
to serve the Department.
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James F. Mathews, CIG
Inspector General (Retired)
James F. Mathews retired this year after serving as
inspector general of the Florida Department of Economic
Opportunity. He held the titled of inspector general in
three Florida state agencies for over 20 consecutive
years, which makes him the longest continuously serving
inspector general in State of Florida Government.
During his career, he served as an agency program
division executive, director of administration, bureau chief
of independent monitoring and a specialist for planning,
policy development and contract management in the
former Florida state Department of Labor and the
Department of Community Affairs, respectively. He spent one year, early in his career,
as an intern with the Senate Appropriations Committee of the Florida Legislature. He
has also served as a private consultant for management assessment centers.
James graduated from Florida A & M University with a Bachelors Degree in Political
Science/Public Management and from the Florida State University with a Masters in
Public Administration. He has received many commendations and awards from various
organizations and agencies for exemplary service during his 35 year governmental
career.
James is a Certified Inspector General and served as President of the Tallahassee
Chapter of the Association of Inspectors General. He was appointed by the then
Governor as one of five members of the Florida Council on State Agency Inspectors
General. He was a founding member of the Association of Inspectors General (National)
having attended the organizational meeting held in 1996. He served as the first
Chairman of the Professional Certification Board. He was elected President of the
National Association of Inspectors General in 2005.
James is very active in his community. He is married to the former Joyce Long of
Marianna and has one son, James III.
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ORGANIZATIONAL STRUCTURE
The inspector general reports to the executive director as prescribed by Section 20.055,
F.S. The OIG office structure is comprised of two main operational units that work
together to fulfill its mission: Audit and Investigations.
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OFFICE OF INSPECTOR GENERAL STAFF
FROM LEFT: Philip Wilcox, Lyndon Rodgers, Everett Condry, Shirley Moore, Bob
Montpellier, Valerie Fitzpatrick, Sherita Keys-Addison, Joe Maleszewski, and John
Smith. Carolyn McGriff (not pictured)
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PROFESSIONAL CERTIFICATIONS
Expertise within the OIG covers a variety of disciplines. Employees are technically
qualified in auditing, accounting, investigations and information technology. Staff
members continually seek to augment their credentials, further enhancing their abilities
and contributions to the OIG and the Department. The accomplishments of staff
members obtaining certifications represent significant time and effort, reflecting
positively on the individual as well as the Department. The list below summarizes the
most recognized professional certifications maintained by OIG staff.
Certified Inspector General (CIG)
Certified Internal Auditor (CIA)
Certified Public Accountant (CPA)
Certified Government Auditing Professional (CGAP)
Certified Inspector General Investigator (CIGI)
National Certified Investigator (NCI)
Certified Information Systems Auditor (CISA)
Certified Government Financial Manager (CGFM)
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PROFESSIONAL AFFILIATIONS
Office of Inspector General staff members participate in a number of professional
organizations to maintain proficiency in their areas of expertise and certification. These
associations allow them to maintain currency, establish and advance professional
networks and participate in professional community activities. OIG staff members serve
in active leadership roles in a number of these associations. The OIG professional
affiliations include:
National Association of Inspectors General (AIG)
Florida Chapter of the Association of Inspector General – (FCAIG)
Institute of Internal Auditors – (IIA)
Tallahassee Chapter – (IIA)
Information Systems Audit and Control Association – (ISACA)
ISACA Tallahassee Chapter – (ISACA)
Association of Government Accountants (AGA)
Tallahassee Chapter (AGA)
Association of Certified Fraud Examiners (ACFE)
Florida Audit Forum
Toastmasters International
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TRAINING ACCOMPLISHMENTS
Section 20.055, F.S., requires offices of inspector general to conduct audits and
investigations in accordance with professional standards. Specifically, the statute
requires that we comply with the General Principles and Standards for Offices of
Inspector General as published and revised by the Association of Inspectors General,
and that audits are conducted in accordance with the current International Standards for
the Professional Practice of Internal Auditing as published by the Institute of Internal
Auditors, Inc., or, where appropriate, in accordance with Government Auditing
Standards issued by the Comptroller General of the United States. These standards
have specific training requirements.
The Association of Inspectors General specifies that each staff person who performs
investigations, audits, investigations, evaluations, or reviews should receive at least 40
hours of continuing professional education every two years that directly enhances the
person’s professional proficiency.
In addition, the International Standards for the Professional Practice of Internal Auditing
and Government Auditing Standards require internal audit unit staff to maintain their
professional proficiency through continuing education and training. Each auditor must
receive at least 80 hours of continuing education every two years.
To ensure staff members are prepared to meet OIG mission requirements and comply
with requirements specified in Section 20.055, F.S., we utilize training resources from
various professional organizations and associations, agencies and individuals to fulfill
training needs.
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OIG Training Activities for Fiscal Year 2011-12
Ethics for Government Employees – This one-hour course, sponsored by the Association of
Government Accountants, provided information on how to address the types of activities and
principles each person in Government service should strive for such as loyalty, upholding laws
and rules, job performance and seeking better ways to get tasks accomplished.
Continuous Monitoring – This two-hour course, sponsored by the Association of Government
Accountants, provided information on critical payment systems and other risks. In addition, it
identified ways organizations are moving from traditional retrospective and detective activities that
result in “pay and chase” systems to proactive and preventive activities and controls.
Advanced Investigation Technique – This seven-hour course, sponsored Associated of
Inspector General, provided information on investigative techniques and current case law and
engaged in discussions regarding Ethics, employee rights, workplace searches and use of Global
Positioning System (GPS) tracking as well as forfeiture of retirement benefits and official
misconduct in internal investigations.
Florida Single Audit – This four-hour course sponsored by the Florida Department of Financial
Services provided the latest information regarding the Florida Single Audit requirements.
2012 Government Accounting Conference – This two-day conference, sponsored by the
Association of Government Accountants, provided a comprehensive, in-depth review of various
topics including Government Auditing Standards, Fraud Prevention, Consolidating State
Information Technology Resources, Microsoft Suite and Risk from Intergovernmental Financial
Dependency.
Tallahassee Chapter of Association of Government Accountants – This monthly meeting of
accounting and auditing professionals from state and local governments provided key
presentations and relevant discussions that affect the profession.
Tallahassee Chapter of the Institute of Internal Auditors – This monthly meeting of internal
audit professionals from the Tallahassee area provided timely and relevant presentations.
Florida Chapter of the Association of Inspectors General – This bi-monthly meeting of
associates of the Inspectors General Community in the Tallahassee Area offered important
presentations of appropriate topics.
Florida Inspectors General Practical Skills for Auditors – This two-day and a half training
sponsored by the Governor’s Chief Inspector General’s Office, in conjunction with the Florida
Chapter of the Association of Inspectors General (FCAIG) especially designed for auditors
new to the Inspector General community. This training covered 21 topic areas, and was
presented by 27 of the “best of the best” in the state inspector general, accounting and ethics
communities. The inspector general was instrumental in the planning and execution of this
course. This significant training even was the subject matter of a press release (see
following page) and a Davis Productivity Award nomination for significant cost savings:
$136,500.
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PRESS RELEASE –
The Governor’s Chief Inspector General’s Office, in conjunction with The Florida Chapter of the
Association of Inspectors General (FCAIG) recently sponsored “Florida Inspectors General
Practical Skills for Auditors” training, especially designed for auditors new to the Inspector
General community. Over 100 auditors and other inspector general team members from state
and county government agencies attended the 2 ½ day training, held at the Florida Department
of Law Enforcement in Tallahassee, July 31- August 2, 2012.
The customized training session for the Florida Inspector General environment covered 21 topic
areas, and was presented by 27 of the “best of the best” in the state inspector general,
accounting and ethics communities. Inspector General audit staff are required to undergo
periodic training, including 80 Continuing Professional Education (CPE) hours every two years.
The ‘Basic Skills’ training CPEs, sponsored by the FLAIG through the National Association of
Inspectors General, provided 20 of these training hours.
“This was the first training session ever of this kind held for Florida auditors” said Chief
Inspector General Melinda M. Miguel. “This collaborative effort provided very beneficial, cost
effective training for the members of the IG community”, added Bob Clift, Florida Department
of Transportation Inspector General and President of the FCAIG. IG Clift continued, “The cost
of comparable training delivered by professional associations and private organizations
averages approximately $1,400 dollars for each registration. We delivered this training for only
$35 per attendee.” Clift added “Our overall cost to the taxpayers for this training was
approximately $3,500 as compared to an average of $140,000 if otherwise provided. This
means that we saved taxpayers approximately $136,500 or almost 98% of the cost of
delivering this necessary training by using our own highly skilled and experienced presenters
as well as existing state resources and facilities. ”
Chief Inspector General Miguel and IG Clift also noted that the evaluations completed by 90% of the
attendees overwhelmingly reflected top ratings and an overall ‘excellent’ rating for the training as a
whole. Additionally, over 90% stated they “strongly agreed” or “agreed” that the training and
instructors were of a high quality and that the material covered was relevant to their jobs.
In light of the current economic climate a major effort was made to hold down the cost of the
training. “Prudent spending is a key goal at the OIG these days, as it is across state
government,” said Chief Inspector General Miguel. “And, since this office is charged with
oversight of state government, it’s especially important that we set a good fiscal example.”
Based on the success of this initial effort, plans are being made to continue to deliver high value
training to the Inspector General community at low cost to the taxpayers we all serve.
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INVESTIGATIVE SECTION
The mission of the Investigations Section is to deter, detect and investigate internal and
external fraud or employee misconduct impacting the Florida Department of Economic
Opportunity.
The authority and charge of the investigative team is outlined in Section 20.055(6), F.S.
Investigative activities are intended to deter, detect and eradicate fraud, waste,
mismanagement, misconduct and other abuses within programs administered by the
Department.
The investigative duties and responsibilities of the Inspector General include:
Receiving complaints and coordinating activities of the Department as required
by the Whistle-blower’s Act pursuant to Sections 112.3187 – 112.31895, Florida
Statutes.
Receiving and considering complaints, which do not meet the criteria for an
investigation under the Whistle-blower’s Act, and conducting, supervising or
coordinating such inquiries, investigations or reviews as the Inspector General
deems appropriate.
Reporting expeditiously to the Florida Department of Law Enforcement or other
law enforcement agencies, as appropriate, whenever the inspector general has
reasonable grounds to believe there has been a violation of criminal law.
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Conducting investigations and other inquiries free of actual or perceived
impairment to the independence of the inspector general or the OIG. This
includes freedom from any interference with investigations and timely access to
records and other sources of information.
Submitting in timely fashion final reports on investigations conducted by the OIG
to the Department head, except for Whistle-blower’s investigations, which are
conducted and reported pursuant to Section 112.3189, F.S.
The OIG follows the Council of the Inspectors General on Integrity and Efficiency
(CIGIE), Quality Standards for Investigation (QSI) to ensure consistency in its approach
to all investigative activities. The QSI categorize investigative standards as General
and Qualitative. General Standards address qualifications, independence and due
professional care. Qualitative Standards focus on investigative planning, execution,
reporting and information management.
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INVESTIGATIONS AND INQUIRIES
Investigative Activity Summary FY 2011-2012
Cases
Substantive Investigations Closed 10
Allegations Referred 83
TOTAL 93
In accordance with s. 20.055(7)(b), F.S., the OIG investigated the following significant
abuses and deficiencies during the reporting period (October 1, 2011-June 30, 2012).
Refer to Appendix I for a summary of the 10 substantive investigations and 83 referrals
performed by the Investigative Section during this reporting period.
2011/12-0022:
Unfair Hiring and Promotional Practices – Unemployment Compensation
An unemployment compensation employee alleged multiple occurrences of unfair hiring
practices and promotions based on favoritism. The complainant also alleged that
promotional vacancies within the unit were not made available to all employees within
the unit but had been filled from a select “pool” of applicants without being advertised.
Determination: We found there were no violations of statutes or rules related to the complainant’s allegations. All applicants whose selection was questioned by the complainant met the qualifications advertised for the positions awarded them. However, the advertisements were not the same for similar positions and interview criteria was not adhered to in a consistent manner. In general, the implementation of the pool hiring concept for Unemployment Compensation vacancies was identified as one area for improvement. Result: DEO’s Unemployment Compensation program office agreed that the minimum qualifications should be consistent for advertised positions in which the duties and responsibilities of job openings are the same, and agreed to ensure interview criteria are consistent for positions that have the same duties and responsibilities.
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2011/12-0035: Favoritism and Unfair Hiring Practices – Regional Workforce Board
An anonymous complaint was sent to a Florida legislator alleging unfair hiring practices
at a workforce board in that several job openings were not advertised and were
awarded to friends and family of board employees. Shortly afterwards, a second
complaint was emailed to the Governor’s Chief Inspector General alleging favoritism in
hiring and promotions and other irregularities by staff at that same workforce board.
Determination: We determined the job placements were not for job openings at the board, but rather listings in Employ Florida Marketplace that resulted from employers submitting job orders to be offered to qualified one stop participants. The OIG examined several instances of friends and family of board employees being placed in job openings. Result: We determined that the friends and family members were eligible for services and specialized treatment by the board could not be substantiated in all cases. In one instance, it was determined the one stop manager was interceding with an employer on behalf of her daughter. When the employer questioned the behavior a conflict of interest was determined and the one stop manager’s employment was terminated by the workforce board.
2011/12-0093: Questionable Regional Workforce Board Expenditures
Former regional workforce board executives entered into a $50,000 sponsorship
contract with a Chamber of Commerce to conduct a survey among employers to
determine perceived barriers for expansion, growth and future success. According to
the contract, the regional workforce board was going to be billed every other week at a
sum of $4,000, for a total contribution of $50,000.
This billing convention was not the regional workforce board’s normal business practice
and created the appearance that former executives circumvented a directive that all
non-payroll expenditure exceeding $5,000 be reviewed by DEO. The regional
workforce board was aware that these invoice payments were subject to prior approval
by DEO, yet prior approval was not sought.
Determination: The purpose of the sponsorship was to help fund a survey of 900 businesses about various roadblocks to improving the business climate in Florida. The survey was conducted and the results provided as specified in the scope of work. The regional workforce board program managers interviewed (1 current and 2 former) could not say how the survey results were used. Therefore, the OIG was unable to determine the value of the expenditure.
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Result: We recommended that the workforce board review the survey results, determine how it could be utilized to enhance programs and promote jobs, and implement any uses accordingly.
2011/11-0094: Questionable Regional Workforce Board Expenditures
A former regional workforce board Chief Financial Officer (CFO) entered into a lease arrangement for 950 Gateway computers in 2008. The Gateway computers were subsequently placed in a storage unit rather than returned to the equipment leasing company, as originally optioned by the lease. One thousand, 1,000, new Hewlett Packard computers were purchased in 2010 to replace the Gateway computers which remained in storage.
The CFO agreed to lease 950 Gateway Profile 6 computers for 36 months. He then subsequently altered the lease to a lease/purchase (buyback) arrangement that resulted in higher procurement costs. The regional workforce board originally spent a total of $1,538,337.50 for the lease of the Gateway computers, less a buyback of $194,512.50, which (if returned as originally optioned) would have reduced the total lease cost to $1,343,825. For 950 units, the regional workforce board paid $95,285.00 ($100.30 x 950) more than what it would have cost to buy them and $194,512.50 ($204.75 x 950 computers) more than if the regional workforce board had stuck with the original lease terms. Further, according to the regional workforce board, between August 2010 and April 2012, it spent $21,832.00 for storage of the Gateway computers.
The CFO agreed to lease Gazelle software and purchase it for estimated fair market value (EFMV) at the end of the lease. The leasing company is now asserting that the fair market value of Gazelle software according to an appraisal was $196,000 (80% of its original selling price). However, the evidence suggests that it is currently worth much less than that. There is a dispute between the leasing company and the Board relative to payment for the software.
Prior to leaving his job, the CFO purchased one of the new HP computers at the Board cost which was $1,100. Although the CFO originally purchased one of the HP computers, he later returned the computer (unopened and in original condition) to the regional workforce board. The funds used to purchase the computer were originally withheld from the CFO’s final salary and compensation payout. After the computer was returned, the funds were released to the CFO. As a result, the regional workforce board did not experience any loss in this transaction.
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Determination: We found the Board’s leasing decisions resulted in higher costs than if it had purchased the computers. In addition to the final costs of the lease/purchase being higher than if the Board had purchased the computers, management’s decision to alter the lease and remove the option to return the computers resulted in the Board incurring $21,832.00 to store the previously leased computers. However, we also determined there was no intentional fraud, waste or abuse; and when faced with a decision to either purchase the computers for $194,512.50 or extend the lease for another year at a cost of $395,940.00, the board chose the most economical option at that point in time. As a result, no demand for repayment was necessary.
Result: We recommended that prior to embarking on any major purchase or lease, the Board should conduct a cost benefit analysis. A structured planning process should be developed and followed when considering large procurements of this nature so that such cost analyses are required. We also recommended that a procurement process be established and followed when securing the services of a vendor such as the one utilized in this case.
2011/12-0095: Questionable Regional Workforce Board Expenditures
All permanent regional workforce board employees (including DEO employees) were
offered membership cards at one of three wholesale clubs (BJ’s, COSTCO and SAM’s
Club).
Determination: The regional workforce board purchased wholesale memberships for Board and DEO staff with BJ’s, COSTCO and SAM’s Club totaling $4,520. These membership cards represented a service for personal use, that constitutes an unallowable expense under OMB Circular A-122 regardless of whether the cost is reported as taxable income for the employees. The 54 SAM’s Club memberships each included a $10 SAM’s Club gift card. These gift cards having a total value of $540 were also unallowable. However, because the gift cards were never distributed, no violation of any law, rule or policy could be determined. Result: We recommended that the total amount of $4,520 be disallowed and recovered from the Board. In addition, we suggested that the DEO Office of Financial Management review the contents of the report and take other appropriate action, as deemed necessary.
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2011/12-0160: Breach of confidential information
On June 23, 2012, the OIG received information that the DEO inadvertently included
confidential material in a Microsoft Excel file sent to Integrity Florida, a new nonprofit
research group on June 4, 2012. The file contained information related to the economic
development incentives managed by the Division of Strategic Business Development.
Section 288.075(7), F.S., addresses the confidentiality of information held by an
economic development agency pursuant to the administration of an economic incentive
program for qualified businesses. Such information is confidential and exempt from
Section 119.07(1), F.S. and Section 24(a), Article I of the State Constitution for a
specified period.
Determination: We determined the Excel spreadsheet provided contained a
number of worksheets tabs that when selected appeared to be empty. However,
if a user scrolled using arrows on the lower left hand side of the spreadsheet,
additional worksheets would come into view. The data included on the additional
spreadsheets was determined to be the confidential data that was disclosed.
However, our review of the incident determined the release was inadvertent and
not intentional.
Result: We found that management timely responded to the incident and quickly
implemented corrective measures to identify the cause and mitigate the chances
of another unintended disclosure. The case was closed with no further action.
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AUDIT SECTION
The mission of the Audit Section is to promote integrity, accountability and process
improvement by providing objective, timely and value-added audit services.
Internal auditing is an independent, objective assurance and consulting activity
designed to add value and improve an organization’s operations. It helps an
organization accomplish its objectives by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, internal control and
governance processes. Although conducting internal audits is the primary mission of
the audit section, substantial benefit is provided to the Department through several
other critical functions that are discussed on the following pages.
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Annual Risk Assessment and Work Plan Development
Section 20.055 F.S., requires the inspector general to conduct
and analyze the results of an annual risk assessment and assist in
the development of an annual Audit Work Plan.
This year, we sent a Risk Assessment Questionnaires to 63 key
managers, which included directors and process managers from
Strategic Business Development, General Services, Equal
Employment Opportunity, Chief of Staff, Workforce Services,
Community Development, Finance and Administration and
Information Systems. We received 57 (or 90%) responses to our Risk Assessment
Questionnaire, and gave substantial consideration to any areas that managers rated as
high or moderate risks.
Our work plan for fiscal years 2012-13 and 2013-14 was based on the results of the risk
assessment, prior OIG audit and investigative findings, monitoring information, external
audits, independent audit reports of subrecipients, special assignments/requests from
management and input from Auditor General Staff.
The Chief Inspector General’s Office along with the State of Florida Inspectors General
submitted to Governor Scott an enterprise-wide risk assessment and audit plan. This
risk assessment was compiled with input from Florida’s state agencies and the plan will
be used to guide an enterprise-wide focus on accountability related to activities that are
common to state agencies. The OIG has set aside 20 % of its audit hours for Enterprise
Projects.
We summarized the narrative responses provided by the respondents as well as those
areas identified by Executive Director Deutsch. Below are the areas of risks ranked
from highest to lowest risk, which are also considered in our list of planned audits,
reviews and special projects.
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RISK AREAS RANKED FROM HIGHEST TO LOWEST
AREA OF RISK DESCRIPTION
Strategic Business Development - Business Incentives
Tracking/Reporting
Transparency/Confidentiality
Procurement Contracting – monitoring; deliverables (measurable); pricing; close out
Contracting – too complex, workload extreme
What services and are the cost appropriate?
Centralized purchasing – office supplies
Leasing – right amount of space?
Workforce Boards Fiscal and Programmatic Monitoring
Single Audits
Information Technology (IT) E-mail Conversion
Electronic Document Management – Housing and Community Development
Systems Access Controls – Workforce Development
Project CONNECT – Unemployment Compensation (UC)
Aging Online Interfaces – Community Planning
Department of Financial Services (DFS) – Florida Accountability Contract Tracking System (FACTS)
Statewide Shared Resource Center (SSRC) – Cost and Business Continuity Planning
FLAIR (Florida Accounting Information Resource)
IT Staff Augmentation – year-end spending
SharePoint – explore use for efficiencies
Awareness – Computer Security Threats
UC Identity Theft
Fraud processes – are they effective?
Overpayments to claimants
Postal/Mail Services
How Unemployment Insurance (UI) information is used
Decrease in Federal Funding
Benefit Payment Control (BPC) system – Data Integrity
F&A Cell Phone Usage
P-Cards
Payroll overpayments
Travel approval and reimbursement process
Property Inventory
Organizational Assessment – Structure and supervisor to staff ratio
Budget/Funding Community Planning
Unemployment Compensation
Labor Market Statistics Early release of embargoed data – release of confidential data
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Summary of Audit Recommendations and Follow-up
During the period, the OIG performed monitoring and follow-up activity on 11 external
audits and 30 audit findings.
In accordance with Section 20.055(7)(c)4., F.S., the OIG is responsible for reporting
each significant recommendation described in previous annual reports on which
corrective action has not been completed. In total, there are 9such issues: six related
to Regional Workforce Boards and three related to Department program operations.
We will continue to follow-up on outstanding items identified in Appendix III until all
corrective actions have been completed.
Entity Finding Source Description Workforce Board 17- Polk Works Independent Audit – FY 2008-
09 Procurement Disallowed - $123,480
Workforce Board 17- Polk Works Independent Audit – FY 2008-09
Capital Expenditures Disallowed - $24,579
Workforce Board 17- Polk Works Independent Audit – FY 2008-09
Contributions Disallowed - $7,500
Workforce Board 17- Polk Works OIG Investigations -2009/2010-0123
Facilities Expenditures Disallowed - $310,421
Workforce Board 7 – Florida Crown
Independent Audit – FY 2009-10 and 2010-11
Adjusting Journal Entries (Repeat Finding)
Workforce Board 15 – Workforce Alliance
OIG Investigations -2009/10-0068 & 0088
Unallowable expenditures and food Disallowed - $147,128
Division of Workforce Services AG Operational Audit 2011-021
Unemployment Compensation System Security Plan
Division of Community Development – Weatherization Assistance Program
AG Federal Awards Audits – FA 2011-023 FA 2010-018
Costs charged to fix priced contracts with State Universities
Division of Community Development – Weatherization Assistance Program
AG Federal Awards Audits – FA 2011-022 FA 2010-017
Cost monitoring procedures
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SINGLE AUDIT ACTIVITIES
The OIG has the responsibility for ensuring that the Department’s
recipients and sub-recipients comply with both Federal and State
Single Audit Acts. Compliance is ensured by:
Reviewing the recipients’/sub-recipients single audit reports;
Coordinating the Department reporting of projects;
Reviewing recipients’/sub-recipients’ annual Audit Plans;
Providing technical assistance to recipients/sub-recipients and independent auditors (Certified Public Accountant).
The OIG issued 8 Management Decisions for Regional Workforce Boards and 2
Management Decisions for other entities.
Single Audit Management Decisions October 1, 2011 – June 30, 2012
Fiscal Year
Date Issued
Regional Workforce Board 6 – North Florida 2010-11 4/27/2012
Regional Workforce Board 11 – Flagler/ Volusia 2010-11 5/25/2012
Regional Workforce Board 17 – Polk 2010-11 5/25/2012
Regional Workforce Board 18 – Suncoast 2010-11 5/25/2012
Regional Workforce Board 14 – WorkNet Pinellas 2010-11 5/30/2012
Regional Workforce Board 19 – Heartland 2010-11 6/8/2012
Regional Workforce Board 9 – Alachua/Bradford 2010-11 6/25/2012
Regional Workforce Board 20 – Treasure Coast 2010-11 6/25/2012
Florida's Great Northwest, Inc. 2009-10 5/8/2012
Workforce Florida, Inc. 2010-11 2/20/2012
Management Decisions Issued 10
With regard to the Division of Community Development, we received 153 audit reports,
one of which will require a Management Decision and received 51 certification
statements that the entity did not require an independent audit under either state or
federal single audit requirements.
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CATALOG OF STATE FINANCIAL ASSISTANCE
The OIG coordinated the Department efforts to identify programs that meet the criteria
of a state project and ensure that the proper documentation was developed. This
continues to be an area of ongoing technical assistance to Department management to
ensure that changes are communicated for inclusion in the Catalog of State Financial
Assistance (CSFA).
In accordance with the Department of Financial Services’ Division of Accounting and
Auditing Memorandum # 49, 2011-12, we submitted the Department’s FY 2011-12
Florida Single Audit Act Annual Certification Update. There were 28 Department CSFA
numbers (programs) with a program detail and compliance supplement for each.
CSFA
NO. DESCRIPTION GRANT
40.001 Florida Black Business Assistance FBBAB
40.002 Economic Development Transportation Program FEDTP
40.003 Enterprise Florida, Inc FETFI
40.004 Space Florida FSPFI
40.005 Florida Sports Foundation FSPTF
40.006 Visit Florida FCOTV
40.007 Rural Community Development FRCDP
40.008 Quick Action Closing Fund FQACF
40.009 Brownfield Redevelopment Bonus FBRBR
40.010 Qualified Defense Contractor and Space Flight Business Tax Refund FQDCP
40.011 Qualified Target Industry Tax Refund FQTIT
40.012 Local Economic Development Initiatives FLEDP
40.013 Rural Infrastructure Fund FRISP
40.014 Military Base Protection FMBPD
40.015 Entertainment Industry Financial No Grant - Tax Credit
40.016 Advocating International Relationships FAINR
40.017 Innovation Incentive Program FINIP
40.018 Economic Gardening Technical Assistance Pilot Inactive
40.019 Economic Gardening Business Loan Pilot Program FEGBL
40.020 New Markets Development Program FNMDP
40.021 Local Government Distressed Area Matching Grant FLDMG
40.022 Regional Planning Councils Inactive
40.023 Civil Legal Assistance Inactive
40.024 Growth Management Implementation FGMTA
40.025 Displaced Homemaker Project DPLHM
40.026 Quick Response Training FQRTP
40.027 Florida Goodwill Association Training Program FGA12
40.028 FL Ready to Work Credential - Business Outreach RTWCP
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ARRA-RELATED OVERSIGHT ACTIVITIES
Conducting Surveys, Assessments and Reviews for Compliance with the
American Recovery and Reinvestment Act of 2009 (ARRA) Funding: Various
ARRA-related oversight and review activities have been performed during fiscal year
2011-12 by the OIG as follows:
All risk assessment surveys used to develop audit work plans including questions
regarding ARRA funding. In addition, the risk assessment survey included questions
regarding the potential for losses from fraud, significant violations, inappropriate
activities or work duplication.
OIG staff coordinated the on-site audits of ARRA funding of by representatives from
the United States Department of Labor-Office of Inspector General (USDOL-OIG).
The State Auditor General issued an audit on the Department that contained ARRA
findings. OIG staff performed procedures to ensure that corrective actions were
implemented.
The review of subrecipients’ (subgrantees) independent audit reports as part of the
OIG Management Decisions process (which are OIG written reviews of audit reports
submitted by independent certified public accountants) included checks to ensure
that ARRA funds are reported in the Schedule of Expenditures of Federal Awards
and that the independent auditor’s reconcile the entity’s financial records to the
Department data and reporting system.
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SIGNIFICANT AUDIT PROJECTS
Presented below are summaries of 8 significant audit projects completed during the year. See Appendix II for a summary of 29 audit-related projects. Report #2011/12-0067: Internal Audit of Pinellas County Urban League's
Weatherization Assistance Program ARRA Subgrant Agreement
The purpose of our audit of Pinellas County Urban League, Inc.’s (PCUL)
Weatherization Assistance Program, ARRA Subgrant Agreement was: 1) to determine
whether the subgrantee complied with applicable rules, regulations and Subgrant
Agreement terms and conditions; and 2) to evaluate the subgrantees’ performance with
the subgrant agreement terms and conditions, including requests for reimbursement,
submission of documents, and performance of outcomes.
In general, our audit determined that PCUL complied with applicable rules, regulations and the Subgrantee Agreement terms and conditions with the following exceptions:
PCUL billed more than the documented amount in program support costs (Fee for Service) to the grant. PCUL billed DEO an accumulated total of $1.3 million for Fee for Service Costs for period January 1, 2010 to December 31, 2011, which was based on the 30% maximum allowable amount; however, the PCUL’s actual documented amount totaled approximately $1.2 million, which is a difference of $100,000.
PCUL did not always document photographs, utility bills and energy audits as required by the terms and conditions of their subgrant agreement.
PCUL concurred with our findings, but noted the Department’s eGrants system required the billings be submitted at the maximum percentage.
Report #2011/12-0096: Internal Audit of DEO’s Security of Highway Safety and
Motor Vehicles Cross-Match Data
The purpose of this audit was to review the controls over the cross-match data obtained
from the Department of Highway Safety and Motor Vehicles (HSMV) and determine
their adequacy in ensuring the security and integrity of this data.
In general, our audit determined that the processes maintained within the Office of
Unemployment Compensation (UC) were adequate to ensure the security and integrity
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of the data obtained from the HSMV. We also determined that the processes
maintained within the Office of Unemployment Compensation could be improved to help
ensure the integrity of the data obtained from the HSMV. We noted the following:
Audit tests indicated that the position descriptions for the employees with cross-match system access did not reflect this requirement of their job duties.
Audit test indicated that a completed Form ISU 27-B was not available for all employees with access to the cross-match system. This form provides documentation that the employee’s supervisor has authorized access to the system as well as an indication that the employee has been instructed as to the consequences of the inappropriate use of the system’s data.
We recommended that the Office of Unemployment Compensation:
Revise the position descriptions for those employees who access the data from the cross-match system to reflect the use of the system and the data within the system.
Ensure that an up-to-date Form ISU 27-B is available for all employees with access to the HSMV cross-match system.
Weatherization Assistance Program - ARRA
1. Report #2011/12-0146: Suwannee River Subgrant Agreement
2. Report #2011/12-0147: Tri-County Subgrant Agreement
3. Report #2011/12-0148: Pinellas County Urban League Subgrant Agreement
The Office of Inspector General completed three audits of the Division of Community
Development’s (Division) monitoring and oversight of three Weatherization Assistance
Program – ARRA Subgrant Agreements: Tri-County Community Council; Suwannee
River Economic Council and Pinellas County Urban League.
The purpose of these audits was: 1) to determine whether the Division complied with
applicable rules and regulations supporting its Weatherization Assistance Program
Subgrant Agreement with subgrantees; and 2) to evaluate the Division’s effectiveness in
monitoring the subgrantee’s performance.
These audits determined that the Division complied with applicable rules and
regulations supporting the Subgrant Agreements and the Division’s monitoring of the
subgrantee was generally effective. However, we noted issues with the eGrants file
system which calculated the maximum allowable amount for Fees for Services (30%)
and Administration (5.25%) rather than the lower actual allowable amounts. In some
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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cases, the Division’s field monitors did not follow program guidance during their
monitoring visits.
Management concurred with our findings and has timely initiated corrective actions to
address these issues for the three audited entities as well as for the program as a
whole.
Economic Development Incentive Programs – Strategic Business Development
1. Report # 2011/12-0079: Phase I – Contracted Services
2. Report # 2011/12-0085: Phase II – Operations
3. Report # 2011/12-0086: Customer Satisfaction Survey
The OIG completed two reviews and a survey related to Economic Development
Incentive Programs managed by the Department’s Division of Strategic Business
Development.
Phase I – Contracted Services (Project No. 2011/12-0079): The purpose of the first
review, titled Management Review of Processes Associated with Tracking and
Reporting Economic Development Incentive Programs’ Performance Phase One -
Contracted Services, was to document and evaluate the processes used to monitor the
performance of incentive program fund recipients to ensure accountability in the
incentive programs.
This review was designed to document the Sharpton, Brunson & Company (SBC), P.A.
process to determine how errors are detected, how confidentiality is ensured, what
controls are in place to ensure program integrity and accountability and to make
recommendations for improvement in the incentive program process.
This review resulted in 14 recommendations. SBC concurred with the findings and
indicated in their response that they were working to address the issues noted.
Phase II – Operations (Project No. 2011/12-0085):
The purpose of the second review, titled Management Review of Processes Associated
with Tracking and Reporting Economic Development Incentive Programs Phase Two –
Division of Strategic Business Development, was to assess the management controls
associated with the processes that verify the accuracy of data and compliance with
provisions of the incentive agreements. The organizational structure and processes
used to receive, review and approve or reject applications and other processes used to
ensure compliance with the rules governing the incentive programs were reviewed.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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This review also examined the Division’s financial processes and those interrelated to
the Department’s Bureau of Financial Management, which are necessary in the overall
accountability structure.
This review resulted in 20 recommendations to the Division. The Division generally
agreed with the reported results and indicated that they had already begun corrective
actions on some noted items and other recommendations were under review.
Customer Satisfaction Survey (Project No. 2011/12-0086):
The third project, titled Report Monitoring and Tracking Economic Development
Incentive Programs – Business Client Survey Economic Development Incentives, was
to report the results of a survey emailed to 734 client business’ contacts. These
surveys were used to aid in improving the Department’s processes and assist the
Department in assessing the services provided to the clients. The percentage of
responses to the survey was 15 percent (110 business respondents completed the
survey/734 total surveys emailed).
The survey consisted of a total of 10 questions; 6 questions related specifically to SBC,
1 general information question and 3 questions related to both SBC and the Division.
SBC overall average score was 4.1, which based on the scoring guidelines specified in
the contract (the scale ranged from 1, which contract defined as Very Poor to 5, which
the contract defined as Very Good). Based on these results, SBC’s performance was
considered good.
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APPENDIX I – INVESTIGATIONS AND REFERALS
During the period from October 1, 2011 – June 30, 2012, the Investigation’s Section
concluded 10 substantive investigations, which are summarized below. Of these, one
investigation included sustained findings.
The Investigation’s Section also made 83 referrals to various entities including the:
United States Department of Labor
o Office of Inspector General
o Wage and Hour Division
Department of Economic Opportunity
o Office of Civil Rights
o Customer Advocacy Call Center
o Unemployment Compensation – Benefit Payment Control
o Other Department Business areas
Local Law Enforcement
Florida Department of Law Enforcement
United States Secret Service
Other State of Florida Agency Office of Inspector General
Summary of Investigated Projects October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2010/11-0173 A school readiness provider alleged an early learning coalition assessor failed to accurately
record the assessment date, failed to review the results with the center Director, and used an
assessment tool which the coalition was not authorized to use. The investigation determined
that the Department did not require submission of a monitoring tool as part of the Coalition's
plan, so there was no required assessment tool. The Director's signature was inadvertently
not obtained, but the Coalition granted an additional 60 days to the provider to make up for
the error. No intentional policy or rule violations were found.
FINDING – Not Substantiated
2010/11-0178 A former Department employee alleged his employment was terminated after he reported that
a team leader instructed him to enter work hours on his timesheet for a day he did not
actually work. The investigation did not substantiate the allegations that the complainant's
separation was based on retaliation.
FINDING – Not Substantiated
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Summary of Investigated Projects October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2011/12-0022 An employee of the unemployment compensation program alleged unfair hiring practices
such as favoritism and discrimination. The complainant alleged that promotional vacancies
within the unit are filled without being advertised and are only offered to a few select people
from a "pool" of applicants--most of whom are friends or church members of the supervisor.
The investigation found no violations of statues, rules or policies; however, OIG did find that
hiring practices could be improved. Management concurred with OIG recommendations and
indicated they will review the use of hiring pools when filling a small number of vacancies.
Management also indicated that they will work closely with HR to ensure consistency when
filling all vacant UC positions and will apply the “best practices” model.
FINDING – Not Substantiated
2011/12-0028 An anonymous complainant wrote a lengthy letter to a Senator alleging wrongdoing by a
regional workforce board, including the Board contracting with companies of Board members
and staff members; hiring consultants that are friends; supervisors fraternizing with staff;
favoritism in hiring and general overall hostile working conditions. An investigation of the
allegations was conducted and there were insufficient evidence to support the alleged
wrongdoing. See also 2011/12-0035.
FINDING – Not Substantiated
2011/12-0035 A complainant sent material to the Office of Chief Inspector General alleging unfair hiring
practices at a workforce board. An investigation of the allegations was conducted and there
were was insufficient evidence to support the alleged wrongdoing. See also 2011/12-0035.
FINDING – Not Substantiated
2011/12-0057 A complainant alleged that an employee in the unemployment compensation program is
using his state computer to prepare court filings and other documents to reduce child support,
increase visitation and other documents related to a child custody dispute. The complainant
alleges these activities are being done on state time using state resources. Since DEO policy
allows limited personal use of information resources if it does not result in a loss of associate
productivity, the matter was referred to the employee's supervisor and UC program manager.
A review determined the employee's use was not affecting his productivity and no violation of
policy was substantiated.
FINDING – Not Substantiated
2011/12-0093 This investigation resulted from reports of elaborate spending by a workforce board for
sponsorships for Chamber events. In particular, the Board spent $50K on an initiative called
"Let's Get to Work" and altered the original agreement so payments to the Chamber could be
broken down into payments under $5K each so prior approval by the Department could be
circumvented. The OIG concluded that the Board did not likely follow the prior approval
procedure as directed WFI.
FINDING – Not Substantiated
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Summary of Investigated Projects October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2011/12-0094 This investigation resulted from reports of elaborate spending by a workforce board for
computers. The investigation examined a computer rental agreement worth thousands of
dollars that eventually resulted in the computers being purchased, and then replaced one
year later with more new computers, leaving the rented ones stored on pallets in rented
storage units. The investigation found that the Board’s decision to sign an addendum to its
computer lease that would result in $194,512.50 higher expenditure at the end of the lease.
However, no violation of federal guidelines could be found, and given a set of circumstances
at the end of the lease period, it appeared the Board chose the most economical option at the
time. No repayment was required.
FINDING – Not Substantiated
2011/12-0095 This investigation resulted from reports of elaborate spending by a workforce board for
employee recognition in the form of memberships to wholesale clubs. An investigation
concluded that the warehouse membership cards were an unallowable expense. The Board
was ordered to repay the unallowable amount ($4,250) from nonfederal sources.
FINDING – Substantiated
2011/12-0160 A DEO employee inadvertently released confidential economic development business
incentive data imbedded in tabs on a template spreadsheet that is used to report such data to
the Governor. The breach was reported to Florida Department of Law Enforcement, which
reviewed and determined a criminal offense was unlikely, and a criminal investigation would
not be conducted. The DEO OIG conducted a review of the release and provided a
chronology of the events surrounding the release of confidential information to the DEO
Director and reviewed subsequent management actions. An intentional breach was not
substantiated.
FINDING – Not Substantiated
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Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2010/11-0042 An employer participating in the Florida Back to Work Program allegedly paid fifteen
FBWP participant employees a much lower salary than what was reported for
reimbursement. Although the Workforce Board did not lose any funds, the fact that the
employer may have not paid the participants properly disqualified them from the
program. The information was referred to the USDOL Office of Inspector General. A
review of the documentation.
2010/11-0096 A complainant contacted the Unemployment Compensation Call Center and alleged that
a former UC employee used their position to alter the mailing addresses of several UC
checks and sent them to various addresses in Orlando so they could be intercepted,
altered, and fraudulently cashed. The matter was referred to the United States
Department of Labor Office of Inspector General for criminal fraud investigation. The
investigation resulted in arrest of several individuals, charged with fraud by the United
States Attorney.
2010/11-0099 An agency contracted by the Department to provide call center communications to
Unemployment Compensation claimants received anonymous complaints that unnamed
employees were changing claimant PINs and addresses in order to fraudulently
intercept payments. After receiving the complaints, managers of the contracted agency
discovered one employee with a notebook in her desk containing 150+ names, dates of
birth, and partial and full social security numbers of UC claimants. The matter was
referred to the United States Department of Labor Office of Inspector General for
criminal fraud investigation. The investigation resulted in the arrest of several
individuals, charged with fraud by the United States Attorney.
2010/11-0122 Two youth participants reported not receiving check payments issued by the Board. A
subsequent inquiry found the checks had been endorsed by an employee of a Board
contractor and deposited into a bank account. The matter was referred to local law
enforcement and the employee was eventually arrested and charged with theft. The
funds were part of Able Trust, which is non federal and non state funds, so repayment
was not an issue for the Department, although the state attorney ordered restitution to
the trust.
2010/11-0157 A Department employee complained of a coworker selling items at work and misusing
his computer to sell items to coworkers. An inquiry by his supervisor did not support the
allegation, but did establish enough concern to move the employee to a location where
he can be directly viewed by his supervisor.
2011/12-0009 A complainant contacted the Chief Inspector General and expressed concerns about
oversight of grant funds intended for green job creation. The OIG referred the matter to
the United States Department of Labor Office of Inspector General who was already
familiar with the complaint and the complainant. Since the Department had nothing to
do with the grants funds, this project was closed for no jurisdiction.
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Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2011/12-0011 A complainant wrote the OIG to inquire about a restaurant that is docking the pay of all
of the servers each night for payment for silverware replacements. The matter was
referred to the United States Department of Labor Wage and Hour Division.
2011/12-0015 It was reported to the Department by law enforcement that an Unemployment
Compensation telecommuter reportedly committed suicide after receiving an eviction
notice from his landlord. Law Enforcement on the scene considered it an active crime
scene and notified the Department that the employee's state owned computer was being
seized so it could be analyzed for a possible suicide note. The computer was later
returned to the Department as no note was found on it.
2011/12-0018 The Governor's Chief Inspector General received information suggesting an employer
was committing Unemployment Compensation fraud by failing to accurately report gross
wages paid to two employees. The form was sent to the employer by Benefit Payment
Control with regard to two of his employees. The employer returned the form to the
wrong place. This was part of Benefit Payment Control’s quarterly wage audit.
2011/12-0032 An applicant for a Department vacancy alleged that he and four others who claimed
veteran’s preference that appeared to have the minimum qualifications were not
afforded an interview. The Chief Inspector General requested review for whistleblower,
but upon research, it was determined that Veteran's Preference complaints against
agencies falls under the jurisdiction of the Florida Department of Veterans Affairs. The
complainant was referred to the agency that has proper jurisdiction.
2011/12-0036 A complainant alleged a check he wrote to Allstate Insurance was inadvertently sent to
the Department and deposited into the agency's account. The complainant had an
overpayment in Unemployment Compensation. While paying bills, his spouse
mistakenly put the Department check in the Allstate envelope and the Allstate check in
the Department envelope. When received, the Department deposited it by mistake. A
report was made to Financial Management, and a refund was expedited to the claimant.
Benefit Payment Control advised staff to be more careful to review payee information
before depositing overpayment checks.
2011/12-0037 A complainant wrote the OIG to report safety issues related to a licensed child daycare
center. The matter was referred to the Child Care licensing offices at Department of
Children & Families, with a copy of the complaint also sent to DCF inspector general's
office.
2011/12-0038 A recipient of Individual Training Account (ITA) funds for college contacted the OIG and
reported he was getting billed for the college courses he was taking through the ITA.
The Board researched and determined that the college experienced a problem with
accounts payable and inadvertently billed both the Board and the participant. The Board
had already paid the bill by the time the complainant contacted the OIG.
2011/12-0039 A claimant called the Unemployment Appeals Commission regarding the status of his
case, and during the call made threatening remarks to the Unemployment Appeals
Commission representative. The threats were reported to local law enforcement, which
came out and took a report.
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Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2011/12-0040 A training provider notified the OIG that upon terminating the employment of one of its
trainers, it was discovered the trainer had been invoicing the regional workforce board
for training that had never occurred. Once brought to the attention of the training
provider, the board was reimbursed for the full price of the training which was
$11,940.00. The money was returned by the Board to the Department.
2011/12-0042 A complainant sent an email stating the services of a Workforce Board were "of no help"
because one stop staff assists with letters and resumes, but does not give patrons one-
on-one face time with potential employers. The matter was referred to Workforce
Services and then to the Regional Workforce Board to contact the complainant and
provide assistance.
2011/12-0043 An employer complained to the Chief Inspector General after a Regional Workforce
Board hired one of the employer's staff. The employer believes that Workforce Boards
should be enjoined from recruiting personnel from employers they do business with.
Upon review of the complainant's issues, it was determined the OIG had no jurisdiction
in the hire/fire decisions of a regional workforce board. This project is closed as "no
jurisdiction."
2011/12-0044 A recipient of Unemployment Compensation Benefits wrote the Chief Inspector General
and said the recent law changes concerning job searches encourages claimants to
misrepresent by applying for jobs for which they do not qualify just the reach the
required 5 per week. The claimant was referred to the Unemployment Compensation
program office for review and response. The claimant was given a full explanation of the
new rules and requirements and how to meet those requirements.
2011/12-0045 A claimant for Unemployment Compensation Benefits wrote the Department to complain
about the automated phone system for claiming weeks. An Unemployment
Compensation representative contacted the claimant, informed her there were no issues
on the claim, and that she would need to file an additional claim every time she earned
over her weekly benefit amount. The claimant was given the representatives contact
information in case she had other questions.
2011/12-0048 It was reported by an accounting department employee at a Workforce Board that after
the resignation of its senior vice president (VP), the VP ordered the Board's accounting
department to issue a check made payable to the VP for $5,000. The matter was
referred to the United States Department of Labor Office of Inspector General for
investigation and further action.
2011/12-0049 A complainant alleged a one stop employee at a Workforce Board contacted her
employer for information by submitting a forged authorization which falsely stated she
was a Workforce Investment Act participant. The Regional Workforce Board conducted
an investigation and determined an employee of a company the Board contracts with for
one stop services had committed an act of "phishing" to obtain the complainant's
personal information. This was done so the employee could take credit for a falsified
placement. The person's employment was terminated, and several corrective actions
were imposed on employees of the contractor.
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Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2011/12-0051 A claimant received an unsolicited advertisement from an attorney after he filed for an
appeal with the Unemployment Appeals Commission. The matter was referred to the
DEO General Counsel's Office, which replied that under Florida law administrative
hearings to determine entitlements to unemployment benefits are open to the public.
The Department makes available upon requests a list of the previous week's appeals
decisions.
2011/12-0055 Three claimants wrote individually to the Office of the Governor to request assistance in
getting approved for Unemployment Compensation Benefits. The complaints were sent
to an Unemployment Compensation program manager for assignment and response to
the claimants.
2011/12-0056 A user of Employ Florida Marketplace notified the helpdesk that she had been contacted
by a bogus employer who tried to lure her into a check cashing scam by asking her to
conduct surveys of MoneyGram in her area. The bogus employer sent the user a
counterfeit check for $3,000 and instructed her to keep $300 and send the remaining
$2,700 via MoneyGram to the scammer. The user sent the counterfeit check to a
helpdesk employee. All was turned over to Florida Department of Law Enforcement
Computer Crime Laboratory. Yahoo was notified and disabled the account. The Florida
Department of Law Enforcement advised that user should report to
http://www.ic3.gov/default.aspx. This website is home to the Internet Crime Complaint
Center (IC3), which is a partnership between the Federal Bureau of Investigation (FBI)
and the National White Collar Crime Center (NW3C), funded in part by the Bureau of
Justice Assistance (BJA).
2011/12-0062 The Governor's Chief Inspector General and Office of the Attorney General received
letters from claimants for Unemployment Compensation Benefits requesting assistance
and information regarding their claims. The claimant’s letters were referred to the OIG.
All were referred to the Unemployment Compensation Program Office for research and
response to the claimants.
2011/12-0063 An Unemployment Compensation claimant made threatening remarks during an angry
rant in a voicemail left on an adjudicator's telephone. The call was referred to local law
enforcement, which responded and took an affidavit from the adjudicator.
2011/12-0065 An anonymous child care provider wrote a state senator and complained about the
intrusiveness of oversight by the local Early Learning Coalition. The matter was referred
to the Office of Early Learning, which was transitioned out of the Department in October
2011, and is now under Department of Education.
2011/12-0066 A claimant for Unemployment Compensation wrote the Governor's Chief Inspector
General to report fraudulent misuse of his/her Unemployment Compensation debit card.
The matter was referred to the Unemployment Compensation Program Office which
contacted the claimant and referred the claimant to The Florida Debit Card for filing a
charge dispute.
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Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2011/12-0071 An appellant whose unemployment claim was in appeal contacted the Governor's Office
and suggested she might "kill" herself because she had no one to talk to about her dire
financial condition and needs her unemployment back. The matter was referred to local
law enforcement to conduct a wellness check on the claimant.
2011/12-0072 A complainant alleged that a one stop employee inappropriately threatened her with
sanctions for insisting she be present when her son (who is enrolled for services) signs
documentation required for participation. The matter was referred to Workforce Services
which contacted the complainant and addressed each concern.
2011/12-0073 A complainant wrote the Governor's Chief Inspector General and alleged that a claimant
collecting Unemployment Compensation Benefits was also working. The matter was
referred to the Unemployment Compensation Benefit Payment Control Unit, which
attempted to contact the complainant because they were unable to locate a claim under
the name given. The complainant never called back and so the referral was dismissed
for insufficient information.
2011/12-0074 A claimant for Unemployment Compensation wrote the Governor's Office and
complained about the debit card option and a disputed charge. Several attempts were
made to contact the complainant to address his/her concerns, but were unsuccessful.
Project closed after failed attempts to contact.
2011/12-0075 An anonymous complainant alleged an Unemployment Compensation executive in the
Ft. Lauderdale office was not qualified to perform her job, hired unqualified friends and
acquaintances in Other Personal Services (OPS) jobs, and overlooked internal qualified
staff when hiring for new vacancies. A review by management did not substantiate the
allegations.
2011/12-0076 A claimant's husband wrote the Governor regarding a delay in getting his wife's
Unemployment Compensation Benefits approved and paid. The matter was referred to
the Unemployment Compensation Program Office for research and response.
2011/12-0077 A complainant alleged that Suwannee River Economic Council's (SREC's)
weatherization program refused to replace her 17 year old central air conditioning unit.
The matter was referred to Community Development program office that worked with the
local community action agency which in turn worked with client and eventually met the
client's needs by fixing her air conditioning unit.
2011/12-0078 A one stop customer alleged he was treated rudely by one stop staff regarding his use of
a cell phone and a computer printer. The matter was referred to the Workforce Board
for research and response.
2011/12-0080 An anonymous complainant wrote the Office of the Governor to express concerns that a
Workforce Board provided more assistance than usual to former employees of a space
contractor simply because they were technicians and engineers with skills too critical to
lose. The matter was referred to the Workforce Board for response. The Board
provided an explanation of its coordinated efforts with the space contractor to obtain
accelerated learning to provide competitive skills to employees after layoffs.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2011/12-0081 A jobless college graduate wrote the Office of the Governor and mentioned suicide
"because of everything that I am going through." The matter was promptly referred to
the Orange County Sheriff's Office and they sent a deputy for a wellness check.
2011/12-0082 A claimant wrote the Office of the Governor to complain about job search requirements
for the program, the vague rules regarding appeals and the fact the filing website is not
user friendly. The complaints were referred to the Unemployment Compensation
Program Office for research and response.
2011/12-0083 A claimant wrote to complain that a call center employee "used abusive language" and
could not help with accepting documents and scanning to a claims agent. The complaint
was referred to the Unemployment Compensation Program Office for research and
response.
2011/12-0088 A former workforce board employee made various allegations of wrong doing during the
period of employment in 2009. The employee was referred to the Board's new interim
director who contacted the employee to hear the complaints, which were management
issues.
2011/12-0089 A former employee of a staffing agency contracted by a Regional Workforce Board
alleged in an email to the Governor's Office that the Board does not care about the
accuracy or truthfulness of job placement data, but rather only cares about "numbers."
The former employee alleged his employment was terminated because his job
placement numbers were low. An inquiry by the Board and report to the OIG revealed
the complainant's allegations were not substantiated. The complainant is an employee
of a Board subcontractor. The complainant was fired for cause with multiple
performance issues.
2011/12-0090 An anonymous complainant alleged that an employee in the Ft. Lauderdale Hub is
disrespectful to supervisors and coworkers alike. The complaint was originally sent to
Unemployment Compensation Program Administration and copied to the OIG. The
matter was referred to Unemployment Compensation Administration, since it was a
personnel issue more than a fraud, waste and abuse issue.
2011/12-0091 A one stop customer reported to management that three one stop employees were
overheard talking about committing insurance fraud in front of one stop customers. The
matter was referred to the Regional Workforce Board for inquiry, which found the
customer overheard another customer discussing something she heard on the nightly
news regarding a national sports star's engagement. The determination was
inappropriate conversation at the front desk. Staff were disciplined and retrained.
2011/12-0092 A Unemployment Compensation claimant sent a distraught email to the Governor's
Office with the subject "Good bye” saying "I've done everything the world has asked of
me, followed blindly driven to Orlando and Virginia for interviews, YES I'M Crazy, nuts
and I'm done…. I'm sorry for the mess I left… But I did try…" The matter was referred to
local police and requested a wellness check under the Baker Act.
2011/12-0099 A Workforce Board reported that it had discovered that a former counselor may have
committed fraud by creating false vendors to generate checks. The counselor allegedly
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
55
Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
completed paperwork to obtain rent payments for participants; and it was later
discovered the participants did not request rent payments and the landlord names and
addresses did not match records in Employ Florida Marketplace (EFM). OIG confirmed
that the counselor was arrested and charged with four felony counts in eleven different
instances of fraud.
2011/12-0100 A one stop customer contacted the Office of Inspector General to complain about lack of
services and inappropriate comments and responses from one stop staff. The matter
was referred by the inspector general to the director of the Workforce Board.
2011/12-0102 The OIG was requested to assist a federal agency in determining if any federal funds
were disbursed through the Community Development Block Grant to a construction firm
building low income housing in the Miami area. The matter was referred to the assistant
director of Housing and Community Development who contacted the agency and
provided the needed assistance.
2011/12-0103 An anonymous writer alleged that workforce board staff share system logons and
passwords with volunteers, misuse their positions, engage in loafing and sell products
while at work. The letter was referred to the Regional Workforce Board for review and
response. Although no policy violations were found, the Region did make some policy
changes in regards to staff referrals of family members.
2011/12-0105 A former employee of the Unemployment Compensation program visited the Caldwell
Building to request legal representation about an unknown issue. Due to his bizarre
behavior, the local police were called. The incident ended without an arrest. The
employee was turned over to family members by local police. No further OIG action was
required.
2011/12-0106 A claimant who lost his appeal for Unemployment Compensation mailed biohazard
waste to the Unemployment Compensation Program Office. The matter was referred to
the local police department and reported as harassment.
2011/12-0107 A complainant wrote the OIG and alleged a participant in a one stop center is committing
fraud by accepting $11,000 in tuition by using her maiden name to shield considerable
assets, including the fact her husband owns a successful trucking business. A review by
the Workforce Board did not substantiate the allegations, using tax information, income
reporting, food stamp database and home foreclosure information.
2011/12-0108 A vacationer wrote the Office of the Governor to report an alleged scam between a
property owner, a towing service and a cab company to increase towing instances and
profits at the expense of unsuspecting senior tourists. The complaint was forwarded to
the OIG for handling, which in turn determined the county with jurisdiction over the
matter and subsequently referred the matter to the county.
2011/12-0110 An anonymous writer to the Governor's Office alleged managers at a Regional
Workforce Board were hostile and disrespectful of staff, provide little or no guidance,
and create "a high level of tension in the office." The complaint was referred to the
executive director of the Workforce Board who conducted an inquiry and addressed
each allegation in writing.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
2011/12-0111 A claimant for Unemployment Compensation Benefits wrote the Governor's Office to
complain about the decision of an adjudicator. The matter was referred to the program
for review. The issue involved self employment, and the Department had to determine
through DOR records if the claimant could be considered an employee. This
complicated issue was referred to a program supervisor for sorting out. No further OIG
action was required.
2011/12-0112 A mother and daughter wrote to the Attorney General about the Unemployment
Compensation Office sharing social security numbers and other personal information
with their former employer. A supervisor from the Unemployment Compensation Office
attempted to contact the claimant and left detailed messages and contact information.
No reply from the claimant was received. The project was closed due to insufficient
information.
2011/12-0114 An anonymous complainant wrote the Governor's Office and alleged a one stop staff
member had threatened to shoot one stop staff and customers. The employee was
evaluated by a psychiatrist and while not judged to be a threat, his employment in the
one stop center was terminated. Workforce Board management felt staff overreacted on
this and subsequently met with staff at the one stop centers to talk about not spreading
rumors and the proper way to handle such issues. The IG advised this project could be
closed since corrective action was taken by the Board.
2011/12-0115 An Unemployment Compensation claimant wrote the Governor's Office to complaint
about not being able to get through on the telephones to check the status of his/her
claim. The complaint was referred to the Unemployment Compensation Program Office
for handling and response to the claimant.
2011/12-0116 An employee of a one stop center in South Florida wrote the Governor's Office to
express concerns over the safety and security of staff due to irate one stop customers
and unarmed security guards. The matter was referred to the Regional Workforce
Board for review and any action deemed appropriate. The Board said additional training
would be provided, and security had been expanded to full time.
2011/12-0117 A Workforce Board notified the OIG of a Temporary Assistance for Needy Families
(TANF) client that allegedly committed participant fraud by forging a doctor's signature
on a medical verification form in order to receive assistance without performing the
required 35 hours of weekly activities. The alleged fraud was referred to the Benefit
Fraud Unit at the Department of Children and Families for investigation.
2011/12-0118 An attorney for a claimant ruled eligible for Unemployment Compensation Benefits
reported that the claimant's employer engaged in witness tampering by ordering another
employee not to testify during the claimant's appeal hearing. The complaint was
directed to the Unemployment Compensation Appeals Office which contacted the
attorney and advised that this matter would have to be pursued through the court system
and that it was out of the jurisdiction of both the Department and OIG.
2011/12-0119 A proclaimed veteran wrote a letter addressed to President Obama and Governor Scott
with a possible underlying veiled threat. The letter was scanned and sent to the United
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
States Secret Service and Florida Department of Law Enforcement.
2011/12-0120 A complainant reported that a one stop caseworker told her daughter (who is receiving
cash assistance) that a certain amount of money must be withheld from the check each
month for "odds and ends." The complainant was referred to Workforce Program staff
who researched the file and determined the reduced amount was failure to report rent
and utility obligations which reduced the benefits. No fraud was indicated.
2011/12-0121 A complainant alleged a heavy equipment course he took at a local community college
was inferior, in that few that completed the course got jobs and several failed the skills
test. An OIG inquiry determined the college was not paid with workforce funds, and that
the complainant had actually demonstrated non-compliance with the program on
numerous occasions. The project was closed as non-jurisdictional.
2011/12-0122 An employee of an employee leasing company assigned to a one stop center sent an
email to a coworker that she interpreted as a threat because in it the employee said he
might "go postal and shoot all of my co-workers." The matter was referred to local police
who conducted an investigation for assessment under the Baker Act. Although the
employee was not Baker Acted, his employment with the temporary agency was
terminated.
2011/12-0123 An anonymous complainant wrote the Governor's Office and alleged supervisors in the
Unemployment Office were rude to OPS workers, practice racism and failed to follow
claims rules by refusing to verify claimants' employment separation. An in-house review
was conducted and there was no evidence to support the allegations. However, since
there were references to race relations, the responses and findings were sent to the
Department’s Office of Civil Rights for review.
2011/12-0126 A complainant wrote the OIG to inquire if her employer could randomly change her work
schedule at a group home for disabled adults. The OIG advised the complainant DEO
has no jurisdiction, but encouraged her to contact United States Department of Labor
Wage and Hour Division if she had questions about hours and wages.
2011/12-0127 A businesses owner, referred to the OIG by his local State Attorney, called to report that
he had made nine calls to the Unemployment Compensation Program Office, left nine
separate messages, and after over one week of waiting had not received one call back.
The OIG referred the complaint to the Unemployment Compensation Program Office for
handling and response.
2011/12-0128 A former employee of an Unemployment Compensation Office alleged nepotism and
favoritism by the Office's current supervisor. The director of Workforce Services called
the complainant personally to discuss his/her concerns. The Department did not find a
basis for any further action on the complainant's issues. No further action is required.
2011/12-0129 A complainant with a wage and hour issue contacted the Department of Agriculture &
Consumer Services which referred the matter to the OIG. The OIG referred the
complaint to the United States Department of Labor Wage and Hour Division.
2011/12-0130 An appellant for Unemployment Compensation wrote the Office of Attorney General to
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
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Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
complain about being notified by the Department that he was being charged by the
Unemployment Compensation Benefit Payment Control Unit for benefits overpaid in the
month of December 2011. The matter was referred to the program office for handling
and response to the claimant.
2011/12-0132 An employee reported to the Department’s Office of Civil Rights that she felt her recent
demotion was because she reported a coworker who was not reporting hours spent out
of the office on her timesheet. The matter was referred to the Unemployment
Compensation Program for review of the employee's timesheets compared with
attendance logs. Although there was some discrepancy found, it could not be proven
the employee had falsified her timesheet.
2011/12-0133 A claimant for Unemployment Compensation wrote the Florida Attorney General's Office
to complain about a bill he received from the Department for overpayment on his claim.
The matter was referred to the Benefit Payment Control Unit.
2011/12-0134 A claimant for Unemployment Compensation contacted the OIG to register his
disapproval at the Workforce Board's sanctions for reduced benefits for non-compliance
with required job searches and other required job search activities. The complaint was
referred to the local one stop operator and Workforce Board for handling.
2011/12-0137 An employer in the work experience program failed to report termination of employment
for one participant. Timesheets were faxed to the Workforce Board's Finance
Department by the employer for payment, although it is uncertain where the fax
originated. A review by the Board determined problems in the manner in which
timesheets were reported. Several corrective measures were taken to ensure an
incident of this nature does not occur again.
2011/12-0140 An employee of an Unemployment Compensation field office reportedly was retaliated
against after reporting that a fellow employee was not accurately reporting time away
from the office on a timesheet. The matter was referred to the supervisor who
conducted a review and found some timesheet discrepancies that were addressed with
the employee.
2011/12-0141 A claimant for Unemployment Compensation wrote the Governor's Office and
threatened to commit workplace violence at his former employer for firing him. The OIG
scanned the letter and sent it to the Orlando Police Department for action deemed
necessary.
2011/12-0144 A claimant for Unemployment Compensation told an Unemployment Compensation
representative that he sits in the dark 24 hours a day and sometimes wants to "blow his
brains out." The matter was referred to local law enforcement for a wellness check.
2011/12-0145 A former employee of a Workforce Board alleged the Board was making false negative
claims about his prior work history to block him from getting a job, using the one stop
center services and from receiving unemployment. A review by the OIG found no
evidence to support the claims.
2011/12-0153 A complainant wrote the Chief Inspector General and reported a possible breach of
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
59
Investigative Referrals October 1, 2011 – June 30, 2012
PROJECT SUMMARY
personal and confidential data that was inadvertently exposed to the Internet. After
talking to the complainant, it was reported there was no evidence the information was
viewed by anyone else, and more than a year had passed with no consequence. As a
result, a breach as defined by law was not suspected.
2011/12-0154 An appellant for Unemployment Compensation Benefits wrote the OIG for help resolving
an appeal and benefit overpayment issue. The complaint was referred to the
Unemployment Compensation Appeals program manager for review and response. No
further action required.
2011/12-0155 An employer wrote the OIG to inform the Department of a former employee fired for
misconduct (business interference and extortion against the company), presumably to
intercede or preempt any filing for Unemployment Compensation by the former
employee. The matter was referred to the Unemployment Compensation Program and
was routed to the appropriate adjudicator.
2011/12-0157 A complainant wrote the OIG to report a former employer for failing to pay net profit and
consignment commissions as originally promised, as well as the title to a car he
purchased while working there. The complaint was referred to the United States
Department of Labor Wage and Hour Division which accepted the complaint and agreed
to contact the complainant and provide assistance.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
60
APPENDIX II – AUDIT PROJECTS
During the period from October 1, 2011 – June 30, 2012, the Audit Section conducted
8 comprehensive internal audit projects and 29 audit-related projects which resulted in
various recommendations for improvement in operations. The following table
summarizes the audit-related activities.
Summary of Audit-Related Activities October 1, 2011 – June 30, 2012
PROJECT DESCRIPTION
2010/11-0058 Reviewed fiscal year 2009-10 Federal Single Audit, Office of Management and Budget A-
133, and Florida Single Audit (if applicable) reports performed by the
recipients/subrecipients contracted audit firms (CPAs), which included all regional
workforce boards. The review process included tracking the receipt of each recipients and
subrecipients, audit reports, reviewing the audit reports for compliance with reporting
guidelines, reviewing the auditee’s corrective action plan, and obtaining additional
information and documentation as necessary to determine if corrective actions were
sufficient. After completion of these tasks, Management Decision Letters were issued by
the OIG.
2010/11-0066 Provided liaison between DEO and the Auditor General in the operational audit of Labor
Market Statistics and the Workforce Investment Act (WIA) programs. The final audit
included four findings, which the Department has worked to correct. The coordination of
both entrance and exit conferences as well as helping to ensure that the audit activity
continued with minimal interruptions was part of the liaison process.
2010/11-0090 Coordinated audit of training provided and outcomes achieved under the WIA for Adult and
Dislocated Workers programs to be performed by USDOL-OIG. There were no findings in
the final report that required a response.
2010/11-0093 Coordinated audit of ARRA Reemployment Services to be performed by USDOL-OIG. The
actual work was performed by Foxx & Co. who was under contract with USDOL-OIG. The
final report had no findings relating to the Department of Economic Opportunity.
2010/11-0143 Provided liaison between DEO and the Auditor General in the annual Unemployment
Compensation - Information Technology audit of selected information technology (IT)
controls applicable to the UC system for fiscal year 2010-11. The final audit included five
findings, which the Department has worked to correct. The coordination of both entrance
and exit conferences as well as helping to ensure that the audit activity continued with
minimal interruptions was part of the liaison process.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
61
Summary of Audit-Related Activities October 1, 2011 – June 30, 2012
PROJECT DESCRIPTION
2010/11-0166 Provided liaison in connection with Auditor General for their audit of Early Learning
Coalitions and the Office of Early Learning. This audit was being performed pursuant to
Section 2, Senate Bill 2156 passed by the 2011 Legislature. Responsibility for this audit
was transferred to the Office of Early Learning as of October 1, 2011; however, DEO
continued to assist with this project.
2010/11-0174 Responded to a USDOL request in connection with the Governors Resolution Report letter
for the Auditor General’s fiscal year 2009-10 federal awards audit. The USDOL requested
additional information to be used in determining that appropriate correction actions had
been taken as a result of the audit. This was part of the process of following up on audit
findings by the awarding federal agency.
2010/11-0175 Provided liaison between DEO (previously AWI) and the USDOL-OIG in connection with
their audit of Unemployment Compensation, Administrative Costs. The Department
responded to a statement of facts received from the auditors; however, a final report was
never received.
2010/11-0177 Prepared response to U.S. Department of Health and Human Services (DHHS) in response
to request for the status of findings pertaining to the 2009-10 federal awards audit.
2011/12-0006 Performed 6-month follow-up to the Internal Audit of the DEO Security of the Department of
Highway Safety and Motor Vehicles’ Cross-Match Data. The original report was released
in April 2011 and had five findings that the Department took steps to address.
2011/12-0007 Performed 6-month follow-up to internal audit of the DEO’s Implementation of Ethics
Requirements. The audit report had two findings that have been corrected.
2011/12-0010 Prepared on a monthly basis, four monthly tracking reports to record and trace corrected
audit findings from audits performed by external audit entities and that resulted in potential
audit liability for DEO from these audits and audit activities from the outside entities. The
reports were titled: Potential Liability from Prior Audit Findings, Summary of Audit Findings
Being Tracked by the OIG (State) Summary of Audit Findings Being Tracked by the OIG
(Federal) and Audits/Reviews conducted by External Entities.
2011/12-0020 Performed attestation of access security of Highway Safety and Motor Vehicles (HSMV)
cross match data in accordance with the requirements of the Memorandum of
Understanding between the Department of Economic Opportunity and Highway Safety
(HSMV) and Motor Vehicles. The overall controls were in place to protect the integrity of
the data that is received from HSMV. This attestation was submitted to HSMV in February
2012.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
62
Summary of Audit-Related Activities October 1, 2011 – June 30, 2012
PROJECT DESCRIPTION
2011/12-0029 At the request of executive director, the OIG performed a risk assessment for the newly
created Department of Economic Opportunity prior to October 1, 2011 launch date. This
process had a two-fold purpose: 1) to identify potential risks to the Department’s
operational and programmatic activities; and 2) to assists the Office of Inspector General in
identifying planned audit projects for the coming months. In order to comply with this
request, a risk assessment of senior management was performed and proposed audit
projects presented to and approved by the executive director.
2011/12-0046 Prepared Schedule IX for the Department’s Budget office regarding major audit findings for
fiscal year 2010-11. This schedule was included in the Legislative Budget Request for
fiscal year 2012-13.
2011/12-0047 Coordinated preparation of Summary Schedule of Prior Audit Findings for Auditor General,
that was included as part of the federal awards audit for the 2010-11 fiscal year.
2011/12-0054 Developed a Work Plan for DEO to cover the period of October 1, 2011 through June 30,
2012. This plan was presented to and approved by the interim executive director.
2011/12-0058 Provided liaison between DEO and the Auditor General in their audit of Federal Awards
and Financial Reporting for fiscal year 2010-11. There were fourteen findings relating to
federal awards that were included in the audit report which the Department has been
working to correct. The coordination of both entrance and exit conferences as well as
helping to ensure that the audit activity continued with minimal interruptions was part of the
liaison process.
2011/12-0059 Performed an Agency for Enterprise Information Technology (AEIT), Department Risk
Assessment Survey Review. This Risk Assessment is to be performed every three years.
There were no significant findings that resulted from this review.
2011/12-0060 Completed the review of Florida Housing Finance Corporation quarterly performance
reports as provided by Chapter 420, Florida Statutes. There were no significant findings
that resulted from this review.
2011/12-0068 Provided status of 2009-10 audit findings from Auditor General federal awards audit report
to the US Department of Energy in connection with findings concerning Weatherization
program. There were five findings that DEO is working to correct.
2011/12-0113 Performed a second follow-up to the Department of Economic Opportunity’s Employees
and Contractors Background Screenings internal audit. The report had nine
recommendations which the Department took steps to address.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
63
Summary of Audit-Related Activities October 1, 2011 – June 30, 2012
PROJECT DESCRIPTION
2011/12-0124 Conducted an assessment of the reliability and validity of the information provided by the
Department for performance measures and standards as part of the Long Range Program
Plan (LRPP) reported for the fiscal years 2012-13 through 2016-17. In addition, we
reviewed the actions taken by the Department to improve program performance and meet
program standards. No recommendations were made.
2011/12-0125 The OIG's Internal Audit Charter was revised to address the newly created Department of
Economic Opportunity.
2011/12-0131 Performed six-month follow-up to the UC-IT audit issued by the Auditor General for fiscal
year 2010-11. The audit was originally issued in September 2010 and contained five
findings and recommendations, which the Department is in the process of implementing
corrective actions.
2011/12-0135 DEO's OIG long-term Work Plan was prepared for fiscal years 2012-2013 and 2013-2014
in accordance with Section 20.55, Florida Statutes. An integral part of this work plan
included a risk assessment that was sent to DEO's senior management.
2011/12-0138 Prepared a presentation and a written report on audit activities for WFI Finance and
Administration Council. This task was to aid in fulfilling OIG’s annual reporting obligation to
WFI Finance Committee on the status of all outstanding audit issues and liabilities.
2011/12-0142 Completed the review of Florida Housing Finance Corporation quarterly performance
reports as provided by Chapter 420, Florida Statutes. This review assessed the validity and
reliability of the data included in the 2011 annual report. There were no significant findings
that resulted from this review.
2011/12-0143 Completed the review of Florida Housing Finance Corporation quarterly performance
reports as provided by Chapter 420, Florida Statutes. This review assessed the validity and
reliability of the data included in the 1st quarter 2012 report. There were no significant
findings that resulted from this review.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
64
APPENDIX III – CORRECTIVE ACTION
Section 20.055(7)(c)4., F.S., requires the identification of each significant
recommendation described in previous annual reports on which corrective action has
not been completed. In total, there are 9 such issues: six related to regional workforce
boards and three related to Department program operations.
REPORT/ FINDING
DESCRIPTION OF ISSUE STATUS
Auditor General Federal Awards Audit Report FA 2011-022 Report FA 2010-017
Weatherization Assistance for Low-Income Persons (WAP)
CFDA 81.042 Management had not implemented procedures to monitor whether certain types of costs incurred by subgrantees were supported by subgrantees’ records, such as vendor invoices, time and attendance records, and appropriate cost allocation methods.
The Department contracted with a Certified Public Accounting firm in April 2011, to develop an expenditure tracking system with all subgrantees that includes documenting costs of providing services allowing DEO staff to review those costs periodically as appropriate. DEO has implemented the new Monthly Expenditures Tracking System (METS) with all subgrantees. DEO has requested that all subgrantees submit a completed Monthly Expenditure Tracking Sheet (METS) for every month of each of their American Recovery and Reinvestment Act (ARRA) WAP Agreements (Capacity, Single Family, and when applicable, Multi-Family) from the beginning of any ARRA activities back to 2009. The METS provides “actual costs” amounts incurred by subgrantees for the three categories. To ensure the validity of the data reported, DEO staff will perform a random audit of three months worth of support documentation for each subgrantee. The random audits of the support documentation will be performed on-site with each subgrantee. In cases where subgrantees were reimbursed for amounts greater than costs actually incurred, subgrantees will be given the opportunity to either repay the amounts identified or perform additional weatherization activities in an amount commensurate with the questioned costs identified in the reconciliation.
Auditor General Federal Awards Audit Report FA 2011-023 Report FA 2010-018
Weatherization Assistance for Low-Income Persons
CFDA 81.042 Management did not fully demonstrate the appropriateness of the
DEO program staff has contacted both universities to secure additional documentation. Documentation has been received and DEO is confident that all actual costs will be accounted for and that any necessary reconciliation will be accomplished to resolve this finding. A letter was sent on June 8, 2012, to the University
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
65
REPORT/ FINDING
DESCRIPTION OF ISSUE STATUS
costs charged for fixed price contracts entered into with State universities. Additionally, procedures did not provide for periodic reconciliations of payments made to costs incurred by the universities or provide for the return of excess funds.
of Central Florida requesting the repayment of $53,816. A letter was sent on the same date requesting additional information that must be provided before a closeout can be performed. The division is currently awaiting responses from both universities.
Auditor General Operational Audit Report 2011-021 October 2010 Finding No. 6
Southwood Shared Resource Center - Unemployment Insurance Program - Information Technology Operational The Department’s Operational Security Plan for the Florida Unemployment Compensation Program contained outdated and inaccurate information related to the UC System security environment. Additionally, there was no evidence of a periodic review of the Plan by Department management. It was recommended that the Agency update the Operational Security Plan for the Florida Unemployment Compensation Program to reflect the current system environment and periodically review the Plan to ensure its ongoing effectiveness.
The Department will review the Operational Security Plan for Florida Unemployment Compensation Program to reflect the current system environment and develop an on-going plan for ensuring its effectiveness through periodic reviews. The Department has received a Supplemental Budget Request (SBR) from the United States Department of Labor (USDOL) to hire a vendor to assist in performing a review and subsequent update of the Operational Security Plan.
2009/10-0068 and 2009/10-0088 Tampa Bay Workforce Alliance
The OIG investigation determined that in addition to $34,028.29 in unallowable food expenditures in project #2009/10-0068, the Board must repay another $113,099.89 for unallowable expenditures identified in this
A DOAH hearing was held and this matter is currently in litigation.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
66
REPORT/ FINDING
DESCRIPTION OF ISSUE STATUS
investigation for a total disallowance of $147,128.18.
2009/10-0123 Polk Works
It was recommended that the amount of $310,421 representing costs relating to 2007/2008 expenditures for building changes/furnishings be disallowed and repaid to DEO.
Settlement is being discussed between the DEO and Polk Works, but not yet resolved.
RWB 7 Florida Crown Fiscal year audit reports: 2009-10 and 2010-11
Procedures are not in place to identify and make auditor’s recommendation adjusting journal entries. The Board should gain an understanding of the adjustments made and should consider whether to revise it procedures on an ongoing basis and especially as part of year-end closing procedures.
Based on the Board’s response, subsequent communication and documentation, steps have been taken toward addressing this finding. The Board has continued to retain training services to assist accounting personnel in understanding year-ending closing entries and to ensure that the entries closes or adjust the appropriate accounts. Also, the Board included in their year-end closing procedures a step to review prior year audit adjustments to ensure all similar type entries are posted. We are unable to determine whether similar adjusting journal entries will be made as part of the year-end closing. As of September 5, 2012, the Board’s staff had not completed the year-ending closing entries. We believe that the Board’s action to fully correct this finding is essential to preventing similar future audit findings. Review of the June 30, 2012, audit report will disclose whether the finding has been resolved or not. The audit report must be submitted pursuant to the OMB A-133 Circular, which is the earlier of 30 days from the date the report is provided to the Board or nine (9) months from the end of the period audited.
RWB 17 Polk Works Fiscal year audit report: 2008-09
Procurement procedures for certain purchases did not conform to standards identified in OMB Circular A-110 and to the Organization’s internal procurement policies. Procurement policies and procedures should be followed for all items. Costs disallowed: $123,480
Total costs disallowed related to the fiscal year audit was $155,559 and is pending resolution.
RWB 17 Polk Works Fiscal year audit report: 2008-09
Prior approval for purchases (capital expenditures) with a unit cost greater than $5,000 was not obtained from the
Total costs disallowed related to the fiscal year audit was $155,559 and is pending resolution.
OFFICE OF THE INSPECTOR GENERAL ANNUAL REPORT 2011-2012
67
REPORT/ FINDING
DESCRIPTION OF ISSUE STATUS
funding source, DEO (formerly Agency for Workforce Innovation) which is required in DEO’s “Financial Guidance on Prior Approval Procedures for selected costs and Administrative Requirements.” Prior approval of the funding agency is also required by the OMB Circular A-122. Costs disallowed: $24,579
RWB 17 Polk Works Fiscal year audit report: 2008-09
A contribution was given to an organization. Attachment B. Sec. 12 of OMB Circular A-122 does not allow donations or contributions. Costs disallowed: $7,500
Total costs disallowed related to the fiscal year audit was $155,559 and is pending resolution.
An equal opportunity employer/program. Auxiliary aids and services are available upon request to individuals with disabilitie s. All voice
telephone numbers on this document may be reached by persons using TTY/TDD equipment via the Florida Relay Service at 711.