STATE OF NORTH CAROLINA Office of the State Auditor

Transcription

1 STATE OF NORTH CAROLINA Office f the State Auditr Beth A. Wd, CPA State Auditr 2 S. Salisbury Street Mail Service Center Raleigh, NC Telephne: (919) Fax: (919) Internet August 19, 2014 The Hnrable Pat McCrry, Gvernr The Hnrable Thm Tillis, Speaker f the Huse The Hnrable Phil Berger, President Pr Tempre The Hnrable Brent Jacksn, C-Chair Apprpriatins/Base Budget Mr. Jhn E. Skvarla, III, Secretary, Department f Envirnment and Natural Resurces Dr. Luis Daniel, Directr, Divisin f Marine Fisheries This letter and attached findings present the results f ur financial related audit f the Department f Envirnment and Natural Resurces, Divisin f Marine Fisheries, At-Sea Observer Prgram. The purpse f this audit was t assist legislatrs in develping the state budget. The bjective was t answer the questins, as listed in this reprt, asked by legislatrs abut Divisin peratins and activities. Secretary Jhn E. Skvarla, III, reviewed a draft cpy f this reprt. His written cmments are included in the Appendix. We cnducted this audit in accrdance with generally accepted gvernment auditing standards applicable t perfrmance audits. Thse standards require that we plan and perfrm the audit t btain sufficient, apprpriate evidence t prvide a reasnable basis fr ur findings and cnclusins based n ur audit bjectives. We believe that the evidence btained prvides a reasnable basis fr ur findings and cnclusins based n ur audit bjectives. T accmplish ur audit bjective, we gained an understanding f internal cntrl ver matters described belw and evaluated the design f the internal cntrl. We then perfrmed further audit prcedures cnsisting f tests f cntrl effectiveness and/r substantive prcedures that may reveal significant deficiencies in internal cntrl. Specifically, we perfrmed prcedures such as interviewing persnnel, bserving peratins, reviewing plicies, analyzing accunting recrds, and examining dcumentatin supprting recrded transactins and peratins. We wish t express ur appreciatin t the staff f the Department f Envirnment and Natural Resurces fr the curtesy, cperatin, and assistance prvided us during the audit. If yu have any questins, please d nt hesitate t cntact my ffice. Sincerely, Beth A. Wd, CPA State Auditr

2 FINDINGS 1. Is the Divisin s $585 per trip estimate fr the At Sea Observer Prgram a reasnable basis fr the fiscal year 2014 budget prjectin? It is difficult t determine the exact cst per trip f the At-Sea Observer Prgram (Prgram) because the Divisin f Marine Fisheries (Divisin) did nt have activity-based csting infrmatin. Additinally, the Divisin did nt dcument infrmatin n all bserver tasks and activities 1 needed t determine the actual cst f the Prgram. Based n the fiscal year 2012 financial and available bserver activity infrmatin, the Divisin s estimate f $585 is 3.9% higher than the auditr calculated amunt f $563 per trip fr the Prgram. Auditrs applied the same methdlgy as the Divisin, with adjustments as needed, 2 t calculate the fiscal year 2014 prgram cst. Based n planned trips, the cst f the Prgram 3 wuld be $1,034,794. The auditr calculatin assumes the Divisin maintains the same rati f full-time bserver emplyees t cntracted bservers as it did in the 2012 base year. If that rati were t change, the calculatin nted abve wuld n lnger be valid. 2. What was the equipment cst spending fr the Prgram in fiscal year 2014? Year-t-date equipment spending fr fiscal year 2014 is apprximately $2,500 as f February 28, Equipment purchases included a cmputer and turtle interactin mnitring equipment (pre-lad sterile tags and implanters). Majr equipment purchases fr fiscal years 2012 and 2013 were $64,260 and $300,202, respectively. Equipment purchases included trucks, bats, mtrs, and trailers. Accrding t the Divisin, all equipment is used slely fr the Prgram. 3. Hw lng d bservatin trips take? On-bard trips 4 range frm 6½ t 13 hurs. Alternative Platfrm trips 5 range frm 7 t 14½ hurs. 1 Observer activities, such as the number f bservatin trips, are maintained and self-reprted by the Divisin. Auditrs did nt audit and d nt attest t the reliability f such data. 2 Adjustments included staff salaries, fixed asset purchases, depreciatin, and prjected bservatin trips. 3 This cst assumes a gal f bserving 10% f large mesh gill net fishing trips and 2% f small mesh gill net fishing trips. The minimum number f bservatin trips required is 7% and 1%, respectively. The gal and minimum percentage f trips is set frth in the Incidental Take Permit (ITP) agreement with the U.S. Natinal Marine Fisheries Service. 4 On-bard trips are trips where the Divisin bserver is physically n-bard the cmmercial fishing vessel. 5 Alternative platfrm trips include 2-Man Observer Trips - bservers n Divisin perated bats; and Marine Patrl - bservatins made by Marine Patrl fficers wh cme int visual cntact with cmmercial fishing bats using large r small mesh gill nets while cnducting nrmal Marine Patrl peratins. 2

3 FINDINGS The amunt f time needed t cmplete an bservatin trip depends upn the type f trip and ther bservatin activity factrs. Factrs such as distance, bat speed, fishing gear, fishing success, and weather affect the length f the trips. 4. Hw much cst and time is wasted n missed trips? Hw big a prblem is this? On-Bard Observer Trips Due t a lack f recrds, the time and cst spent n missed trips culd nt be determined. Hwever, the Divisin stated that missed trips ccurred nly a handful f times ver the past 2½ years. If an bserver is able t schedule a trip and get n a fisherman s bat, the n-bard bserver trips are 100% effective (i.e., the trip cunts twards meeting the gal and minimum number f trips). Alternative Platfrm 2-Man Observer Trips 6 The cst f unsuccessful 7 2-man bserver trips: Fr 2012: 9 unsuccessful trips X $563/trip 8 = $5,067. Fr 2013: 67 unsuccessful trips X $563/trip 8 = $37,721. The hurs spent n unsuccessful 2-man bserver trips: Fr 2012: 9 unsuccessful trips X tw staff X 10 hurs (average) = 180 hurs. Fr 2013: 67 unsuccessful trips X tw staff X 10 hurs (average) = 1,340 hurs. Alternative Platfrm Observer trips still appear t be smewhat effective in enabling the Divisin t meet the minimum bserver cverage requirements f the Incidental Take Permit 9 (ITP) agreement with the U.S. Natinal Marine Fisheries Service. During 2012, 70 f the 79 trips (88%) resulted in successful bservatins. During 2013, 123 f the 190 trips (65%) resulted in successful bservatins. Alternative Platfrm - Marine Patrl 6 The Divisin estimates this cst t be apprximately $435,000 in fiscal year Hwever, auditrs were nt able t btain dcumentatin t substantiate this estimate. Time wasted n unsuccessful trips is nt applicable since the primary functin f Marine Patrl trips is nt bservatins fr the At-Sea Observer Prgram. 6 Alternative platfrm trips include 2-Man Observer Trips - bservers n Divisin perated bats; and Marine Patrl - bservatins made by Marine Patrl fficers that cme int visual cntact with cmmercial fishing bats using large r small mesh gill nets while cnducting nrmal Marine Patrl peratins. 7 An unsuccessful trip ccurs when the Divisin makes an effrt t find gill net fishing activity but is nt able t lcate any gill nets and, therefre, is nt able t make an bservatin. Unsuccessful trips cannt be cunted twards meeting the requirements f the ITP. 8 The cst per trip estimate is based n the assumptins nted in Questin #1. 9 The ITP allws fishermen t use gill nets in waters where sea turtles may cme in cntact with fishing gear. Once the number f incidental cntacts between fishermen and sea turtles exceeds the allwed number, the gill net fishery may be clsed fr the seasn. If the terms f the ITP are nt fllwed, the Natinal Marine Fisheries Service may clse the waters t gill net fishermen. 3

4 FINDINGS Marine Patrl bservatin attempts d nt appear t be effective in enabling the Divisin t meet the minimum bserver cverage requirements f the ITP. During 2012, 331 f the 1,941 trips (17%) resulted in successful bservatins. During 2013, 230 f the 1,858 trips (12%) resulted in successful bservatins. 5. Hw clse is the Divisin t meeting the 7% minimum bserver cverage target? Large mesh gill net bservatin cverage minimum requirements 10 were met in all areas except ne. 11 Small mesh gill net bservatin cverage minimum requirements 10 were met in all areas except ne Is lack f manpwer the reasn fr nt meeting the 7% target? The Divisin states it did nt meet the 7% minimum bserver cverage target in ne area because it struggled t get fishermen t cmply with scheduling and cmpleting the bservatin trips needed t meet the target. As a result, the Divisin culd nt justify hiring the additinal staff it needed t make the minimum number f bservatin trips required t meet the requirements f the ITP. 7. What is the Prgram s spending per quarter in fiscal year 2014? Ttal spending frm July 1, 2013, t March 31, 2014, was $491, Spending per quarter is as fllws: Fiscal Year Quarter Ttal Q1 14 $ 129,586 Q2 14 $ 153,519 Q3 14* $ 208,154 Ttal $ 491, , , ,000 Q1 t Q Cst Trend Q1 14 Q2 14 Q *The increase in spending between the secnd and third quarters is primarily related t filling fur vacant psitins in January Cverage data fr the fall 2013 seasn was the first and nly required reprting during the perid July 1, 2013, t March 31, A seasn is defined as the three-mnth perid starting with March f each year. 11 Based n infrmatin self-reprted by the Divisin in the NCDMF Seasnal Prgress Reprt, Permit N , September 1 Nvember 30, 2013 reprt submitted t the Natinal Marine Fisheries Service. The infrmatin in this reprt was nt audited. 4

5 BACKGROUND At-Sea Observer Prgram Started in 2000 t cllect infrmatin abut cmmercial and recreatinal catch. Expanded in 2010 as the result f a lawsuit. The settlement agreement: Required minimum 7% bserver cverage with a gal f 10% in the large mesh gill net fishery nly. Did nt include all state waters. Resulted in apprximately eight psitins supprting the Prgram. Granted an Incidental Take Permit frm the Natinal Marine Fisheries Service effective September 10, 2013, allwing a certain amunt f sea turtle interactin. Expanded minimum bserver cverage requirements t bth large and small mesh gillnet fisheries. Expanded minimum bserver cverage requirements t apply statewide. 18 psitins assigned t the Prgram. The Prgram currently perates ut f three satellite ffices: Mrehead City; Wilmingtn; Elizabeth City. 5

6 APPENDIX 6

7 ORDERING INFORMATION Cpies f this reprt may be btained by cntacting the: Office f the State Auditr State f Nrth Carlina 2 Suth Salisbury Street Mail Service Center Raleigh, Nrth Carlina Telephne: Facsimile: Internet: T reprt alleged incidents f fraud, waste r abuse in state gvernment cntact the: Office f the State Auditr Fraud Htline: r dwnlad ur free app Fr additinal infrmatin cntact: Bill Hlmes Directr f External Affairs This audit required 1,304 audit hurs at a cst f $122,576. 7