Operational Audit THE FLORIDA SCHOOL FOR THE DEAF AND THE BLIND. Prior Audit Follow-Up and Selected Administrative Activities

Transcription

1 Reprt N August 2017 THE FLORIDA SCHOOL FOR THE DEAF AND THE BLIND Prir Audit Fllw-Up and Selected Administrative Activities Operatinal Audit Sherrill F. Nrman, CPA Auditr General

2 Bard f Trustees and President f the Flrida Schl fr the Deaf and the Blind During the perid January 2015 thrugh March 2016, Dr. Jeanne Glidden Prickett served as President f the Flrida Schl fr the Deaf and the Blind and the fllwing individuals served as Members f the Bard f Trustees: Christpher D. Wagner, Chair Owen B. McCaul, Vice-Chair Christine M. Chapman Carl Clptn t Linda C. DiGnzalez Ralph V. Terry Hadley, III, frm Gerald W. Weedn t Carl F. Zampgna frm Dr. Thmas M. Zavelsn The team leader was Nick Druash and the audit was supervised by Randy R. Arend, CPA. Please address inquiries regarding this reprt t Kathryn Walker, CPA, Audit Manager, by at kathrynwalker@aud.state.fl.us r by telephne at (850) This reprt and ther reprts prepared by the Auditr General are available at: FLAuditr.gv Printed cpies f ur reprts may be requested by cntacting us at: State f Flrida Auditr General Claude Pepper Building, Suite G West Madisn Street Tallahassee, FL (850)

3 THE FLORIDA SCHOOL FOR THE DEAF AND THE BLIND SUMMARY Prir Audit Fllw-Up and Selected Administrative Activities This peratinal audit f the Flrida Schl fr the Deaf and the Blind (Schl) fcused n asset management, related financial recnciliatins, and selected administrative activities. The audit als included a fllw-up n the findings nted in ur reprt Our audit disclsed the fllwing: Finding 1: The Schl s Legislative Budget Request (LBR) fr Public Educatin Capital Outlay funding was nt adequately supprted and neither the LBR nr the supprting Facilities Master Plan identified all specific prjects planned. Similar findings have been nted in prir audit reprts, mst recently in ur reprt N Finding 2: Schl cntrls ver the selectin f subcntractrs fr cnstructin management prjects cntinue t need enhancement. Finding 3: As similarly nted in prir audit reprts, mst recently in ur reprt N , Schl purchasing card cntrls need imprvement. Finding 4: The Schl inadvertently awarded an $8,256 Flrida Best and Brightest Teacher Schlarship t an ineligible recipient. Finding 5: Schl emplyees did nt always timely achieve required American Sign Language skill levels. BACKGROUND Pursuant t State law, 1 the Flrida Schl fr the Deaf and the Blind (Schl) perates under the leadership and directin f a Bard f Trustees (Bard). The Bard cnsists f seven members wh are appinted by the Gvernr fr a 4-year term, subject t cnfirmatin by the Senate. The Bard must include ne blind persn and ne deaf persn, and each member is required t have been a Flrida resident fr at least 10 years. The Bard exercises cntrl f the Schl thrugh a Bard-appinted President, wh serves as the chief executive fficer and is respnsible fr the rganizatin, peratin, and management f the Schl and its prgrams. The Schl is a State-supprted residential public schl fr hearing-impaired and visually impaired students in preschl thrugh 12 th grade and is funded thrugh the Department f Educatin. The Legislature apprpriates fixed capital utlay mneys t the Schl n an annual basis frm the Public Educatin Capital Outlay and Debt Service Trust Fund. 2 Over half f the Schl s students participate in the Schl s barding prgram and live in campus drmitries during the week, while apprximately 30 percent f the students are day-students frm 1 Sectin (4), Flrida Statutes. 2 Article XII, Sectin 9(a)(2) f the State Cnstitutin. Reprt N August 2017 Page 1

4 St. Augustine and surrunding areas. Students wh participate in the barding prgram are bused hme n weekends and hlidays. As f March 2016, the Schl had 815 emplyees and ther persnal services persnnel and, during the perid January 2015 thrugh March 2016, had a peak enrllment f 627 students. The Legislature apprpriated t the Schl $55.9 millin, including $5.4 millin in Public Educatin Capital Outlay (PECO) funds, fr the fiscal year and $50.2 millin, including $1.1 millin in PECO funds, fr the fiscal year. 3 FINDINGS AND RECOMMENDATIONS Finding 1: Legislative Budget Request and Facilities Master Plan Pursuant t State law, 4 the Schl is t prepare and submit legislative budget requests (LBRs) fr peratins and fixed capital utlay t the Department f Educatin (DOE) fr review and apprval. The DOE is t analyze the amunt requested fr fixed capital utlay t determine if the request is cnsistent with the Schl s campus master plan, educatinal plant survey, and facilities master plan. Additinally, State law 5 requires the Schl t develp a plan f facility needs that lists the Schl s facility needs in rder f pririty and includes a 5-year schedule fr preventative maintenance, replacement, imprvement, r cnstructin f facilities n a specific prject-by-prject basis. State law als prvides that, fr years 2 thrugh 5, each plan is t prvide a full explanatin f the basis fr each prject, including a descriptin f the functin which requires the facility; an explanatin f the inability f existing facilities t meet such requirements; histrical backgrund; alternatives; and anticipated changes in bth initial and cntinuing perating csts. The Schl s Facilities Master Plan (Plan) served as the primary supprting dcument fr the Schl s annual fixed capital utlay budget request. The Schl s May 2013 Plan cvered the thrugh fiscal years and utlined the Schl s plans t expend apprximately $43.8 millin n capital prjects, maintenance, and related items during that 5-year perid. T prepare the Schl s fiscal year LBR, the Schl partially updated the May 2013 Plan. As summarized in Table 1, the Schl s fiscal year LBR, submitted t the DOE in July 2016, prjected fixed capital utlay needs ttaling apprximately $40.9 millin fr the thrugh fiscal years. Table 1 Fixed Capital Outlay Needs Identified in Fiscal Year LBR Ttal Capital Prjects $ 5,454,359 $ 3,974,753 $ 3,004,898 $ 3,967,737 $ 3,621,156 $20,022,903 Maintenance and Repairs 5,306,789 4,717,991 4,267,179 3,233,697 3,321,007 20,846,663 Ttal Fixed Capital Outlay Needs $10,761,148 $ 8,692,744 $ 7,272,077 $ 7,201,434 $ 6,942,163 $40,869,566 Surce: Schl s fiscal year LBR. 3 Chapters and , Laws f Flrida. 4 Sectin (4)(f)1., Flrida Statutes. 5 Sectin , Flrida Statutes. Reprt N Page 2 August 2017

5 Our examinatin f the Schl s fiscal year LBR and available supprting recrds, including the Plan, disclsed that: The Schl requested capital prjects funding ttaling $20 millin fr the thrugh fiscal years, reflecting the same infrastructure needs identified in the updated May 2013 Plan. Table 2 illustrates, by fiscal year, the Schl s capital prject requests, prpsed cnstructin actins, and related cst estimates. Table 2 Schl Capital Prject Requests Fr the Thrugh Fiscal Years Fiscal Year Prject Actin Cst Gregg Hall Design/Demlitin/New Cnstructin $ 5,454, McClure Center Design/Remdel/Renvatin/New Cnstructin 3,974, Knwles Hall Design/Renvatin 3,004, Vaill Hall Kramer Hall MacWilliams Hall Allied Health Services Design/Renvatin Design/Renvatin Design/Renvatin Design/Renvatin 2,271,058 1,696,679 1,841,856 1,779,300 Ttal Capital Prject Requests $20,022,903 Surce: Schl s fiscal year LBR. Our examinatin f Schl recrds disclsed that the amunts requested were nt adequately supprted by engineering studies, cst estimates, r ther dcumentatin. Fr example, the Schl s request fr the design, demlitin, and new cnstructin f Gregg Hall indicated that the 14,669 square ft drmitry shuld be replaced by a new, 15,000 square ft drmitry t address life, safety, and Americans with Disabilities Act (ADA) issues. The Schl used a cnstructin cst estimate f $364 per square ft t demlish and replace the drmitry. Hwever, Schl recrds did nt evidence the basis fr the $364 per square ft estimated cst f the wrk t be perfrmed. Similarly, Schl recrds did nt include dcumentatin demnstrating the basis fr the amunts requested fr the ther prjects shwn in Table 2. In respnse t ur audit inquiry, the Schl s Directr f Cnstructin and Facilities indicated that the estimated capital prject csts had been develped by his predecessr and that the supprt fr the amunts requested was nt available fr ur review. The Schl's LBR separated the prjected funding needs fr Maintenance and Repairs int the fllwing categries: Service Cntracts Fr the nging servicing f equipment, such as the Schl s fire alarm and fire sprinkler systems, as well as fire extinguisher recharging and recertificatin, campus security system maintenance and repairs, and chemical water treatments. Maintenance Agreements T inspect, repair, and maintain equipment, such as the Schl s elevatr, chiller, HVAC, and severe weather warning systems. Annual Trade Cntracts Fr majr prjects such as windw replacement, painting, electrical, mechanical, and infrastructure prjects. Frm the ppulatin f the 32 maintenance and repair line item requests with prjected csts ttaling $5,306,789 included in the Schl s fiscal year LBR, we selected and examined Schl recrds fr 16 line item requests, with prjected csts ttaling $5,079,733, t determine whether the prjected csts were reasnable and adequately supprted. Our examinatin disclsed that: Reprt N August 2017 Page 3

6 Schl recrds did nt adequately supprt the prjected csts fr 8 annual trade cntract requests ttaling $4,306,338. Specifically: Althugh requested, recrds supprting prjected csts ttaling $2,126,627 fr extending fiber ptic cnduit t 17 buildings ($916,712), repairing and replacing aging mechanical equipment ($303,376), repairing r replacing building mechanical and plumbing systems ($302,312), repairing r replacing building electrical systems ($200,000), replacing fire alarm and equipment and emergency lights ($188,527), repairing and imprving site infrastructure ($150,000), and installing and maintaining campus fiber ptic cabling ($65,700) were nt prvided. Althugh the Schl prvided recrds supprting the prjected csts fr replacing windws in six Schl buildings and painting the exterir f eight Schl buildings ($2,179,711), the recrds included amunts that were nt adequately supprted r detailed in the LBR. Fr example, Schl recrds did nt evidence hw the Schl determined the anticipated cst ($1,670,064) t replace the windws. Additinally, the ttal amunt requested included a 10 percent cntingency markup, ttaling $185,472, and $139,521 fr general and rfing repairs, that were nt specifically nted in the LBR. The amunt requested fr tw ther maintenance and repair line item requests, ttaling $67,350, exceeded the amunt supprted by Schl recrds by $40,869. In respnse t ur audit inquiry, Schl management indicated that staff turnver in the Facilities Department cntributed t recrds nt being available t supprt certain prjected csts. Our examinatin f the Schl s fiscal year LBR als disclsed that, fr the prjected csts ttaling $15,539,874 fr maintenance and repairs fr the thrugh fiscal years, Schl recrds did nt identify the specific prjects planned. Schl management indicated in respnse t ur audit inquiry that the amunts requested fr these years were based n the amunts requested fr the fiscal year and subsequent years maintenance and repair csts were generally assumed t decrease based n the cmpletin f maintenance and repair prjects frm preceding fiscal years. Absent cmprehensive, cnsistent, and prperly supprted LBRs that specifically identify capital and maintenance-related prjects, the Schl cannt demnstrate cmpliance with State law and there is an increased risk that the Schl s PECO funding requests and related apprpriatins will nt crrespnd with actual anticipated needs. Similar findings were nted in ur reprt Ns (finding N. 1) and (finding N. 2). Recmmendatin: We recmmend that Schl management strengthen prcedures fr preparing Facilities Master Plans and LBRs t ensure that capital prject and maintenance and repair funding needs are specifically identified n a prject-by-prject basis and supprted by adequate recrds. Finding 2: Cnstructin Management Pursuant t State law, 6 the Schl may cntract with a cnstructin management entity (CME) fr the cnstructin r renvatin f facilities. Under the CME prcess, cntractr prfit and verhead are cntractually agreed upn and the CME is respnsible fr all scheduling and crdinatin activities during the design and cnstructin phases. The CME is als generally respnsible fr the successful, timely, 6 Sectin (1)(c), Flrida Statutes. Reprt N Page 4 August 2017

7 and ecnmical cmpletin f the cnstructin prject. The Schl may require the CME t ffer a guaranteed maximum price (GMP) that allws the difference between the actual cst f the prject and the GMP amunt (net cst savings) t be returned t the Schl. As such, a GMP cntract requires Schl persnnel t clsely mnitr subcntractr bid awards and ther cnstructin csts. Our examinatin f Schl recrds disclsed that the Schl entered int a GMP cntract, ttaling $2,455,094, with a CME fr a campus building renvatin prject substantially cmpleted in July Accrding t the GMP cntract, the CME was required t slicit bids fr subcntractr services. Gd business practices dictate that the Schl mnitr the CME s cmpetitive selectin f subcntractrs t ensure that subcntractr services are btained at the lwest cst cnsistent with acceptable quality and that maximum savings are realized. Schl recrds indicated that the CME utilized 16 subcntractrs n the campus building renvatin prject. We evaluated Schl prcedures fr mnitring the CME s award f subcntracts and cmpared, fr eight subcntracts, the bid tabulatin sheets t the subcntractr prpsals and subcntracts awarded. We nted that: Schl recrds did nt evidence that the Schl btained frm the CME seven subcntractr bid prpsals related t tw f the eight bid tabulatin sheets. Fr tw ther bid tabulatin sheets, Schl recrds indicated that the Schl nly btained frm the CME tw f the six subcntractr bid prpsals, and neither f the tw subcntractr bid prpsals were selected by the CME. Subsequent t ur audit inquiry, the Schl btained frm the CME the ther subcntractr bid prpsals, evidencing that the subcntracts were awarded t the vendrs with the lwest bid prpsal r indicating the basis fr selecting ther than the lwest bidder. The bid tabulatin sheets did nt agree with the subcntractrs bid prpsals fr five f the eight subcntracts reviewed. Althugh the differences between the bid tabulatin sheets and the subcntractrs bid prpsals did nt affect which vendr was awarded the subcntract, tw subcntractrs were verpaid a ttal f $3,065. Subsequent t ur audit inquiry, Schl management cntacted the CME and were advised by the CME that the verpayments resulted frm errrs in cmpiling the amunts reprted n bid tabulatin sheets, and that such amunts were als used fr the subcntracts. In respnse t ur audit inquiry, Schl management indicated that the Schl had nt established prcedures fr attending subcntractr bid penings, dcumenting attendance and review by signing bid tabulatin sheets, r cmparing bid tabulatin sheets t CME subcntractr cntracts t ensure that subcntractrs were cmpetitively selected and that bid award and cntract amunts agreed. Absent prcedures fr Schl persnnel t btain and cmpare subcntractr bid prpsals t bid tabulatin sheets and subcntracts, the risk is increased that the Schl may nt btain subcntractr services at the lwest cst cnsistent with acceptable quality and realize maximum cst savings under GMP cntracts. Similar findings were nted in ur reprt Ns (finding N. 2) and (finding N. 1). Recmmendatin: We recmmend that Schl management establish prcedures fr Schl staff t dcument attendance at subcntractr bid penings and verify that CMEs select subcntractrs using a cmpetitive prcess. Such prcedures shuld require: Dcumented cmparisns f subcntractr bid awards listed n bid tabulatin sheets t subcntractr bid prpsals and subcntracts. Reprt N August 2017 Page 5

8 Schl recrds t evidence the verificatin f the prpriety f the CME s selectin prcess, including the basis fr selecting ther than the lwest bidder. Schl management shuld als take apprpriate actins t recver frm the CME the $3,065 in verpayments. Finding 3: Purchasing Card Cntrls As a participant in the State s purchasing card prgram, the Schl is respnsible fr implementing key cntrls, including prcedures fr ensuring Schl recrds demnstrate cardhlder authrizatin and the timely cancellatin f purchasing cards upn a cardhlder s separatin frm Schl emplyment r when purchasing cards are lst r stlen. Schl plicies and prcedures 7 established the Directr f Purchasing as the Schl s Purchasing Card Prgram Administratr (PCPA) and specified that the PCPA was respnsible fr issuing and updating the Schl s Purchasing Card Plan and Prcedures (Prcedures). Prir t being issued a purchasing card, the Prcedures required cardhlders t sign a Purchasing Card Cardhlder Agreement (Agreement) and specified that signed Agreements were t be retained by the Purchasing Department. The Prcedures als specified that, when a cardhlder separated frm Schl emplyment, the applicable Department head was t ntify the PCPA and the PCPA was t cancel the card n the cardhlder s last day f emplyment. Additinally, cardhlders were required t immediately ntify the purchasing card issuing bank, the cardhlder s Department head, and the PCPA within 1 wrkday after the discvery f the lss r theft f a purchasing card. During the perid January 2015 thrugh March 2016, the Schl issued 23 purchasing cards and Schl emplyees used purchasing cards t make 4,618 purchases ttaling $755,943. Our evaluatin f Schl prcedures fr issuing and canceling purchasing cards disclsed that: Fr 7 f 12 purchasing cards issued during the perid January 2015 thrugh March 2016 and selected fr testing, Schl recrds did nt evidence an Agreement. In respnse t ur audit inquiry, Schl management indicated that the Agreements had nt been cmpleted as a result f staff versight and the Agreements were subsequently cmpleted and signed. Cmpleted and signed Agreements are necessary t dcument the cardhlder s understanding f, and agreement with, Schl Prcedures. The Schl did nt always timely cancel purchasing cards upn a cardhlder s separatin frm Schl emplyment r when purchasing cards were lst r stlen. Specifically: During the perid January 2015 thrugh March 2016, 11 cardhlders separated frm Schl emplyment. We examined Schl recrds fr 5 f the cardhlders and nted that the Schl did nt cancel the purchasing cards fr 2 f the cardhlders until 5 and 58 days, respectively, after the cardhlders emplyment separatin dates. Our audit tests als identified a purchasing card that was nt canceled until 45 days after it was reprted lst. While ur examinatin f Schl recrds did nt disclse any purchasing card activity subsequent t the tw cardhlders separatin frm Schl emplyment r after the purchasing card was reprted lst, timely cancellatin f purchasing cards upn a cardhlder s separatin frm Schl emplyment r immediately when a card is reprted as lst r stlen reduces the risk that 7 Schl Operatinal Plicy and Prcedure 1.31, Purchasing Card Prgram. Reprt N Page 6 August 2017

9 unauthrized purchases will be made. Similar findings were nted in ur reprt Ns (finding N. 4) and (finding N. 4). Recmmendatin: We recmmend that Schl management ensure that Agreements are cmpleted and signed by cardhlders prir t card issuance and that purchasing cards are prmptly canceled upn a cardhlder s separatin frm Schl emplyment r when a card is reprted lst r stlen. Finding 4: Flrida Best and Brightest Teacher Schlarship Prgram The Flrida Legislature established the Flrida Best and Brightest Teacher Schlarship Prgram (Prgram) 8 t reward teachers wh achieved high academic standards during their wn educatin. Pursuant t General Apprpriatins Act prvis language, 9 t be eligible fr a schlarship, a teacher must have scred at r abve the 80 th percentile n a cllege entrance exam based n the natinal percentile ranks in effect when the teacher tk the assessment and have been evaluated as highly effective pursuant t State law 10 r, if the teacher was a first-year teacher wh had nt been evaluated pursuant t State law, must have scred at r abve the 80 th percentile n a cllege entrance exam based n percentile ranks in effect when the teacher tk the assessment. Pursuant t State law, 11 nce a classrm teacher is deemed eligible by the Schl, including teachers deemed eligible during the fiscal year, the teacher is t remain eligible as lng as he r she remains emplyed by the Schl as a classrm teacher at the time f the award and receives an annual perfrmance evaluatin rating f highly effective. Schl persnnel were respnsible fr determining teacher eligibility fr schlarships and annually submitting the number f eligible teachers t the DOE. The DOE disburses schlarship funds t the Schl fr each eligible classrm teacher t receive a schlarship as prvided in the applicable General Apprpriatins Act. During the fiscal year, the Schl awarded Prgram schlarships ttaling $49,538 t six teachers based n the list f eligible teachers submitted by the Schl t the DOE. Our examinatin f Schl recrds supprting the six schlarship awards disclsed that an errr in cnsidering cllege entrance exam natinal percentile ranks resulted in the Schl awarding an $8,256 schlarship t an ineligible teacher. Specifically, the cllege entrance exam reprt used by the Schl as the basis fr the schlarship indicated a natinal percentile rank f 72, which was lwer than the 80 th percentile required based n the natinal percentile ranks in effect when the teacher tk the assessment. Recmmendatin: We recmmend that Schl management ensure that Prgram schlarships are awarded nly t eligible recipients. We als recmmend that the Schl refund the DOE fr the $8,256 award paid t the ineligible schlarship recipient and take apprpriate actins t recver frm the recipient the imprper payment. 8 Sectin , Flrida Statutes (2016). 9 Chapter , Specific Apprpriatin 99A, Laws f Flrida. 10 Sectin , Flrida Statutes. Sectin (3)(a), Flrida Statutes, requires the evaluatin t include cnsideratin f student perfrmance. 11 Sectin (3)(b), Flrida Statutes (2016). Reprt N August 2017 Page 7

10 Finding 5: Sign Language Prficiency Schl plicies and prcedures 12 specified that the Schl recgnized the fundamental need and purpse f clear, cnsistent, and dependable cmmunicatin as (1) a fundatin fr the develpment f language skills, (2) the basis fr the develpment f interpersnal skills, and (3) critical t the sharing f infrmatin amng all members f the Schl campus cmmunity because, fr sme members, the primary and mst efficient methd f cmmunicatin is American Sign Language (ASL). Schl plicies and prcedures als specified that emplyees were t pssess the skills and knwledge needed t wrk effectively with all students and staff. Schl emplyees wh had nt achieved their required ASL skill level at the time f initial emplyment were required t take the Sign Language Prficiency Interview (SLPI) 13 within 60 days f emplyment, unless the emplyee signed a statement indicating that they had n ASL skills. Emplyees wh indicated that they had n ASL skills were required t take the SLPI within 2 years f hire, and all emplyees wh were required t have ASL skills were expected t achieve their required skill level within 4 years f initial emplyment. The Schl s ASL Prgram Office is respnsible fr cmpiling an annual ASL Prgram Reprt that summarizes the extent t which Schl emplyees met the required minimum levels f ASL prficiency. Our review f the Schl s academic year ASL Prgram Reprt and supprting dcumentatin disclsed that, as f June 1, 2016: 82 emplyees had nt met their required ASL skill level and 41 f these emplyees had wrked fr the Schl fr mre than 4 years, including 21 emplyees wh had wrked at the Schl fr mre than 10 years and 3 emplyees wh were teachers required t have advanced ASL skills t effectively cmmunicate with deaf and hard f hearing students. 14 emplyees had nt signed a statement indicating that they had n ASL skills r taken the SLPI. Of these 14 emplyees, 9 had wrked at the Schl frm 1 t 9 years. 26 emplyees had signed a statement indicating that they had n ASL skills; hwever, 3 f these emplyees had nt taken the SLPI althugh they had been emplyed fr ver 2 years. While the ASL Prgram Reprt prvides Schl management and thers infrmatin regarding the extent t which Schl emplyees cmply with required minimum levels f ASL prficiency, withut prcedures t address nncmpliance, there is an increased risk that emplyees may nt effectively cmmunicate infrmatin t all members f the Schl cmmunity. Subsequent t ur audit inquiries, in January 2017, the Schl revised its ASL Prgram plicies and prcedures t reduce fr certain staff the time permitted t achieve required ASL skill levels frm 4 years t 1 year. In additin, the revised plicies and prcedures require fllw-up meetings with an evaluatr t identify areas fr imprving r refining ASL skills and, at least every 6 mnths, a reassessment until the required ASL skill level is achieved. Recmmendatin: We recmmend that Schl management cntinue effrts t enhance plicies and prcedures fr ensuring that emplyees timely achieve required ASL skill levels. 12 Schl Operatinal Plicy and Prcedure 1.24, FSDB Staff Member American Sign Language Prgram. 13 The SLPI invlves ne-t-ne cnversatin in sign language between an interviewer and candidate. The interview is vide recrded and is rated by trained SLPI ASL team members. Reprt N Page 8 August 2017

11 PRIOR AUDIT FOLLOW-UP Except as nted in Findings 1, 2, and 3, and shwn in Table 3, the Schl had taken crrective actins fr the findings included in ur reprt N Table 3 Findings Als Nted in Previus Audit Reprts Finding Reprt N , Finding Reprt N , Finding OBJECTIVES, SCOPE, AND METHODOLOGY The Auditr General cnducts peratinal audits f gvernmental entities t prvide the Legislature, Flrida s citizens, public entity management, and ther stakehlders unbiased, timely, and relevant infrmatin fr use in prmting gvernment accuntability and stewardship and imprving gvernment peratins. We cnducted this peratinal audit frm March 2016 thrugh March 2017 in accrdance with generally accepted gvernment auditing standards. 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. This peratinal audit f the Flrida Schl fr the Deaf and the Blind (Schl) fcused n asset management, related financial recnciliatins, and selected administrative activities. The verall bjectives f the audit were: T evaluate management s perfrmance in establishing and maintaining internal cntrls, including cntrls designed t prevent and detect fraud, waste, and abuse, and in administering assigned respnsibilities in accrdance with applicable laws, administrative rules, cntracts, grant agreements, and guidelines. T examine internal cntrls designed and placed in peratin t prmte and encurage the achievement f management s cntrl bjectives in the categries f cmpliance, ecnmic and efficient peratins, the reliability f recrds and reprts, and the safeguarding f assets, and identify weaknesses in thse internal cntrls. T identify statutry and fiscal changes that may be recmmended t the Legislature pursuant t Sectin 11.45(7)(h), Flrida Statutes. Our audit als included steps t determine whether management had crrected, r was in the prcess f crrecting, all deficiencies nted in ur reprt This audit was designed t identify, fr thse prgrams, activities, r functins included within the scpe f the audit, deficiencies in management s internal cntrls, instances f nncmpliance with applicable Reprt N August 2017 Page 9

12 gverning laws, rules, r cntracts, and instances f inefficient r ineffective peratinal plicies, prcedures, r practices. The fcus f this audit was t identify prblems s that they may be crrected in such a way as t imprve gvernment accuntability and efficiency and the stewardship f management. Prfessinal judgment has been used in determining significance and audit risk and in selecting the particular transactins, legal cmpliance matters, recrds, and cntrls cnsidered. As described in mre detail belw, fr thse prgrams, activities, and functins included within the scpe f ur audit, ur audit wrk included, but was nt limited t, cmmunicating t management and thse charged with gvernance the scpe, bjectives, timing, verall methdlgy, and reprting f ur audit; btaining an understanding f the prgram, activity, r functin; exercising prfessinal judgment in cnsidering significance and audit risk in the design and executin f the research, interviews, tests, analyses, and ther prcedures included in the audit methdlgy; btaining reasnable assurance f the verall sufficiency and apprpriateness f the evidence gathered in supprt f ur audit s findings and cnclusins; and reprting n the results f the audit as required by gverning laws and auditing standards. Our audit included the selectin and examinatin f transactins and recrds. Unless therwise indicated in this reprt, these transactins and recrds were nt selected with the intent f statistically prjecting the results, althugh we have presented fr perspective, where practicable, infrmatin cncerning relevant ppulatin value r size and quantificatins relative t the items selected fr examinatin. An audit by its nature, des nt include a review f all recrds and actins f agency management, staff, and vendrs, and as a cnsequence, cannt be relied upn t identify all instances f nncmpliance, fraud, abuse, r inefficiency. In cnducting ur audit we: Reviewed applicable laws, rules, Schl plicies and prcedures, and ther guidelines t gain an understanding f Schl peratins and prcesses, including asset management prcedures and related financial recnciliatins. Obtained an understanding f the Schl s internal cntrls and evaluated the effectiveness f key prcesses, plicies, and prcedures related t asset management and related financial recnciliatins. Specifically, we: Reviewed Schl plicies and prcedures fr asset management and related financial recnciliatins t determine whether the plicies and prcedures were adequately designed t prmte sund asset management and timely and accurate financial recnciliatins. Analyzed Schl asset balances fr the thrugh fiscal years and evaluated the reasnableness f the causes fr significant changes. Analyzed Schl revenue and cash receipt data fr the thrugh (thrugh February 2016) fiscal years and reviewed Schl prcedures fr recnciliatins and cllectins t btain an understanding f the nature and significance f Schl revenues and cash receipts. Frm the ppulatin f 180 State Treasury t Schl financial recrds recnciliatins perfrmed during the perid January 2015 thrugh March 2016, examined 36 selected recnciliatins t determine whether the recnciliatins were mathematically accurate, timely perfrmed, and reviewed by supervisry persnnel. Reprt N Page 10 August 2017

13 Frm the ppulatin f 15 student bank recrds t Schl financial recrds recnciliatins perfrmed during the perid January 2015 thrugh March 2016, examined 3 selected recnciliatins t determine whether the recnciliatins were mathematically accurate, timely perfrmed, and reviewed by supervisry persnnel. Analyzed Schl receivables balance infrmatin fr the thrugh fiscal years and interviewed Schl management t btain an understanding f the nature and significance f Schl receivables and determine whether the Schl had established adequate plicies and prcedures fr the timely recrding and cllectin f receivables. Analyzed Schl fund balance accunts as f June 30, 2015, t determine whether amunts were prperly classified and reprted in accrdance with generally accepted accunting principles and Department f Financial Services (DFS) guidelines. Frm the ppulatin f 15 mnthly Schl investment statements fr the perid January 2015 thrugh March 2016, examined 3 selected statements with reprted investment balances ttaling apprximately $12 millin each t determine whether the Schl s Endwment Fund investment hldings cmplied with the Schl s investment plicy. Frm the ppulatin f 38 Schl buildings with recrded accumulated depreciatin ttaling $56,934,317 as f March 31, 2016, recalculated depreciatin amunts fr 10 selected buildings with recrded accumulated depreciatin ttaling $16,359,779 t determine whether Schl buildings were depreciated in accrdance with generally accepted accunting principles and DFS guidelines. Interviewed Schl management t btain an understanding f Schl financial statement cmpilatin prcedures. Recnciled the Schl s June 30, 2015, fiscal year end trial balance t State accunting recrds t determine whether the Schl cmplied with DFS guidelines and generally accepted accunting principles fr reprting general ledger accunt balances. Evaluated Schl actins taken t crrect the findings nted in ur reprt N Specifically, we: Examined Schl recrds related t the capital prjects and maintenance and repairs funding requests included in the Schl s fiscal year Legislative Budget Request (LBR) fr the thrugh fiscal years t determine whether prjects were specifically identified and priritized as required by State law and the amunts requested were supprted by apprpriate dcumentatin. Frm the ppulatin f the 32 maintenance and repair line item requests with prjected csts ttaling $5,306,789 included in the Schl s LBR, examined Schl recrds fr 16 line item requests, with prjected csts ttaling $5,079,733, t determine whether the amunts requested were reasnable and adequately supprted. Fr the ne significant Schl cnstructin prject, with expenditures ttaling $2,408,903 during the perid April 2015 thrugh Nvember 2015, we: Examined dcumentatin fr three selected expenditures, ttaling $1,175,015, t determine whether the expenditures were made in accrdance with cntract terms and cnditins, Bard plicies and prcedures, and the prvisins f applicable State laws and rules. Reviewed 8 f the 16 cnstructin management entity s subcntractr cntracts, bid tabulatin sheets, and subcntractr bid prpsals t determine whether subcntractrs were cmpetitively selected and the subcntractr selectin prcess was adequately mnitred by Schl management. Reprt N August 2017 Page 11

14 Frm the ppulatin f 413 salary adjustment and supplemental payment transactins, ttaling $267,414, made during the perid January 2015 thrugh March 2016, examined Schl recrds fr 38 selected transactins, ttaling $63,013, t determine whether the transactins were prperly authrized, adequately dcumented, and cnsistent with Bard plicy. Frm the ppulatin f 44 emplyee classificatin changes apprved by the Bard during the perid January 2015 thrugh March 2016, examined Schl recrds fr 19 selected classificatin changes t determine whether the changes were prperly apprved and in accrdance with State law and Department f Management Services rules. Frm the ppulatin f 423 Schl emplyees wh held tw r mre psitins during the perid January 2015 thrugh March 2016, examined Schl recrds fr 25 selected emplyees t determine whether the additinal emplyment psitins were prperly authrized and the emplyees were paid in accrdance with the dual-emplyment authrizatin. Frm the ppulatin f 4,618 purchasing card transactins, ttaling $755,943, made during the perid January 2015 thrugh March 2016, examined Schls recrds fr 30 selected transactins, ttaling $25,730, t determine whether purchasing card transactins were fr an authrized public purpse, in accrdance with Schl plicies and prcedures, reasnable and apprpriate, and apprpriately apprved and accunted fr. Frm the ppulatin f 23 purchasing cards issued during the perid January 2015 thrugh March 2016, examined Schl recrds fr 12 selected purchasing cards t determine whether cardhlder agreement frms were cmpleted t dcument the cardhlders agreement with Schl purchasing card plicies and prcedures. Examined Schl recrds fr 5 f the 11 purchasing cardhlders wh separated frm Schl emplyment during the perid January 2015 thrugh March 2016 t determine whether the Schl timely canceled the emplyees purchasing cards. Fr the three bank accunts maintained by the Schl during the perid January 2015 thrugh March 2016, examined Schl bank accunt recnciliatin and ther recrds t determine whether bank accunt infrmatin was timely recnciled t Schl recrds and the accunts were maintained in a qualified public depsitry. Reviewed Schl prcedures, banking agreements, and the Schl s electrnic funds transfer (EFT) prcess t determine whether Schl cntrls prvided fr an apprpriate separatin f duties with respect t the initiatin and authrizatin f EFT transactins and EFT transactins were prperly dcumented and reprted. Frm the ppulatin f 65 student bank cash advances, ttaling $9,598, made during the perid January 2015 thrugh March 2016, examined Schl recrds fr 30 selected advances, ttaling $4,892, t determine whether the advances were authrized and administered in accrdance with Schl plicies and prcedures. Interviewed Schl persnnel, examined Schl recrds, and evaluated Schl cmpliance with applicable statutry requirements fr cllecting and utilizing individuals scial security numbers. Observed, dcumented, and evaluated the effectiveness f selected Schl prcesses and prcedures fr: Purchasing activities, managing access t the State s accunting system (FLAIR), ther infrmatin technlgy systems, and ther Schl recrds and assets, and settlement agreements. Reprt N Page 12 August 2017

15 The acquisitin, assignment, cntrl, use, and dispsal f mtr vehicles. As f March 2016, the Schl was respnsible fr 118 mtr vehicles with related acquisitin csts ttaling $3,341,602. The administratin f Schl travel in accrdance with State law and ther applicable guidelines. During the perid January 2015 thrugh March 2016, Schl travel expenditures ttaled $585,204. The acquisitin, assignment, and use f wireless devices with related service csts ttaling $11,866 during the perid January 2015 thrugh March Obtaining backgrund screenings fr Schl persnnel and cntractrs pursuant t Sectins (2), , and , Flrida Statutes. Specifically, frm the ppulatin f 815 Schl emplyees and ther persnal services (OPS) persnnel as f March 2016, we examined Schl recrds fr 30 selected emplyees and OPS persnnel t determine whether emplyees and OPS persnnel wh had direct cntact with students had undergne the required backgrund screenings. Determining eligibility fr and awarding Flrida Best and Brightest Teacher Schlarship Prgram awards t teachers wh achieved the required minimum cllege entrance exam scres and evaluatins. The administratin f the Schl s American Sign Language plicies and prcedures t ensure Schl emplyees had the skills and knwledge needed t wrk effectively with all students and staff. Cmmunicated n an interim basis with applicable fficials t ensure the timely reslutin f issues invlving cntrls and nncmpliance. Perfrmed varius ther auditing prcedures, including analytical prcedures, as necessary, t accmplish the bjectives f the audit. Prepared and submitted fr management respnse the findings and recmmendatins that are included in this reprt and which describe the matters requiring crrective actins. Management s respnse is included in this reprt under the heading MANAGEMENT S RESPONSE. AUTHORITY Sectin 11.45, Flrida Statutes, requires that the Auditr General cnduct an peratinal audit f the Schl n a peridic basis. Pursuant t the prvisins f Sectin 11.45, Flrida Statutes, I have directed that this reprt be prepared t present the results f ur peratinal audit. Sherrill F. Nrman, CPA Auditr General Reprt N August 2017 Page 13

16 MANAGEMENT S RESPONSE Reprt N Page 14 August 2017

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18 Reprt N Page 16 August 2017