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Audit Reports

To view a summary of any of the following audit reports, click on the report name.

Audit Report on Fleet Fuel (#0801)

During a prior Audit of Fleet Parts Operations (2003), we were unable to provide assurances over accountability for fuel due to inadequate and unreliable fuel records. The purpose of this audit was to review current fuel operations to provide assurances that: fuel is properly safeguarded and accounted for as to fuel purchased, received, dispensed, and in inventory; fuel is bought and sold internally and externally at competitive prices; and fuel purchases and operations comply with applicable laws, policies, and contracts.

We provided recommendations to further enhance fuel operations, by:

  1. Enhancing the monthly fuel reconciliation processes, and implementing oversight controls to compensate for the lack of segregation of duties;
  2. Implementing additional controls over department-specific fuel tanks not managed by Fleet;
  3. Implementing additional physical and logical controls over FuelMaster dispensing unit cabinet keys, and user ids and passwords; and
  4. Updating fuel operations procedures and implementing performance measures to evaluate fuel operations efficiencies and effectiveness.

We also provided recommendations to:

  1. Further enhance compliance with state fuel tax laws by filing additional returns and related amended returns to obtain eligible refunds related to diesel fuel purchased for off-road use; and
  2. Process contract amendments according to City policy.

Since 2003, the accounting for and safeguarding of fuel has greatly improved. Management acquired and implemented the FuelMaster® Fuel Management System (FuelMaster), implemented a monthly reconciliation process to account for the fuel inventory, and implemented improved processes to track purchased and dispensed fuel. Overall, we concluded:

Areas where improvements were needed related to:

Final Audit Follow-Up as of September 30, 2007, Fire Operations (#0802)

This is the third and final follow-up on the action plan steps originating from the Fire Operations Audit (#0612) issued April 25, 2006. Applicable City departments have completed 19 of the 20 (95%) action plan steps developed to address issues identified in the audit report.

In audit report #0612, issued April 25, 2006, we identified issues related to: 1) retaining fire vehicles for longer time periods; 2) complying with volunteer fire department (VFD) mutual agreements regarding the leased fire vehicles; 3) improving the consistency and quality of hydrant testing and reporting of deficiencies, maintenance and reporting of completed repairs, and notification of newly installed hydrants; 4) ensuring that ladders and hoses are properly identified, tested, and tracked; and 5) ensuring fire trucks have the appropriate equipment in the proper location. We provided specific recommendations to address these issues.

During the period April 1, 2007, through September 30, 2007, the Fire Department (Fire) took the following actions to complete two of the three remaining action plan steps due for the audit:

The remaining outstanding action plan step due is for the Department of Management and Administration (DMA) to review the Fleet Management Policy and work with Fleet to ensure the vehicle replacement rate calculation meets the policy's intentions. This final action step has been turned over to management for resolution.

Audit Follow-up as of September 30, 2007, Emergency Management (#0803)

This is the second follow-up on the action plan steps originating from the Emergency Management Program Audit (#0707) issued on January 8, 2007. The Fire Department and Department of Management and Administration completed 10 of the 13 (77%) action plan steps due during the period April 1, 2007, through September 30, 2007. Two action plan steps are behind schedule and one was deleted by management. Additionally, two action plan steps will be due in the next follow-up period.

In audit report #0707, we identified issues related to the administration of the Emergency Management (EM) program and the EM planning and preparation activities. We provided specific recommendations to address these issues.

Between April 1, 2007, and September 30, 2007, the following actions have taken place:

The two action steps behind schedule relate to: 1) periodically reevaluating the City's identified "critical applications," and prioritizing the order in which applications will be restored during a catastrophic event; and 2) evaluating and determining a cost-effective and beneficial method to identify and track costs associated with all EM associated activities.

Audit Follow-up as of September 30, 2007, 800 MHz Radio System (#0804)

In report #0614, we noted areas where improvements could be made to increase preparedness for emergencies/disasters, improve oversight of the 800 MHz radio system, and increase the physical security of the various 800 MHz radio system infrastructure and radio tower locations.

The Information Systems Services Radio Communications Division (RCD) has completed nine of the 17 action plan steps that were due as of September 30, 2007. Of the remaining eight action plan steps, seven have been amended to be completed by September 30, 2008, and one was deleted as management has accepted the risks identified in the initial audit report.

Overall, to address the action plan steps due this follow-up period, RCD has:

While RCD has had success in completing nine of the action plan steps due, completion of several remaining steps will require direction from the Public Safety Communications Board (PSCB) that replaced the Management Oversight Committee (MOC) in July 2006.

In addition to the steps that were delayed, one step was deleted because management has decided to accept the risk the step was designed to mitigate. That step related to moisture sensors in the shelters that house components of the 800 MHz radio system infrastructure.

Audit of P-Card Activity at Selected City Departments and Offices (#0805)

This audit of P-Card activity within selected City departments was conducted as part of our 2007 annual audit plan. The purpose of the audit was to determine, for selected departments and offices, whether the City's P-Card program was operating efficiently, effectively, and according to good business practices.

The audit addressed activity during the sixteen-month period October 2005 through January 2007. P-Card activity within five separate City departments and offices was reviewed. Those five departments included NCS, UBCS, ISS, HR, and Parks and Recreation. In addition, we reviewed oversight and administrative activities performed by DMA and the Office of Treasurer-Clerk's Records Management Division (RMD).

Overall, we found that P-Card activities within the five audited departments and offices (as well as DMA and the Treasurer-Clerk's RMD) were efficient, effective, and in accordance with good business practices. For the most part, P-Cards were used only by staff to make authorized and appropriate acquisitions of goods and services. Adequate controls were generally in place. No instances of fraud were noted. However, risks were identified that increase the likelihood of (1) unauthorized purchases occurring and not being timely detected and/or (2) goods and services not being procured efficiently and in accordance with controlling rules, regulations, and guidelines. Those risks include:

Measures we recommend that management take to strengthen controls relative to the P-Card program include:

To help ensure the identification and resolution of issues and risks that may exist at City departments and offices not included in the scope of this audit, we recommend that the respective Appointed Officials distribute this report to management of each City department and office for their review and follow through as applicable.

Audit Follow-Up as of September 30, 2007, The City's Parking Program (#0806)

This is the third follow-up on the action plan steps originating from the audit of the City's Parking Program (Report #0622) issued on September 8, 2006. In the original report, we identified issues and provided 16 recommendations toward developing a comprehensive and coordinated parking ticket program strategy and improving the accounting of the parking ticket inventory, management of internal controls over the parking program activities, and the integrity of computer based parking ticket information.

During the previous follow-up period, five of the 16 original action plan steps were completed and the targeted completion dates for the remaining 11 action plan steps were amended. Of the amended steps, five were due on September 30, 2007, and the six remaining steps will be due in future follow-up periods.

Our review of the five action steps due this period showed that departments completed three steps and made some progress on two steps. The following actions were completed:

Two action items were only partially completed:

During our review of the action plan steps due this period, we noted two related and continuing issues: 1) the parking program activities are not being effectively coordinated across the five departments; and 2) the lag time that occurs between when a handwritten ticket is issued and input into the Duncan system impacts citizens trying to pay the ticket on-line.

Audit Report on Citywide Disbursements 2007 (#0807)

Our audit covered the period July 1, 2006, through June 30, 2007. Total disbursements for that period, $718,233,988, were segregated, for purposes of our audit, into three broad categories: general disbursements; salary payments; and retirement benefit payments.

Generally, disbursements were proper, authorized, supported, correctly recorded, and in compliance with laws, rules, policies, and procedures. However, we did note instances where controls were not in place or operating effectively to ensure proper, timely, and efficient disbursement of City funds in accordance with City policies and procedures. Those instances included the following:

Inquiry into City Hall Roof Replacement (#0808)

The purpose of this report is to communicate the results of our inquiry into assertions made in a telephone call received by the City Auditor's Office through the City's Fraud Hotline.

Audit Report on Take Home Vehicles (#0809)

This audit of take-home vehicles was conducted as part of our 2008 annual audit plan. The purpose of the audit was to identify all City vehicles that were taken home by a City employee during the audit period; identify and analyze related data including the types of vehicles; distances traveled, and associated costs; review and determine the adequacy of policies and procedures governing the taking home of vehicles by employees; including a comparison of City policies and procedures to those of other local governments; and provide options for management to consider that will create savings in commuting costs.

The audit addressed activity during the two-year period, January 1, 2006 through December 31, 2007. This audit also included all City departments that have vehicles taken home by employees.

Overall, we concluded that the policy governing take home vehicles needed to be improved. We noted:

We have made recommendations to address the above identified issues, which include:

This audit analyzed the costs associated with vehicles that were reported as having been taken home by employees during the two-year audit period, January 1, 2006 through December 31, 2007.
Our analysis showed the estimated annual cost associated with employees taking vehicles home was approximately $1.4 million.
Our analysis also showed:

In light of the analysis of costs, we provided several options for consideration that would help control costs of commuting. Those options included:

Audit Follow-Up on Gas Infrastructure (#0810)

The Gas Utility and other City departments have completed the eight action plan steps due for completion as of March 31, 2008. Six additional steps that were due subsequent to that date have also been completed.

In audit report #0727 we noted that, overall, the City has adequate and proper processes and procedures to ensure a safe and reliable infrastructure. We also noted that significant improvements and enhancements had been and were being made in regard to accounting for and tracking that infrastructure. We reported that installations of new infrastructure met federal and state requirements and that expansions and replacements were planned and funded. We reported that an effective public protection program was established. However, we also identified areas where improvements and enhancements were needed. Accordingly, recommendations were made to install an additional isolation valve, accurately designate critical valves in the Gas Utility geographic information system (GIS), develop a project management plan for refinement of the Gas Utility's GIS, protect stored pipe from environmental elements, ensure timely repair of leaks, and enhance monitoring of system pressures at a satellite utility facility. Recommendations were also made to improve documentation in several areas, including infrastructure testing and inspection, leak identification and repair, emergency notifications and responses, and other areas.

Twenty-seven action steps were developed to address the identified issues, for which eight were due for completion as of March 31, 2008. In our follow up we found that the Gas Utility (in conjunction with the Municipal Supply Center and Station 21, a satellite utility facility) has completed each of those eight steps and an additional six steps that were due for completion subsequent to that date. Actions that were completed included:

Audit Follow-Up on Fleet Fuel Operations (#0811)

This is the first follow-up on the action plan steps originating from the audit of the City's Fleet Fuel Operations (Report #0801) issued on October 18, 2007.

During our audit, we noted that the accounting for and safeguarding of fuel had greatly improved since a prior audit conducted in 2003. Processes had been developed and implemented to better account for fuel purchased, issued, and in inventory and to better safeguard the City's fuel inventory. We also noted additional areas where improvements were needed and provided recommendations related to daily fuel operations, reconciliation processes, and fuel tax reporting. The audit report included management's action plan consisting of 15 action plan steps to address the recommendations in the audit report.

During the follow-up period October 1, 2007, through March 31, 2008, 13 action plan steps were due to be completed. Of those 13 steps, 7 have been completed and 6 were partially completed.

The seven steps completed during this period are related to:

The six steps partially completed during this period are related to:

Final Audit Follow-Up on Pension Investments (#0812)

The Treasurer-Clerk's (T/C) Office and Accounting Services have completed 29 of the 32 action plan steps that were established to address issues identified in audit report #0621. T/C staff has made progress in completing the three remaining steps. Responsibility for following up to ensure completion of those three steps is turned over to T/C management.

In audit report #0621, we reviewed investment performance and activity for the City defined benefit and defined contribution pension plans. We found that, overall, the City had achieved its investment return goals and, as a result, the City's pension plans were in sound financial condition. However, areas were identified where improvements and enhancements were needed. For example:

Thirty-two action plan steps were established to address those issues. We found that T/C and Accounting Services staffs successfully completed 29 of those 32 steps. T/C staff has made progress in completing the three remaining steps.

Significant actions completed include:

Significant progress has been made by T/C staff on the three remaining steps. However, as of March 31, 2008, those steps had not been completed. Those three action plan steps include:

Responsibility for following up to ensure completion of those three steps is turned over to T/C management.

Final Audit Follow-Up on Electric Revenues (#0813)

Twenty-seven of the 29 action plan steps developed to address the issues identified in audit report #0602 have been completed or resolved as of March 31, 2008. Actions have been initiated but not completed for the two remaining steps. Responsibility for following up to ensure completion of those two steps is turned over to City utility management.

In audit report #0602, we concluded that, overall, electric consumption and related activities were properly billed. We also identified issues that indicated the need to better manage operations, activities, and records impacting electric consumption and related revenues. The audit also identified instances of unbilled consumption, billing errors, errors in the records used to determine the semiannual energy cost recovery rate, and errors in the application of non-consumption fees. In addition, the audit identified the need to enhance use of the PeopleSoft Customer Information System (CIS) to account for all meter activity and to enable an efficient process for identifying meters for periodic testing based on meter age and prior test dates.

Twenty-nine action plan steps were developed to address the identified issues. In our three previous follow ups on this audit, we reported that 21 of those 29 steps had been successfully completed. For this fourth and final follow up engagement, we found that:

Final Audit Follow-Up on Emergency Management (#0814)

This is the third and final follow-up on the action plan steps originating from the Emergency Management Program Audit (#0707) issued on January 8, 2007. The Emergency Management Department and Department of Management and Administration has addressed all four action plan steps due during the period October 1, 2007, through April 30, 2008, by completing two steps and determining for the remaining two steps that no additional actions will be taken.

In audit report #0707, we identified issues related to the administration of the Emergency Management (EM) program and the EM planning and preparation activities. We provided specific recommendations to address these issues.

Between October 1, 2007, and April 30, 2008, the following actions have taken place:

For the two remaining steps, management has determined that no additional actions will be taken. The two steps are related to tracking the cost of EM planning activities, and prioritizing and sequencing a second tier of applications that would be next important to restore after a disaster.

Audit Follow-Up on Police Overtime (#0815)

Our original audit of Police overtime indicated that, overall, overtime costs were substantially valid, accurate, properly approved, and generally in compliance with City policies and procedures and Police Benevolent Association agreements. Other than a few exceptions, approval documentation existed for most of the overtime transactions sampled in our audit.

However, during the audit, we identified three areas related to the recording of overtime in the payroll system that should be improved. Management developed 11 action plan steps to address the issues in these 3 areas. All 11 action plan steps were due to be completed by March 31, 2008. Of the 11 steps, 5 steps were completed, 4 steps are partially completed, 1 step is behind schedule, and 1 step was deleted by management.

The five action steps completed included:

The four partially completed steps are related to developing additional earn codes to better track overtime, implementing a process to periodically review payroll transactions involving overtime, and developing procedures to monitor retroactive adjustments and assure all adjustments are properly authorized and approved.

The one step behind schedule is related to addressing how Communication staff trainers are compensated and complying with the corresponding City policies.

The step deleted by management was related to reviewing past inconsistencies related to overtime pay on holidays to determine the most efficient and equitable method to address any prior discrepancies.

Final Audit Follow-Up on The City's Parking Program (#0816)

This is the third and final follow-up on the action plan steps originating from the audit of the City's Parking Program (Report #0622) issued on September 8, 2006. In the original report, we identified issues and provided 16 recommendations toward developing a comprehensive and coordinated parking ticket program strategy and improving the accounting of the parking ticket inventory, management of internal controls over the parking program activities, and the integrity of computer based parking ticket information.

To date, 13 of the 16 steps have been completed and 3 steps have been partially completed. The following five steps were completed during this period:

The three action plan steps that are in process but have not yet been fully implemented included:

We are turning these partially completed action plan steps over to management for their final resolution.

Additionally, our review of parking committee meeting summaries and observations during the past two follow-up periods indicate a continuing need for coordination across the five departments in conducting City parking program activities. We recommend that the assigned Assistant City Manager meet with the parking committee to clarify the parking program's direction, goals and objectives, and resolve the outstanding issues to ensure that the parking program activities are coordinated across the City departments.

Audit of StarMetro Staffing (#0817)

This audit of StarMetro staffing of drivers and mechanics was requested by StarMetro management to assist in developing a methodology for determining staffing needs in the General Transit, Special Transportation, and Garage Divisions. Additionally, we assisted management in determining the costs of services for General Transit bus services.

The audit reviewed staffing levels for drivers and mechanics during fiscal year 2007 and costs of general transit services for fiscal years 2005 through 2007.

For General Transit, we provided recommendations related to reducing annual overtime costs by: 1) maximizing the use of temporary drivers to provide the services in addition to the regularly scheduled routes; 2) implementing more efficient routing and scheduling techniques, including automation, and accounting for all routes and known events in the regular scheduling; 3) improving budget planning and cost projections by including all scheduled routes, considering additional work, anticipated vacancy rates, and overtime paid on holidays; 4) improving StarMetro's ongoing monitoring over budgeted to actual expenditures; 5) working with the HR Safety Managers to evaluate reasons for and identify ways to minimize workers' compensation and leave without pay; and 6) implementing a method for tracking the amount of time employees are out of work due to workers' compensation and/or leave without pay.

For Special Transit, we provided recommendations toward reducing their annual overtime costs by: 1) further maximizing the use of temporary drivers to provide the services to fill the gap between scheduled drive hours and available driver hours; 2) tracking overtime on holidays by using the earn code designated for holiday overtime; 3) working with HR Safety Managers to evaluate reasons for and identify ways to minimize catastrophic leave, workers' compensation leave, and leave without pay; and 4) developing and implementing a method for tracking the amount of time employees are out of work due to workers' compensation and/or leave without pay.

For Garage, we provided recommendations to assist them in measuring mechanics' productivity levels in the future by: 1) implementing better record keeping processes to track mechanics' work time and manage operations; and 2) tracking overtime on holidays by using the earn code designated for holiday overtime.

For determining costs of General Transit services, we provided recommendations to ensure the validity and reliability of information used in management's calculations of costs of services.

For General Transit:

For Special Transit:

For Garage:

For determining costs of General Transit services, we concluded consistent processes were not performed in data collection to ensure the validity and reliability of the information used to determine costs of services.

 Audit Of Automated Deposit Reporting And Verification Processes (#0818)

In December 2007, the Treasurer-Clerk requested an audit of the automated reporting and verification of deposits processes that were being implemented within the Revenue Division to provide assurances that there were adequate controls in place.

The automated reporting and verification of deposits processes included the implementation of a new collections reporting system, the Internet Payment Processing System (iPay). Staff utilizes the iPay system, the CORE cashiering system, downloaded bank deposit files, and the PeopleSoft Financials system to verify and report collections and deposits.

Our audit objectives were to determine whether there are adequate internal controls designed and in place within the new automated deposit reporting and verification processes conducted within the Treasurer-Clerk's Office to assure that all deposits reported received were accounted for (i.e., complete and accurate).

Our review included examining controls related to the automation of deposit reporting and verification processes, including selected general computer controls, application controls, and related manual activities. We identified those controls we noted were in place and those that needed to be addressed, along with the associated activities observed. For each control needing to be addressed, we provided the current status of the control and management's actions and/or plans to improve the control.

We concluded that the newly implemented automated deposit reporting and verification processes reviewed included adequate controls to assure that all deposits reported received were accounted for. Controls we noted that were in place were related to:

During the audit, all identified potential issues were discussed with management for their review and timely resolution prior to the automated deposit reporting and verification processes being implemented across all City departments. There were five issues identified during the audit; two were addressed and three are in the process of being addressed.

The three issues being addressed relate to:

  1. 1. Eliminating the inefficiencies caused by the differences between when credit card deposits are reported by credit card companies and by City departments. Revenue management is working with the credit card companies to resolve the issue related to the credit cards and expects to have this issue resolved in October 2008.
  2. Recording of the "unlabeled" payments to resolve any differences between the CORE and financial systems. Revenue management is working with Accounting Services to determine the best way to record "unlabeled" payments so payments can be reconciled in CORE and the City's financial system.
  3. Measuring the success of the automation project. Criteria have been developed to measure the success of the automation project and management will measure the performance of the newly implemented processes over the next year.

The issues that were identified and addressed during the audit included:

Audit Follow-Up of the Purchasing Section of the Procurement Services Division (#0819)

In audit report #0725, on the Purchasing Section of Procurement Services, we identified issues for improvement; in response, management developed 22 action plan steps to address those issues. The issues we identified broadly related to:

This is our first follow-up on the actions taken by Procurement Services in response to the audit. As of March 31, 2008, there were 16 action plan steps due to have been completed.

Our review of the 16 action plan steps due this follow-up period showed 5 steps were completed, 8 were partially completed and considered in progress, and 3 were adjusted to be completed at a later date.

Overall, during our review of the action plan steps due this period, we noted that Procurement Services is making progress in addressing the issues identified in our initial audit. For some action plan steps due, Procurement Services did not begin corrective actions until near the end of the review period.

A continuation of efforts by Procurement Services should allow the action plan steps that are currently identified as in progress to be completed before the end of the next follow-up reporting period, September 30, 2008.

Audit Report on Other Postemployment Benefits (OPEB) (#0819A)

In June 2004, the Governmental Accounting Standards Board (GASB) issued Statement No. 45 on Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. As a result, this statement became part of the body of knowledge known as generally accepted accounting principles (GAAP) and must be followed in the preparation and issuance of the City's Comprehensive Annual Financial Report for the 2007-2008 fiscal year.

Other Postemployment Benefits (OPEB) includes government healthcare, prescription drugs, and life insurance provided to employees during their retirement years. Historically, employees have been promised that in return for their services the City will pay a portion of their monthly healthcare premium when they retire. The City has made good on this promise by annually appropriating and expending current operating funds for its share of retiree healthcare premiums as they came due. This method of funding is referred to as a "pay-as-you-go" approach. As such, the City has not in the past set aside any monies to pay for future healthcare subsidies for current retirees or for employees currently working that will retire in the future.

GASB Statement No. 45 now requires recognition of OPEB costs at the time an employee provides services to the government. In other words, an accounting event has occurred and should be recognized at the time when there is an "exchange of benefits for services."

Historically, in exchange for services rendered by employees, the City has biweekly paid employees a salary and has at the same time set aside monies for its portion of the City pension to be paid employees in the future. However, the City (like many other cities nationwide) has not set aside monies for healthcare subsidies also promised employees in the future. As a result, a significant UAAL (unfunded actuarial accrued liability) now exists for current and retired employees that have rendered services in the past in exchange for future benefits.

GFOA (the Governmental Finance Officers Association) has stated that OPEB is a form of compensation and should always be considered as an integral part of an employee's total compensation package. Some have described OPEB as a form of deferred compensation.

For the year ending September 30, 2008, the City will be required to disclose the AAL (actuarial accrued liability) associated with OPEB in the notes to the City's financial statements along with a description of efforts and progress being made to fund the actuarial liability. If the City fully funds OPEB cost for the current year in an irrevocable trust, no liability will have to be recorded on the face of the financial statements. However, if the City does not establish a dedicated irrevocable trust fund and instead continues on a pay-as-you-go basis, the full amount of the ARC (Annual Required Contribution) will be reported as a liability in government-wide financial statements.

Even though not required, the City made early disclosure of the UAAL in its annual financial statement notes for the year ended September 30, 2007. Based on the actuary study at the time, on a pay-as-you-go basis the AAL would be $103,362,000; whereas, if the City had established a dedicated irrevocable trust fund for OPEB, the liability would be $60,520,000.

A July 8, 2008, updated study for the year beginning October 1, 2007, shows the AAL for an unfunded (pay-as-you-go) plan is now $123,122,000 and for a funded (a dedicated irrevocable trust) plan is now $73,688,000. The ARC for 2008 for an unfunded pay-as-you-go plan amounts to $9,975,000, and the ARC, for a funded plan where monies are placed in an irrevocable trust, amounts to $6,833,000.

The following summarizes issues relating to OPEB:

The GFOA has said that the real issue is not the accounting requirements for OPEB, but how governments intend to finance the cost of OPEB in an environment characterized by an increasing retirement age population and escalating healthcare cost.

To address this important issue, the City has an Employee Benefits Committee made up of the City Treasurer-Clerk, the Director of Management and Administration, and the Director of Human Resources. One of the responsibilities of this Committee is to review healthcare premiums for active and retired employees. Based on their review, the Committee recommends to the City Commission, through the budget process, the portion of the premium to be paid by the City.

For the 2009 fiscal year, the proposed budget addresses OPEB by fully budgeting the enterprise fund commitment to OPEB but not fully budgeting the general fund commitment. Since neither of these commitments will go into an irrevocable trust, the City will be required to record the full amount of the OPEB liability for 2009. Regardless, there appears to be a commitment by the Committee to recommend an irrevocable trust and a commitment to address OPEB in the future.

To address this important issue, the following recommendations are made:

Research conducted for this report identified several options for funding and structuring a plan to address the impact of OPEB. Some of the options relate to what other state and local governments have already done to address OPEB and some options are those that deserve further consideration if it is necessary to change plan benefits. These options were discussed with and provided to the Benefits Committee for their review and consideration, and for their recommendations, as applicable, to the City Commission.

There should be recognition that the contribution the City currently makes to retiree healthcare was likely made in previous years in good faith and in recognition of valuable contributions made by employees in exchange for (or for foregone) salary increases. Any reduction in contributions by the City has the effect of reducing current and retiree salary and pensions, respectively. GFOA recommends that governments strive to avoid benefit reductions that place an undue burden on employees, or risk making the government uncompetitive as an employer.

In view of the significance of decisions to be made, the City Commission (through its Financial Viability of the Government Target Issue Committee) should give consideration to recommendations made by the Benefits Committee and the Office of the City Attorney.

Inquiry into Misuse of City "Sam's Club Card" (PRNA) (#0820)

The purpose of this report is to communicate the results of our inquiry into misuse of a City Sam's Club card by an employee of the Parks, Recreation, and Neighborhood Affairs Department (Department).

This inquiry was conducted at the request of City management after Department management determined that an employee (Wayne Funderburke) had inappropriately used a City Sam's Club card for personal benefit. The results of our inquiry showed that the employee inappropriately made 89 personal purchases totaling $5,213 during the period July 28, 2006 through July 21, 2008. Of those 89 personal purchases, 78 were for gasoline (totaling $4,221) and 11 were for other items (totaling $992). Those other items included, for example, a car battery, soft drinks, groceries, toiletries, light bulbs, shirts, and a ladder. Our analysis shows that the majority, if not all, of those purchases were charged to the City's account. We found that the City did not pay for any of those inappropriate purchases. However, the employee had not paid for a significant portion of those purchases as of the date of his resignation, July 21, 2008. As of that date, the balance owed Sam's Club on the City's account for his personal purchases totaled $2,981. In addition, whether intentional or not, some state sales taxes (i.e., $29) were not paid on those personal purchases.

Upon determination of the amount still owed on the City's account, the City paid Sam's Club the $2,981 balance on September 8, 2008 and closed the account. To obtain reimbursement from Mr. Funderburke, the City will withhold an equal amount from the funds owed Mr. Funderburke for his unused leave balances. Payment to Mr. Funderburke for the balance of any unused leave will not be made until completion of this inquiry and a determination by management that such payment is warranted.

This misuse was not initially detected by the Department because the periodic account statements were not sent to and reviewed by a person other than the employee who inappropriately charged his personal purchases to that City account.

At the request of management, we also reviewed other functions performed by the applicable employee to ascertain if any City resources (e.g., cash and revenue collections and purchased items) relating to those functions were missing or otherwise unaccounted for within the City's records. Our review of those other areas did not disclose additional instances of misuse that could be attributable to the applicable employee. However, issues were identified for which enhancements are needed to assist the Department in accurately and completely accounting for fees and activities.

We have made recommendations within this report to address all identified issues, including those pertaining to the misuses of the Sam's Club account and the other functions performed by the applicable employee.