The OIG Intermodal Audit Section is responsible for auditing grant agreements and projects related to airports, seaports, rail, transit, and transportation authorities. During the past few months, we have audited three Special Districts. According to Chapter 189, Florida Statutes (F.S.), a Special District is:
A unit of local government created for a special purpose, as opposed to a general purpose, which has jurisdiction to operate within a limited geographic boundary and is created by general law, special act, local ordinance, or rule of the Governor and Cabinet. The term does not include a school district, a community college district, a special improvement district created pursuant to s. 285.17, a municipal service taxing or benefit unit as specified in s. 125.01, or a board which provides electrical service and which is a political subdivision of a municipality or is part of a municipality.
While conducting these audits, we verify Special Districts’ processes and procedures and compare them to agreement terms, applicable laws, rules, and regulations. When issues are detected, we determine the “root cause” and ask why is there a problem. Understanding the root cause helps facilitate timely and effective corrective actions. Issues identified in recent audits include:
- lack of appropriate governing board oversight;
- lack of transparency and fiscal accountability;
- state funds used to fulfill responsibilities other than authorized per contracts/programs;
- poorly-written deliverables in agreements; and
- no tracking, monitoring, or reporting of funds expended.
Special Districts are governed by Boards of Directors who need to maintain oversight and hold the Special Districts’ staff accountable for carrying out their job duties and responsibilities. Likewise, the Florida Department of Transportation (department) must ensure that its staff is vigilant in properly monitoring the expenditures of public funds. Also, the department’s grant agreements need to contain specific language for how the funds are spent and track expenditures through the Special Districts’ annual financial audit reports, in accordance with Section 218.39, F.S., and the Florida Single Audit Act (Section 215.97, F.S).
The outcomes of our audits are summarized below:
- Develop the chart of accounts and general ledger in accordance with applicable regulations, agreement terms, and generally accepted accounting principles.
- Document costs allocated from various funding sources; separately account for federal and state revenues/expenditures.
- Maintain supporting documentation, such as timesheets and work orders, as backup for reimbursements on payroll and invoices.
- Assign a Catalog of Federal Domestic Assistance (CFDA) number or Catalog of State Financial Assistance (CSFA) number for grant tracking and expenditure reporting purposes.
- Verify that any laws, rules, and regulations referenced in the agreement or external entities’ accounting procedures/methodology are accurate and current.
- Ensure the agreement contains quantifiable units of deliverables to measure project completion.
Article by Helen Titoff, Intermodal Auditor