Submitted by Suanne Z. Thamm
Reporter – News Analyst
August 15, 2016 4:20 p.m.
Fernandina Beach City Manager Dale Martin today released without comment a report dated August 12, 2016 from the accounting firm of Dufresne & Associates entitled “City of Fernandina Beach, Florida Agreed Upon Procedures Report Regarding Parks and Recreation Department Internal Controls.” The city commissioned this review following reports of poor financial controls over city-sponsored special events.
In announcing their findings, the report authors stated: “We were not engaged to, and did not, perform an examination, the objective of which would be the expression of an opinion on the internal control structure. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.”
The 9-page report singled out many current practices that reflect the overall absence of written policies and procedures for internal control over the Parks and Recreation Department’s (P&R) various business practices. Highlighted in bold in the report was a recommendation that a fraud risk assessment be performed.
Among the deficiencies noted in current P&R practices:
- Failure to require supporting documentation evidencing business purpose in expenditures;
- Lack of internal control procedures for revenue collection, which could create an opportunity for the category of fraud called skimming;
- Lack of written policy for use of city credit cards that are routinely left with persons other than the Department Director;
- Inadequate legal review of department contracts;
- Inadequate job descriptions;
- Lack of consistency in allowing departments to determine when compensatory time is appropriate;
- Organization chart that does not appropriately align duties and responsibilities;
- Inadequate mail opening procedures with respect to handling incoming checks or cash;
- Schedule discrepancies between activity participants and lists of actual participants.
Singled out for more detailed attention was the department’s handling of special events. The report recommended better control over all aspects of special events by the Special Events Committee. Also singled out for mention was department employee Jay Robertson, who admitted to depositing city funds into his personal bank account. The report stated: “[Robertson] was asked to provide a detailed report to prove that any and all City funds had been returned to the City for deposit to the City’s bank account. No such report has been provided to us as of the date of this report.”
At this time, it is not known how the city will address the report findings.