- April 19, 2024
-
-
Loading
Loading
East Flagler Mosquito Control District Seat 1 candidate Perry Mitrano previously wrote a letter reminding voters of the state audit, which found that the board's financial policies in 2017 were inadequate. Incumbent Jules Kwiatkowski was given a chance to respond. Mitrano then wrote a second letter, and Seat 2 incumbent Barbara Sgroi was given a chance to respond. Their exchange follows.
Dear Editor:
If I may respond to Commissioner Kwiatkowski's selective understanding of the state audit report requested by Rep. Paul Renner and Sen. Travis Hutson. The only part of the dozen or so audit findings found against the board was the fact there were no illegal activities. What about the rest of the story conveniently forgotten by Commissioner Kwiatkowski?
On that footnote, the rest of the findings uses the term "The Board" referencing the current Board of Commissioners' consistent failures to follow, use or even train for policies that would have prevented this egregious audit.
For 12 years, Seat 1 Commissioner Kwiatkowski — and eight years for Seat 2 Commissioner Barbara Sgroi — they only reacted to the audit. Neither uses any type of outreach to the general public other than the grand opening of the new facility shrouded by reporters’ questions on the $1.1 million oversight.
I guess that outreach is not important to these commissioners, only that the rates were kept low. Very shallow on their part to only speak of the only thing they have done: keep taxes low. It makes me suspect on how they may have even come to the numbers. How did they calculate the number with their problematic bookkeeping?
Mr. Editor, here is the summary of the findings as written and copied from your own news article by staff writer Jonathan Simmons February 25, 2019:
The following state of Florida Auditor General operational audit summary findings and the East Flagler Mosquito Control District management's responses are compiled from the audit report.
State audit finding 1: Contrary to State law, the District did not use a competitive selection process to obtain architectural services for the Consolidated Facility Construction Project.
East Flagler Mosquito Control District management's response: As stated in the Auditor’s findings, the District utilized the “piggy back” method of contract procurement when soliciting the services of the design firm. ”Piggy backing” is a common practice utilized by local governments when the selection process has already been undertaken by another agency, in this case, Flagler County. The District will develop policies and procedures before considering any such projects in the future.
Finding 2: The District did not maintain records evidencing professional liability insurance required by the Consolidated Facility Construction Project architect contract.
District management’s response: The District concurs with the finding. Proper contract management by a qualified project manager should have included a procedure for verification of insurance coverage. The District will develop policies and procedures before considering any such projects in the future.
Finding 3: The Board had not established policies or procedures for evaluating the suitability of proposed construction sites prior to obligating District resources for site leases.
District management’s response: The District concurs with the finding. The Lease with the County Airport should have included a clause for cancellation had the site not been suitable for the project. The District will develop policies and procedures before considering any such projects in the future.
Finding 4: Contrary to State law, the District did not retain all records identified in the construction contract agreement.
District management’s response: The District agrees with the recommendation. The former Director should have retained and cataloged all documents related to the project. The District will develop policies and procedures before considering any such projects in the future.
Finding 5: Although the Consolidated Facility Construction Project was completed a year after the planned completion date, District records did not evidence consideration of damage assessments against the contractor for delays.
District management’s response: The District agrees with the recommendation. Many circumstances delayed construction, as mentioned in the Auditor’s findings. Determining if the contractor bore any responsibility for delays would have required legal action. The building was completed, with a reasonable delay because of change orders and Hurricane Matthew without additional cost related to delays. The District will develop policies and procedures before considering any such projects in the future.
Finding 6: District procedures for monitoring construction project change orders could be improved.
District management’s response: The District agrees with the recommendation. Again, the former Director should have retained and cataloged all documents related to the project. The former Director should have also followed the District’s purchasing policy for approving purchases and properly informed the Board when required. The District Attorney will provide an evaluation for construction damages reimbursement.
Finding 7: The Board did not have policies and procedures for direct purchases of construction materials and the District did not take advantage of sales tax exemptions by making direct purchases of construction materials or document why such purchases would not result in cost savings to the District.
District management’s response: The District agrees with the recommendations. Options for the direct purchase of materials should have been formally documented and cost savings from sales tax exemption for supplying materials should have been weighed against the assumed risk of directly supplying materials to determine if there was any economic feasibility to this option.
Finding 8: The Board had not established policies and procedures for budget development and monitoring.
District management’s response: In the past, the District had followed a simple manual provided by the Florida Department of Agriculture and Consumer Services to prepare and track the budget, just as many mosquito control programs around the State do. The District has in the intervening time researched and prepared an anti-fraud policy, 5-year capital outlay plan, Capital assets policy, revised purchasing policy, purchased and implemented new accounting software, enhanced financial reporting so that the Board has better information with which to make decisions, and retained the services of a CPA to serve as a part-time CFO and is another check on financial monitoring and process improvement. We will continue to strengthen our policies and procedures in this area.
Finding 9: The beginning fund balance for the 2016-17 fiscal year original budget was overstated by $1.1 million because the estimates used by District personnel did not consider the most current available data.
District management’s response: The Auditors’ findings are consistent with what our independent auditor initially reported. Specifically, that $1.1 million was not misspent but was a budgeting error that should have been found and corrected by previous staff early on. Consequently, incorrect information was reported to the Board. The District now uses only Reserve and untapped contingency funds to estimate the beginning fund balance for the following year, which is a far more conservative method than the previous. The District will continue to improve its’ policies and procedures on budget preparation and monitoring.
Finding 10: District policies and procedures did not require and ensure that budget amendments that increase the budget are posted on the District Web site within 5 days after adoption and remain there for at least 2 years.
District management’s response: Previously, only the current year’s Budget documents were posted to the District’s website. Budget materials will remain on the website for at least two years.
Finding 11: District records could be enhanced by using capital projects funds to separately account for construction projects.
District management’s response: The way in which the expenditures for the capital projects were reported may have been cumbersome but did not negatively affect the tracking of expenditures, as this is a separate issue from the incorrectly stated estimate for the beginning fund balance. As stated, earlier in this report, budget preparation was the critical component for error. The use of separate funds will be further considered for capital outlay projects.
Finding 12: The Board had not adopted policies and procedures establishing the minimum unrestricted fund balance for the General Fund.
District management’s response: The District concurs with the recommendation. The GFOA recommendation may not be sufficient since the fiscal year begins October 1 and the intervening months until December when ad valorem revenue is collected to fund the current year’s budget are prime hurricane months. This potential for extreme storm events, as has happened in the past two years in a row, necessitates a greater fund balance to ensure services. A policy for replenishing funds is possible. As long as a policy for maintaining fund balances is in place as part of an overall budget policy, the Board can make decisions as to how to address replenishing funds as they see fit based on current circumstances as raising funds is the sole discretion of the Board at that time.
Finding 13: As of March 2018, the District had not established any anti-fraud policies or procedures.
District management’s response: Anti-fraud policy was adopted on April 16, 2018, and is based on the model policy available from the Association of Certified Fraud Examiners. Staff will receive training on this annually. To be clear, no fraud has been detected or reported.
Ultimately, the board are the bosses, and the district director is the employee. The director must manage the day-to-day operation, and the board answers to us, the taxpayers.
Let's make this clear to everyone that pays the East Flagler Mosquito Control fee: You have a choice. Vote for your current board that was the root cause of the negative audit findings as per the actual audit, or vote for change.
Perry Mitrano
Candidate Seat 1
East Flagler Mosquito Control District
Editor’s Note: Barbara Sgroi was offered a chance to respond to Mitrano’s letter, and she submitted the following:
“We moved to Palm Coast 23 years ago. Through the years, I volunteered with many organizations, including Palm Coast Fire Department, COPS, Flagler County Sheriff's Office. I now serve on the East Flagler Mosquito Control Board Seat 2.
“I would like to address some of Mr. Mitrano comments. Most are past tense. At that time, the former director was in office. Things have changed for the better.
“First of all, we’ve been accused of having too much cash through overtaxing. But it would be irresponsible to not have adequate reserves as stated in our policy, which is based on the Government Finance Officers guidance.
“We are rebuilding our reserves after keeping tax rates low for many years because of the recession and now have them at acceptable levels and can adequately address the growth we are about to embark upon in and outside the district. Contrast our prudent reserves and no tax increase this year with the county's and city's increases with the county's keeping the same tax rate in excess of the roll-back rate; the county's reasoning was to rebuild their reserves.”
“Specifically, we will start the fiscal year with a reserve at $1,005,368. This amount is comprised of:
“Capital Outlay Reserve: $251,737
“Cash Reserve: $692,119 (adding $42,119 from revenue this year for future helicopter maintenance of engine turbines estimated cost $71,500 for two years)
“Sick and annual leave: $61,512
“Cash Reserves: These funds are to be used when unexpected costs arise beyond what has been planned with contingency. They also provide funds to spend at the beginning of the fiscal year before ad valorem revenue is collected in December.
“Future Capital Outlay: These funds are to aid in the purpose of items on the five-year capital outlay program and for long-term capital considerations. The district is heavily reliant on equipment to accomplish our mission planning for replacement of current equipment and acquisition of new types of equipment is a critical part of planning the budget.
“Sick and Annual Leave Reserves: The expected cost of leave payouts upon separation from employment can be estimated by average staff turnover and any planned retirement.
“As far as the fiscal year 2020/21 operating millage rate district-wide is .2375 mills which exceeds the rolled back rate of 0.2375 mills by 0%.
“For example: If your home is valued at $100,000, your taxes for the year would be $23.75.
“In conclusion: The district is financially sound.”
