Tourist Development Council
(264) Section 125.0104, Florida Statutes (the " Local Option Tourist Development
Act" ), authorizes a county to levy a tourist development tax pursuant to an
ordinance containing a county tourist development plan and subject to a referendum of the
electors in the subcounty special district in which the tax is to be levied. Pursuant to
Section 125.0104(4), Florida Statutes, the BCC adopted Ordinance No. 86-18 on July 21,
1986, which authorized the levy of a 2 percent tax on specified rental charges to fund the
Walton County tourist development plan which was included in the ordinance. The ordinance
was approved by a referendum held September 30, 1986.
(265) Section 125.0104(4)(e), Florida Statutes, requires that the governing board of a
county that levies a tourist development tax appoint an advisory tourist development
council. Accordingly, the Walton County BCC established the Walton County Tourist
Development Council (TDC) by Ordinance No. 86-18. The TDC is responsible for making
recommendations to the BCC for the effective operation of the tourist development projects
or for uses of the tourist development tax revenues. The TDC is also responsible for
continuously reviewing the expenditures of tourist development tax revenue and reporting
to the BCC all expenditures of such revenue believed to be unauthorized. The TDC did not,
of record, report any unauthorized expenditures to the BCC for the period October 1996
through June 1998. Pursuant to Section 125.0104(10), Florida Statutes, the BCC adopted
Ordinance No. 91-12 on August 27, 1991, which provides for local collection and
administration of the tourist development tax.
Tourist Development Plan
(266) Section 125.0104(4)(c), Florida Statutes, requires that prior to enactment of the
ordinance levying and imposing the tourist development tax, the county tourist development
council shall prepare and submit to the board of county commissioners for its approval a
plan for tourist development. The plan is required to set forth the anticipated net
tourist development tax revenue to be derived by the county for the 24 months following
the levy of the tax; the tax district in which the levy is proposed; a list, in the order
of priority, of the proposed uses of the tax revenue by specific project or special use as
authorized under Section 125.0104(5), Florida Statutes; and the approximate cost or
expense allocation for each specific project or special use.
(267) The most recent tourist development plan, as included in Ordinance No. 97-38
dated October 27, 1997, provided that the tax would be levied in all of Walton County
lying south of the intercoastal waterway and estimated that approximately $4,300,000 of
tax proceeds would be received for the next 24 months and used for the following specific
projects or special uses:
tourist advertising/promotion/materials;
beach maintenance/reserve;
administrative expense/office supplies;
and contingency.
Tourist Development Council Expenditures
(268) Section 125.0104(5), Florida Statutes, specifies the authorized uses of the
tourist development tax revenues. The purposes for which such revenues may be used
include: (1) to acquire, construct, extend, enlarge, remodel, repair, improve, maintain,
operate, or promote convention centers, sports stadiums, sports arenas, coliseums,
auditoriums, museums, zoological parks, fishing piers, or nature centers that are publicly
owned and operated or owned and operated by not-for-profit organizations and open to the
public; (2) to promote and advertise tourism in the State of Florida and nationally and
internationally; (3) to fund convention bureaus, tourist bureaus, tourist information
centers, and news bureaus; and (4) to finance beach park facilities or beach improvement,
maintenance, renourishment, restoration, and erosion control, including shoreline
protection, enhancement, cleanup, or restoration of inland lakes and rivers. Subject to
certain restrictions, revenues to be derived from the tourist development tax may be
pledged to secure and liquidate revenue bonds issued for these purposes.
(269) TDC expenditures totaled approximately $4,550,000 during the period October 1996
through June 1998. As discussed in paragraphs 179 through 208, our audit disclosed
numerous inadequately supported and/or improper expenditures and several deficiencies in
the County’s purchasing practices. Our separate test of TDC expenditures also
disclosed similar problems as discussed under appropriate subheadings below.
(270) The Chairman included, with his written response to the findings, a response
from the Executive Director of the Tourist Development Council to the findings related to
the Tourist Development Council. The Executive Director has indicated that supporting
documentation for TDC expenditures, beyond that submitted to the Clerk, is available and
would be provided to the Clerk upon request. As noted in paragraph 171, the Attorney
General, in Opinion No. 068-12, has stated that vouchers for payment of public funds
should contain sufficient information for the paying agency, or its pre-auditors and the
post auditor, to determine whether the requested payments are authorized by law. The
TDC,
in the future, should provide the Clerk with all relevant supporting documentation for
expenditures at the time that the payment is requested. In view of the Executive
Director’s responses, clarifications of these findings are included under specific
subheadings, as appropriate.
(271) Our test of TDC expenditure vouchers disclosed deficiencies in the County’s
purchasing practices regarding the acquisition of goods or services for the
TDC, which
could result in the purchase of unauthorized goods or services, duplicate payments, or
budget overexpenditures.
(272) Our test of 52 TDC expenditure vouchers totaling $543,754.19 disclosed
deficiencies in the County’s purchasing practices for 50 of these expenditure
vouchers totaling $469,968. In 39 instances, there was no documentation of purchase order
approval prior to the acquisition of goods or services, including 38 instances in which
the expenditure was not supported by an approved purchase order. Also, in 50 instances
(includes the 39 instances where there was no prior purchase order approval), invoices
submitted for payment were not properly canceled or stamped as paid after payment.
(273) Prior approval of purchases of goods or services is necessary to ensure that only
authorized purchases are made and that sufficient budgeted resources are available for the
purchase. Failure to properly cancel all paid invoices could result in duplicate payments.
We recommend that the BCC review and revise the County’s purchasing practices as
necessary to ensure that all TDC purchases of goods and services are properly approved
prior to acquisition. Further, the Clerk should revise the pre-audit procedures to assure
that all necessary documentation is available at the time of payment and all paid invoices
are properly canceled.
(274) The Executive Director, in his written response to the findings, described
various controls stated to be in place at the TDC to assure that TDC expenditures are
proper and adequately documented. As demonstrated by the findings included in paragraphs
275 through 281, and 289 through 292, these controls were not effective in assuring the
propriety of TDC expenditures and the adequacy of documentation to support the
expenditures. The Executive Director also stated that the TDC had been exempted from the
County’s purchase order requirement since the TDC’s inception over ten years
ago. Documentation of this exemption was not provided for our review and, in light of the
findings in this report regarding TDC expenditures, it appears that any such policy should
be reconsidered by the BCC.
(275) Our audit disclosed $85,022.03 of TDC expenditures that were not supported by
documentation that clearly demonstrated that such expenditures were reasonable and
necessary and/or served an authorized TDC public purpose.
(276) The TDC is limited in the use of its resources by Section 125.0104(9), Florida
Statutes, which authorizes the TDC to provide, arrange, and make expenditures for
transportation, lodging, meals, and other reasonable and necessary items and services for
such persons in connection with its performance of promotional and other duties. The TDC
has some discretion as to what expenditures are necessary to carry out its promotional
activities; however, it also has a responsibility to clearly demonstrate in its public
records how its expenditures serve a public purpose in furtherance of its responsibilities
and are reasonable and necessary.
(277) Our audit disclosed $85,022.03 of TDC expenditures during that period October
1996 through June 1998 that were not supported by documentation that clearly demonstrated
that such expenditures were reasonable and necessary and served an authorized TDC public
purpose as shown on Exhibit C. For example, Exhibit C includes a $60,181.52 payment to a
furniture company. Of this amount, $30,186.92 was supported by an invoice indicating only
that the expenditure was for furnishings and installation but did not specify what or how
many furniture items were received, each item’s cost, and the specific nature of the
installation.
(278) Several other expenditures included on Exhibit C did not appear to be necessary
or were not documented as to how they related to the TDC’s responsibilities under
Section 125.0104, Florida Statutes. These expenditures included, for example, $2,600 to
the Sandestin Academy to allow students to travel to Boston; $2,000 in donations to two
nonprofit organizations (Freeport High School Boosters and South Walton Turtle Watch);
$1,600 for entertainment for the South Walton Snowbirds Association; $1,416 for antiques
to furnish the TDC Executive Director’s office; $1,000 to the Walton High School
Cheerleaders reportedly for the distribution of TDC brochures in California; $554.90 for
flowers and plants for various persons with professional associations with
TDC, TDC staff
and council members, and the TDC Executive Director’s wife; $390 for flowers to
decorate an annual luncheon hosted by the TDC and attended by County officials and local
business people; and $64 for personalized mugs for TDC staff and council members. While
some of these expenditures may, as indicated by the Executive Director, have been
beneficial to the public or made as a result of concern for the welfare of TDC employees
and Council members, it was not apparent that such uses of TDC resources provided a
demonstrable benefit to the TDC other than to promote a generally favorable attitude to
the TDC.
(279) The expenditures included on Exhibit C for office furnishings (check numbers
6518, 6520, and 6666) included furniture items, the costs of which appeared to exceed that
which would be considered reasonable and necessary for the purpose for which they were
purchased. For example, these items included:
· A high back leather chair costing $1,010.10 and 14 conference chairs costing $695.15
each;
· Two 19 gallon waste receptacles costing $370.70 each and three 40 gallon waste
receptacles costing $455.90 each; and
· A " bronze dolphin" costing $320 for the TDC Executive Director’s
office. While many of the items purchased may have been necessary, the justification for
purchasing items at the amounts indicated, without documentation demonstrating that less
expensive items would not be adequate for the needs of the TDC, was not apparent.
(280) In several instances, the TDC Executive Director furnished, in response to our
inquiries, additional information concerning the justification for particular
expenditures. However, that information did not, in many instances, clearly establish how
the subject transactions furthered an authorized purpose of the
TDC. Additionally, these
written explanations were not, of record, available to Clerk staff prior to payment and,
consequently, the propriety of the expenditures was not readily apparent from the
County’s records on initial post-audit or to the public. Therefore, prior to the
submission of the additional explanations, the basis in law relied upon by Clerk staff in
approving the expenditures was not apparent.
(281) We recommend that all necessary particulars of the transactions shown on Exhibit
C, including any explanations as to how the expenditures furthered an authorized purpose
of the TDC, be included in the County's public records. We also recommend that the TDC
request an opinion from the Attorney General to clarify its authority to expend moneys for
the purposes described in paragraph 278. In the absence of an affirmative clarification
from the Attorney General, the TDC should discontinue expending its resources for such
purposes.
(282) The Executive Director, in his written response to this finding, stated that
the expenditures have extensive supporting documentation. In concluding that the
expenditures were not adequately documented as to their purpose, necessity, and
reasonableness, we considered all documentation provided for our examination, either by
the Clerk or the TDC. The Executive Director reiterated explanations provided to us for
several of the expenditures but did not provide any additional supporting documentation.
Again, these explanations were considered and such documentation was requested in the
development of the findings. The Executive Director cited Attorney General Opinion No.
98-74, issued subsequent to these preliminary and tentative findings, which provides that
it is the responsibility of the governing body of the county to determine whether a
project is related to tourism and that such determination must show a distinct and direct
relationship between expenditures of tourist development tax revenues and the promotion of
tourism. The Attorney General also stated, in that opinion, that it is the governing body
of the county that must make a factual determination as to whether a project is related to
tourism and primarily promotes such a purpose. We have not been provided with
documentation to demonstrate that the expenditures in question were directly related to a
project that had been determined to serve an authorized tourism purpose based on a factual
determination by the BCC.
Contracted Services
(283) Contrary to good business practices and/or the BCC’s Purchasing Policies
and Procedures, TDC purchases totaling $507,248 for goods or services were acquired
without benefit of competitive selection and/or written agreements.
(284) As discussed in paragraphs 198 and 205, as a matter of good business practice,
procurement of goods or services should be done using a competitive selection process to
provide an effective means of equitably procuring the best quality goods or services at
the lowest possible cost, and every contractual arrangement for services should be
evidenced by a written agreement embodying all provisions and conditions of the
procurement of such services. Our audit disclosed the following TDC services acquired by
the TDC without benefit of competitive selection and/or written agreements:
Type of Contractual Service Amount Paid Competitive Written for Services Selection
Agreement?
10/96 - 6/98 Process?
Marketing 426,548 $ Yes No
Engineering 48,802 Yes No
Cleaning, painting, and grounds maintenance 15,655 No No
Lease of building for TDC Information Center 8,100 No (1) No
Cleaning 3,300 No No
Grounds maintenance and landscaping 2, 935 No (2) No
Motivational seminar 838 No No
Lease of copier machine 549 No No
Lease of mini storage building 521 No No
Total 507,248 $
Notes: (1) According to the TDC Executive Director, this building was leased because it
was at the only location that allowed visibility on Highway 331 South. (2) According to
the TDC Executive Director, all area landscape maintenance companies were called but none
of the other companies would accept a new account. However, no documentation of this was
provided.
(285) We recommend that the TDC, as a matter of good business practice and as required
by BCC Purchasing Policies and Procedures (see paragraph 205), award contracts for
professional services only after using a competitive selection process and enter into
written agreements with selected contractors to document the nature of the services to be
performed and the amount of compensation to be provided.
(286) The Executive Director, in his written response to this finding, stated that
the schedule in paragraph 284 is incorrect because the TDC does have a written agreement
for its marketing and engineering services. However, no such agreement was provided to us
for review after our written request to the Executive Director, nor did he provide copies
with his written response to this finding.
Tourist Development Council Travel Expenses
(287) In addition to any other powers and duties provided for agencies created for the
purposes of tourism promotion by a county levying a tourist development tax, such agencies
are authorized and empowered by Section 125.0104(9), Florida Statutes, to provide,
arrange, and make expenditures for transportation, lodging, meals, and other reasonable
and necessary items and services for such persons, as determined by the head of the
agency, in connection with the performance of promotional and other duties of the agency.
Entertainment expenses are authorized only when meeting with travel writers, tour brokers,
or other persons connected with the tourist industry. Complete and detailed justification
for all travel and entertainment-related expenditures must be shown on the travel expense
voucher or attached thereto. All transportation and incidental expenses paid pursuant to
Section 125.0104, Florida Statutes, must be as provided in Section 112.061, Florida
Statutes, except that actual reasonable and necessary costs of travel, meals, lodging, and
incidental expenses may be paid for meetings with travel writers, tour brokers, or other
persons connected with the tourist industry, and for attendance at, or travel connected
with, travel or trade shows. Payments for the costs of per diem and incidental expenses
for foreign travel may be at the rates specified in the Federal publication, "
Standardized Regulations (Government Civilians, Foreign Areas)."
(288) TDC travel expenditures totaled $76,905.39 during the period October 1996 through
June 1998. These expenses included reimbursements to officers/employees for travel
expenses incurred and credit card charges. As discussed in paragraphs 241 through 245, and
Exhibit B, our audit of County travel disclosed numerous inadequately supported and/or
improper travel expenditures. Our separate test of TDC travel-related expenditures also
disclosed similar problems as discussed under appropriate subheadings below.
Unauthorized/Unsupported TDC Travel Expenses
(289) The County’s records regarding TDC travel-related expenses generally were
not adequate to demonstrate the authorized public purpose served and/or compliance with
State law.
(290) Our detailed examination of $76,905.39 of TDC travel-related expenses incurred
during the period October 1996 through June 1998 (242 transactions), including
travel-related credit card charges, disclosed that many of these expenses were
inadequately supported and/or not in accordance with State law as follows (detailed
listings of unauthorized or inadequately supported expenses are included in this report as
Exhibits D and E):
· Supporting documentation for travel-related expenses generally did not indicate how
the expense served a public purpose and/or how the expense benefited the
TDC. In 31
instances included on Exhibit D, and 5 instances included on Exhibit E, documentation
evidencing that the expense was incurred (e.g., receipts, bills, invoices) was not
available (see deficiency type A on Exhibits D and E). In 31 instances included on Exhibit
D, and 173 instances included on Exhibit E, supporting documentation either did not
indicate the purpose for the expense or, if the purpose was stated, did not specifically
indicate how the expense benefited the TDC and was necessary in carrying out the
TDC’s duties as prescribed by law (see deficiency type B on Exhibits D and E). Also,
in 21 instances included on Exhibit E (see deficiency type G), the traveler did not file a
travel voucher.
· In 2 instances included on Exhibit D, and 28 instances included on Exhibit E,
payment was for meals, hospitality, amusement, entertainment, or transportation of
individuals not identified in supporting documentation. Consequently, TDC records did not
demonstrate that these costs were allowable under Sections 112.061(6)(b) or 125.0104,
Florida Statutes (see deficiency type C on Exhibits D and E).
· In numerous instances, convention and conference registration fees and related
lodging and meal expenses were paid; however, convention or conference agendas were not
submitted with the applicable travel expense reports. In the absence of convention and
conference agendas we could not verify compliance with Section 112.061(6)(c), Florida
Statutes, which provides that no traveler shall be reimbursed for any meal or lodging
included in a convention or conference registration fee.
· Section 112.061(5)(b), Florida Statutes, states that no allowance shall be made for
meals when travel is confined to the city or town of the official headquarters or
immediate vicinity except assignments of official business outside the traveler’s
regular place of employment if travel expenses are approved. In 16 instances included on
Exhibit E (see deficiency type D), supporting documentation did not indicate why it was
necessary for travelers to conduct business at a local restaurant rather than at their
regular place of employment. Also, in 8 instances included on Exhibit E (see deficiency
type E), supporting documentation did not indicate why it was necessary for travelers to
conduct business at a restaurant located in a neighboring county rather than at their
regular place of employment.
· Section 112.061(6)(b), Florida Statutes, establishes the amounts travelers are
allowed for meals while on official business. However, pursuant to Section 125.0104,
Florida Statutes, payment for actual meal costs are allowable when such costs are
reasonable and are related to meetings with travel writers, tour brokers, or other persons
connected with the tourist industry, or involve travel or trade shows. In 33 instances
included on Exhibit D (see deficiency type D), supporting documentation was not sufficient
to allow a determination as to whether travelers had been paid meal allowances for meals
also charged to a County credit card. Also, in 19 instances included on Exhibit D and 37
instances included on Exhibit E (see deficiency type F), supporting documentation did not
clearly indicate whether or not the travel was for a travel or trade show. In these
instances, we could not determine whether the traveler’s actual meal costs should
have been paid pursuant to Section 125.0104, Florida Statutes, or whether the traveler
should have been paid a meal allowance pursuant to Section 112.061(6)(b), Florida
Statutes.
· In 15 instances included on Exhibit D (see deficiency type E), supporting
documentation did not indicate the traveler’s place of departure/return and/or time
of departure and return. Such documentation is essential to allow the proper pre-audit of
travel reimbursements to determine compliance with Section 112.061, Florida Statutes,
including a determination as to the entitlement to and reasonableness of the per diem/meal
allowances and mileage amounts claimed.
· In 3 instances included on Exhibit D (see unauthorized expense type 1) in which the
traveler was not entitled to actual meal costs pursuant to Section 125.0104, Florida
Statutes, the traveler was reimbursed for meal allowances that exceeded the meal
allowances authorized by Section 112.061(6)(b), Florida Statutes. Also, in 21 instances
included on Exhibit E (see unauthorized expense type 1), actual meal costs were paid by
the County that were not allowable under Section 125.0104, Florida Statutes. These
exceptions included instances in which travel did not involve meetings with travel
writers, tour brokers, or other persons connected with the tourist industry, or travel or
trade shows.
· In 2 instances included on Exhibit D and 26 instances included on Exhibit E,
expenses were for items such as alcohol, movies, snacks, telephone calls, or gratuities
(see unauthorized expense type 2 on Exhibits D and E). It was not apparent, of record, how
these expenditures were necessarily incurred in the performance of a public purpose.
· In 1 instance included on Exhibit E (see unauthorized expense type 3), a duplicate
payment was made for air fare.
· In 1 instance included on Exhibit E (see unauthorized expense type 4), a ticket
purchased for the TDC Executive Director for a March 1997 trip was not used because the
TDC Executive Director used a different airline to make the trip. Although permissible
under the airline’s policy, the ticket has not, of record, ever been used.
(291) Pursuant to law and BCC policies, adequate documentation for travel-related
expenses should include explanations evidencing the necessary and authorized public
purpose served by the expense and sufficient details of travel to permit a determination
that reimbursements were made in accordance with applicable laws. As discussed above (see
deficiency type G on Exhibit E), many of the inadequately supported and/or unauthorized
travel expenses disclosed by our audit, including those incurred by TDC employees, were
not recorded on a travel voucher and, as such, in these instances, it was not apparent as
to how the expense benefited the TDC and was necessary in carrying out the TDC’s
duties as prescribed by law.
(292) As previously noted, the Clerk has a constitutional and statutory responsibility
for pre-auditing the BCC’s expenditures. We recommend that, in the future, the Clerk
require TDC employees to provide adequate supporting documentation (including properly
completed travel vouchers) for any claims of travel-related expenses which clearly
evidences the necessary and authorized public purpose served. We also recommend that the
BCC and the Clerk review the questioned travel-related expenses disclosed by our audit,
determine the extent of unauthorized amounts paid to employees for such travel expenses,
and consult with the BCC’s attorney regarding procedures to recover amounts not
authorized by Section 112.061, Florida Statutes, including $1,785.70 of unauthorized
expenses as identified on Exhibits D and E ($151 of underpayments on Exhibit D and
$1,936.70 of overpayments on Exhibit E).
Reasonableness of TDC Travel and Promotional Expenses
(293) The BCC had not adopted a policy that provided specific guidance as to what is
considered to be reasonable for TDC travel and promotional expenses and our audit
disclosed several TDC travel/promotional expenses that were questionable as to their
reasonableness.
(294) Pursuant to Section 125.0104, Florida Statutes, TDC travel, entertainment, and
promotional expenses should be limited to those that are necessary and reasonable, as
determined by the head of the agency, in connection with the performance of TDC
responsibilities. Furthermore, although actual transportation and incidental expenses are
allowable pursuant to Section 125.0104, Florida Statutes, for travel that involves
meetings with travel writers, tour brokers, or other persons connected with the tourist
industry, or travel or trade shows, such expenses must be reasonable and necessary. Our
audit disclosed several TDC travel/promotional expenses that were questionable as to their
reasonableness. For example, we noted two occasions in which alcoholic beverages totaling
$383.50 ($195 on October 10, 1996, and $188.50 on October 12, 1996) were charged to a
credit card. We also noted eight occasions in which meal/beverage tips ranged from 25 to
45 percent of the meal/beverages. In addition, during a trip to Tallahassee in August
1997, a car was rented at a rate of $65.99 per day.
(295) Although the TDC, on February 11, 1998, adopted a policy that addresses what
constitutes a reasonable gratuity, the policy does not address other types of travel
expenses such as meal costs (the policy only addresses meal tips), use of common carriers,
and lodging, nor does it address promotional expenses. Furthermore, the TDC policy was
not, of record, adopted by the BCC, and the BCC has not, of record, adopted a written
policy that addresses the allowability of TDC travel/promotional expenses.
(296) We recommend that the BCC, in consultation with the
TDC, amend its travel policy
to provide specific guidance (i.e., such as that included in the TDC gratuity policy) as
to what constitutes an allowable TDC travel/promotional expense.
Vehicle Usage
(297) Adequate vehicle usage logs were not maintained for many BCC-owned vehicles.
Also, assignments of vehicles on a 24-hour basis to employees of the Tourist Development
Council appeared to be contrary to BCC policy and were not justified in the BCC’s
records. Additionally, the procedure used to value the availability of employer-owned
vehicles to the employees was not in full compliance with United States Treasury
Regulations.
(298) During the 1996-97 fiscal year, the BCC owned 106 passenger vehicles, including
25 automobiles and 81 pick-up trucks. Vehicles were assigned to certain employees on a
24-hour basis and those employees were authorized to drive the vehicles to and from home.
Listings provided to us of 24-hour vehicle assignments indicated that 24 and 12 employees
were assigned vehicles on a 24-hour basis during the 1996 and 1997 calendar years,
respectively. BCC Personnel Policies Section 5.50, effective April 22, 1997,
states, " At the end of each day, Countywide employees will park their county
vehicles at the nearest county yard and return there the next day to escort county
equipment. The only county employee permitted to drive a county vehicle to and from their
residence daily is road foremen. County employees shall keep a daily log of vehicle usage
and gasoline pumped into tanks as well as any other services performed on vehicles."
Our review of the assignment of BCC vehicles and of records maintained to document their
usage disclosed the following:
· As indicated above, BCC policy requires that daily logs of vehicle usage be
maintained for BCC vehicles; however, our inquiries disclosed that such logs were kept for
vehicles assigned for only 7 of the 21 departments to which vehicles were assigned. The
policy does not prescribe a vehicle usage log form or the information to be included on
the form. The logs provided for our review generally included information such as the
date, points of origin and destination, beginning and ending mileage, amount of gas pumped
into the vehicle, and other service performed on the vehicle. The logs did not indicate
the purpose of the travel or travel between home and office.
· At a meeting on October 29, 1996, the Board approved a motion stating, " All
county vehicles are to be left at the county office and not driven home with the exception
of the road foremen, South Walton Tourist Development employees and Regional Utility
employees." However, BCC Personnel Policies Section 5.50, as the most recent
expression of the BCC’s intentions, limits the 24-hour assignment of vehicles to road
foremen. Listings of such assignments provided to us indicated that, in addition to the
road foremen, five employees of the BCC’s Tourist Development Council continued to
receive 24-hour vehicle assignments after April 22, 1997, and four of those employees
still have such assignments. We were informed by BCC’s Administrative Supervisor that
the 24-hour vehicle assignments benefit the County by allowing the road foremen and
Tourist Development Council (TDC) employees to respond to emergencies, such as flash
floods, hurricanes, and tornadoes. In the absence of vehicle usage logs that identify
vehicle usage for such emergencies, we could not affirm the reasonableness of the
assignments. While the responsibilities of road foremen appear to be consistent with the
assignment of vehicles on a 24-hour basis for emergency purposes, the basis for such
assignments for TDC employees is not apparent.
· United States Treasury Regulation 1.61-21 provides that an employer-provided
automobile is a fringe benefit that must be included in the employee’s gross income
as compensation for services unless otherwise excluded. The amount to be included is
generally the value of the availability of the vehicle to the employee. However,
alternative methods can be used to value the availability of employer-provided
automobiles, including the annual lease method, the cents-per-mile method, and the
commuting value method. BCC employees who have been assigned vehicles on a 24-hour basis
are allowed to use the vehicles for commuting between home and work.
The BCC has utilized the commuting value method, whereby the value of the commuting use
of the employer-provided vehicle is set at $1.50 per one-way commute (or $3.00 per
round-trip commute); however, this method is allowed only if certain provisions included
in United States Treasury Regulation 1.61-21 are met. Our review disclosed that some of
the conditions had not been met. For example, in order to utilize the commuting valuation
method, the employer must require the employee to commute to and/or from work in the
vehicle and must have established a written policy under which the employee may not use
the vehicle for personal purposes other than commuting or de minimis personal use. BCC Personnel
Policies Section 5.50 does not address these issues. Although BCC Personnel
Policies Section 6.40 provides that " County vehicles are to be utilized for
County purposes only," it does not specifically address vehicles assigned to
employees or provide that such employees may not use the vehicle for personal purposes
other than commuting or de minimis personal use.
(299) We recommend that the BCC review its policies and procedures regarding vehicle
assignments and usage logs to assure that adequate motor vehicle usage logs are utilized
for all vehicles. If it is the BCC’s intention to provide 24-hour assignment of
vehicles to Tourist Development Council employees, the policy should be revised to clearly
indicate such intention and justification for the assignments should be entered in the
records of the BCC. Further, the BCC should review its policies and procedures regarding
employee use of employer-provided vehicles and make any changes necessary to assure
compliance with applicable provisions of the United States Treasury Regulations.
Other Matters
Nepotism
(300) The County had not established adequate internal controls to ensure compliance
with Section 112.3135(2)(a), Florida Statutes, regarding the employment of relatives.
(301) Section 112.3135(2)(a), Florida Statutes, states that a public official may not
appoint, employ, promote, or advance, or advocate for appointment, employment, promotion,
or advancement, in or to a position in the agency in which the official is serving or over
which the official exercises jurisdiction or control any individual who is a relative of
the public official. Section 112.3135(1)(c), Florida Statutes, defines a public official
as an employee of an agency in whom is vested the authority by law, rule, or regulation,
or to whom the authority has been delegated to appoint, employ, promote, or advance
individuals or to recommend individuals for appointment, employment, promotion, or
advancement in connection with employment in an agency.
(302) Our audit disclosed the following employee relationships that appear to be
contrary to Section 112.3135(2)(a), Florida Statutes:
· A Courts Clerk worked in the Clerk’s Courts Division under the jurisdiction of
her mother who is the Director of Courts, responsible for the Clerk’s Courts
Division. Although the Courts Clerk does not report directly to the Director of Courts,
the Director’s responsibilities, as described in her position description, included
planning, directing, and managing Courts Division activities and personnel, including
conducting performance evaluations and implementing performance plans.
· A Clerk’s Circuit Court Supervisor supervised her sister and nephew (both
Courts Clerks). The nephew, effective April 1, 1998, was reassigned to a different area of
responsibility and no longer reports to the Circuit Court Supervisor. Although the
Director of Courts was responsible for conducting performance evaluations of these
employees and signing their time sheets, the Circuit Court Supervisor’s
responsibilities, as described in her position description, included assisting in the
employee performance evaluation process.
The Clerk, in his written response to this finding, stated that both the sister and
the nephew were removed from a personnel supervision relationship early in 1997, when the
Clerk became aware of the relationships, and that the Supervisor is responsible for work
flow and training and not personnel matters regarding hiring, termination, or promotion.
Our finding was based on a May 1997 Position Description for the Courts Supervisor which
indicated responsibilities for interviewing applicants for employment and making
recommendations for hiring, assisting in the employee performance appraisal process, and
recommending disciplinary action. The Clerk did not provide any documentation of approved
exceptions to the Position Description.
· The BCC’s District 5 Assistant Road Foreman worked under the direct supervision
of his son who is the BCC’s District 5 Road Foreman. The District 5 Road
Foreman’s responsibilities, as described in his position description, included
participating in personnel matters affecting subordinates, including appraising and
disciplining of employees.
The Chairman, in his written response to this finding, indicated that in view of the
fact that the finding does not cite a violation of Section 112.3135(2)(a), Florida
Statutes, it seems absurd to recommend reassignment of valuable employees. We concur with
the Chairman and it is for this reason we specifically recommended that where reassignment
was not practical or possible, policies and procedures should be revised to specifically
prohibit employees from taking actions affecting another employee, to whom they are
related, that would constitute a violation of law.
EXHIBIT – A BOARD OF COUNTY COMMISSIONERS AND THE CLERK OF THE CIRCUIT COURT
WALTON COUNTY, FLORIDA ORGANIZATIONAL CHARTS
