03-010 DDA Audit Report

Ermey - Motero

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67 pages

English

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Informations

Publié par	Ermey
Nombre de lectures	14
Langue	English

Extrait

C: The Honorable Mayor Manuel A. Diaz
Commissioner Tomas Regalado
Commissioner Arthur E. Teele, Jr.
Commissioner Johnny L. Winton
issioner Joe M. Sanchez
Commissioner Angel González
Genaro Iglesias, Chief of Staff, City Manager’s Office
DDA Board of Directors
Member of the Audit Advisory Committee
Alonso Menendez, Interim Executive Director, DDA
Dania Vergel, Comptroller, DDA
Dena S. Bianchino, Assistant City Manager, Planning and Development
Robert J. Nachlinger, Assistant City Manager, Finance and Administration
Frank Rollason, Assistant City Manager, Operations
Alejandro Vilarello, City Attorney
Priscilla A. Thompson, City Clerk
J. Scott Simpson, CPA, Director, Finance Department
Marcelo A. Penha, Acting Director, Management and Budgets
File

AUDIT OF DOWTOWN DEVELOPMENT AUTHORITY
FOR THE PERIOD OCTOBER 1, 2000, THROUGH APRIL 30, 2002, AND
SELECTED TRANSACTIONS/CONTROLS THROUGH SEPTEMBER 30, 2002.
TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................... 5
SCOPE AND OBJECTIVES....................................................................................................... 7
METHODOLOGY ...................................................................................................................... 8
AUDIT FINDINGS IN BRIEF.................................................................................................... 9
DOWNTOWN DEVELOPMENT AUTHORITY (DDA).......................................................9
PROCUREMENT PRACTICES – SIGNIFICANT CONTROLS DEFICIENCIES. ....................................... 9
QUESTIONABLE EXPENDITURES. ........................................................................................................... 11
CONTROL DEFICIENCIES OVER THE MANAGEMENT OF FIXED ASSETS. ..................................... 13
INADEQUATE PERSONNEL AND PAYROLL RECORDS....................................................................... 14
BANK STATEMENTS WERE NOT PROPERLY RECONCILED. ............................................................. 16
CURRENT OFFICE LEASE CONTRACT PAYMENT IS NOT COST EFFECTIVE. ................................ 18
LACK OF CONTROLS OVER BUDGET. .................................................................................................... 19
DOWNTOWN ENHANCEMENT TEAM (DET).......................................................................................... 22
AUDIT FINDINGS AND RECOMMENDATIONS ................................................................ 24
DOWNTOWN DEVELOPMENT AUTHORITY .................................................................24
PROCUREMENT PRACTICES – SIGNIFICANT CONTROLS DEFICIENCIES. ..................................... 24
QUESTIONABLE EXPENDITURES. ........................................................................................................... 31
CONTROL DEFICIENCIES OVER THE MANAGEMENT OF FIXED ASSETS. 38
INADEQUATE PERSONNEL AND PAYROLL RECORDS....................................................................... 42
BANK STATEMENTS WERE NOT PROPERLY RECONCILED. ............................................................. 47
CURRENT OFFICE LEASE CONTRACT PAYMENT IS NOT COST EFFECTIVE. ................................ 51
LACK OF CONTROLS OVER BUDGET. .................................................................................................... 56
DOWNTOWN ENHANCEMENT TEAM (DET).......................................................................................... 59
EXHIBIT I ................................................................................................................................. 63
EXHIBIT II................................................................................................................................ 63
EXHIBIT III............................................................................................................................... 65
EXHIBIT IV......... 66

INTRODUCTION

The Downtown Development Authority (DDA) was created pursuant to Laws of Florida,
Chapter 65-1090. The DDA is empowered to engage in the development, redevelopment and
physical improvement activities for the benefit of the Downtown environment and the
maintenance of its economic stability. The DDA encourages, promotes, initiates and assists in
the implementation of public and private projects within its designated district boundaries;
promotes public and private commitments and investments that will ensure the continuing
growth and development of Downtown Miami.

Section 14-52 of the City Code provides that a Board of Directors made-up of 15 members
shall oversee DDA. The members are composed of downtown business and property owners
appointed by the City of Miami Commission; a representative of the State of Florida Cabinet;
and a member of the Miami-Dade County Commission. The DDA board is chaired by a City
of Miami Commissioner appointed by the Commission.

Section 14-60 of the City Code authorizes the City Commission to levy an additional ad
valorem tax on all real and personal property in the downtown district area, not to exceed one-
half mill on the dollar valuation of such property, for the purpose of financing the operation of
the downtown development authority. This levy of one-half mill per dollar ad valorem tax
shall be in addition to the regular ad valorem and special assessments. These funds, which are
collected by the tax collector are transmitted to the City and deposited into DDA’s account.
The DDA also receives grants monies from other government agencies, which provide
additional funding for DDA projects.

The Board of Directors of DDA, is responsible for undertaking the following activities:

• Monitor downtown development and redevelopment activities and assist the public and
private sectors in the implementation of proposed development projects and potential
investment.
5
• Monitor downtown environmental condition and initiate improvements as necessary to
mitigate any problems that impact on the health, safety and welfare of the downtown
community.
• Encourage, initiate, and provide technical assistance in the maintenance, improvement
and development of all infrastructures serving downtown, including, but not limited to,
the downtown transportation network (vehicular access, circulation and mass transit).
• Promote and assist in the development of public/institution facilities, amenities and
programs, which serve the local business and the residential community in downtown;
attractions that will benefit the greater Miami area and encourage public participation
from the entire South Florida Community.
• Promote the recruitment and development of new businesses and encourage the
improvement of the business environment within the downtown area.
• Promote the continuing development of downtown Miami as the business center of
South Florida and the State of Florida as a whole.
• Promote and support any actions, planning efforts, physical improvements,
development and redevelopment activities that will ensure continued growth, increase
the tax base and improve the overall economic/business climate of downtown Miami.

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SCOPE AND OBJECTIVES

The proper administration of public funds requires agencies to establish and maintain internal
controls that would ensure that the agencies achieved their primary objectives/responsibilities
as mandated by the City Code/Charter. As part of its oversight responsibilities, the Office of
Internal Audits (OIA) performs financial, operational, performance, and compliance audits to
determine the extent of compliance with those objectives. The audit included an examination
of certain financial transactions, operational, and compliance related issues. The examination
covered the period of October 1, 2000, through April 30, 2002 and selected
transactions/controls through September 30, 2002. In general, the audit focused on the
following 7 objectives:

• To evaluate the effectiveness of internal control as it relates to the processing of certain
financial transactions.
• To determine whether selected expenditures and other transactions were properly
authorized, documented, economical, and served a public purpose.
• To evaluate the internal controls relating to the hiring process and the disbursement of
payroll checks.
• To determine whether the audited financial statements of the DDA are in agreement
with the financial information reported on the City’s Comprehensive Annual Financial
Report (CAFR) for fiscal year September 30, 2001.
• To determine whether the reimbursement received for grant-funded projects are
properly recorded and deposited in the appropriate bank account.
• To determine whether fixed assets are properly safeguarded.
• Other audit procedures as deemed necessary.

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METHODOLOGY

We conducted our audit in accordance with generally accepted government auditing standards
and applicable standards contained in the Standards for the Professional Practice of Internal
Auditing, issued by the Institute of Internal Auditors. To obtain an understanding of the
intern