Updates on the Fight for Quality Public Education in Brevard County, FL
0:00 Good morning. The Joint Board Audit Committee meeting is now in
0:03 session.
0:04 Can you have a roll call please? Ms. McDougal? Present. Mrs. Gamble?
0:08 Present. Mr. Susan? Present.
0:10 Mrs. Escovert? She’s absent. She will be joining us as soon as
0:18 she can.
0:18 Okay. And Mrs. Belfer? Present. Please stand for the Pledge of
0:23 Allegiance.
0:23 I pledge allegiance to the flag of the United States of America,
0:31 and to the republic for which it stands, one nation, under God,
0:36 indivisible, with liberty and justice for all.
0:39 All right, Dr. Mullins, I believe you are starting us off this
0:45 morning.
0:47 Good morning. I just wanted to take the opportunity to introduce
0:52 a new individual around the table with as much joy and exuberance
1:00 as I can because it’s been a road the last few months without a
1:06 chief financial officer.
1:08 Cindy Lisinski is our new CFO, a distinguished career in the
1:18 military as a finance director, budget director, chief financial
1:23 officer with budgets of like magnitude as ours and some of the
1:29 same kinds of funding complexities for the federal government
1:34 that we experience at the state level.
1:36 So she has done a fabulous job of jumping in with both the
1:40 learning, learning, getting familiar with her staff and our
1:45 district and how things operate, and just already made valuable
1:50 contributions to the team and our processes.
1:53 So, Ms. Lisinski, welcome again.
1:56 All right. Thank you.
1:57 And welcome to the audit committee. We will bring you along
2:01 along the way, so.
2:03 I’m glad to be here. Thank you.
2:07 All right. And I think at this point we are turning the meeting
2:10 over to Mr. Art Edwards, our audit committee chair.
2:13 Good morning.
2:19 There’s one other person that you didn’t introduce.
2:22 Oh.
2:24 Yes.
2:25 My apologies.
2:27 Also, I didn’t realize, that’s right, we have not met since last
2:31 year.
2:32 November.
2:34 Mr. Paul Gibbs, our new general counsel, comes to us from
2:38 previously general counsel in Marion County.
2:41 He has been on, he has been on board since January 6th.
2:45 And there’s just, there’s been a few things that have come up.
2:48 So his timing was impeccable.
2:51 But he’s done also, done just a fabulous job of hitting the
2:56 ground running and catching up with all of the things that are
3:01 going on.
3:02 As you can imagine, most recently spent a lot of time reviewing
3:07 our processes around just a little thing that’s getting some
3:12 news attention these days.
3:14 CB-19 as we’ve finally called it, but been a valuable part of
3:18 the team already.
3:20 So welcome.
3:21 Thank you.
3:22 And audit committee.
3:24 Glad to come.
3:25 Thank you.
3:27 Okay, what we can do is…
3:30 Mr. Edwards, is Mr. Slate there?
3:32 Yes.
3:34 I was going to get him on board.
3:35 Oh, okay.
3:36 I thought he was getting excited to introduce him.
3:39 And I was like, wow, this is the most excited introduction that
3:42 I’ve ever seen.
3:43 So I was waiting for Mr. Slate over here to be okay, so I didn’t
3:46 want him to be forgotten.
3:48 Okay.
3:49 I’m sorry, can I interrupt one time?
3:51 Is Wally not part of the committee anymore?
3:54 Yes, he is.
3:55 Okay.
3:56 Mr. McDougal, he’s in the hospital having some medical testing.
3:59 Oh, I did not know that.
4:00 He was unable to be here.
4:01 He emailed me yesterday.
4:02 Great.
4:03 Thank you.
4:04 Okay.
4:05 I’m sorry.
4:06 Okay, and we will introduce ourselves as we go through the
4:10 presentation.
4:11 That’s okay.
4:12 Give me a jump gun on you, Mr. Edwards.
4:13 That’s fine.
4:15 Okay.
4:16 Next page.
4:17 We’re basically going to cover 12 or 13 items in terms of what
4:22 we as an audit committee are
4:23 responsible for and what we do.
4:26 Initially, we’re going to talk about our financial oversight
4:29 responsibilities.
4:30 We’re going to introduce the committee members.
4:32 Talk a bit about the reporting structure.
4:35 How the external and internal auditors all kind of play into
4:39 this whole mix.
4:41 We’re going to talk about how we implement internal audit.
4:44 The audit universe is this paper here that shows – it’s kind of
4:50 a historical document,
4:52 as well as a look forward.
4:54 Here we’re going to look at where we’re focusing this year and
4:59 highlights from the past year and
5:02 what we hope to achieve in 2020.
5:05 And talk about some corrective actions and remediations that we
5:09 have ongoing.
5:12 And we’ll end shortly after.
5:15 Go to the next page.
5:18 There’s an interconnection between the audit committee in terms
5:24 of an interface with the external auditors,
5:27 internal auditors, and district staff.
5:30 And it is our collective responsibility to make sure that we
5:35 implement fiscally sound,
5:39 fiscally fit processes for the citizens of Nevada County.
5:47 The audit committee members is myself, Wally, and we’ll go
5:53 through and do a little more formal introductions on the next
5:57 page.
5:58 And, of course, we – Mrs. Deskovich was the ex-officio school
6:02 board chair last year,
6:04 and Mrs. Delford is this year’s school board chair.
6:08 We operate under school board policies 6705 and school board
6:13 policies 6700.
6:15 If you flip to the very next page, this is where we introduce
6:19 our sales.
6:20 My name is Art Edwards.
6:22 I’m retired from over 45 years working in the space program, manned
6:28 space programs.
6:29 I worked Apollo.
6:30 I worked shuttle.
6:31 Did a number of things.
6:33 I’m a degreed engineer, but I ended up being the corporate
6:37 safety manager for United Space Alliance.
6:40 I’m responsible for environmental safety and health across the
6:45 state of Florida for USA.
6:48 I also hold a general contractor’s license, and I do some other
6:52 things.
6:53 I’ve been on the audit committee for over 12 years.
6:56 Mr. Lust, if you could just kind of introduce yourself.
6:59 Yes, I’ll be there.
7:02 I’m retired from Blavard County Board of County Commissioners
7:05 after being there for 31 years.
7:07 I just told Mr. Slate I tried sitting out for three months and
7:10 not doing anything like to be really retired.
7:13 It did not work for me.
7:14 So I started to work for a not-for-profit here in the county
7:17 called Career Source Blavard.
7:19 I’ve been there for almost 10 years now, and I’ve been on this
7:22 particular board learning lots every year for the last seven
7:27 years.
7:29 My name is Jim Slate.
7:31 I’ve had 40 years experience in various positions as far as
7:34 accounting is concerned, both public and private accounting.
7:38 I’m retired from Health First.
7:43 I’ve worked with them for about 18 years.
7:45 Don’t hold it against me, but I was responsible for the billing
7:48 and collections operation and a lot of other things that go
7:53 along with that, too.
7:54 I’m happy to be part of the board.
7:56 I’m Nicole Tolbear.
7:58 I represent District 3.
8:00 I have three boys in the school board, so I have the vested
8:03 interest in making sure we are fiscally responsible to work.
8:07 I’m a CPA and I am a controller in the private industry right
8:12 now, and I was in public before that.
8:16 Okay, and our missing number is Wally Mahid.
8:19 I’ve known Wally for many, many years.
8:21 We worked together at the Space Center.
8:24 He was one of the engineering guys on the team, and he’s been on
8:29 this board for, I guess, a year and a half, maybe two years,
8:33 somewhere and a half.
8:35 Okay, if you go to the next page, we kind of have a top-down
8:41 structure when we look at our reporting scheme.
8:47 We all report to the citizens of LaVar County.
8:52 Immediately under the citizens of LaVar County, we have the
8:57 school board and the superintendent’s cabinet and the quality
9:02 control function, which we’re looking at.
9:06 The audit committee reports directly to the school board and the
9:11 internal and external audit functions report to the audit
9:16 committee.
9:18 The school board attorney reports to the school board of LaVar
9:21 County.
9:22 The next page.
9:23 In terms of external auditors, in 2014, we recommended to the
9:29 school board for Moa Steven Loveless to be selected as the
9:34 external auditor for the district.
9:36 And this was a combination of an extensive RFP process.
9:41 In fact, it’s a process that we, along with members of the
9:44 district, developed.
9:46 And it is comprehensive.
9:48 And I think it will qualify as a best practice.
9:53 At any rate, a three-year contract was awarded in 2014,
9:57 including four optional one-year extensions.
10:01 The Florida Auditor General comes in every three years and does
10:08 an external audit of LaVar County records.
10:14 The AG function started their audit fiscal year 2019.
10:20 I think some of that is still ongoing.
10:24 We have previously recommended to the school board to exercise
10:28 one-year options to facilitate the auditor general working in
10:33 concert with the external auditor to kind of streamline the
10:36 process.
10:37 And this has proven to be very, very beneficial.
10:40 The things that MSL have been able to contribute in terms of
10:47 little caps and holds, otherwise would have probably consumed a
10:53 lot of time from the AG.
10:55 In October 2019, MSL gave us an unqualified audit opinion, clean
11:01 audit, for the 2019 fiscal year.
11:06 And in conjunction with that, members of the audit committee
11:10 completed a fraud awareness questionnaire.
11:13 In terms of the internal auditors, in 2018, the audit committee
11:19 recommended to the school board that RSM be selected as the
11:23 district’s internal auditor.
11:26 The recommendation, again, was the culmination of a fairly
11:30 extensive RFP process.
11:32 We looked at a number of other firms and determined that RSM was
11:37 the one to go with.
11:39 A three-year contract was awarded with three optional one-year
11:43 extensions.
11:44 And that was based on the recommendation by the audit committee
11:48 to the school board.
11:50 The initial term of the RSM contract ends in July 2021.
11:55 The fiscal year 2019-2020 total budget approved for the internal
12:02 audit contract is $199,500.
12:06 In addition, there are some almost $117,000 available for other
12:12 internal audit services.
12:15 I might add that the price that we paid for internal audits has
12:19 been fairly constant over the years.
12:23 And I think this is a credit to RSM as well as us working
12:26 together to diligently determine the things that needs to be
12:31 looked at.
12:32 And working to get those done at a reasonable cost to the
12:36 taxpayers.
12:37 We have – we just took a pimp with the performance of RSM.
12:42 They have historically done everything we needed them to do.
12:47 And they’ve identified all of the reporting that we need from
12:51 our committee members.
12:52 And they’re very timely in their response to audits.
12:55 So how do we do audits?
12:57 If you look at the next page, we basically use a four-component
13:03 matrix.
13:04 And that matrix, it looks at functions with high exposure and
13:09 high priority.
13:11 And those are the things that typically would keep senior
13:15 leadership and the school board awake at night.
13:20 If you look at the matrix, beginning on the bottom left-hand
13:26 corner,
13:27 those items with low exposure and the risk coverage is fairly
13:33 low, the likelihood of occurrence.
13:35 So we basically monitor those functions.
13:37 If you put your attention on the right-hand bottom side,
13:41 moderate exposure with maybe a high risk,
13:47 we do some self-assessments on a rotational basis.
13:50 As you go up to the high level, that’s where we get into the
13:53 stuff that we’ve got to pay a lot of attention to.
13:57 Where the risk impact is high and the likelihood of occurrence
14:02 is beginning to be high.
14:04 And over on the right-hand side, those are the big dogs.
14:10 That’s where we have to put the most attention.
14:14 Am I going too fast?
14:16 Okay.
14:17 Okay, the next page, there’s a lot on this chart.
14:21 It’s very comprehensive.
14:22 But what it shows, basically, is within the world of internal
14:28 auditing, we look at compliance.
14:31 We look at financial management.
14:34 We look at performance, operational performance.
14:37 And we also have done some deep dives into information
14:41 technology.
14:43 This is all done based on this matrix.
14:47 And this chart is something that when you have absolutely
14:50 nothing else to do, you kind of go down and read through it in
14:54 detail.
14:55 But the point of the matter is we spend the bulk of our time in
14:59 operational performance.
15:01 But we do hit those other areas when needed.
15:04 And again, it’s based on risk and exposure.
15:09 The internal audit universe, as we’ve said before, is this
15:14 handout.
15:15 This is something that has evolved over the years.
15:18 I guess we started this probably back in 2008, maybe, somewhere
15:22 in that time frame.
15:23 And there’s been a maturation process.
15:26 But it allows us to have a visual so we can fairly easily see,
15:31 one, what we’ve done previously,
15:34 where our potential needs to be and to plan forward on a manual
15:42 basis.
15:43 We basically have five different items that we focus on from an
15:49 internal audit standpoint.
15:53 We have district-wide audits.
15:55 We have individual function audits.
15:57 We have cycle audits.
15:58 We have follow-ups.
16:00 And then we have other audit projects that come along from time
16:06 to time.
16:07 The next page looks at follow-up audits.
16:10 Basically, this is a requirement from the International
16:17 Standards for Professional Practice for Internal Audit.
16:22 And that’s performance standard 2500.
16:25 The follow-up audits look at open issues from previous audits to
16:30 make sure that those open issues have been properly remediated.
16:34 If there are management actions, have those management actions
16:38 been effectively implemented?
16:41 And in some cases, senior management decides to not completely
16:46 implement the actions.
16:48 And senior management does their own risk assessment and
16:52 determine that we’re going to go with the risk and come up with
16:57 the rationale for taking that risk.
17:00 The intent of a follow-up audits is just to validate, and this
17:04 is done on a sample basis, but it’s to validate how effectively
17:08 we’ve remediated items and if those remediation controls are
17:15 properly working.
17:18 So, district-wide audits is the next audit that we do.
17:21 And those are addressed processes and functions that touch all
17:27 district departments or functions and processes that touch most
17:33 departments within the district.
17:35 District-wide audits are designed to gain the confidence of
17:39 scale, and they do that by taking a very broad, high-level,
17:44 district-wide view of a particular function.
17:48 Evaluate the implementation of policies, procedures, standards,
17:53 and best practices across the district as a whole.
17:57 An example that we typically give is PCOS, where we look at PCOS
18:03 across the district, and that would include PCOS issued to
18:07 schools and to school departments.
18:14 The next audit is the individual function audits, and those
18:19 focus on unique scenarios or unique processes within a specific
18:23 department.
18:24 Individual function audits may also focus on processes or
18:28 scenarios within several departments, but the operative word
18:34 here is they do not target all departments in the district.
18:39 And if we continue with the PCOS example, a PCOS audit of food
18:45 services will focus on their risk and controls for transactions
18:51 related only to food services.
18:54 Then we have cycle audits.
18:58 Cycle audits are very narrow in scope, much more narrow than
19:02 district-wide and individual function audits.
19:05 Cycle audits are very specific to inherently high-risk,
19:09 decentralized functions and processes.
19:12 They provide testing and reassurance that policies and
19:16 procedures are being followed within different departments.
19:21 That controls continue to be effective once it has been
19:24 determined that they are appropriately designed and implemented.
19:28 And from time to time, we do go and look at the design of the
19:32 controls to make sure we’ve got it right.
19:35 And a good example there is property control.
19:38 We’ve had, for a number of years, we’ve had continuing
19:43 improvements in property controls, and I would credit that
19:49 largely with some of the cycle audits that we’ve done.
19:51 There are additional internal audit projects that are performed,
19:58 and those projects focus on areas of functions that are high
20:03 exposure and high priority based on risk ranking.
20:07 The internal audit special projects that address solutions or
20:12 potential situations outside of our existing audit plan that the
20:21 board, the audit or the management of the school board may
20:24 become aware of.
20:26 The internal audit special projects that are generally
20:30 specifically defined and narrowly focused.
20:33 And some examples are some things that happened with our galley
20:38 high school where we had to go in and do some deep diving and
20:42 digging.
20:43 In the transportation department, we had some issues that we
20:49 worked as a special project.
20:52 And both of these turned up items that needed to do some further
20:58 investigations and actions.
21:02 If you look at 2018-2019, you look at our follow-up audits, our
21:09 provide audits, our individual audits of the half sentence surtax.
21:15 If you look at some of the additional things that we did,
21:19 internal accounts, the pharmacy review, whistleblower complaint,
21:24 all of these have been completed.
21:27 If you look to the next page, 2018-2019, follow-up audits
21:34 complete district-wide, we’re purchasing this complete internal
21:42 and external penetration test in progress.
21:44 We’ve looked at Legacy Academy, we’ve looked at the half
21:48 sentence sales surtax, and we’ve completed the internal audits
21:53 for fiscal year 2019.
21:56 Fraud awareness has not yet started, but this is where we are
22:02 for this current fiscal year.
22:06 One of the things that I’m most proud of is results.
22:13 And this chart shows results.
22:16 We’ve had 107 audits completed since the inception of this
22:20 committee in fiscal year 2000.
22:23 Of those 170, 35 were cycle audits, 36 were district-wide audits,
22:29 70 individual audits, looking at high risk areas.
22:33 And 29 were additional audit projects.
22:37 Follow-up procedures conducted and reported to audit committee.
22:42 We’ve had a total of 377 total corrective actions that have been
22:47 reported since the inception of the audit committee.
22:52 Ninety percent of those corrective actions have been validated
22:54 and closed through the formal follow-up process.
22:58 Another thing that we’re especially approved, or rather, we’re
23:04 especially happy to report, is that we’ve made some significant
23:09 improvements.
23:10 And those have been gained by somewhat stepping outside of the
23:14 internal audit function, but ensuring that when we find
23:20 something that touches several departments or several areas,
23:23 that we share those lessons learned, that we go and address
23:28 training, that we go and ensure that that knowledge and that
23:32 information gets spread across the district.
23:34 As well as if we find a best practice, we make sure that those
23:38 best practices are shared across the district.
23:41 So I think these are the kinds of things that make this function
23:49 effective.
23:51 So what are we going to do this year?
23:53 In September, we had our off-site workshop and training.
24:00 And Mr. Slate, we’re going to have to get you up to speed.
24:03 We do have a new members package, and I don’t know if you’ve
24:07 received one of those yet or not.
24:09 But we do have a new members package that has a lot of
24:12 information.
24:13 As well, RSM will sit down with you and kind of run through the
24:17 process and get you up to speed on –
24:21 Does that mean he doesn’t have to take the exam since he didn’t
24:25 get the packet?
24:26 Or should we make an issue?
24:27 No.
24:28 We’ll go ahead.
24:29 Okay.
24:30 As long as it’s not a three-day exam, I’m okay with it.
24:33 We’ve got a baseline here, so we’re going to do that today.
24:38 Our next formal off-site training is scheduled for September 3rd,
24:42 2020.
24:43 And the reason for these workshops, one, is to make sure that we’re
24:47 all pretty much on the same page.
24:50 They also allow us to put anything on the table that we think
24:54 can add to or improve the process.
24:58 It’s very informal, and so far it’s been very effective.
25:04 This year we will, again, do annual evaluations of the internal
25:08 auditors as well as the external auditors.
25:11 And in my mind, this is ultra important, is that we give these
25:15 guys a report card on an annual basis.
25:18 So if for some reason they’re unhappy, they’re nowhere unhappy.
25:22 And we can allow them to go do whatever corrective actions they
25:26 need to do.
25:27 But we’re happy.
25:29 We are very happy.
25:31 The documentation of the external audit RFP process is being
25:36 completed.
25:38 It was completed in late 2014, but we still brush that up and
25:42 touch it up as we need to.
25:44 The internal audit process, we did some brush up on that in 2018
25:50 as we went through the process again.
25:53 The internal audit and external audit contract recommendations,
25:58 we will be making those to the board.
26:00 And we’re looking to continue with improvements in how we
26:05 function and how we identify and prioritize and manage our
26:09 action items.
26:10 Again, this is one of the things I think that has allowed us to
26:15 become a better group, is that we don’t lose sight of things
26:19 that we need to do, things that we said we’re going to do.
26:23 And we hold ourselves accountable to ensuring that we get things
26:27 done on town and now.
26:29 We also will continue maintaining sensitivity to opportunities
26:33 for improvement.
26:35 And this is part of our continuous improvement process.
26:38 The half-sale tax accountability, we will support that as
26:42 required.
26:43 RSM, I’m happy to say, have been more than just go look at how
26:48 the half-sale tax group is doing.
26:52 They’ve also shared information with them and helped them to
26:56 improve their processes.
26:58 So this has been, this has worked really, really well for the
27:02 district.
27:03 We still have an open item to look at our charter to see if
27:08 there is an opportunity to make some improvements.
27:13 But we want to be smart about it.
27:15 We have a very good process now.
27:18 The process can always be made better.
27:20 But we need to look at it with deliberation and not be ashamed.
27:26 I’m happy to report that in terms of our goals and objectives,
27:31 we are 100% complete.
27:33 And not because we keep the bar low, but because I think we’re
27:37 very diligent in approaching our goals and objectives.
27:41 And I’ve done that quickly, and hopefully I’ve got the southern
27:44 drawl.
27:45 I’m talking real fast.
27:47 Hopefully it came across okay.
27:49 Any questions?
27:50 Okay.
27:51 Very thorough, sir.
27:52 I’ll turn it back to the chair.
27:53 Oh.
27:54 Can I say one more thing?
27:55 Absolutely.
27:56 I think most people know that I’ve got a situation with my
28:06 daughter, and she has an epidural set up for this morning.
28:11 She doesn’t drive.
28:12 She’s in the wheelchair at this point.
28:14 So I’m going to have to book out of here so I can get her to the
28:17 pain management over in there.
28:19 I don’t know.
28:20 But I’m going to stay as long as I can.
28:24 Okay.
28:31 All right.
28:32 If there’s no board discussion, then we are scheduled to move
28:39 into the regular audit committee.
28:42 But the only one that has to stay with you, and I don’t think
28:46 you can start at the meeting until 10:00 because it’s advertised.
28:50 We advertised to start at the 10:00 because usually this
28:53 discussion takes a lot longer than it did today.
28:56 Yeah.
28:58 Okay.
28:59 So you want me to reset the joint meeting until 10:00?
29:01 Okay.
29:02 And you’re coming back, but we’re not.
29:04 Is that what I just heard?
29:05 Correct.
29:06 You’re welcome to.
29:07 No, I know.
29:08 Can I say one thing before you adjourn?
29:09 Say whatever you want.
29:10 I just wanted to say thank you for your leadership and Don Lusk
29:13 and RSM.
29:14 We discussed this in our court evaluation the other day about
29:18 how the turnover in our departments and at the top, both the
29:22 school board and many of our district leaders, has been an area
29:26 for risk.
29:26 And having the ability to come back to you guys with some of
29:28 those experiences that you’ve had throughout the years is
29:31 amazing.
29:32 I referenced to Mr. Lusk when we were having an issue with
29:35 Legacy Charter, and he remembers going all the way back with
29:38 Barbara Murray.
29:39 And he was talking about some of the stuff they were dealing
29:42 with back then.
29:43 And that insight is amazing.
29:44 Mr. Slate, I think it’s going to be great having you on the
29:46 addition because we have some healthcare concerns in different
29:48 areas and you’ll be able to bring that expertise to it.
29:51 But in general, I just wanted to say thank you for what you guys
29:54 have done for a long time.
29:55 And I really appreciate you guys, and please don’t go anywhere.
29:59 We really need you guys.
30:01 Thank you.
30:02 And don’t forget Nicole.
30:03 No, Nicole is amazing.
30:05 I mean, do you want me to go around the road?
30:07 I can just keep going.
30:08 I mean, no.
30:09 Thank you.
30:10 Nicole has been on the board now for a year and a half, right?
30:15 A little longer than that now.
30:16 Two years?
30:17 How long?
30:18 Four now.
30:19 Four.
30:20 I fly under the radar.
30:21 I don’t know.
30:22 Mr. Susan, it’s nothing if not appreciative.
30:25 Thank you.
30:27 I would like to say a couple of things.
30:30 Go ahead.
30:31 A little please.
30:32 Well, first of all, for the people that’s new to the process,
30:36 this process has evolved.
30:38 And I’ve been here for a while.
30:41 And I intend to stay as long as I’m wanted.
30:44 One of the things, well, a couple of things that I need to make
30:47 sure you’re aware of.
30:49 In 2000, I think my date’s wrong.
30:53 Sometime in 2000.
30:54 Maybe in 2012.
30:57 When Governor Bush was in office, the Water County School Board
31:01 received the Sterling Award.
31:03 And the audit committee was very prominent in the write-up for
31:07 that Sterling Award.
31:09 We have also been benchmarked by other school districts.
31:14 This process has been benchmarked by other school districts.
31:18 I don’t think we, as the members, can take all of the credit.
31:23 I give a lot of credit to the school board because they’ve been
31:26 very selective, in my opinion,
31:28 of bringing people onto the board.
31:30 Typically, we’ve had CPAs.
31:33 From time to time, we’ve had attorneys.
31:35 We’ve had forensic accountants.
31:37 We’ve had people like Don and myself who understand finances but
31:41 don’t come from the finance world.
31:43 I’m more of a project management procedure.
31:47 And from time to time, you hear me talk a lot about that.
31:50 But I think the balance has always been very effective in
31:54 ensuring that this process,
31:57 because we all bring different things to the table.
31:59 We all have different passions, and we all have different groups
32:03 of knowledge.
32:05 But for the people that are new to this process, I would say
32:10 just observe,
32:11 and I think you’re going to find that this is a very, very
32:14 unique committee, decided committee.
32:17 I’m sorry.
32:18 If Ms. Belford doesn’t mind, I would like to just bring up one
32:24 topic that is applicable to both,
32:27 all parties and as an update, and it saves me individual phone
32:31 calls to my board as an update,
32:34 but just from an efficiency perspective, the board in the audit
32:39 committee is aware that we are in the middle of the AG,
32:44 the every three year AG audit, and I had an exit interview
32:50 conversation with the AG.
32:52 Ms. Lisinski wasn’t here yet.
32:56 I want to say it was January, right after the first of the year.
32:59 And they went through some of the potential findings in the
33:04 audit.
33:05 And one of them was the finding or evaluation of the finding of
33:11 not meeting the Florida statute for the district to employ an
33:18 internal auditor.
33:19 So it’s an interesting – we discussed it at the off-site
33:23 workshop in November.
33:25 Is that right?
33:26 So I thought I’d provide you an update.
33:29 It’s an interesting – yet another interesting conundrum, if you
33:33 will.
33:34 The AG indicated – we discussed the fact that in the
33:39 interpretation of the statute,
33:42 Brevard County was actually noted as an exemplar of meeting that
33:46 expectation by virtue of our audit committee process,
33:50 the employment of RSM and external auditor to meet that internal
33:55 audit function,
33:56 and that the audit committee reports directly to the board.
33:59 However, it has since been determined that the word employ is a
34:06 literal application of a –
34:12 the internal auditor must be a school board employee.
34:16 Can I interrupt and say I’m not so sure that it has been
34:19 determined, but it has been interpreted by the auditor general’s
34:24 office to indicate?
34:25 Correct.
34:26 Because I still contest with that.
34:27 Yes.
34:28 As do we.
34:29 So in my conversation with the AG, it was interesting.
34:33 I pushed back on the change of interpretation.
34:39 And his response was, well, understand that all of these go to
34:44 the AG to review all of these findings.
34:47 And then – I don’t remember who our AG is.
34:50 Jim’s welcome.
34:51 Thank you.
34:52 Well, he’s our local, but it goes up the chain to –
34:56 In any case, and they either validate the findings and they
35:05 stick or they dismiss the finding before the final audit is
35:09 presented to us as district.
35:12 So he indicated it’s going to go up the chain and not sure if it
35:18 will stick or not.
35:20 I want to be transparent about the fact that it was identified
35:25 as a finding, but even in my conversation with our local AG, Tim
35:31 Tucker, not a – the highest level of confidence that it is
35:36 where it is going to stay.
35:38 So I don’t want to suggest – we, as a district, we have not
35:43 moved forward with the employment of an internal auditor.
35:49 One, it will be at a considerable additional cost to the
35:54 district, but not because it isn’t valued or important, but by
35:58 virtue of other districts have been building their model around
36:03 that statute against Brevard,
36:05 and us not making a hasty decision, we have been standing on our
36:10 current structure.
36:12 But I – if it comes back that we must employ, then we will
36:16 certainly reevaluate because we want to be as completely and
36:22 openly transparent with all of our finances, every element
36:26 aspect and perspective of the school district.
36:30 And it’s not a matter of that.
36:31 It is just trying to balance fiscal responsibility with our
36:34 statutory requirements and so on.
36:36 So we’re waiting to get word back from –
36:39 Cheryl Norman.
36:40 A.G. Norman.
36:42 And then we’ll be making a decision from there.
36:47 If you – if the audit committee recalls, and for the board, we
36:52 had a quality control or quality assurance function in the
36:56 district that could have potentially been modified to meet that
37:02 internal audit requirement, if that’s what happens.
37:06 The positions dedicated to that function were vacated probably
37:11 close to a year ago now.
37:13 And I made the decision to not fill those positions in reevaluating
37:18 the function, reevaluating the alignment in the organization.
37:23 And then shortly after that, then came the A.G. or the audit.
37:28 And so that – those positions continue to remain on hold, if
37:32 you will.
37:33 They have not been cut from the budget, but they have not been
37:36 reallocated as well.
37:37 So just wanted to provide that status update and just be
37:40 completely open and transparent about where we are with that
37:44 particular function as it relates to the audit committee.
37:47 Can I say something as follow-up?
37:49 Sure.
37:50 So when I worked at Greenberg-Troyd, we did the legislative
37:52 intent research for all of them.
37:53 And when we found inside the committee that the legislators were
37:56 saying this is what it – and when it’s in print, it supersedes
38:00 any opinion that goes on because it’s the intent of the law.
38:03 So I think we’re on good standing for what we’re doing.
38:06 And just what Art was saying, we became a model so that that’s
38:09 why we were referred to in that committee.
38:12 So for them to turn and reverse that, I think maybe part of the
38:16 process is for us to reach out to the committee that developed
38:19 that because it was a committee substitute bill that was brought
38:23 up and it was referred to in a staff analysis in that committee.
38:26 Those gentlemen can give testimony and give legislative intent
38:29 that supersedes the Attorney General.
38:31 Just a thought.
38:33 When they do make a determination, did they indicate a timeframe?
38:37 That’s what I was just going to ask next.
38:39 Right.
38:40 They didn’t.
38:41 I met with Tim Tucker and –
38:43 Tim Tucker and Claire Waters.
38:44 Yes.
38:45 No, it was two gentlemen.
38:46 I think the other name was Mark.
38:47 Yeah.
38:48 Mark Henning.
38:50 Did they – that was in January, I want to say?
38:53 I think mid-January.
38:54 It was a couple of weeks after we came back from the break.
38:57 And they were sending it up the chain from there.
38:59 It was the preliminary findings of the audit.
39:02 So I don’t have the time.
39:03 I care.
39:04 Could you follow up and find out when they anticipate bringing
39:12 something back to us?
39:15 Sure.
39:16 I would also add to that, how long we had to respond.
39:20 I mean, if they make a determination, are they going to give us
39:23 a month to find, to fill that role?
39:25 Well, I did go further with my little bit of pushback in that
39:31 the statute came out, I believe, I think it was in legislative
39:38 session 18, applied to 18-19.
39:40 We thought we were in good standing in 18-19.
39:44 And I said, we just renewed a contract with RSM for three years,
39:48 I believe.
39:49 Or, not renewed, but we did a new contract.
39:52 I said – thank you, Mr. Edwards.
39:57 This shift, or suggested shift in the interpretation of the law,
40:03 comes at considerable financial impact to the district.
40:08 So I said, I would ask at the very least, we be given time to
40:14 live out the contract with RSM and have the opportunity at that
40:19 time to reevaluate the allocation of dollars.
40:21 And its role with the audit committee.
40:24 He said, I think his response was, I understand your request.
40:29 Okay.
40:30 So, I don’t know what that will mean when it comes down to the
40:32 end.
40:33 We may be obligated to, you know, and maybe not even obligated,
40:37 but it may be prudent to, you know, fill that position more
40:43 immediately or depending on what position that is.
40:48 I don’t want to give any suggestion that we’re not willing to
40:52 meet levels or measures of accountability to ensure that our
40:56 organization is on the right standing.
41:00 That’s not the issue.
41:01 It’s just trying to balance all of the –
41:02 When I do recall, when we were looking for someone to fill that
41:06 quality control or that individual internal auditor position, it
41:09 took us quite a ton.
41:11 One of the challenges I have is who out there and with what kind
41:18 of credentials could come in and serve as a all things internal
41:25 auditor for an organization of our size and magnitude.
41:28 And if it isn’t one person and it’s potentially multiple people,
41:33 now we’re really talking about some significant financial index.
41:38 Could we, and I don’t know the ruling, could you employ a staff
41:42 as the internal auditor that reports to RSM?
41:46 Staff member, would that fill a role, the requirement?
41:51 It just has to be employed by.
41:54 Yeah.
41:55 It just has to be employed by.
41:56 I think they have to report to either the board or the general
41:59 counsel.
42:00 Right.
42:01 It says board.
42:02 It’s actually this.
42:04 So.
42:05 We’ll keep you posted.
42:09 And if we get finding back from the AG before we meet again, we
42:14 can – if you remember, we’ll send the audit committee and, of
42:18 course, the board, an update on what that is.
42:20 Perfect.
42:21 Just a couple things.
42:24 I will repeat how I feel about it.
42:26 I appreciate your candidacy and your other words that you use
42:31 and just sort of lays it out for everybody to see.
42:33 I appreciate that.
42:34 That’s easier to deal with.
42:35 You know, I don’t know how it works in your world, but, you know,
42:38 the only time you really sometimes in the world that I came from,
42:42 you have to push back is in that conversation with the auditors,
42:46 which you’ve done, push back some.
42:48 You know, then the next opportunity would be what you – how you
42:51 reply in writing, which sets out how you’re going to – to
42:54 resolve it.
42:55 And that begins at least in a written dialogue back and forth.
42:58 And I’m sure that’s how you do it.
42:59 Yeah.
43:00 And I would just encourage you to, you know, how they decide
43:03 what the definition of the word employee is.
43:06 I forget what word you used earlier.
43:08 They used the most simple definition of employee.
43:11 However, my mind immediately upon a reading was employee means
43:14 lots of things.
43:15 You know, so I know you know this, but I would just hope that we
43:18 push back a little bit and not sort of jettison the system we
43:23 have that works very well.
43:25 And I know you agree with me, and that comes in at this
43:27 particular point in time.
43:29 So if you need any help from us, not that you do, but, you know,
43:33 somebody could bang on the table or something of that nature to
43:36 say, “Hell no, speak my language,” then I’m happy.
43:39 You know, Mr. Rodgers, you know, not you, not anybody here.
43:45 Stupid is stupid.
43:46 You know, sometimes it’s what comes out of it.
43:48 That’s right.
43:49 It can be stupid.
43:50 Sometimes it’s very good.
43:51 A lot of times it’s stupid.
43:52 Well, thank you.
43:53 I feel better now.
43:54 Thank you.
43:55 I understand cathartic moments.
43:58 It creates a system that is with less oversight and less
44:03 experience.
44:05 Right.
44:06 And I think that when the intent of the legislature was to
44:09 create this, it was to go the other direction.
44:12 Right.
44:13 And so I keep going back to intent, and I think that if we went
44:16 to the individuals that made the law and said, “This is what you
44:19 created and this is what the AG is doing,” there would be a
44:22 strict conversation over what that means.
44:25 You know, this happens all the time, the interpretation, but you’re
44:28 exactly right.
44:29 We get one guy in here and two people.
44:32 Their experience is limited to the scope of what they’ve had in
44:34 the past and what they can do.
44:36 When we bring in experienced individuals, those are top-shelf
44:40 individuals from across the country that RSM brings in to audit.
44:44 We don’t get the same level of expertise, and it really upsets
44:47 me that they did that.
44:48 So, Don, thank you.
44:49 We didn’t talk about this, by the way, before we got here.
44:52 He just kind of thinks going to the same lines along this.
44:55 It does present a lot of questions.
44:57 Even if an internal employee reports to the board or the general
45:04 counsel, they will be in administrative oversight by me and/or
45:08 my other staff.
45:09 It just is a compromising position for that function.
45:13 The separation of duties and accountabilities with a scope of
45:20 expertise at a firm like RSM, it just seems to provide the
45:26 highest level of accountability, autonomy, separation of
45:31 influence, if you will, and those types of things.
45:34 But we will continue to ask the right questions.
45:38 I was just going to say, it’s an independence issue, as far as I’m
45:43 concerned.
45:44 An internal employee lacks a bit of independence that you get
45:48 from the external population.
45:51 Yeah.
45:52 And we did share those thoughts when we met with the AG.
45:57 Well, not the AG, but when our local AG people came to meet with
46:01 us, we did share those concerns as well.
46:04 Yes, as well.
46:05 We’re there.
46:05 Yeah.
46:06 Thank you.
46:07 Any further discussion?
46:08 Board members?
46:09 None?
46:10 All right.
46:11 Seeing no further discussion, I will adjourn the joint school
46:21 board audit committee.
46:23 Thank you.
46:27 Call the meeting to order.
46:28 The first item on the agenda is the approval of the November 21st
46:35 minutes.
46:37 Can I get a motion to approve?
46:39 Move to approve.
46:40 Do I have a second?
46:41 I’ll second it.
46:42 All right.
46:43 Ready for the question?
46:46 Excuse.
46:47 All in favor?
46:48 Aye.
46:49 All opposed?
46:50 The minutes pass.
46:51 Next on the agenda is the ICOC annual report.
46:51 Good morning.
46:52 Welcome.
46:53 Good morning, everybody.
46:54 My name is Sue Hand, and I’m the assistant superintendent for
47:03 facility services.
47:07 You’ve seen me here before.
47:08 Typically, we have one of our ICOC members, typically the
47:11 chairman, present the annual report.
47:13 He and the other officers of the ICOC were not available this
47:17 morning, so you get the B team.
47:20 But at any rate –
47:22 Hardly, hardly the B team.
47:25 She is the A++ team as far as BPS is concerned.
47:29 For those of you who don’t know, though, our ICOC members are
47:32 very, very engaged in the process,
47:34 and they do a lot of work on oversight.
47:36 I think you all would validate that statement.
47:38 So don’t misunderstand their presence – their lack of presence
47:42 here as not being engaged
47:43 because they truly are.
47:45 I’m going to talk about the annual report that we provide to the
47:49 school board every year.
47:51 But before I do that, I want to hand out a document just to give
47:53 you an opportunity to
47:54 kind of take a look at it.
47:55 This is not the annual report, but these are copies of facility
48:00 assessments that are completed.
48:03 And this will be part of my presentation to kind of tell you the
48:06 story of this document,
48:08 but I wanted you to have a copy while I talk through the story.
48:11 I think Kara had provided you with a copy of the annual report
48:15 that we provided as the ICOC to the school board.
48:18 Mr. Schifrin, our chair, presented that to the school board in
48:21 December.
48:22 And then we also have an obligation per the ballot language to
48:25 provide that annual report to the audit committee.
48:28 So that’s my purpose here today.
48:30 So just briefly, these are our ICOC members.
48:34 Roughly half of our members have been with us since the
48:38 inception of the ICOC and the sales surtax in 2014.
48:42 We do have some new members, but they represent a wide variety
48:45 of folks out in the community
48:48 and has been a really good sounding board for us as we talk to
48:51 them about different projects
48:53 and programs and priorities for our sales surtax resources.
48:57 This is just an excerpt from the charter, so if you’re not
49:00 familiar with the ICOC, this is their charge.
49:03 So they do a general oversight of our sales surtax program.
49:07 They do not have approval authority per se, but when we have
49:11 issues or policy questions
49:13 or just things we’re concerned about, we do bring those
49:15 questions to them, and they, as I said, have been very engaged.
49:19 They’ve been particularly helpful in our security arena.
49:22 That’s probably one of the bigger policy issues that came up
49:25 early on in the program where the initial investment was
49:28 relatively small,
49:29 and we found that we had a much greater need for security
49:32 resources, and we worked with the ICOC to make a recommendation
49:36 to the school board
49:37 to advance the security projects using the resources that were
49:40 allocated in the facility renewal bucket, which was a whole lot
49:43 bigger,
49:43 and that allowed us to be successful in putting the security
49:47 assets in the field a lot sooner.
49:49 Our annual report covers these areas, just going to highlight
49:56 several of these for you.
49:58 So talking about priorities and needs, the surtax program was
50:02 established back in 2014, and the key piece of data on this
50:06 slide is right here.
50:07 It’s 22% funded.
50:09 If you look in facility renewal back in 2014, the facility
50:13 assessment indicated that we needed about $722 million worth of
50:18 work.
50:19 The resources that were allocated out of about a $200 million
50:24 sales surtax program over six years is about $157 million.
50:29 So you can see we’re at 22%.
50:31 Now, our resources have been a little bit more, but certainly
50:34 nowhere approaching the $722 million.
50:37 The educational technology piece is pretty much on target, and
50:42 the school security piece, we funded that at $5.7 million.
50:48 It was about 2.9% of the revenue of the surtax program, and that
50:54 was by design early on in 2014, and we have found over time that
50:58 that is not enough.
51:00 So we have allocated more resources through the ICOC’s
51:03 recommendation and the school board.
51:06 This is the needs assessment.
51:07 This is where we are right now.
51:09 We realized through the course of the sales surtax program that
51:12 our needs assessment in 2014, which was done primarily in-house
51:17 with a tremendous level of effort, had some shortcomings.
51:21 And so we worked on how we could do this differently and better
51:27 and get a handle on our assets.
51:30 In the district, we really didn’t know how many chillers we had,
51:32 how many air conditioning units we had.
51:34 We don’t know how much stuff we have.
51:36 We talk about having 12.8 million square feet of buildings, but
51:44 we don’t really know what are those components that we have and
51:50 how frequently we should be maintaining them, what condition
51:52 they’re in.
51:53 So we hired a firm that comes in and has a really robust
51:57 software program that we can use to manage our assets on an
52:01 ongoing basis.
52:03 And so rather than the point in time approach that we did in
52:06 2014, we now have software that allows us to update when we put
52:10 in a new chiller, we put in a new air handling unit, we update
52:14 that data and we have a real time perspective on what our assets
52:17 are.
52:18 So we are really moving into a new generation of facility asset
52:21 management in the school district.
52:24 So I wanted you to see these.
52:25 These are just examples of completed projects.
52:28 You can see that there’s a current replacement value.
52:31 There’s an assessment as to what is needed
52:33 in year one, year two, year three through five,
52:37 and year six through 10.
52:38 So it’s going to allow us to do a much better job
52:40 of capital asset replacement and renewal programming
52:45 going into the future.
52:46 And these are site-specific by school.
52:49 We have a multi-pronged team that goes out
52:51 and actually does the assessment,
52:53 including the folks from Cannon Design.
52:56 They are a professional assessment firm.
52:59 And we bring our maintenance folks in.
53:01 We bring folks in from the schools.
53:03 We look at our work orders and we try to make sure
53:05 that we are capturing everything that is happening
53:07 out in the schools.
53:08 So I’m really proud of this effort
53:10 and I think this is going to help us make better
53:12 data-driven decisions moving on in the future.
53:16 So let’s see, revenue.
53:18 Our revenue picture has been very strong
53:20 for the sales surtax.
53:22 The program was estimated at about $198 million back in 2014.
53:27 We are at about $217 to $218 million as of the end of January.
53:33 Our revenue is about $3 to $5 million a month overall.
53:38 And we’re tracking at about $56 million over what our original
53:43 projections were
53:43 for this point in time.
53:46 We estimate we’re going to have about $72 to $75 million more
53:51 than $198 million that was originally projected.
53:54 And we have been working very closely with the ICOC to program
53:57 those resources.
53:58 This is just a chart that kind of shows the monthly revenue over
54:03 time.
54:03 And you can see how the revenue varies by month.
54:07 And you can also see that over time it has continued to climb.
54:11 Year over year between 2019 and 2018 is about a 2% delta from
54:16 month to month.
54:17 So we’re continuing to have a good revenue history in the sales
54:22 surtax program.
54:22 And that has worked very well for us in terms of being able to
54:27 invest those resources in our schools.
54:29 Right now, this is the estimate as of, I think, early January in
54:35 terms of the projected revenue over $198 million.
54:38 You see it’s a little over $72 million and we’re continuing to
54:42 track that.
54:43 We do now really, every time our ICOC gets together, which is
54:48 every other month,
54:49 we bring them projects that need additional resources and they
54:53 help us facilitate a conversation about how we invest those
54:57 resources.
54:57 For the most part, we have brought them primarily facility
55:01 renewal projects as we’re trying to wrap up the end of the
55:05 school-based projects this coming summer.
55:07 But we’ve also been talking with them about additional security
55:10 investments and additional technology investments using these
55:13 resources that are above and beyond what was officially
55:16 programmed.
55:16 So this is our expenditures as of January 31st.
55:22 And you can see in overall, we’re spending and encumbering about
55:28 82% of our revenue.
55:30 This is another piece of data that I’m particularly proud of.
55:34 We have these resources coming in and they are getting out into
55:38 the schools.
55:39 So this is not a program where our revenue comes in and sits
55:42 around, it comes in and we get it back out.
55:45 This time of year, we are gearing up for our summer construction.
55:48 So you’ll see that number start to climb as time goes on through
55:52 the spring.
55:53 Our expenditures by type, this shows you kind of how we allocate
56:01 our resources and you see we’re very heavily weighted in
56:05 contracted renovation.
56:06 We’re doing big projects.
56:08 Most of our projects are in the two, well, one and a half to six
56:13 or so million dollar range by school.
56:17 We do a little bit of computer replacement that’s in here, a
56:22 little bit of site improvements.
56:25 Those are things like fencing primarily.
56:28 And then you see our professional fees are about 10%, so that’s
56:33 pretty typical in the industry.
56:35 Our in-house administration, this is permitting and our staff
56:40 that supports these activities.
56:42 And that typically runs 1% to 2%.
56:46 This is also a particularly good thing.
56:49 We use the owner direct purchase program in the district, so
56:52 when we buy a chiller or big pieces of equipment,
56:55 we manage to save the sales surtax for the state owner direct
56:59 purchase program, so we don’t pay taxes, sales taxes, on those
57:03 assets.
57:03 And we’ve purchased over $21 million worth of stuff, and we’ve
57:07 saved a million and change, which we can then redeploy into the
57:11 program.
57:11 So that’s something else that has been very effective in this
57:15 program.
57:16 In terms of getting the work done over the last year, this shows
57:21 you the project distribution.
57:24 We have finished 58 schools, we’ve done a lot of investment in
57:28 educational technology, and we have completed the original
57:32 security program.
57:34 And we are continuing to add security features in collaboration
57:38 with our district school security staff.
57:41 We anticipate that we will finish, or substantially finish, most
57:44 of our school projects, either this summer or this coming fall.
57:48 And then we will do some of our ancillary facilities that were
57:52 also included in the sales surtax program.
57:55 In terms of how we invest our facility renewal money, you’ll
57:57 notice this is super heavily weighted in air conditioning.
58:00 That was our big need identified in 2014, and that’s where the
58:04 bulk of our facility renewal money has gone, supplemented with
58:09 electrical, a little bit of building envelope.
58:12 If we are to consider a future sales surtax program, you’ll see
58:15 that chart probably start to change more heavily weighted
58:19 towards roofing and towards classroom renovation.
58:22 Those are our needs now.
58:24 The prior program in 2014 included a very specific program of
58:28 work and did not include things like flooring, bathroom
58:32 renovation, paint.
58:34 All of the kind of the second tier activities that we might do
58:38 in facility renewal, those were not included.
58:41 So this is all the big stuff that came with the first program.
58:46 Audits, we have the pleasure of working with RSM twice, well, I
58:51 was going to say twice a year, but really pretty much
58:53 continuously.
58:55 This is, I think you’ll be seeing audit number nine today.
58:59 And so they have been a big help in talking through some things
59:03 that we consider.
59:05 Working with them in terms of like communication has been
59:08 something that you all have brought up.
59:11 We have engaged the ICOC and engaged our communications team
59:14 here in the district.
59:16 That’s been a function of you all talking to us about those
59:19 issues.
59:20 So we appreciate that we have that relationship with our auditors
59:24 where you all give us some advice.
59:26 We talk about it and we work through anything that you see might
59:30 make our program stronger.
59:32 Just so you all know, as the audit committee, we also do
59:34 construction auditing of all of our projects over one million.
59:39 So in addition to the program audit where you are looking at
59:42 whether we’re reporting correctly to the ICOC,
59:46 we also have our construction auditor CRI.
59:49 They come in and they audit our projects against the contract to
59:52 make sure that we are paying bills in accordance with our
59:56 contract requirements.
59:57 And those are done every project over one million.
59:59 And then I typically will pick one project per vendor that is
1:00:04 under one million to audit that as well.
1:00:06 So we have a lot of audit history in the sales surtax program.
1:00:10 So this is where our chairman usually talks about all the good
1:00:15 stuff that we’ve done.
1:00:17 But I feel that this has been a really good program for Brevard.
1:00:22 The sales surtax has made a huge difference in our schools.
1:00:26 We have air conditioning in places where really it wasn’t
1:00:29 functioning too well back in 2014.
1:00:31 And it’s been a big success.
1:00:34 And so I appreciate everyone’s attention this morning.
1:00:37 And I guess I should mention we have great support from Sydney’s
1:00:42 department to finance as well as purchasing.
1:00:46 We couldn’t do what we do without those folks.
1:00:49 It has been just a wild ride with all of you.
1:00:52 We push about $45 million or so a year through the project’s
1:00:57 funnel.
1:00:58 And your team supports us quite well as it’s purchasing.
1:01:01 So I’d be happy to answer any questions.
1:01:03 Not a question.
1:01:07 Yeah, a question.
1:01:08 So this is just my one.
1:01:10 Yes, there’s going to be approximately 100 of these.
1:01:14 Wow.
1:01:15 Yeah.
1:01:16 All I can say is wow.
1:01:17 I mean, if you’re really, if you’re, I don’t know that there’s
1:01:19 very many public facilities that ever have been measured this
1:01:23 way.
1:01:24 Maybe it happens everywhere else.
1:01:25 But this is my first experience with it.
1:01:27 But, I mean, principals are not facility managers.
1:01:30 And neither some of the times it’s the superintendent or others,
1:01:33 you know.
1:01:34 So this is great.
1:01:35 And it really gives you an idea of what would need to be
1:01:38 accomplished.
1:01:40 If I can add on to that, it has been a couple things.
1:01:44 One, phenomenal effort on the part of facilities.
1:01:48 They went out and procured an impressive software program
1:01:51 opportunity.
1:01:53 They came and trained us how to do it.
1:01:55 But then Sue and her team somehow has integrated the assessments
1:02:00 within her current staffing.
1:02:01 And has ensured that there has been no gap in the assessment and
1:02:08 then real time updating it as projects have happened the day
1:02:12 after the assessment was done.
1:02:14 So sometimes when we’re in the process of inputting data, if we’re
1:02:19 not careful, there can be a lag.
1:02:21 And work will have been done during that lag that then doesn’t
1:02:24 get captured and it compromises the real time or the
1:02:27 authenticity of the data.
1:02:29 But by Sue’s leadership and her team, we’ve ensured that that
1:02:32 isn’t the case.
1:02:34 So that was done at a moment in time, but you can go to the
1:02:37 online version and see what the current status is.
1:02:41 So it’s all integrated.
1:02:44 There is cumulative spreadsheets by virtue of, you know, what
1:02:48 are our most critical needs?
1:02:50 What is our preventative maintenance schedule for all of the
1:02:53 assessed facilities?
1:02:55 So I think by summer you’ll be done with virtually all of our
1:02:58 facilities across the district.
1:03:01 Yeah, the data query functions are really powerful.
1:03:03 So if you want to know what roofs do we need to do in the next
1:03:06 five years?
1:03:07 You have a couple buttons and magic happens and we get that
1:03:11 answer.
1:03:12 And so this is going to be really powerful for us.
1:03:14 That’s great.
1:03:15 So I’ll just do what the chairman would have done if he was here,
1:03:17 which is best practice.
1:03:19 Good job.
1:03:20 I don’t know anybody that’s doing it any better.
1:03:22 So I do think that lands on your shoulders and your great team.
1:03:26 So thank you.
1:03:27 I know some places that could be used.
1:03:29 Can I make a couple suggestions where you can go to use this?
1:03:32 I’ll just leave it alone.
1:03:34 I don’t know where this was back in my day.
1:03:37 Well, Don, we’ve known each other a long time from our county
1:03:39 days.
1:03:40 And I agree.
1:03:41 This is kind of state of the art in facility asset management.
1:03:44 And I’m proud to provide all these students as a leader in that
1:03:48 regard.
1:03:49 If I may, the committee may recall, we had an approved audit of
1:03:53 maintenance on the plan for this year when we approved the risk
1:03:56 assessment last year.
1:03:58 But after meeting with Sue and understanding the depth that her
1:04:01 division is going through in putting together this assessment
1:04:05 and what kind of information she’s going to be able to glean
1:04:07 from it going forward.
1:04:09 This impacts our staffing models.
1:04:11 It impacts capital budgeting processes.
1:04:13 This is a game changer.
1:04:15 So this is coded purple.
1:04:16 It is postponed and rightfully so because of this major
1:04:19 initiative that they have undertaken.
1:04:22 Do we have a time frame for when we’re going to put that
1:04:24 assessment that will actually take place and put it back on the
1:04:27 audit?
1:04:28 I think we’ll just keep in touch and keep monitoring the
1:04:30 progress and we can bring it forward to you all if we decide
1:04:34 that it’s time for an audit.
1:04:37 We also had the DOE audit this year so our entire department was
1:04:41 audited by DOE concurrently.
1:04:46 With the AG.
1:04:48 Yeah, thank you.
1:04:49 All of us get so confused with all this audience going on.
1:04:54 Sue, do you want this back?
1:04:55 You may keep them for the day, but if you just leave them for
1:04:57 Carol before you leave today, I’d appreciate it.
1:05:00 So thank you.
1:05:01 Thank you.
1:05:02 Thanks.
1:05:03 Thank you, Sue.
1:05:04 Alright, on the heels of that, next up is the half-cent
1:05:06 assessment.
1:05:07 So this is our ninth round of our half-cent report.
1:05:18 And just to reiterate and refresh everyone about the purpose of
1:05:22 these reports, our role, the audit committee’s role,
1:05:27 is to validate and send the internal auditors in to vouch the
1:05:31 reporting that the district provides to the ICOC
1:05:34 so that the ICOC can perform their due diligence.
1:05:38 We have a very specific and very narrow role.
1:05:41 And we continue to do that to support the ICOC in their function.
1:05:45 So with that being said, this is Matt Blondell.
1:05:47 He’s a manager and a construction expert in our RSM practice.
1:05:51 And he leads the team in these half-cent, twice-annual reports.
1:05:55 Alright.
1:05:56 So starting with the Transmittal Letter on the reports in front
1:06:00 of you there.
1:06:02 You know, we’ve got a paragraph that we’ve included just sort of
1:06:05 as an executive summary relating to where we are kind of
1:06:09 currently.
1:06:10 The period that was covered in this audit was from July 2019
1:06:13 through November 2019.
1:06:16 In our last round eight report, of course, we reported that at
1:06:19 that time collections had surpassed the original projection of
1:06:22 198 million.
1:06:24 Obviously, that changes a couple of things and we’ll talk a
1:06:26 little bit about some of the history there.
1:06:29 Of course, you’ve been seeing the presentation that Sue just
1:06:30 gave to kind of provide a little bit more context there as well.
1:06:34 But pending the completion of a facilities assessment, which is
1:06:39 currently underway and the separate security assessment,
1:06:44 funds that are being collected in excess of that 198 million are
1:06:47 now being held and spent on an as needed basis through
1:06:50 recommendations that the management brings to the ICOC.
1:06:54 And whereas previously, funds were kind of funneled into
1:06:57 separate accounts for security, educational technology, and
1:07:02 facilities renewables.
1:07:04 So we’re in kind of a limbo period.
1:07:06 Funds are being kind of held in a contingency account and being
1:07:09 dispersed on an as needed basis until those assessments are
1:07:13 completed in a final accounting or recommendation of the split
1:07:17 between different projects approved by the board.
1:07:21 If I may add to that, we are also in the process of concluding a
1:07:25 district-wide security assessment.
1:07:28 And that third party will be presenting out to the board in the
1:07:31 next 30 days, which will then contribute to decisions of the
1:07:37 surplus.
1:07:38 If there would be a – if the board would like to allocate some
1:07:45 additional – some of those surplus funds to specifically
1:07:48 district security,
1:07:50 within the scope of the original charter of the surtax, single
1:07:53 point of access and/or access control.
1:07:57 So part of the intent of putting the funds in reserve is to wait
1:08:02 until that security assessment is completed.
1:08:07 All right.
1:08:08 So then in the executive summary, we just showed that the – as
1:08:12 of November 30th, 2019, the collections, a total of 217 million,
1:08:17 and expenditures were about 140.
1:08:19 As Laura mentioned, our role is to test the reporting that comes
1:08:22 from management and goes to the ICOC, which of course ultimately
1:08:25 ends up on a committee and board and available to the public.
1:08:28 And specifically related to revenues that are collected, making
1:08:32 sure that they’ve been – that we’re vouching it back to the
1:08:35 bank statements
1:08:36 and making sure that it’s accurately reported in the right
1:08:38 period and so forth, expenditures that they’re in accordance
1:08:41 with the referendum.
1:08:41 As Dr. Mullins mentioned, not being spent on things that weren’t
1:08:44 originally approved.
1:08:46 And then making sure that, of course, accounting and the
1:08:48 reporting is accurate.
1:08:50 And then on the procurement side as well, making sure that the
1:08:53 contracts that are being used for these funds have been procured
1:08:57 in accordance with relevant statutes and policies.
1:09:01 At the bottom right, you’ll see we have three green checks for
1:09:03 each of the areas.
1:09:04 We did not have any exceptions noted in the current period
1:09:07 testing.
1:09:08 We like those checks.
1:09:10 So I’ll move on to page three, which talks a little bit about
1:09:14 the public perception program.
1:09:17 We had previously reported on phase one, which was the district’s
1:09:20 initiative to provide public awareness and communication as the
1:09:23 surtax program progressed.
1:09:26 In the February ICOC meeting, the Government and Community
1:09:30 Relations Department presented phase two of that communications
1:09:33 plan to the ICOC, which involves the bullets that are listed
1:09:38 below.
1:09:39 Continuing on the social media campaign that was started in
1:09:42 phase one, and then involving the Legacy Club as ambassadors and
1:09:46 to host events.
1:09:48 And then targeting digital advertisements, press releases, newsletters,
1:09:51 and so forth to specific areas to provide information on schools
1:09:55 that impact those particular residents.
1:09:58 You know, their homeschools.
1:10:00 And then, of course, there’s going to be a speaker training
1:10:03 session to allow people that are speaking on behalf of the surtax
1:10:07 function to have a standardized presentation methodology.
1:10:13 So that was recently presented.
1:10:15 Just wanted to provide some context there.
1:10:17 On page four, as we spoke earlier, after the last, right at the
1:10:21 very tail end of the last period, the district had surpassed
1:10:25 collections of the original estimated $198 million.
1:10:28 The current proposed reallocation is 50% to school security, 15%
1:10:33 to educational technology, and 35% to facility renewal, which,
1:10:37 as you can see in that table there, differs, kind of flips the
1:10:41 facility renewal,
1:10:42 and security on which one gets the heavier dose.
1:10:47 But again, that is pending approval by the board, which is, of
1:10:49 course, pending the completion of the security assessment and
1:10:52 the facility assessment.
1:10:58 Moving on to page five, we have just some similar tables to what
1:11:01 Sue showed in the ICOC packet that show the budgeted versus the
1:11:05 actual surtax revenue and a table that accompanies it.
1:11:09 The only thing I’ll draw your attention there is that the last
1:11:12 row is for fiscal ‘19-‘20.
1:11:14 It’s just only a portion.
1:11:15 They look smaller because it’s only a portion of the year or
1:11:18 something, not the complete year.
1:11:21 Page six shows a similar table, but with respect to the
1:11:25 expenditures and the breakdown between the expenditures of
1:11:28 school security, educational technology, and facility renewal.
1:11:35 Page seven is some more detail on our specific approach and
1:11:38 methodology.
1:11:39 As we mentioned, really, it’s validating the reporting that
1:11:42 comes from management to the ICOC to validate the accuracy of
1:11:46 the reports there.
1:11:48 And then moving on, we’re on page nine now.
1:11:50 This is the specific results and the specific procedures that
1:11:53 are performed for each area.
1:11:55 Nine is revenue.
1:11:57 So step one there for this round is not applicable.
1:12:00 As we mentioned, that was where we were previously making sure
1:12:04 that the funds were going into the proper accounts that were
1:12:08 split among the 2.9% for the security and the other percentages
1:12:13 and so forth.
1:12:15 Right now they’re being accumulated into a contingency fund
1:12:19 pending approval on an as needed basis and then pending the
1:12:23 facility’s assessments.
1:12:26 We recalculate the collections and make sure that they’re
1:12:28 tracing them back to the bank statements and make sure that
1:12:30 everything is accurate there.
1:12:32 We didn’t have any exceptions.
1:12:34 We had previously reported on that transfer that was sort of
1:12:38 that loan or transfer from the facility renewal fund to security
1:12:43 to expedite the security projects.
1:12:45 During this testing period, the transfer was totally repaid.
1:12:49 As collections came in, the transfers, the security was repaid
1:12:53 back to the facility renewal funds.
1:12:56 Page 10 details the results of the expenditures testing.
1:13:02 That’s where we see the expenditures that are listed.
1:13:05 We trace them back to the school reports.
1:13:07 We confirm that they’re accurate and making sure that they’re in
1:13:09 accordance with what was approved in the referendum.
1:13:12 And that they’re recognized in the proper period.
1:13:15 And step five there is for this round not applicable.
1:13:19 It relates to labor allocations.
1:13:21 Internal costs for labor for Sue’s team are allocated to
1:13:25 individual projects.
1:13:27 It varies sometimes biannually, annually.
1:13:30 As of this period, it hadn’t been done yet.
1:13:32 It is a very small portion.
1:13:34 So we don’t see an issue with that.
1:13:36 But we test those allocations when they are made to the
1:13:41 individual school projects.
1:13:44 And then page 11 is procurement.
1:13:46 This is where I mentioned that we test for the procurements of
1:13:49 the related contracts that are funding for their providing
1:13:54 services for the schools that are in the surtax program.
1:13:57 And during the period, there were four contracts awarded.
1:13:59 And we tested three of them for compliance with statute, making
1:14:02 sure that they were competitively bid.
1:14:05 And this, it’s important to note, the procurement, even though
1:14:08 these might be for the surtax program, it follows the standard
1:14:11 procurement policy that the district follows.
1:14:14 And so we’re just checking to make sure that everything is done
1:14:16 in accordance with policy and statute.
1:14:18 And we didn’t have any exceptions there.
1:14:20 And then page 12 and beyond is the appendix, which was our
1:14:25 original and our first couple of reports.
1:14:27 background section, which really provides sort of the original
1:14:30 layout of the referendum and the surtax program.
1:14:33 So that concludes my presentation.
1:14:40 I’m happy to answer any questions if you guys have any.
1:14:42 The one comment I’ll add, we had great discussion with Dr. Mullins
1:14:47 and with Sue and with district leaders this round about what
1:14:50 this audit is designed to do.
1:14:53 And it is not a compliance audit.
1:14:55 Like when you think of internal accounts, we test a very small
1:14:58 sample.
1:14:59 And any exceptions are reported through.
1:15:01 This tests a very heavy sample of expenditures, revenue items,
1:15:05 etc.
1:15:06 We’re to the tune of what, 75% coverage.
1:15:09 It’s extremely deep.
1:15:11 So we are looking for a materiality.
1:15:14 And are the reports materially correct when they are provided to
1:15:18 the ICOC?
1:15:19 And those green checks represent that, yes, they are.
1:15:22 This does not mean that we might not find $10 here, $20 there,
1:15:25 what have you.
1:15:26 And we provide those real-time results and feedback to
1:15:28 leadership so that they can make real-time adjustments,
1:15:32 which I know Sue has expressed appreciation for.
1:15:35 We do find those.
1:15:36 But it’s not going to give you a red X because those are immaterial
1:15:39 to the ICOC’s decision-making based on those numbers.
1:15:43 And Laura and the team and Matthew present to the ICOC.
1:15:47 Every time you see one of these, they see one of these too.
1:15:50 We have great dialogue, as Sue mentioned.
1:15:52 They are a great volunteer group of citizens and are very tentative
1:15:57 to us and appreciate us coming.
1:16:00 And I don’t know, it’s quite impressive to go there and see the
1:16:04 level of detail that they talk about and analyze and the input
1:16:10 that they provide to Sue.
1:16:12 So we hope that as auditors and by providing these reports that
1:16:17 the citizens can see how diligent the school district has been
1:16:21 with these funds
1:16:22 and with the marketing that they can actually see where the
1:16:27 dollars have gone for our kids.
1:16:31 I will say, when I saw it on the agenda today, I was quite
1:16:33 excited because it’s always a clean audit.
1:16:35 It’s always a very detailed and I thought, yes, no problems
1:16:39 today.
1:16:40 So, thank you guys.
1:16:42 Next up we have, does anybody have any questions?
1:16:45 Any additional questions?
1:16:47 We have the follow-up report as of February 20th.
1:16:51 So, annually we report back to you all the status of any open
1:16:56 audit items.
1:16:58 We go in, we do some testing, we work with management, the
1:17:01 process owners to establish status of where the items are as of
1:17:05 our testing.
1:17:07 And if management is ready for us to go in and test and see if
1:17:10 those are closed, then that is what we do.
1:17:13 This round we tested three reports, transportation, employee
1:17:17 recruitment and onboarding, and timekeeping.
1:17:20 And purchasing, you’ll recall, Christy was here presenting at
1:17:22 our last meeting.
1:17:23 That one will be due for follow-up at our next follow-up round.
1:17:27 Page two, this is our matrix, giving you an overall status of
1:17:33 the reports that are in follow-up status.
1:17:36 How many have been issued, how many have been closed, how many
1:17:39 are still open, and any that have passed their estimated
1:17:43 completion dates.
1:17:43 That is what ECD stands for.
1:17:45 So, we performed testing on timekeeping, and this one is closed.
1:17:52 I’ll walk you through the details.
1:17:53 Employment, recruiting, and transportation were also tested.
1:17:56 We have a couple updates to those.
1:17:58 And purchasing is highlighted in peach, so that we know that it’s
1:18:01 coming next time.
1:18:02 Page three, timekeeping is a report that we issued several years
1:18:09 ago.
1:18:10 I believe it was 2012, probably before my time here even.
1:18:14 And one of the issues that has remained open for the audit
1:18:17 committee to continue following up on is related to the manual
1:18:21 process at the district.
1:18:23 This is a common thing for many processes throughout the
1:18:26 district.
1:18:27 We’ve also had several conversations here at this committee
1:18:30 level about updating the software, possibly district-wide.
1:18:34 ERP, gap assessment we brought before you, as well as a couple
1:18:38 other items.
1:18:39 So this, we felt, and in collaboration with Dr. Mullins as well,
1:18:44 we feel like this particular audit finding really is just one
1:18:48 risk that has come before this committee related to a bigger
1:18:52 discussion about an ERP and automating systems district-wide.
1:18:56 Because this is not something isolated, it is part of a bigger
1:19:00 discussion, we feel it’s appropriate to close it here in this
1:19:04 follow-up process.
1:19:05 And the district can continue to update the committee as you see
1:19:08 fit on their discussions related to ERP.
1:19:11 So Dr. Mullins, I don’t know if you have anything else you’d
1:19:14 like to add to that.
1:19:15 No, we’ve put some manual, some enhanced timekeeping practices
1:19:20 in place.
1:19:21 It’s not perfect, it’s not risk-free.
1:19:26 But again, it’s part of a larger discussion and quite frankly a
1:19:31 very costly corrective action that we’ve got to plan some years
1:19:37 out.
1:19:38 So that’s why we are continuing to implement the enhanced
1:19:41 procedures and I don’t know what the right terminology is, but
1:19:47 the level of risk against our current ability to manage it was
1:19:51 at an acceptable level.
1:19:54 Okay, so we’re going to, you’ll see on the risk assessment and
1:19:57 next year’s audit plan, proposed audit plan, a cycle audit of
1:20:01 timekeeping.
1:20:03 It’s been on the plan, it’s a big investment, the district, I
1:20:06 don’t see it in their future from a budgeting standpoint, within
1:20:10 the next six months certainly.
1:20:13 So what we’ll do, as Dr. Mullins mentioned, they’ve put in
1:20:16 manual controls to mitigate the risk, so now it’s time for us to
1:20:20 go out and see if those are working.
1:20:22 And hit those departments that carry the risk with them, for
1:20:27 example, transportation, food services, where you have hourly
1:20:31 employees that have different schedules and calculations and
1:20:35 certainly, you know, touch some unions.
1:20:38 So in next year’s audit plan, we’ll be proposing to look at some
1:20:43 timekeeping and do some cycle audits there.
1:20:48 Are all employees on the time loop system, manual time loop
1:20:52 system?
1:20:53 They are all manual, yes.
1:20:55 Everything is done manually, but not all employees are hourly.
1:21:00 Right.
1:21:01 That’s right.
1:21:05 9,000 employees.
1:21:06 I am hearing that we’re comfortable this year that we have mitigating
1:21:11 controls in place and we’re comfortable with the controls in
1:21:16 place.
1:21:17 They put controls in place, we have to test them to see if they
1:21:20 are operating effectively and that’s what we’re going to propose
1:21:23 next year.
1:21:24 Has there been anything in the past that has indicated that
1:21:26 might be issues with the timekeeping system?
1:21:29 Yes.
1:21:30 And, you know, you can see this date, 2012.
1:21:35 We were in, in 2012, and pretty much every year after that,
1:21:38 looking at doing individual detailed testing.
1:21:41 We were very, I want to say four years ago when Dr. Pace was
1:21:46 here, they put a lot of manual controls in place around timekeeping.
1:21:54 Thinking that the day was coming when automation was in the
1:21:57 future, in the near future, and since that’s not going to happen
1:22:00 in the near future, it’s just time to move forward and start the
1:22:05 testing.
1:22:07 Have you had any significant findings?
1:22:10 In the past?
1:22:11 Every year.
1:22:12 Yes.
1:22:13 Moving on to transportation.
1:22:23 We’re going to follow up on this.
1:22:24 I know you’re going to propose that.
1:22:26 I just don’t want to, I don’t want to lose track of it.
1:22:29 It’s going to be, so at the next meeting we’ll propose the
1:22:31 internal audit plan and it will be included in there as a cycle
1:22:33 audit.
1:22:34 Okay.
1:22:35 Moving on to the transportation audit.
1:22:43 We performed this original audit a few years ago.
1:22:47 We did a deep dive into the procurements and the parts room in
1:22:50 those areas.
1:22:52 We have since been able to close, I believe, nine of those
1:22:56 issues.
1:22:57 So they have done some significant updates and changes to their
1:23:01 processes and procedures.
1:23:03 You may recall last time we came here and presented to you, it
1:23:06 was a full scope follow up audit that we performed on that
1:23:09 transportation department.
1:23:10 Because of the significant changes that they had made, part of
1:23:13 their plan for remediation included implementation of a fleet
1:23:18 management information system
1:23:20 to help mitigate these last couple remaining audit issues.
1:23:24 Since then, there has been some turnover in leadership at the
1:23:27 transportation department level, also at the COO level.
1:23:31 And FMIS has been put on hold until folks could get their feet
1:23:35 on the ground.
1:23:37 Now that those folks have been in place for some time, that is
1:23:40 back on the table.
1:23:41 And I believe they have gone through the procurement process.
1:23:44 We have.
1:23:45 They have gone through the procurement process.
1:23:47 They are now doing final negotiations with the contract and the
1:23:51 implementation and so on.
1:23:54 Unfortunately, the reality is the cost of implementation has
1:24:00 grown from what was previously allocated as budget for it.
1:24:06 To include what was originally allocated for the cost of the FMIS.
1:24:16 It was originally allocated in LCI funds, and we’re getting
1:24:19 clarification from who’s looking for the DOE, whether or not we
1:24:26 can spend those funds from LCI on that kind of purchase.
1:24:30 And if not, then we have to look at operating fund and, you know,
1:24:33 so there are some budget elements that we have to address.
1:24:37 And what was not built into the original proposal was a
1:24:40 maintenance.
1:24:41 So there was just presented that there’s an anticipated annual $50,000
1:24:46 a year maintenance cost associated with the FMIS.
1:24:50 So it is likely being rolled into our budget process for 2021
1:24:56 fiscal year because of some growing fiscal implications.
1:25:01 So, but it’s in, we’re in the process of trying to negotiate it
1:25:05 and know exactly what the obligations are going to be for the
1:25:09 district.
1:25:10 And ultimately, what you saw for facilities assessment, the
1:25:14 expectation is, is that will become what is, what we see for
1:25:18 transportation.
1:25:20 So for now, these remain open, implementation is foreseeable in
1:25:24 the future.
1:25:26 The first one relates to business operations monitoring.
1:25:29 We reduced the original risk from this finding from high to
1:25:31 moderate because they’ve put in some manual processes to track
1:25:35 certain metrics.
1:25:36 There are additional metrics that the district would like to
1:25:38 track that they will need to automate to do so.
1:25:41 So this remains open for now, but the risk is mitigated.
1:25:46 The second transportation finding on page seven relates to core
1:25:50 charges and credits and warranty revenue.
1:25:53 The district is hoping to track this through their automated
1:25:55 system.
1:25:56 This has to do with when you purchase certain parts that have a
1:25:58 core charge applied to them.
1:26:00 When you return those parts, the district gets a credit back or
1:26:03 a revenue back.
1:26:04 So in the meantime, since we are waiting for implementation in
1:26:07 order to automatically track those,
1:26:10 we have been working with the district to help create a manual
1:26:14 process as a stopgap.
1:26:16 And that’s all we have on transportation.
1:26:25 Moving on.
1:26:26 And Dr. Teddy, do you want to come up?
1:26:27 No?
1:26:28 Moving on, starting on page nine.
1:26:33 We did follow up of our HR recruitment selection and onboarding
1:26:36 audit we brought to you all about a year ago.
1:26:39 If you recall, Dr. Teddy was brand new to that seat at the time
1:26:43 of this audit.
1:26:44 And this was really kind of an education process for all of us
1:26:48 about the status of things as she took her place over there.
1:26:51 These were some major rocks that we had discussed in our
1:26:54 original audit that we acknowledged will take some time to close,
1:26:59 as these are major decisions to be made.
1:27:01 So we went back.
1:27:02 We checked on her.
1:27:03 It’s been a year.
1:27:04 And we were able to close a few things, which was very positive.
1:27:07 And I know she has a few items that are already in progress as
1:27:10 well, which I’m sure she’ll expand on some more.
1:27:13 It’s not that different than what happened with transportation.
1:27:16 It’s a little deja vu, right?
1:27:17 It takes so much time.
1:27:19 And for those of you who were here during the transportation
1:27:22 audit, you recall all of those 11 high-risk issues and all the
1:27:26 work that it took to close them.
1:27:28 And we’re down to two issues now, which is really extraordinary
1:27:31 for the district.
1:27:32 All the things that you have to deal with that level of
1:27:35 concentration.
1:27:36 And so now it’s happening in human resources.
1:27:39 So the movement we feel as auditors and the progress that has
1:27:43 been made is really, it’s great.
1:27:46 It’s very commendable.
1:27:50 So walking through these, number one relates to metrics and
1:27:53 performance measures.
1:27:55 As she was new in her seat, Dr. Thetty needed some time to
1:27:58 gather data and to benchmark against leadership’s expectations,
1:28:02 the board expectations, et cetera.
1:28:04 And this just takes time to gather the data and understand where
1:28:07 your baseline is at, which she has done so and has put some
1:28:11 manual tracking procedures in place.
1:28:14 So we continue to have this open because she’s refining her
1:28:16 process as she gathers additional data.
1:28:19 And Dr. Thetty, chime in any time if you have something to add.
1:28:22 So I will.
1:28:23 Part of it is – thank you.
1:28:24 Part of what we’ve had to do in human resources is restructure
1:28:28 our organizational chart.
1:28:30 And because we’ve had several retirements, we’ve been able to do
1:28:33 that to put a lot of these things in the audit in place.
1:28:36 But the retirements started in January and are continuing
1:28:39 through June.
1:28:41 So that’s why you’ll still see some things open here and still
1:28:44 with moderate risk because we haven’t been able to implement
1:28:46 them.
1:28:47 In regards to metrics, what I found out in coming on board is
1:28:51 that data collection can be difficult.
1:28:54 And we have identified what is important organizationally to
1:28:57 collect and how we’re going to collect it, who’s doing it, on
1:29:00 what schedule.
1:29:02 Because the other thing we’ve found is our system is a point in
1:29:04 time.
1:29:05 So if somebody asks for a piece of data, whether it’s teacher
1:29:09 attendance or turnover or terminations, it’s a point in time
1:29:14 when someone runs it.
1:29:15 And when you don’t document the time it was run, the data will
1:29:17 never be the same the next time you run it.
1:29:20 So we’ve had to identify specific time frames.
1:29:23 This will be run on the first of the month.
1:29:24 This will be run only every July 31st.
1:29:27 So that everybody knows where we’re getting our information from,
1:29:30 where our source is.
1:29:32 And if you ask for it off cycle, we can’t give it to you because
1:29:35 it will not match.
1:29:36 I don’t know if that makes a lot of sense, but we did find that.
1:29:41 There’s no way to date stamp and time stamp.
1:29:43 We do date stamp and time stamp, but I’m very hesitant to give
1:29:46 out information that we run out of our AS400 system.
1:29:49 Like teacher salary data, for example.
1:29:51 And that is a point in time.
1:29:53 If somebody asks for that today and I run it, it will be
1:29:55 different than what I give you tomorrow.
1:29:57 Because we have people separate employment, we have payroll
1:30:00 catch up with people, and the numbers will never be the same.
1:30:04 So the question always is, why can’t we get the same consistent
1:30:07 number?
1:30:08 The only way we can give the same consistent number is to base
1:30:10 it on a date certain.
1:30:12 So that’s what we do, and I always identify what that date and
1:30:16 time is so that we can go back to it later.
1:30:19 So number two, starting on page 11, manual procedures.
1:30:27 At the time that we performed our original audit, Dr. Fetty had
1:30:30 walked in and there was a process in place to already implement
1:30:34 an applicant tracking system to automate parts of the onboarding
1:30:38 process.
1:30:39 So since she has been there, I think she’s been able to get her
1:30:42 feet under her and get a better handle on that project and has
1:30:45 made some changes in the direction.
1:30:47 It’s still in process of being implemented because Dr. Fetty has
1:30:50 her strategic plan in place for how she wants it to be
1:30:53 implemented.
1:30:54 So if you have anything to add to that as well.
1:30:56 I do, I do.
1:30:57 The employee who was originally assigned to the ATS separated
1:31:00 employment in September.
1:31:02 And after her separation, we realized that it was not as ready
1:31:05 for prime time as I may have been under the impression that it
1:31:09 was.
1:31:10 So I’ve worked with a vendor because we do have an applicant
1:31:14 tracking system right now.
1:31:16 It’s called Beacon.
1:31:17 And what I found out is the development of this process was
1:31:20 really just a different beacon.
1:31:22 And that’s not what we needed.
1:31:24 We don’t need a different system than what we already have.
1:31:28 We need a different system than what we already have.
1:31:30 We don’t need a new system to mimic our process right now.
1:31:33 And so we’ve had to go back to the drawing board on some things.
1:31:36 And a stage two in this applicant tracking system was to
1:31:38 automate some of the onboarding processes.
1:31:41 Well, we’re not ready to deploy the applicant tracking system at
1:31:44 this point.
1:31:45 So we can’t deploy the automated onboarding.
1:31:48 So right now, our onboarding is still very, very manual.
1:31:52 We’ve worked out a process behind the scenes.
1:31:55 And we’re working with a particular department and a couple of
1:31:58 schools to do an online through a secure site to do onboarding.
1:32:04 And we’ve taken over some of the onboarding functions with my
1:32:08 organizational review.
1:32:10 That will hopefully, as we move forward, we’ll get all the pitfalls
1:32:13 out of that.
1:32:14 And then until we can get ATS working, we may be able to use
1:32:17 this folder system that we’ve developed with ET to do some more
1:32:22 online onboarding.
1:32:23 Because we have delays.
1:32:25 And the delays are noted in the report.
1:32:27 You noted things are not getting signed until we finally get
1:32:30 them in the courier.
1:32:32 And we’re trying to mitigate all that risk.
1:32:35 Moving to page 13, number 3, Standard Operating Procedures.
1:32:44 Dr. Fetty’s team has drafted and finalized or is still working
1:32:49 to complete many SOPs.
1:32:51 And certainly significant documentation and formalization of
1:32:55 their internal processes has taken place since our last touchpoint
1:32:59 with her.
1:33:00 We left this open because there are a few key ones that her
1:33:03 management is still working to finish.
1:33:05 But by and large, they have completed quite a bit.
1:33:08 There was significant progress here.
1:33:10 Number 4, we were able to close out.
1:33:17 This had to do with training our HR liaisons, which are our
1:33:20 secretaries out in the schools and in the departments,
1:33:23 so that they understand the procedures required of them in their
1:33:26 role.
1:33:27 We tested that and had no exceptions and feel comfortable
1:33:30 closing that.
1:33:31 Number 5 on page 16, New Hire and New Appointment Review and
1:33:37 Approval.
1:33:38 We tested a sample of new hires and appointments and we noted a
1:33:41 couple exceptions in approval dates and things like that.
1:33:45 And it’s probably a product of the manual process that is still
1:33:49 in place.
1:33:50 We feel like this will be mitigated once the applicant tracking
1:33:53 system and the automation is put in place.
1:33:56 Dr. Fetty, any comments on those?
1:34:02 No, you covered it.
1:34:03 Thank you.
1:34:04 Number 6, page 18, Calculating and Reviewing Compensation.
1:34:08 This one relates to separating the duties between preparation of
1:34:11 a compensation calculation and review of that calculation.
1:34:15 There’s some challenges with resources in that department and
1:34:18 some duties have been offloaded from the director of
1:34:22 compensation,
1:34:23 but still working to identify which resource can really take the
1:34:26 full reigns of this separate duty that needs to be put in place.
1:34:30 I would agree with that.
1:34:32 We, part, like I said, with my retirements, part of my restructure
1:34:35 has to do with who calculates salary offers
1:34:39 and who gets salary offers and where they go for their approval
1:34:42 and then the final approval being the director.
1:34:45 In cases in the past, she was the first, second, and third approver
1:34:49 and that was the exception.
1:34:50 And, well, it was the norm, but it was the exception noted in
1:34:54 the audit and that has been, to the extent possible,
1:34:59 rectified but not totally rectified yet.
1:35:02 Since she retires coming out?
1:35:03 No, she’s not retiring, but I’ve had other retirements that have
1:35:06 allowed me to restructure my employment group
1:35:09 so that I can have the employment group working through,
1:35:11 especially non-bargaining.
1:35:13 Our director of compensation did all the non-bargaining, so she
1:35:16 was the first, second, and third line, and she can’t be.
1:35:19 That’s the separation of duties, so we’ve restructured that.
1:35:22 My third retirement comes in June, and that’s when the next
1:35:25 piece falls in place.
1:35:27 Moving on to number seven on page 19, we tested employee, new
1:35:34 hire employee files for completion of the required onboarding
1:35:38 documents.
1:35:39 We had no exceptions, so we feel comfortable closing this one.
1:35:42 And I know you all put a lot of work into that.
1:35:44 Number eight, page 20, job advertising and job description forms.
1:35:52 If you may recall the discussion we had on this, this is a huge
1:35:55 project.
1:35:56 Probably thousands of hours for your team to complete updating
1:35:59 job descriptions for all the jobs that we have here at the
1:36:02 district.
1:36:03 We have done some, 16% I think you have here in your comments,
1:36:07 Dr. Thede.
1:36:08 But this is an ongoing process that will take multiple years to
1:36:12 complete.
1:36:13 What we’re doing right now with job descriptions, it started as
1:36:16 a project about a year, a little bit before I came on board,
1:36:20 where every one of our about 600 job descriptions was supposed
1:36:23 to be rewritten in the space of six weeks,
1:36:25 and taken to the board for approval, and that is, that’s not
1:36:28 something that we can do.
1:36:31 So we changed that scope to looking at departments that are
1:36:35 reorganizing and looking at job descriptions that are completely
1:36:39 updated,
1:36:40 that we have to update through the needs of our different
1:36:43 departments, and that’s what we’ve taken to the board.
1:36:45 The goal is to finish all of them, and to get them all done.
1:36:49 But to do that in six weeks was not something that was feasible,
1:36:53 or really even advisable.
1:36:55 We’re working through it.
1:37:00 Number nine on page 22, I-9 forms.
1:37:04 The district’s in the process of putting in an e-verify process
1:37:09 for this.
1:37:10 So previously it had been done manually, now they’re going to
1:37:13 use the system e-verify to automate the I-9 process.
1:37:17 That’s still in the works, but we’ll come back and test it.
1:37:20 We’ve done the training process on several of our employees.
1:37:23 They have to take a training course in order to be able to use e-verify.
1:37:26 And so we’ve done that, and we’re getting ready to deploy that.
1:37:29 Our target is July 1st.
1:37:31 If we feel comfortable, once that’s in place, this will close.
1:37:35 And number 10 on page 23, roles and authority levels for salary
1:37:39 adjustments.
1:37:40 We have requested that the board and the superintendent clarify
1:37:43 the roles and authority levels given to each of them for salary
1:37:46 adjustments.
1:37:47 And we noted that the board policy has since been updated to
1:37:49 clarify that role.
1:37:51 So we’ve closed this issue.
1:37:56 Number 11, recruitment strategy on page 24.
1:38:00 We met with Mike Alba, your director of recruitment, who just
1:38:04 was full of information for us.
1:38:07 Almost information overload regarding what the district has in
1:38:10 place for their recruitment programs and their strategy.
1:38:13 And it was a fascinating conversation.
1:38:16 We felt comfortable that their arms are completely around where
1:38:19 they want to be in terms of recruitment.
1:38:21 And certainly, teacher shortage is always an issue.
1:38:24 But they are acting very proactively.
1:38:27 So we felt comfortable closing this issue.
1:38:30 But all of our school districts that we go to.
1:38:33 Again, we’re in Collier, Lee, West Coast, Belusha, Osceola,
1:38:37 Miami.
1:38:38 Anytime we sit down with a board member and say, “What keeps you
1:38:41 up at night?”
1:38:42 Their first reaction is typically teachers.
1:38:44 We can’t find them.
1:38:45 So the district completely is on board with this.
1:38:49 And I wish we could do more.
1:38:51 But I don’t know what we can do to mitigate that risk.
1:38:54 But it certainly is interesting to see how Brevard tackles it
1:38:58 compared to some of our other clients very proactively.
1:39:05 And that concludes our follow-up report.
1:39:12 Are there any questions?
1:39:13 We’ll see this again, I’m sure.
1:39:22 Next on the agenda is the financial services update.
1:39:25 Right.
1:39:26 And there is none of this.
1:39:29 I’m glad to be here.
1:39:30 And this has been very, very insightful and very helpful.
1:39:34 So I’m glad to be.
1:39:35 Excellent.
1:39:36 Welcome on board.
1:39:37 Thank you.
1:39:38 All right, Carrie, you ready for the action items?
1:39:41 Yes, ma’am.
1:39:43 You’ll see that Mr. Edwards requested at our last meeting that I
1:39:47 create a parking lot so that we don’t lose sight of some of our
1:39:50 older action items.
1:39:52 That’s going to be on the back page of the current ones, just so
1:39:55 that you guys see that we’ve still got a handle on them.
1:39:59 Item number one, from March of ‘18, Mr. Edwards requested a
1:40:03 follow-up on the transportation FIMS system.
1:40:07 And Dr. Mullins has kind of given us an update on that during
1:40:12 the follow-up report.
1:40:14 And I will amend the notes to read that we have gone through the
1:40:19 RFP process and are negotiating costs with the selected vendor.
1:40:26 And we’ll leave that open.
1:40:28 I would, yeah, I would thank Mr. Edwards if you want to continue
1:40:30 to follow-up on that.
1:40:31 I agree.
1:40:32 Item number two, Ms. McDougall requested that the committee
1:40:35 consider an audit of the district’s discipline plan.
1:40:38 And I have that as Dr. Mullins is discussing that with the board
1:40:42 to determine who will perform this function.
1:40:46 And also, Mr. Seusson requested that we consider an audit of the
1:40:50 district’s expulsion policy and process.
1:40:53 And that also is being discussed with the board to determine who
1:40:57 will perform this function.
1:40:59 And I have no added action items for this meeting.
1:41:03 Okay.
1:41:04 Do we have any last-minute items?
1:41:10 Do you want to go if there’s actually others on the path?
1:41:15 Would you like to do the parking lot items?
1:41:17 Oh, okay.
1:41:18 We do.
1:41:20 Items that are in the parking lot so we don’t lose sight of them
1:41:23 is further discussion of PTO booster clubs and a plan for club
1:41:27 accountability.
1:41:29 That is still pending policy review by Cindy, our new CFO, and
1:41:34 Mr. Gibbs, our school board attorney.
1:41:38 I know you’re coming here to get work today.
1:41:40 That’s great.
1:41:41 I’m so sorry.
1:41:42 Mr. Edwards requested a status report on the new ERP system.
1:41:47 Again, that’s something that is a little bit low on the priority
1:41:53 list right now.
1:41:55 Noted that in the last meeting that it’s approximately two to
1:41:58 five years out on getting that in and implemented.
1:42:02 Mr. Edwards, in June of last year, requested an update on the
1:42:05 status of the-
1:42:06 Sorry, Kara, can I just add a note to the ERP?
1:42:12 Yes, sir.
1:42:14 Probably one of the, a significant factor in that delay is it is,
1:42:21 it’s a funding challenge.
1:42:24 It’s a funding issue.
1:42:25 It’s a millions of dollar commitment and we’re evaluating the
1:42:29 funding landscape as to whether or not what that looks like
1:42:34 because there just does not seem to be millions of dollars
1:42:36 necessarily coming.
1:42:38 So we will hopefully have a better sense of that, what that may
1:42:41 look like for the Audit Committee, maybe at our next meeting.
1:42:49 Um, update on the status of the Quality Control Department at a
1:42:52 future meeting.
1:42:53 Um, allocations repurposed to internal audit to meet Auditor
1:42:56 General requirements.
1:42:58 And I did, Dr. Mullins, get a response from Tim Tucker.
1:43:01 Um, yes, we still intend to report that the internal auditor
1:43:07 should be employed by the district.
1:43:11 And he put that in quotation marks.
1:43:13 Our operational report release has been delayed until mid-April.
1:43:17 And that’s all the response that he gave.
1:43:20 And, yeah, go ahead.
1:43:26 Do we have a meeting with him next week?
1:43:30 Yes, on the 17th.
1:43:31 And that, but that’s just required communications.
1:43:34 It’s not going to take any word of it.
1:43:36 It’s not actually based on the report that they will issue.
1:43:39 It’s just required things that they’re, they have to tell you
1:43:42 and Ms. Belfer.
1:43:44 So he’s not necessarily bringing back the finding from?
1:43:48 Correct.
1:43:49 Okay.
1:43:50 And our last item that’s in the parking lot is, um, Neola
1:43:55 policies, um, reviewed to update the audit.
1:43:59 The audit committee charter.
1:44:00 And discussions are ongoing with that.
1:44:02 I wanted to also update the committee.
1:44:07 You’ll find in your packet, I’ve updated the audit committee, um,
1:44:11 contact information sheet to add Mr. Slate.
1:44:14 And to add Cindy, I did neglect in my hurry to put Cindy’s email
1:44:18 address.
1:44:19 But I will correct that and send this out to everyone.
1:44:23 No, that’s wrong.
1:44:24 Oh, you’re not email.
1:44:25 No, I’m not email.
1:44:26 Oh, no, you’re not email.
1:44:27 I’m not email.
1:44:29 I don’t imagine that that would work or not.
1:44:32 That’s funny.
1:44:33 So I will fix that.
1:44:34 My apologies.
1:44:35 Sorry.
1:44:36 And get that sent out to you when I get back to my desk.
1:44:39 Okay, once that’s it, the meeting is closed.