08/15/2003 Audit1
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AUDIT REPORT OF MONROE COUNTY
SALVATION ARMY
MISDEMEANANT CONTRACT
August 15, 2003
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Prepared by:
Internal Audit Department
Clerk of the Circuit Court
Danny L. Kolhage, Clerk
Monroe County, Florida
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O1P0E COUII:Y. fy00
CLERK OF THE CIRCUIT COURT
MONROE COUNTY
BRANCH OFFICE
MARATHON SUB COURTHOUSE
3117 OVERSEAS HIGHWAY
MARATHON, FLORIDA 33050
TEL. (305) 289-6027
FAX (305) 289-1745
August 15, 2003
The Honorable Danny L. Kolhage
Clerk of the Circuit Court
MONROE COUNTY COURTHOUSE
500 WHITEHEAD STREET, SUITE 101
KEY WEST, FLORIDA 33040
TEL. (305) 292-3550
FAX (305) 295-3663
Re: Audit of the Monroe County Salvation Army Misdemeanant Contract
Dear Mr. Kolhage:
BRANCH OFFICE
PLANTATION KEY
GOVERNMENT CENTER
88820 OVERSEAS HIGHWAY
PLANTATION KEY, FLORIDA 33070
TEL. (305) 852-7145
FAX (305) 852-7146
The Clerk's Internal Audit Department has completed the audit of the Monroe County Salvation
Army Misdemeanant Contract. The audit concentrated on the Cash Management Process used in
the Misdemeanant Offender Supervision Services contract. Probation services include the
collection of court imposed fines and fees that the Salvation Army subsequently remits to the
Clerk of the Court. A review of the Salvation Army method of accounting and reporting fine
information to the Court was performed.
We would like to thank the Commanding Officer of the Salvation Army and his staff for their
cooperation while conducting the audit. By its nature, this report focuses on exceptions,
weaknesses, and problems. This should not be understood to mean there are not also various
strengths and accomplishments.
Our audit revealed that although the County has contracts with private business organizations to
administer programs, strong financial and internal controls are needed in the contracts.
The audit was completed with the assistance of Patricia Sutton, Internal Auditor.
The accompanying audit report is provided for your information. Additional copies of the report
will be provided upon your request.
Sincerely,
�►� C
' Sandra L. Mathena, CIA, CFE, CPA
Director of Internal Audit
Cc: Board of County Commissioners (5)
Judge Payne, Chief Judge of the Sixteenth Judicial Circuit
Captain David Worthy, Commanding Officer Salvation Army
James Roberts, County Administrator
Mark Kohl, State Attorney
Jacque Donahue, Supervisor Clerk's Office
AUDIT REPORT OF MONROE COUNTY
SALVATION ARMY MISDEMEANANT CONTRACT
TABLE OF CONTENTS
Page
I.
SCOPE AND OBJECTIVES
1
H.
METHODOLOGY
1-2
III.
BACKGROUND
3-4
IV.
CONCLUSIONS
5
V.
AUDIT FINDINGS:
A. Unauthorized Loan
6
B. Distribution Of Amounts Collected Not Made On A Timely Basis
7
C. Outstanding Check List Contains Numerous Checks That Could Be Voided
And Reissued
8
D. Annual Financial Reports Not Submitted
9
E. Quarterly Reports Not Submitted
10
F. Financing Purchases From Escrow Funds
11
G. Excluding The Escrow Account From The External Financial Statements
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H. Collection Of Public Defender Application Fees
13
I. Theft Of Probation Funds By Counselors At The Marathon And Key West
Probation Offices
14-15
J. Utilization Of System Generated Reports
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A. Contract For Misdemeanant Offender Supervision Services Provided By The
_ Salvation Army
B. Letter From The Salvation Army
C. Assistant County Attorney Opinion
D. Letter From Court Administrator
E. Monthly Statistical Report
VII. AUDITEE RESPONSES
AUDIT REPORT OF MONROE COUNTY
SALVATION ARMY MISDEMEANANT CONTRACT
I. OBJECTIVES AND SCOPE
At the request of the Monroe County Clerk of the Circuit Court, the Internal Audit
Department has completed an audit of the Cash Management Process used in the
Misdemeanant Offender Supervision Services contract provided by the Salvation
Army. A review of Salvation Army bank reconciliations and methods of accounting
and reporting fine information to the Court was performed.
II. METHODOLOGY
A. During the audit, the following personnel were interviewed to obtain information
about the Policies and Procedures used in Supervision Services:
1. Captain David Worthy, Commanding Officer - Salvation Army
2. Tom Wagner, Accountant - Salvation Army
3. Terry Buchaus, Misdemeanant Operations Analyst - Salvation Army
4. Lillian Harrison, Coordinator of Information Services - Salvation Army
5. Jim Gannon, Director of Corrections - Salvation Army
6. Kim Lieberknect, Sr. Probation Officer - Salvation Army
7. Director of Court Services
8. Supervisor Traffic/Misdemeanors
9. Assistant County Attorney
B. The Internal Audit Department examined the following documents:
1. Executed copy of the contract between Monroe County and Salvation Army
2. Official County Records and supporting documentation
3. Copies of Salvation Army Bank Statements
4. Copies of Salvation Army Receipts, Canceled Checks
5. Observation at Salvation Army of the Cash Process
6. Spreadsheets provided by the Salvation Army of all Cash Receipts and Cash
Disbursements from 1992 to April 2003
7. Salvation Army's Financial Statements
8. Florida Statute 717 - Disposition of Unclaimed Property
9. Florida Statute 948.15 - Misdemeanor Probation Services
10. Salvation Army Escrow Disbursement Report
11. Salvation Army Internal Audit Reports
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C. The Internal Audit Department reviewed contracts to ensure that all terms and
conditions were being complied with as documented within the agreement.
D. The Internal Audit Department reviewed a number of probation files maintained by
the Salvation Army and the Clerk's Office to determine whether court orders were
complied with and reported to the Clerk's Office.
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H
III. BACKGROUND INFORMATION
Monroe County sought the services of a private entity to provide misdemeanor probation
services pursuant to Section 948.15 of the Florida Statutes. The current Contract For
Misdemeanant Offender Supervision Services Provided By The Salvation Army was entered
into between Monroe County and the Salvation Army (Army) on behalf of the Chief Judge of
the Sixteenth Judicial Circuit on December 10, 2000. This contract falls under the supervision
of the Courts.
The contract appoints the Salvation Army per Section 948.15 F.S. as the private entity to
provide certain probation services for the efficient administration of justice in Monroe County.
Probation services include the collection of court imposed fines and fees that the Salvation
Army subsequently remits to the Clerk of the Court. The Army is entitled to collect from each
probationer costs of supervision. Under this agreement, the Army derives its funding by
charging probationers $45.00 per month for its services. During May 2003, clients under
active supervision totaled 582 in Key West and 299 in Marathon.
Terms of the December 2000 executed contract are for a 36-month period or until terminated
by either party. See Exhibit A - Contract For Misdemeanant Offender Supervision Services
Provided By The Salvation Army. In addition to other services applicable to the contract, the
Army agrees to provide the following services to the Court:
Assign in-house court representatives in each county courthouse for initial intake of
persons placed on misdemeanor probation.
Provide interpreters to assist non-English speaking probationers in understanding and
meeting the terms of probation.
Maintain flexible hours including weekend and/or evening hours by appointment when
necessary for continued employment of the probationer and to encourage employment
of the probationer.
Prepare a written plan of need, which is to be addressed during the period of
supervision on each probationer.
Maintain separate case files containing information on all cases referred to the
misdemeanor probation program. The information in the file shall include the name of
the probationer, case number, charge(s), COURT order(s) relating to supervision, intake
and supervision reports, payment records of restitution and court ordered fees, data and
time records of in -office and field contacts with the probationer, records of community
service work hours, report of treatment programs or other special conditions of the
COURT, computer house arrest records, any known prior criminal record, reports of
violation, report of termination, and probation disposition.
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tMaintain records for a period of three (3) years past the termination of probation to
encourage employment of the probationer.
Provide a minimum of one monthly probationer contact, either through mail or in
person, for counseling and/or supervision, unless waived by the COURT.
' Provide all probation services as directed by the COURT and shall follow up and
enforce special conditions of probation including but not limited to restitution, fines and
I court costs, evaluation and treatment, community service, cost of supervision and
procurement of licenses.
Shall place priority on supervision of the payment of restitution to probationers'
victim(s). Waivers by the COURT of any special condition of probation shall be noted
in the case file.
All sums payable to the Clerk of the Court and to victims shall be deposited into an
escrow account usable only for such payments. Payments of fines and court costs shall
be made in accordance with a schedule to be developed by the Clerk of the Court.
Establish a program, which allows individuals, assigned to' the program to pay court
' ordered obligations in monthly installments.
' Obtain verification in writing from the appropriate agency for all non -monetary
conditions of probation imposed by the COURT.
The Army agrees to maintain auditable financial records of all fines, restitution, and
I supervision fees received and disbursed by the Army. A financial report shall be
provided to the Chief Judge within (90) days following the close of the Army's fiscal
year.
In 2002, the Salvation Army implemented a new module to their current computer software
that allows maintenance of payment information and automates payment information for
review and processing. Payments collected for restitution and court ordered fees adjudicated
after September 11, 2002 are to be processed and distributed on a biweekly basis.
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IV. AUDIT CONCLUSIONS:
A. Unauthorized loan of $25,000 to the Army's corporate headquarters using escrow
funds violating the terms of the contract.
B. Distribution of fines, court costs, and restitution collected are not made on a timely
basis.
C. The outstanding check list contains numerous stale dated checks that. could be
reissued.
D. Annual financial reports have not been provided to the Chief Judge within 90 days
following the close of the Army's fiscal year.
E. Quarterly reports summarizing the number of offenders supervised by the Army are
not submitted as required by Florida Statute 948.15 Misdemeanor Probation
Services.
F. Escrow funds are being used to finance check stock purchases, bank fees and
deposit corrections. Reimbursement does not appear to be on a timely basis.
G. The escrow account balance and the related liability are excluded from the Army's
financial statements.
H. The public defender application fees of $40 are frequently not paid when filed, or
within 7 days thereafter. The Army does not collect the $40 unless the Judge
indicates it is a condition of probation.
I. Internal theft and falsification of documents was discovered by Army personnel in
both the Marathon and Key West probation offices.
J. The newly implemented module to maintain payments for fines and restitution
generates numerous reports that are not being utilized for system management.
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V. AUDIT FINDINGS:
A. Unauthorized Loan
Finding:
The Army acts in a fiduciary capacity for the Clerk of Courts, State Attorney, Key West
Police Department, Monroe County Sheriff's Office, Florida Highway Patrol, other
agencies and the victims. The Army's accountant wire transferred a $25,000
unauthorized loan to its corporate headquarters in October 1998 violating the contract
provisions. The Army accountant indicated there was a lack of funds in their other
accounts due to Hurricane George and the Fines and Restitution account was reimbursed
the following month.
This unauthorized loan violates the contract which states "All sums payable to the Clerk
of the Courts and to victims shall be deposited into an escrow account usable only for
such payments."
Recommendation:
1. Unauthorized loans should not be made from the escrow account according to the
terms of the agreement with the Army.
Salvation Army Response:
The Salvation Army certainly understands that utilizing escrow monies for any purpose
other than that relating directly to the outlay and distribution of F & R monies is not
permissible. In fact, doing so directly counters Salvation Army policy, and internally, we
would never knowingly allow such a practice to occur. I was not in command in 1998
nor did The Salvation Army condone such an act, but I can assure you that it has not
occurred since nor will it occur in the future.
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B. Distributions Of Amounts Collected Not Made On A Timely Basis.
Finding:
The Army collects fines, court costs, restitution and other costs from probationers on
behalf of the Courts, deposits the funds into a non -interest bearing escrow account and
then distributes the money to the appropriate owner. Due to turnover within the Army,
funds due to the Clerk of Courts totaling more than $90,000 had not properly been
distributed. See Exhibit B - Letter from the Salvation Army. The Clerk requested an
internal audit of the Army misdemeanor collection and distribution process. The Army's
Director had Army personnel from the district headquarters process $79,499.36 of the
$90,000 backlog. These funds were distributed to the Clerk's office in August 2002.
During the internal audit, it was discovered that there were additional amounts totaling
$29,196.50 from the period 1992 through 2000 that were not distributed. The Army and
the Clerk's Misdemeanor Department are currently researching this amount and
approximately $20,400 will be processed.
Recommendation:
1. The Salvation Army should continue researching the distribution of the remaining
funds.
2. The remaining payments of approximately $8,800 received by the Army cannot be
identified. Appropriate authorities should decide what should be done with this
variance.
Salvation Army Response:
The Salvation Army is in the process of determining and identifying the remaining
outstanding funds so that the monies can be disbursed properly in a timely manner and
we will comply with the law in the distribution of those unidentified monies. In other
counties this money has been sent to the State of Florida Department of Banking and
Finance.
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C. Outstanding Check List Contains Numerous Checks That Could Be Voided And
Reissued
Finding:
After reviewing the Army's most current bank statement April 2003, the auditors
discovered outstanding checks being carried forward each month since 1994. The total is
$51,480.15 as of the April 30, 2003 bank statement. The amount outstanding between
1994 and 2002 totals $22,662.98. The Army's accountant explained that many of the
checks were issued to victims for restitution payments and had been returned without
forwarding addresses. These funds should be sent to State of Florida Department of
Banking and Finance as abandoned funds in accordance with the Assistant County
Attorney's Opinion. See Exhibit C - Assistant County Attorney Opinion.
Of the outstanding checks carried on the bank reconciliation since 1994, 37% are easily
identified as owing to local organizations. For example, Monroe County Clerk of Courts
has a balance of $3,731.50, Winn Dixie $1,072.17, State Attorney $240.00, Public
Defender $30.00, Key West Citizen $50.00 and the Board of County Commissioners
$50.00. Checks totaling $2,767.00 of the Clerk's $3,731.50 had been returned to the
Salvation Army and should have been corrected and reissued to the Clerk. The auditors
have requested that these checks be reissued during the audit.
Recommendation:
1. Outstanding checks and returned checks should be resolved on a timely basis.
2. Appropriate authorities should decide when the unclaimed restitution payments
should be processed as abandoned property.
Salvation Army Response:
Salvation Army bookkeeper, Tom Wagner, will be formally instructed on procedures
related to clearing outstanding amounts. Checks not cleared in six months will be voided
and reissued in a second attempt to locate the payee. If the victim cannot be found,
checks will be reissued to the State of Florida Department of Banking and Finance as per
instructions of the Assistant County Attorney. I, as officer in charge, will continue to
monitor our process for check distribution to ensure that they are processed, cut and
mailed in the most efficient manner possible.
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D. Annual Financial Reports Not Submitted
Finding:
The Contract for Misdemeanant Offender Supervision Services Provided by the
Salvation Army - Section III. Records. states "The ARMY shall maintain auditable
financial records of all Fines, Restitutions, and Supervision Fees received and disbursed
by the ARMY. A financial report shall be provided to the Chief Judge within (90) days
following the close of the Army's fiscal year. " According to the Court Administrator,
financial reports have not been provided by the Salvation Army to the Chief Judge. See
Exhibit D - Letter from Court Administrator.
The financial report should be completed annually and provided to the Chief Judge to
ensure accountability and the effectiveness of the Army in providing services to the
Court.
Recommendation:
1. The Salvation Army should adhere to the terms of the Agreement and provide the
financial report on an annual basis.
Salvation Army Response:
We have been lax in the requirement that annual financial reports be submitted to the
Chief Judge as per the contract requirement. This report and all other required
accountability documentation will be submitted to the proper parties within the outlined
contractual deadlines.
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E. Quarterly Reports Not Submitted
Finding:
Quarterly reports summarizing the number of offenders supervised by the Army are not
submitted as required by Florida Statute 948.15 Misdemeanor Probation Services.
During the audit, the Army started a monthly statistical report that will be forwarded to
the Court. See Exhibit E - Statistical Report.
Florida Statute 948.15 discusses the tenns of the contract that must be stated in the
Agreement. Part (3) states "In addition, the entity shall supply the chief judge's office
with a quarterly report summarizing the number of offenders supervised by the private
entity, payment of the required contribution under supervision or rehabilitation, and the
number of offenders for whom supervision or rehabilitation will be terminated."
The Agreement states only that "The ARMY shall also record and maintain statistical
data concerning the number and type of cases being handled, terminated, and completed
as well as such additional information as may be required by the Chief Judge to assist in
evaluating the effectiveness of the ARMY'S activities. "
Recommendation
1. The Agreement should require quarterly activity reports in accordance with Florida
IStatute 948.15 Misdemeanor Probation Services.
Salvation Army Response:
The issue of not submitting reports to the judges has been rectified and reports dating
back through January 2003 have been sent to all judges.
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F. Financing Purchases From Escrow Funds
Finding:
The Army's non -interest bearing escrow account should be used for the purpose of
depositing funds to be immediately reissued to the appropriate recipient(s). It appears
escrow funds are being used to finance check stock purchases, bank fees and deposit
corrections. The Army's accountant stated the funds are returned to cover the cost of any
expenses to that account the month following the purchase or charge to the account. A
review of the bank statements revealed that reimbursement does not appear to be on a
timely basis.
Recommendation:
1. Policies and Procedures should be in place to mandate the Army to reimburse the
account for any check stock purchases, bank fees and deposit corrections.
Salvation Army Response:
Again, Salvation Army policy mandates that monies from escrow accounts not be used
for any purpose other than those explicitly allowed for by the account. I, as officer in
charge, will monitor the escrow account to ensure that this situation never occurs again. I
can assure you at this time that all monies have been replaced in the escrow account.
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G. Excluding The Escrow Account From The External Financial Statements
Finding:
A fundamental part of non-profit accounting is the establishment of fiduciary funds to
account for funds held for others. This discloses and provides control over the liability
for funds collected for third parties.
The Army has full control over the escrow account and therefore should show this
account as an asset on their financial statements with an offsetting liability. The net
effect is zero and the notes to their financial statements would provide any necessary
details regarding the account. Currently, the Army doesn't provide any notes to the
financial statement mentioning their fiduciary duty to the Courts.
Recommendation:
1. The Salvation Army should show the balance of funds held for others in its external
accounting reports. Fiduciary funds should be reported which account for the
Salvation Army's liability for funds collected for others.
Salvation Army Response:
-- The Salvation Army's Territorial (regional) Finance Department determines the setup of
our accounting functions. I have no authority to change the manner in which these
accounts are setup or functionalized, however, I will make certain that our finance
department understands that this audit has expressed concerned regarding this issue.
Please understand, though, that these funds are auditable at any time per our contract.
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H. Collection Of Public Defender Application Fees
Finding:
Public defender application fees of $40 are frequently not paid when filed, or within 7
days thereafter. The Salvation Army does not collect the $40 unless the judge indicates it
is a condition of probation. Florida Statute 27.52 (ld) states `If the application fee is not
paid prior to the disposition of the case, the clerk shall advise the sentencing judge of
this fact and the court shall:
1. Assess the application fee as part of the sentence or as a condition of probation; or
2. Assess the application fee pursuant to s. 938.29. "
The statute further states "Notwithstanding any provision of law or local order to the
contrary, the clerk of the court shall assign the first $40 of any court assessed fees or
costs that are paid by an indigent defendant as payment for the application fee. " The
Clerk automatically assesses the $40 fee on the case when an application for public
defender is filed.
Recommendation:
1. The Salvation Army should consider consulting with the Court to make it an
automatic condition of probation when the public defender application fee is not paid
prior to filing or within seven days thereafter.
Salvation Army Response:
As we understand it, the collection of the public defender application fee is the Clerk of
the Court's responsibility per Florida Statute 27.52, as is the notification of nonpayment
to the court. It is The Salvation Army's responsibility to have clients comply only with
conditions first ordered by the courts. The Salvation Army does not have the authority to
order clients to comply with conditions which have not been ordered by the court.
In order to ensure the accuracy of the sentence ordered by the court, the Clerk of Court
should be responsible for typing the court orders and then relaying a copy to The
Salvation Army. Out of necessity, we have taken on responsibility traditionally
belonging to the Clerk in obtaining information from the court minutes and completing
court orders for the judges to sign. This has proven to be both costly and time
consuming.
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I. Theft Of Probation Funds By Counselors At The Marathon And Key West Army
Probation Offices
Finding:
Internal theft of probation funds was discovered by Salvation Army personnel. Salvation
Army district headquarters personnel subsequently performed an internal investigation.
The investigation in the Key West probation office revealed 23 cases of fraud in the
amount of $10,017.50, due to the Monroe County Clerk of the Court. Detail was
provided to the Key West Police Department.
The Salvation Army's probation office in Marathon also incurred internal theft. The
terminated employee has been ordered to pay restitution in the amount of $1,337.00, due
to the Monroe County Clerk of the Court.
The Salvation Army has experienced a 100% turnover in staff in the Key West office and
has limited personnel in the Marathon facility resulting in the falsification of records and
theft of funds paid by probationers. The Salvation Army audit personnel in their audit
report dated May 31, 2002 stated `Breaks and irregularities in the receipt number
- sequences contained in the deposits makes internal control over funds received very
difficult." The Army further recommended "To provide sound internal controls, all
numerically controlled documents should be issued in sequential order. Receipts should
also be deposited in numerical order to insure that all receipts are deposited promptly."
The Army has a new director managing both probation offices and is more closely
adhering to policies and procedures to prevent the occurrence of future theft.
Recommendation:
1. The Salvation Army should reimburse the Clerk's Office the remaining amount of
the $10,017.50 in a lump sum, at this time.
2. Salvation Army policies and procedures for cash management should be followed.
Salvation Army Response:
The Salvation Army will reimburse the Clerk of the Court for the $10,017.50 allegedly
stolen by former probation counselor, William Rodriguez (see attached check).
Employee theft has been a serious and most unfortunate problem in the past, however, it
is important to note the responsiveness of The Salvation Army in handling this issue.
Once the Army became aware of records falsification and alleged theft, an internal
investigation was conducted and local law enforcement agencies were notified, who
subsequently, conducted follow-up, official investigations of their own.
Additional, we have both implemented new and strengthened existing standing policies
related to financial accountability with our counselors. As an example, when a
probationer makes a payment, the payment process begins with the counselor entering
the information into the computer to generate a receipt. The probationer then walks the
Iactual payment into the office of the receptionist who receives the money. The receipt
for monies owed/paid (entered into the computer by the counselor) is then printed by the
receptionist to ensure that the payment owed and payment made match up. In the past,
misappropriation of funds by employees has primarily occurred when there was only one
employee involved in the transaction. I might also note that while there has been
I significant turnover, the staffing level in each office is proportionate to the number of
cases being supervised and does not relate to theft or the falsification of records.
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J. Utilization Of System Generated Reports
Finding:
The Army implemented a new module on September 11, 2002 to their current software
that allows maintenance of payment information and automates payment information
for review and processing. The new module produces various reports to manage the
fines and restitution receipts and payments in a more efficient manner. The
Coordinator of Information Services indicated there are numerous reports to be used for
reconciliation and review by the Army's accountant and other Army personnel. The
auditor's were provided a system generated report, Escrow Disbursement Report, to
reconcile open receipts maintained on a Lotus spreadsheet by the Army's accountant to
current system information. The review of the Escrow Disbursement Report revealed
payments received dating back to the inception of the new module. The director was
unaware of the report, but indicated it could be a useful tool in managing distributions
on a timely basis.
Review of the system generated reports would ensure proper distribution of client
Ipayments and provide Army personnel the capability to monitor and maintain receipts
and payments in a current and accurate manner.
Recommendation:
1. The Army's District Headquarters should provide additional training to allow Army
personnel to fully utilize the tools available with the new system module.
2. Salvation Army personnel should review system reports on a regular basis.
ISalvation Army Response:
The Salvation Army Divisional (state) Correctional Services Department staff has
committed to offering any and all employee training that will further enhance our staff s
ability to effectively operate and meet client's needs. Further, the commanding officer
and senior administrative staff will ensure that probation personnel submit all required
reports.
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VI. EXHIBITS
1
Exhibit A
Contract For Misdemeanant Offender
Supervision Services Provided By The
Salvation Army
CONTRACT
FOR MISDEMEANANT OFFENDER SUPERVISION SERVICES
PROVIDED BY THE SALVATION ARMY A GEORGIA CORPORATION
TMS.AGREEMENT (the "CONTRACT") is entered into this 10* day to December, 2000,
pursuant to B948.15, Florida Statutes (1991), upon the signature of all parties, by and between
the Board if COUNTY Commissioners of Monroe County, Florida (the "COUNTY"), a political
subdivision of the State of Florida, on behalf of the Chief Judge , Sixteenth Judicial circuit (the
"CHIEF JUDGE") and the Salvation Army, a Georgia Corporation (the "Army").
WHEREAS, certain misdemeanor defendants are sentenced to terms of probation by the County
Court, Sixteenth Judicial Circuit, Monroe County, (the "COURT"); and
WHEREAS, Section 948.15, Florida Statutes (1991), states that supervision, rehabilitation,, and
probation services may be provided by a court -approved private entity; and
WHEREAS, Sections 775.089 and 948.03, Florida Statutes (1989) authorize courts to order
defendants to make restitution; and '
WHEREAS, the COURT seeks a private entity to provide certain probation services for the
efficient administration of justice in Monroe County; and
WHEREAS, Salvation ARMY has pi ovided probation services to the COURT and the COURT
desires that the ARMY continue such services pursuant to a written understanding which
establishes minimum standards of service and financial accountability for the ARMY; and
WHEREAS, the CHIEF JUbGE of the COURT CONTRACT: requests the COUNTY to execute this
Page 1 of 9
NOW THEREFORE, in consideration of the mutual covenants and provisions contained herein,
and for b other valuable consideration received by the parties, the COUNTY and the ARMY
agree as follows:
L TERM AND RENEWAL. The term of the CONTRACT shall begin at the data above
written, upon signatures of all parties and shall remain in effect for thirty-six (36) months or until
terminated by either party hereinafter started. This CONTRACT may be canceled for just cause
by either party. However, the CIRCUIT, after advising the ARMY in writing of deficiencies,
must allows the ARMY ninety (90) days to bring the program'into compliance. If compliancy is
attained, the CONTRACT period will continued unimpaired. Future noncompliance will be
handled as above. If there is continued non-compliance after ninety (90) days, the CONTRACT
can be canceled after thirty (30) days written notice.
M SCOPE OF CONTACT. The ARMY agrees to provide the following services to the
COURT and court -ordered probationers under their supervision consistent with standards and
criteria of the Florida Department of Corrections:
A The ARMY shall assign in -court representatives in each COUNTY courthouse to provide
Proper liaison with the COURT and for initial intake of persons placed on misdemeanor
probation with the ARMY.
B. The ARMY shall have, either on staff or on an on -call basis, interpreters to assist non-English
speaking probationers in understanding and meeting the terms of probation.
C. The hours of operation of the ARMY shall be flexible to encourage employment
probationer. The ARMY shall provide weekend and/or evening hours by appointment when
necessary for continued employment of the probationer.
D. The ARMY shall prepare a written plan of need which is to be addressed during the period of
supervision on each probationer. The'ARMY shall maintain separate case files containing
information on all cases referred to the misdemeanor probation program. Records shall be
maintained for a period of three (3) years past the termination of probation. The information in the
file shall include the name of the probationer, case number, charge(s), COURT order(s) relating
to supervision, intake and supervision reports, payment records of restitution and court -ordered
fees, data and time records of in -office and field contacts with the probationer, records of
community service work hours, report of treatment programs or other special conditions of the
COURT, computer house arrest records, any known prior criminal record reports of violation,
report of termination, and probation disposition. '
E. The ARMY shall provide a minimum of one monthly probationer contact, either through mail
or in person, for counseling and/or supervision, unless waived by the COURT.
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Page 2 of 9
F. The ARMY agrees to provide all probation service as directed by the COURT and shall
follow up and enforce special conditions of probation including but not limited to:
i Restitution
H Fines and Court Cost '.
ii.i Evaluation and treatment
iv Community Service
v Cost of Supervision
A Procurement of Licenses
G. The ARMY shall place priority on supervision of the payment of restitution to probationers"
victim(s). Waivers by the COURT of any special condition of probation shall be noted in the case
file
H. The ARMY is entitled to collect from each probationer costs of supervision as may be ordered
by the COURT and as authorized by Florida Statutes B948.09(1991). Any failure to pay such
costs shall constitute a ground for the revocation of probation by the COURT. This amount is
currently established at forty-five dollars ($45.00) per month. The Chief Judge shall review tins
amount at least annually and may order an increase or decrease for new cases,
I. The COURT may exempt a probationer from the payment of all or any part of the cost of
supervision under a determination of extenuating circumstances. As well, the ARMY may exempt
a probationer from payment of all or any part of the costs of supervision if any of the following
factors are found to exist through actual documentation:
I The probationer has diligently attempted but has been unable to obtain employment which
provides him with sufficient income to make such payments.
ii. The probationer is a student in a school college, university, or course of vocational or technical
status shall be provided to the AGENCY by the educational institution in which the
training designed to prepare the student for gainful employment, Certification of such students
enrolled. probationer is
iii. The probationer has an employment handicap as determined by a physical, psychological, or
Psychiatric examination acceptable to, or ordered by, the COURT.
iv. The probationer's age prevents him or her from obtaining employment.
v. The probationer is responsible for the support of dependents, and the
of supervision constitutes and undue hardship on the probationer, payment of such costs
I The ARMY shall accept payment of all fees only by certified check or money order made
Page 3 of 9
payable to the Salvation Army. The ARMY shall establish a program which allows individuals
assigned to the program to pay court -ordered obligations in monthly installments. All sums
payable to the Cleric of the Court and to victims shall be deposited into an escrow account usable
only for such payments, Payments of Fines and Court Costs shall be made in accordance with a
schedule to be developed by the Clerk of the Court/Chief Financial Officer of Monroe County.
K. The ARMY shall establish and maintain a Community Service Work program which will
allow conversion of Fines and /or Court Cost into community service work hours. The sentencing
judge will determine'eligibility of defendants for this program. The program will be implemented
in accordance with the provisions of the order provided by the COURT. Community Service
Work hours submitted by probationers will be verified either in writing or by phone by the
ARMY prior to being credited in fulfillment of the conditions of probation ordered by the
COURT.
L. The needs of each case referred to the ARMY by the COURT shall be evaluated by the
ARMY. The ARMY shall determine if referred probationers require other services in addition to
those ordered by the COURT and shall use its best efforts to direct probationers to appropriate
programs. Records of referrals to such programs and progress reports shall be included in the case
file. Should the ARMY deem any additional program participation needs
modification of probation shall be made to the sentencing COURT.' and application for
M. In order to be considered as completed, all non -monetary conditions of probation imposed by
the COURT shall be verified in writing from the appropriate agency.
N. The fee schedule and program content of any outside agency providing services or programs
which fulfill conditions of probation are subject to review by the COURT.
O. The ARMY shall encourage unemployed probationers to improve their employability through
referrals to schools and training.
P. The ARMY shall maintain regular contact with all treatment agencies, schools, and other
Programs to which offenders are referred. In any case where a treatment agency, school, or other
program does not appear to be providing its proper function, the ARMY shall notch the
COURT.
Q. Proposed orders of probation violation
, probation modification, and termination orders as
Page 4 of 9
Appropriate shall be prepared by the ARMY.
R. In any case where COURT jurisdiction has been lost prior to all conditions of probation
being satisfied by the offender, the ARMY shall transmit a copy of the case file to the judge in
whose division the case has been heard. The probationer counselor shall transmit, with the case
file, a cover letter on ARMY letterhead outlining in detail the efforts made by that counselor to
seek compliance with the terms of probation.
S. The ARMY shall have or will secure at their own expense, all necessary, personnel to perform
the services under this CONTRACT. Such personnel shall not be employees of or have any
contractual relationship with the COUNTY, the COURT, or any law enforcement agency.
T. All newly hired probation officers and supeMsors shall possess a B.A. degree from an
accredited College or University or have an equivalent combination of education and experience.
A thorough background check in accordance with essential standards established by the American
Correctional Association as of January I, I991 shall be conducted of all newly hired probation
officers and supervisors to determine that the person is of good character and has no felony or
other conviction involving dishonesty or deceit.
U. The ARMY shall maintain a staffing level of professional employees
caseloads of no more than Igo cases. which willensure
V. This CONTRACT shall be applicable to all probation cases currently assigned to the A
as well as any new cases, RW
III, RECORDS. The ARMY shall maintain auditable financial Restitutions, and Supervision Fees received and disbursed b the records
��s of all Fines,
be provided to the Chief Judge within (90) days following the close oRfth AA�Yci l report shall
' fiscal year.
The ARMY shall also record and maintain statistical data concerning the number and type
cases being handled, terminated, and completed as well as such additional information aof
required by the Chief Judge to assist in evaluating the effectiveness of the A $Y be
ARMY, activities.
Page 5 of 9
Representatives of the Auditor General of the State of Florida, the Court Administrator, the Clerk
of the Court, the Board of County Commissioners, the Chief Judge or their duly authorized
representatives shall have authorization to visit the ARMY'S probation facilities periodically and
to have access for purposes of examination, any books, documents, papers, and records of the
ARMY as they relate to this CONTRACT. . .
The ARMY shall maintain adequate records to justify all charges, expenses, and cost incurred in
estimating and performing the work as well as records of payments received and- disbursed for at
least three (3) years.
IV. REPORTS. A monthly statistical report of activities shall be submitted to the COURT..
V• INSURANCE. The ARMY shall obtain all insurance and bonding required under this
CONTRACT.
All insurance polices and security bonds shall be issued by companies authorized to do business
under the laws of the State of Florida. The ARMY shall furnish Certificates of Insurance to the
COURT. The Certificates shall clearly indicate that the ARMY has obtained insurance of the
type, amount, and classification as required for compliance with this CONTRACT and that no
material change or cancellation of the insurance shall be effective without thirty (30) days prior
written notice to the COURT. Compliance with the foregoing requirement shall not relieve the
ARMY of its liability and obligations under this CONTRACT.
The ARMY shall maintain, during the time this CONTRACT is in effect, comprehensive general
liability insurance in a minimum amount of $500,000 per occurrence to protect the ARMY from
claims for damages for bodily and personal injury, including wrongful death, as well as any claims
for property damage which may arise from any operation under this CONTRACT, whether such
operations be by the ARMY or by anyone directly employed by or contracting with the ARMY.
The policy shall also contain a hold harmless clause for Monroe County.
VL NOTICE. Pursuant to this agreement, notice shall be given in writing by U.S. Mail,
certified return receipt requested, addressed as follows:
t:
Page 6 of 9
The O oonEWMf mmrtment
1930 Flagler Avenue
ey West, Florida 33040
The "CHIEF JUDGE"
The Chief Judge of the Sixteenth Judicial Circuit
$00 Whithead Street
' Key West, Florida 33040
The "COUNTY"
?Monroe County Board of County Commissioners
310 Fleming
' Kay West, Florida 33040
' VII. ENTIRE AGREEMENT. This written agreement contains the sole and entire agreement
between the COUNTY an the ARMY, and supersedes any and all other agreements between
them,
i
VrM WAIVER OR MODIFICAr/ON. No waiver or modification of the agreement or any
' covenant, condition or limitation herein contained shall be valid unless in writing and duly
executed by the parties thereto. /
IX. CONTRACT GOVERNED BY FLOR]DA LAW. This agreement and
performance
hereunder and all suits and special proceedings thereunder shall be construed in accordace with
' the laws of the State of Florida. Thd; venue for any litigation arising under this contract will be in
Monroe County, Florida.
X. SEVERABII,TTY. If any provision, or any portion thereof contained in this agreement is
held unconstitutional, invalid, or unenforceable, the remainder of this agreement, or portion
thereof shall be deemed severable, stall not be affected and shall remain in W force and effect.
Page 7 of 9
XL STATEMENT OF ASSURANCE. During the performance of this agreement, the
- ARMY herein assures the COUNTY that the ARMY is in compliance with Title VII of the 1964
Civil Rights Act as amended and the Florida Human Rights Act of 1977 in that the ARMY does
not, on the grounds of race, color, national origin, religion, sex, age, handicap, or marital status,
discriminate in any form or manner against the ARMY"S employees, applicants for employment,
or clients. The ARMY understands and agrees that this Agreement is, conditioned upon the
veracity of this Statement of Assurance. Furthermore, the ARMY herein assures the COUNTY
- that the ARMY will comply with Title VI of the Civil Rights Act of 1964 when any federal
grant(s) istare involved. Other applicable federal and state laws, executive orders, and regulations
prohibiting the type of discrimination as hereinabove delineated are included by this reference
thereto. This Statement of Assurance shall be interpreted to include Vietnam -Era Veterans and
Disabled Veterans within its protective range of applicability.
Page 8 of 9
IN WITNESS WHEREOF, the COUNTY has executed and signed this agreement through its
Chairman, and duly attested by its Clerk and the ARMY has signed and executed this agreement,
as set forth below.
r:.DANNY.L. KOLHAGB, Clerk
OF THE CIRCUIT COURT
t Clerk
)KONROE COUNTY FLOPmA
Chairman, B d of County
ATTEST:
ARMY. n 6 •VATTON ARMY,
A G RGIA rflRPO p
BY:
DAVID R. MOTHERSKI).
Printed Name of Signer
ASSISTANT TREASURER
Title
Page 9 of 9
O
1'' � • '�Cv.
7
N
n r•„
Certificate of Insurance
i THIS CERTIFICATE IS ISSUED AS A MATTER.OF INF . ATION •ONLY AND CONFERS NO RIGHTS UPON YOU THE i ` " FICATE HOLDER. THIS CERTIFICATE IS NOT AN
INSURANCE POLICY AND DOES.NOT AMEND, EXTFr,J, OR ALTER THE COVERAGE AFFORDED BY THE POLICIES Lib ilD BELOW.
' This Is to Certify that
THE SALVATION ARMY :.::: Liberty
1424 NORTI-IEAST EXPRESSWAY Name and
ATLANTA, GEORGIA 30329 address of Mutug.
t Insured.
- L J
Is, a: Ltie Issue date of this certificate, Insurad by.the Company under the poll y(les) fisted below. The insurance afforded by the fisted policy(les) Is subject to all their terms, exclusions
and condillons end is rot arercd by any requirement, term or eondWon of any contract or other dorument with respect to which this certificate may be issued.
EXP. DATE
n CONTINUOUS
TYPE OF , •OLICY
[1 EXTENDED '
POLICY NUMBER
LIMIT OF LIABILITY
t�C LICY eR1A
WORKERS
COMPENSATION
10/01/2001
WAi-65D-004052-270
COVERAGE AFFORDED UNDER WC
LAW OF THE FOLLOWING STATES:
AL AR DC.FL GA KY.LA MD
MS NC OK SC.TN TX VA
EMPLOYERS LIABILITY
Bodily Injury By Accident
$1,000,000 Each
Accident
Bodily Injury By Disease
$1,000,000Policy
u la
Bodily Injury By Disease
$1,000,000 EachPerson j
GENERAL LIABILITY
10/01/2001
RG2-651-004052-280
General Aggregate= Other than Products/Completed Operations f
$5,000.000
OCCURRENCE
Products/Completed Operations Aggregate j
500,000
❑ CLAIMS MADE
RETRO DATE
'Y- - --
ATE (
Bodily Injury and Property Damage Liability
,000 Per
Personal Injury
Per Person/
$500.000 Organization
%!1'EYES
Other
Y
AUTOMOBILE LIABILIT
10J01/2001
AS2-651'-004052-290
Each Accident - Single Limit
$500,000 B.I. and P.D. Combined "
Each Person
® OWNED
Garage Coverage Form
Each Accident or Occurrence
® NON -OWNED
® HIRED
Each Accident or Occurrence
OTHER
Customer Is self Insured for Physical Damage
ADDITIONAL COMMENTS
LISTED AS ADDITIONAL INSUREDS AS THEIR INTEREST MAY APPEAR: MONROE COUNTY BOARD OF COUNTY
COMMISSIONERS, 5100 COLLEGE RD., KEY WEST, FL 33040
• If the certificate expiration date Is continuous or extended term, you wil be notified if coverage is temtinated or reduced before the certificate expiration date.
SPECIAL NOTICE OHI& ANY PERSON WHO, WITH INTENT TO DEFRAUD OR KNOWING THAT HE IS FACILITATING A FRAUD AGAINST AN INSURER SUBMITS AN
APPLICATION OR FILES A CLAIM
CONTAINING A FALSE OR DECEPTNE STATEMENT IS GUILTY OF INSURANCE FRAUD,
IMPORTANT NOTICE TO FLORIDA POLICYHOLDERS AND CERTIFICATE HOLDERS: IN THE EVENT YOU HAVE ANY. QUESTIONS OR NEED INFORMATION
ABOUT THIS CERTIFICATE FOR ANY REASON, PLEASE CONTACT YOUR LOCAL SALES PRODUCER, WHOSE NAME AND TELEPH NUMBER APPEARS IN THE Liberty Mutual Group
LLNOOWER RIGHT HAND CORNER off THIS CERTIFICATE. THE APPROPRIATE LOCAL SALES OFFICE MAILING ADDRESS MAY ALSO TAINED BY CAWING THIS
CANCEL RRIENF �REDUCE E THE INSURANCEAAFFFORDEED UNDpUCABLE ER THE ABOVR OFE PDAYS CIES UNTIL AENTE T LEASTTW') BEFORE THE STA T. N"DATE THE CAMP U. NOTM
505�
Monroe County Board of County Comm. ArB
CERTIFICATE .. LIn a F. Childs
HOLDER 5100 College Road AUTHORIZED REPRESENTATIVE
_ Room 203 _ Norcross; GA (770) 564-0400--- - 8/112001
L Key West, FL 33040 'OFFICE PHONE NUMBER DATE ISSUED
Exhibit B
Letter From The Salvation Army
JOHN GOWANS
GENERAL
LT. COLONEL DONALD FAULKNER
DIVISIONAL COMMANDER Founded to 1865 by William Booth
RAYMOND COOPER
TERRITORIAL COMMANDER
CAPTAINS DAVID 3 DAWN WORTHY
CORPS OFFICERS
Monroe County Administration
1920 Flagler Avenue - P.O. Box 2878 • Key West FL 33045
Telephone (305Y 294-5611 - Fax (305) 294-0478
- August 15, 1002 ..,.�
Sandra L. Mathena
Director of Internal Audits '
500 Whitehead Street
Key'West, FL 33040
Re: Misdemeanor Offender Supervision Services Contract Audit
Dear Ms. Mathena,
- Per your discussion with Jim Gannon, in the. recent.months, The Salvation Army Correctional
Services Office has experienced an immense 100% turnover in staff which made for some
difficulties, especially as it relates to the disbursement of fine and restitution monies. Mr.
Gannon was immediately tasked with improving internal controls, providing the necessary level
of increased management and leadership and improving the overall condition and quality of our
correctional services program and he immediately instituted new policies and procedures aimed
at succinctly and expeditiously improving the outlay of monies:
I trust that your visit to our offices solidified the fact that our operations have been vastly and
monumentally improved under Mr. Gannon's leadership. ..We believe that the progressive
changes that have been recently implemented are paving the way for continued and exponential
- progress in the handling of fines and restitution monies.
In order to resolve the backlog of fines and restitution disbursements,wehavesecured the able
assistance of our state correctional services, office in Tampa.. Due. to our local staff's short
tenure and severe caseload, our state office's assistance is vital to ensuring that fine and
restitution monies are completely disbursed expeditiously. Our lofty yet obtainable goal is to
have a check representing all monies due to the Clerk of Courtin your possession within the next
three weeks.
Regarding the audit, it would certainly. be .helpful 'if we _could have 60 days to complete the
process of distributing funds, including restitution, to adequately prepare for the audit.
I trust that my comments herein adequately outiine; the;fact'that months ago we identified the
need for policy, procedural and personnel changes within the department. We have a -proven
i track record of fiscal and managerial responsibility and`we intend to continue ensuring that our
services. are provided at the. highest level -and with -the greatest care possible.
Serving All'the Florida Keys
Social Service Thrift Store Thrift Store Social Service Thrift Store Thrift Store
1920 Flagler Ave. 1924 Flagler Ave. 10896 Overseas Hwy: ' 2845 Overseas Hwy. 2835 Overseas Hwy. 100109 Overseas Hwy.
,Key West, FL 33040 Key West, FL 33040 Suite 1, Montaldo Bldg:... 7-9 fhon,-FL 33050 Marathon, FL 33050 Key Largo, FL 33039—
(305) 294-5611 (305) 294-5622 Summerland Key, FL 33042 (305) 743,9410 (306) 743-0054 (305)' 451-2882
(305) 294-0478 Fax (305) 745-3327 1(305) 743-8129 Fax.. r
j
I do look forward to hearing from you regarding your thoughts And direction on these matters.
Sincerely,
Captain David Worthy
Commanding Officer
The Salvation Army `-
Monroe County, FL
Copy: Danny Kolhage, Clerk of Court .
James Gannon, Salvation Army Correctional -Se M-ces,Director
Major Gary Haupt, The Salvation Army';' General' Secretary, State Headquarters
Exhibit C
Assistant County Attorney Opinion
r�
OUNTYMONROE
KEY WEST RORIDA33010
(305) 23 111
Office of the County Attorney
PO Box 1026
Key West, FL 33041-1026
305/292-3470 - Phone
- , 305/292-3516`- Fax
;A�\'lam%,��•'\
MEMORANDUM
BOARD OF COUNTY COMMISSIONERS
MAYOR Charles 'Sonny' McCoy, District 3
s Mayor Pro tem Dixie Spehar, District 1
Murray Nelson, District 5
Gorge Neugent, District 2
Bert Jimenez, District 4
TO: Sandy Mathena
Internal Audit
FROM: Suzanne A. Hutton
_- Assistant County Attorney
DATE: October 11, 2002
SUBJECT: Salvation Army Supervision Services .
Amy Heavilin wrote a memo on September 11, 2002 requesting a legal interpretation with
respect to the Salvation Army's contract. with. Monroe County for supervision services for
misdemeanor offenses. Specifically, she . asked whether the Salvation Army should be
submitting unclaimed monies held in their escrow account to the State Department of Unclaimed
Property. I have a number of problems with this situation. However, with respect to any
-- amounts in the escrow account which indeed are unclaimed, the statutes Would require said
monies to be turned over to the Department of Banking and Finance if they have remained in the
escrow account longer than five years. after the termination of probation and any government
agencies entitled to any of the funds have been provided reports of the collections to which they
are entitled.
- Since Section 775.089(3), Florida, Statutes, -allows a .defendant to pay restitution in installments
over a period no longer than his probation,. which can exceed three years, or the period of his
incarceration plus five years, I have a hard time believing that it is intended that at the end of five
years of money being in the escrow account -A should immediately be turned over to Banking
and Finance. Instead, it appears that the- more appropriate method of operation is for the escrow
account holder to give proper notice to any potential government claimant and to use the date of
that notice as the basis for the running of the .five years for any specific sum of money. There is
in fact an Attorney General opinion that states that the limitation period..begins. to run from the
date that the person entitled thereto, would be. .entitled to claim the possession thereof and not
from the date of the deposit in the court. AGO 064-47.
6
. r.
Sandy Mathena
Salvation Army
October 10, 2002
Page 2
Further, there are provisions,�p the criminal code for the payments ordered by the court for cost
of supervision and rehabilitation to be used to •offset the actual cost of the Department of
Corrections associated with community supervision programs [F.S. 948.09(1)]. Provisions for
State Attorney's collections of monies that are deposited into the State' Attorney's grants and
donations trust fund have specificity for use within the year collected. However, the monies in
question are .those that are received by the Salvation Army and should bp 'disbursed for the
purposes for which they were collected, which would require some reporting to the appropriate
entities as to the monies that have been collected and which are distributable to those entities,
whether to the Clerk of Courts or State Attorney's Office.
The laws dealing with victims seeking restitution does seem to place the burden on the victim to
seek the restitution award without being noticed of its availability. The time would start running
at the end of probation.
I hope that this information is of use in the continuation of your audit. If you have any questions,
please feel free to call.
I
1
I_
Exhibit D
Letter from Court Administrator
•�� I MONROE COUNTY COURTHOUSE ANNEX
. Boo WHITEHEAD STREET
3040
SIXTEENTH JUDICIAL CI$cm OF FLOBIDA KEY WEST, (30S) A -3423
TELEPHONE (305�292.3423
T=R sAD.WSSTSBPISLD SUNCOM: 494.3423
COURT ADMINISTRATOR TELEFA% (305) 292.3433
' April 2, 2003
Sandra L. Mathena
Internal Auditing
Clerk of the Court
500 Whitehead Street, Suite 101
Key West, FL 33040
Dear Ms. Mathena,
I
This is in response to your letter of March 3`1 2003 wherein you asked whether the
Salvation Army provided annual financial reports to the Chief Judge pursuant to their
contract filed for record on June 30, 2001. I have been unable to locate. any financial
reports provided by the Salvation Army to the Chief Judge.
Sinc rely,
Theresa D. Westerfield
cc: The Honorable Richard G. Payne, Chief Judge
r
Exhibit E
Monthly Statistical Report
a
1
THE SAL VATIONA. MY
MONROE COUN,, TY CORRECTIONAL SERVICES
STATISICAL REPORT FOR MAY 2003.
KEY WEST AND MARATHON
Key Wes Marathon
Client's under ACTIVE SUPERVISION: # 58:
NEW CLIENT'S. received this month:: # 17�
Client's SUCCESSFULLY TERMINATED:
Client's TERMED BY COURT: = # 3�
Client's supervised FREE OF COST or at a ,
REDUCED FEE: # 1
COMMUNITY SERVICE HOURS completed: #133
FULL TIME EMPLOYEE'S
PART TIME EMPLOYEE' S
#
4
#
0
# 299
# 56
# 30
# 6
u
VII. AUDITEE RESPONSES
July 31, 2003
IDanny L. Kolhage
Monroe County Clerk of Circuit Court
Key West, Florida 33040
Re: Audit Response - Salvation Army Misdemeanant Program
' Dear Mr. Kolhage,
Per your request, following is The Salvation Army's response to the findings of the audit recently
' conducted of our misdemeanant probation program.
Item A
The Salvation Army certainly understands that utilizing escrow monies for any purpose other than that
' relating directly to the outlay and distribution of F & R monies is not permissible. In fact, doing so directly
counters Salvation Army policy, and internally, we would never knowingly allow such a practice to occur.
I was not in command in 1998 nor did The Salvation Army condone such an act, but I can assure you that it
' has not occurred since nor will it occur in the future.
Item B
The Salvation Army is in the process of determining and identifying the remaining outstanding funds so
that the monies can be disbursed properly in a timely manner and we will comply with the law in the
distribution of those unidentified monies. In other counties this money has been sent to the State of Florida
Department of Banking and Finance.
Item C
Salvation Army bookkeeper, Tom Wagner, will be formally instructed on procedures related to clearing
outstanding amounts. Checks not cleared in six months will be voided and reissued in a second attempt to
locate the payee. If the victim cannot be found, checks will be reissued to the State of Florida Department
of Banking and Finance as per instructions of the Assistant County Attorney. 1, as officer in charge, will
continue to monitor our process for check distribution to ensure that they are processed, cut and mailed in
the most efficient manner possible.
Item D
We have been lax in the requirement that annual financial reports be submitted to the Chief Judge as per the
- contract requirement. This report and all other required accountability documentation will be submitted to
the proper parties within the outlined contractual deadlines.
Item E
The issue of not submitting reports to the judges has been rectified and reports dating back through January
2003 have been sent to all judges.
Item F
Again, Salvation Army policy mandates that monies from escrow accounts not be used for any purpose
other than those explicitly allowed for by the account. I, as officer in charge, will monitor the escrow
account to ensure that this situation never occurs again. I can assure you at this time that all monies have
been replaced in the escrow account.
Item G
The Salvation Army's Territorial (regional) Finance Department determines the setup of
our accounting functions. I have no authority to change the manner in which these accounts are set-up or
functionalized, however, I will make certain that our finance department understands that this audit has
expressed concern regarding this issue. Please understand, though, that these funds are auditable at any
time per our contract.
Item H
' As we understand it, the collection of the public defender application fee is the Clerk of the Court's
responsibility per Florida Statute 27.52, as is the notification of nonpayment to the court. It is The
Salvation Army's responsibility to have clients comply only with conditions first ordered by the courts.
' The Salvation Army does not have the authority to order clients to comply with conditions which have not
been ordered by the court.
In order to ensure the accuracy of the sentence ordered by the court, the Clerk of the Court should be
responsible for typing the court orders and then relaying a copy to The Salvation Army. Out of necessity,
' we have taken on the responsibility traditionally belonging to the Clerk in obtaining information from court
minutes and completing court orders for the judges to sign. This has proven to be both costly and time
consuming.
' Item I
The Salvation Army will reimburse the Clerk of the Court for the $10,017.50 allegedly stolen by former
probation counselor, William Rodriguez (see attached check). Employee theft has been a serious and most
' unfortunate problem in the past, however, it is important to note the responsiveness of The Salvation Army
in handling this issue. Once the Army became aware of records falsification and alleged theft, an internal
investigation was conducted and local law enforcement agencies were notified, who subsequently,
-- conducted follow-up, official investigations of their own.
Additionally, we have both implemented new and strengthened existing standing policies related to
financial accountability with our counselors. As an example, when a probationer makes a payment, the
payment process begins with the counselor entering the information into the computer to generate a receipt.
The probationer then walks the actual payment into the office of the receptionist who receives the money.
The receipt for monies owed/paid (entered into the computer by the counselor) is then printed by the
receptionist to ensure that the payment owed and payment made match up. In the past, misappropriation of
funds by employees has primarily occurred when there was only one employee involved in the transaction.
I might also note that while there has been significant turnover, the staffing level in each office is
proportionate to the number of cases being supervised and does not relate to theft or the falsification of
records.
Item J
The Salvation Army Divisional (state) Correctional Services Department staff has committed to offering
any and all employee training that will further enhance our staff's ability to effectively operate and meet
client's needs. Further, the commanding officer and senior administrative staff will ensure that probation
personnel submit all required reports.
The Salvation Army only commits to programs that we believe will further assist people in their most
desperate of times. Our international mission statement reads, in part, that we exist, "...to meet human
needs ...without discrimination." We are an international organization with one underlying objective — to
reach out to people in need. The intent of our correctional services program in Monroe County is to
complete that mission. Throughout the state of Florida, our misdemeanant and residential correctional
services programs have excellent records of service and accountability in their respective communities.
It is most unfortunate that we have not fulfilled all of our obligations regarding our misdemeanant contract
with Monroe County. We truly regret this. Without casting blame on any one person, we have been
_ reminded that we are an organization made up of and driven by people. People make mistakes. People
make misjudgments.
After I arrived in 2001, it became obvious to me that we had numerous personnel and management
challenges within the program. Soon thereafter, we terminated (both voluntarily and involuntarily) all
employees in the Key West office. We hired a new director and new probation counselors. Since that
time, things have markedly improved and efficiency, although not at its potential peak, has greatly
increased. The audit conducted by the county has certainly aided us in specifically determining the areas in
which we need to continue to work. We have a renewed commitment to the county to"ensure that the terms
' of our contract are strictly adhered to and that every probation client receives the highest level
1 of service
possible. Further, I can state in good conscience that The Salvation Army Correctional Services
' (misdemeanant) Program has tamed the corner and is rapidly moving forward to increasing our
effectiveness and level of accountability, both to the Courts and to the public.
I hope that I have adequately responded to the findings of your audit and I look forward to securing a final
disposition regarding its contents.
May God bless you!
David Worthy, Captain
The Salvation Army
Monroe County, Florida
Copy: Major Gary Haupt —Divisional Headquarters
Jim Gannon — CS Director
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July 31, 2003
July 31, 2003
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July 31, 2003
Disaster
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The Salvation Army
July 31 2003
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F
muF cer.vaTION ARMY -CORRECTIONS ACCOUNT
11828
INVOICE
DATE
DESCRIPTION
GROSS AMOUNT
DISCOUNT
NET AMOUNT
L 07/31/03
WILLIAM RODRIGUEZ
$10,017.50
$0.00
$10,017.50
qp�:1
9
11828
TOTALS
$10,017.50
$0.00
$10,017.50
Page: 1
THE SALVATION ARMY zk-A&WVim„ TIB BANK OF THE KEYS 11828
AN
CORRECTIONS ACCOUNT �� KEY WEST, FL ssoai
1930 FLAGLER AVENUE'`:
KEY WEST, FL 33040 63-928/670
f�nAto" (305) 294-5611
DATE CHECK NO.
07/31/03 11828
'Ay ** Ten Thousand Seventeen and 50/100 Dollars **
AMOUNT
*****$10,017.50
THE SALVATION ARMY
THE DANNY KOLHAGE, CLERK
DER P.O. BOX 1980
JF KEY WEST, FL 33041-1980
1110 1 18 28ii' 1:0�6 ?009 2801: 60800 ? L 3QSii406
U SECURITY FEATURES INCLUDED. DETAILS ON BACK. U