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Report No. 08828, Clerk 8E328 STATE OF FLORIDA OFFICE OF THE AUDITOR GENERAL •..'oi tHE st47. Iry 4'0• 4, y J d/ t tw 741 • *** MONR0E COUNTY *** CLERK OF THE CIRCUIT COURT For the Period April 1, 1974 to June 30, 1975 8828 STATE OF FLORIDA OFFICE OF THE AUDITOR GENERAL Report on Audit of the Accounts of MONROE COUNTY CLERK OF THE CIRCUIT COURT For the Period April 1, 1974 to June 30, 1975 Dated: September 9, 1976 (� ^1 � STATE OF FLORIDA OFFICE OF THE. AUDITOR GENERAL Poe„TO ERNEST ELLISON,C. P A. Tallahassee, Florida AUDITOR GENERAL September 9, 1976 The Legislative Auditing Committee of the Legislature and the Governor of Florida Sirs: Pursuant to the provisions of Section 11.45, Florida Statutes, I have directed that an audit be made of the accounts and records of the HONORABLE RALPH W. WHITE MONROE COUNTY CLERK OF THE CIRCUIT COURT Par. For the period beginning April 1, 1974, No. and ending June 30, 1975, and present this report thereon. (1) The Clerk's accounts as Clerk of the Board of County Commissioners ex officio are audited in connection with the audit of the accounts of that Board, and therefore are not covered in this report. (2) Effective October 1, 1974, the Board of County Commissioners pursuant to Section 145.022, Florida Statutes, guaranteed and appropriated the salary of the Clerk as specified in Chapter 145, Florida Statutes, and provided for all fees collected by the Clerk to be turned over to the Board. Under this budget system the Board pays the expenses for the Clerk's operations. (3) Since the income of the office was reported on a fiscal year basis, the income for the entire fiscal year ended September 30, 1974, is shown in this report. SCOPE AND OPINION (4) I have examined the financial statements of the various funds of the Monroe County Clerk of the Circuit Court for the fiscal year ended September 30, 1974, and the nine-month period ended June 30, 1975. My examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as I considered necessary in the circumstances. 1 Par. No. (5) In my opinion, the accompanying financial statements present fairly the financial position of the Monroe County Clerk of the Circuit Court at June 30, 1975, and the results of operations of the General (Operating) Fund for the fiscal year ended September 30, 1974, and of the Agency (Trust) Funds for the fifteen-month period ended June 30, 1975, in conformity with generally accepted accounting principles applied on a consistent basis. FINANCIAL POSITION (6) The financial position of the Agency (Trust) Funds at June 30, 1975, is shown on exhibit A. (7) There were no balances in the General (Operating) Fund at June 30, 1975. FINANCIAL OPERATIONS - GENERAL (OPERATING) FUND Budgets (8) Budgets for the operation of the Clerk's office for the fiscal years ending September 30, 1974, and September 30, 1975, were properly filed with the State Courts Administrator and the Board of County Commissioners as provided by Section 218.35, Florida Statutes. Revenues and Expenditures (9) An annual report of revenues and expenditures for the fiscal year ended September 30, 1974, was properly filed with the Board of County Commis- sioners as provided by Section 218.36, Florida Statutes. Excess income was promptly remitted. (10) Fees charged by the Clerk appeared to be in accordance with applicable laws. (11) Pursuant to Section 34.041, Florida Statutes, collections of fees from County Court functions were remitted monthly to the Board of County Commissioners. The salaries of the Clerk's employees performing County Court functions were reimbursed to the Clerk by the Board when he was on the fee system. (12) Beginning October 1, 1974, fees collected from Circuit. Court functions were paid over to the Board of County Commissioners on a monthly basis and all payrolls and expenditures were administered by the Board's accounting department. 2 Par. No. (13) Expenses of the office under the fee system were paid by the Clerk and were adequately supported. Expenses paid by the county under the budget system are audited in connection with the audit of the Board of County Commis- sioners and, therefore, are not covered in this audit. (14) The Clerk paid an $80 per month salary supplement to a County Court secretary who was filling a regular full-time State position and was being paid by the State under the State Classification and Pay Plan. There were no records showing that overtime hours had been worked as a basis for the $80 per month supplement. The Board of County Commissioners began paying this supple- ment on October 1, 1974. (15) Insurance for the Clerk's office included workmen's compensation, employees' blanket honesty bond, moneys and securities, and Clerk's public official bond. Compensation (16) The Clerk's maximum compensation governed by Chapter 145, Florida Statutes, was correctly paid. (17) Beginning October 1, 1974, the payment of the Clerk's compensation was administered by the Board of County Commissioners. Retirement and Social Security (18) The Clerk properly deducted retirement and social security contribu- tions from the salaries paid to all eligible employees. These contributions, together with those for his personal account, were promptly remitted to the retirement system. (19) Beginning October 1, 1974, retirement and social security contribu- tions were administered by the Board of County Commissioners. FINANCIAL OPERATIONS - AGENCY (TRUST) FUNDS (20) In general, trust collections were promptly and accurately remitted. (21) Sections 197.186 and 197.291(2), Florida Statutes, provide that excess proceeds from a tax deed sale that are unclaimed shall, upon expiration of 90 days from receipt of moneys, be remitted on the first day of the follow- ing quarter to the Board of County Commissioners. At June 30, 1975, excess proceeds totaling $11,274.28, that should have been remitted to the Board on April 1, 1975, were still on hand. (22) Collections and remittances for fines and forfeitures were generally in accordance with amounts established for each case by the Courts; however, documentation was not available showing that disposition was made as provided by the Courts for some cases examined for audit. With regard to the lack of documentation supporting the dispositions of cases, the Clerk stated that defendants, who wished to plead guilty and were unable to appear in court, would sometimes appear before the judge in his chambers. At that time the judge would determine the fine or other disposition of the case and orally advise the Clerk's office of his disposition. It is recommended that the Clerk try to obtain written documentation from the judges whenever a case is handled in this manner. 3 Par. No. (23) The Clerk collected and remitted filing fees for the county's Law Library Fund as provided by Ordinance No. 3-1973, as amended by Ordinance No. 2-1975, and by Sections 28.241 and 34.041, Florida Statutes. (24) Registry of court funds deposited with the Clerk and not needed for immediate disbursement were invested in interest bearing certificates of deposit. At June 30, 1975, registry of court funds totaling $30,336.53 were invested in certificates of deposit. (25) The Clerk received and disbursed support moneys under the provisions of the Uniform Reciprocal Enforcement of Support Law (Chapter 88, Florida Statutes) . All collections were in the form of checks and were remitted intact to eligible parties. Beginning in June 1975, for checks that were made pay- able to the Clerk, prenumbered receipts were written and the checks were deposited in the Clerk's trust account. The amounts were subsequently remitted to eligible parties. (26) A statement of cash receipts and disbursements of the Agency (Trust) Funds is presented on exhibit D. RECORDS AND INTERNAL CONTROL (27) Financial records were generally well kept. Collections were deposited or remitted intact. (28) Internal controls over cash receipts and disbursements could have been improved as follows: 1. Checks included in collections should be restrictively endorsed immediately upon acceptance. 2. Listings should be made of all collections received by mail which is opened by any person who does not write a receipt at that time. Such lists of collections should be later compared by another person who is not a cashier to the records of amounts deposited. 3. Each employee accepting collections should be assigned a separate change fund instead of different employees using the same change fund. 4. To the greatest extent possible, the functions of collecting money, preparing and making bank deposits, recording trans- actions, making disbursements, signing checks, and preparing bank reconciliations should be done by different individuals. The most important separation is the functions of handling or disbursing funds and the keeping of the accounting records. 5. Disbursement checks for the Key West and the Marathon office accounts should be prenumbered. (29) A printer's affidavit required by Section 3A-50.03(3) (b) , Rules of the Department of Banking and Finance, was not on file for 1,000 receipt blanks purchased locally during the audit period. 4 Par. No. AGENT FOR THE BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND (30) There were no transactions of record by the Clerk as Agent for the Board of Trustees of the Internal Improvement Trust Fund. STATEMENT FROM AUDITED OFFICIAL (31) In accordance with the provisions of Section 11.45(6)(d), Florida Statutes, a list of audit findings was submitted to the Clerk. The Clerk's response to the audit findings included in this report is shown on exhibit G. 5 EXHIBITS The following exhibits are attached to and form a part of this report: EXHIBIT - A Agency (Trust) Funds - Balance Sheet. EXHIBIT - B General (Operating) Fund - Statement of Revenues and Expenditures. EXHIBIT - C General (Operating) Fund - Statement of Changes in Fund Balance. EXHIBIT - D Agency (Trust) Funds - Statement of Cash Receipts and Disbursements. EXHIBIT - E Summary of Significant Accounting Policies. EXHIBIT - F Notes to Financial Statements. EXHIBIT - G Statement from Audited Official. Respectfully submitted, (Signed) Ernest Ellison, C.P.A. Auditor General Audit supervised by: (Signed) Willard G. Hale Audit made by: (Signed) James A. Bell fi MONROE COUNTY EXHIBIT - A CLERK OF THE CIRCUIT COURT AGENCY (TRUST) FUNDS BALANCE SHEET June 30, 1975 ASSETS Cash on Hand $ 329.00 Cash in Banks 187,426.17 Due from Clerk 21.00 TOTAL $187,776.17 LIABILITIES Tax Deed Surplus $ 11,428.30 Advertising - Tax Deeds 128.32 Refunds Due Individuals 10.00 Unclaimed Funds 175.10 Support Payments 488.60 Registry of the Court Funds 62,238.38 Civil Cash Bond Funds 12,257.69 State Documentary Stamps Consigned $40,000.00 Less, Stamps on Hand 14,742.80 25,257.20 State Surtax Stamps Consigned $ 8,000.00 Less, Stamps on Hand 2,110.05 5,889.95 Juror and Witness Payroll Funds Consigned $30,000.00 Less, Payrolls on Hand 6,474.04 23,525.96 Due to Department of Revenue - Intangible Tax 11,030.11 Due to Police Academy 595.00 Due to City of Key Colony Beach 317.00 Due to Board of County Commissioners: Law Library Fund 975.00 Local Police Training Fund 595.00 Fines and Forfeitures 16,287.01 Court Costs 2,850.00 County Court Filing Fees 565.00 Clerk's Fees 13,162.55 TOTAL $187,776.17 See accompanying summary of significant accounting policies and notes to financial statements. EXHIBIT - A 7 EXHIBIT - B MONROE COUNTY CLERK OF THE CIRCUIT COURT GENERAL (OPERATING) FUND STATEMENT OF REVENUES AND EXPENDITURES October 1, 1973 to September 30, 1974 Budget Actual Over (Under) Budget Revenues: Tax Deed Applications $ 800.00 $ 510.00 $ -290.00 Filing Fees 14,400.00 18,504.50 4,104.50 Recording Fees 120,000.00 110,753.00 -9,247.00 Criminal Court Costs 85,000.00 11,334.75 -73,665.25 Probate Fees 15,200.00 11,469.35 -3,730.65 Certified and Other Copies 2,600.00 9,857.50 7,257.50 Card Sound Bridge 4,800.00 4,800.00 Commissions 4,100.00 3,538.55 -561.45 Law Library 4,800.00 -4,800.00 Miscellaneous Fees 6,000.00 14,464.98 8,464.98 Interest - Court Registry Account 1,251.38 1,251.38 Marriage Licenses 1,687.75 1,687.75 Income as Clerk of the Board of County Commissioners Ex Officio 54,999.96 54,999.96 Salary Reimbursement - County Court Employees 12,661.93 12,661.93 Total Revenues $257,700.00 $255,833.65 $ -1,866. 35 Expenditures: Salaries: Clerk $ 20,305.40 $ 20,305.40 $ Others 158,996.08 176,282.19 17,286.11 Payroll Matching Funds 17,929.28 18,986.43 1,057.15 Office Supplies and Expenses 11,600.00 9,104.32 -2,495.68 Travel 6,700.00 1,477.43 -5,222.57 Contract Services 19,400.00 19,204.91 -195.09 Equipment 7,000.00 595.18 -6,404. 82 Rentals 500.00 460.00 -40.00 Law Library 4,800.00 -4,800.00 Total Expenditures $247,230.76 $246,415.86 $ -814.90 Excess of Revenues Over Expenditures $ 10,469.24 $ 9,417.79 $ -1,051.45 See accompanying summary of significant accounting policies and notes to financial statements. EXHIBIT - B 8 MONROE COUNTY EXHIBIT - C CLERK OF THE CIRCUIT COURT GENERAL (OPERATING) FUND STATEMENT OF CHANGES IN FUND BALANCE October 1, 1973 to September 30, 1974 Fund Balance, October 1, 1973 $ - - Add: Excess of Revenues Over Expenditures 9,417.79 Deduct: Excess Income Payable to Board of County Commissioners 9,417.79 Fund Balance, September 30, 1974 See accompanying summary of significant accounting policies and notes to financial statements. EXHIBIT - C 9 EXHIBIT - D MONROE COUNTY CLERK OF THE CIRCUIT COURT AGENCY (TRUST) FUNDS STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS April 1, 1974 to June 30, 1975 4-1-74 to 10-1-74 to 9-30-74 6-30-75 Cash Balances, Beginning $168,094.15 $103,378.35 Receipts: Revenue for County: Tax Deed Applications $ $ 450.00 Filing Fees 15,274.00 Recording Fees 64,066.88 Criminal Court Costs 4,746.00 Probate Fees 7,991.35 Certified and Other Copies 8,071.55 Card Sound Bridge 3,200.00 Commissions 1,978.42 Marriage Licenses 1,221.00 Interest - Court Registry Account 1,252.84 Miscellaneous Fees 3,521.49 County Court Filing Fees 3,096.12 9,350.75 Fines and Forfeitures 119,588.71 156,381.01 Court Costs 12,455.00 Law Library 4,267.50 8,280.00 Local Police Training 3,046.00 4,853.00 Total Revenue for County $129,998.33 $303,093.29 Documentary and Surtax Stamp Sales 298,255.65 372,865.90 Intangible Tax 92,861.54 99,521.84 Juror and Witness Payrolls Advanced, Net of Amounts Unused and Refunded 22,199.76 60,468.68 Candidates' Qualifying Fees 4,125.08 Tax Deed Sales 1,112.00 23,486.86 Advertising - Tax Deeds 595.00 910.38 Registry of the Court 23,131.88 62,001.10 Civil Cash Bonds 12,257.69 Support Payments 883.60 State Police Academy 3,046.00 4,853.00 Marriage Licenses - State Fees 1,264.50 1,749.00 Fines and Forfeitures - Cities 671.00 Other Collections 185.10 Total Receipts $576,589.74 $942,947.44 EXHIBIT - D (Continued) 10 MONROE COUNTY EXHIBIT - D (Continued) CLERK OF THE CIRCUIT COURT AGENCY (TRUST) FUNDS STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS April 1, 1974 to June 30, 1975 4-1-74 to 10-1-74 to 9-30-74 6-30-75 Disbursements: State $422,982.57 $453,874.58 County 154,117.47 268,658.73 Cities 354.00 Individuals 63,585.50 134,880.25 Advertising 620.00 782.06 Errors in Change Fund - Due from Clerk, June 30, 1975 21.00 Total Disbursements $641,305.54 $858,570.62 Cash Balances, Ending $103,378.35 $187,755.17 See accompanying summary of significant accounting policies and notes to financial statements EXHIBIT - D 11 EXHIBIT - E MONROE COUNTY CLERK OF THE CIRCUIT COURT SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES For the Period April 1, 1974 to June 30, 1975 The significant accounting policies followed by the Monroe County Clerk of the Circuit Court are described below to enhance the usefulness of the financial statements to the reader: Basis of Accounting. The Clerk's financial records were main- tained on the cash basis of accounting whereby revenues are recognized only when cash is received and expenditures are recognized when cash is disbursed. The accompanying financial statements are presented on the cash basis of accounting. Clerk's Compensation and Excess Income Distribution. The Clerk's office was operated on a fee income basis to September 30, 1974, whereby the Clerk's official statutory compensation is achieveable only to the extent that fee income exceeds office expenditures. Excess income was distributed annually to the Monroe County Board of County Commissioners. Effective October 1, 1974, the Board of County Commissioners pursuant to Section 145.022, Florida Statutes, guaranteed and appropriated the salary of the Clerk as specified in Chapter 145, Florida Statutes, and provided for all fees collected by the Clerk to be turned over to the Board. Under this budget system, the Board pays the expenses for the Clerk's operations. Tangible Personal Property. Acquisitions of tangible personal property for the fiscal year ended September 30, 1974, were recorded as expenditures in the General (Operating) Fund at time of purchase. Such assets are reported to and capitalized by the Board of County Commissioners and consequently are not shown on the Clerk's records. Retirement Plans. The Clerk and employees of his office are members of one of the retirement plans administered by the State of Florida, Department of Administration, Division of Retirement. These plans require contributions by the office (by the Board of County Commissioners beginning October 1, 1974) and in some instances by the employees at a stated percentage of compensation dependent upon the individual plan. EXHIBIT - E 12 MONROE COUNTY EXHIBIT - F CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS For the Period April 1, 1974 to June 30, 1975 1. The statement of revenues and expenditures for the General (Operating) Fund does not include a $75 monthly travel allowance and travel reimburse- ments paid directly to the Clerk by the Board of County Commissioners. The Clerk received this monthly amount through August 1974. Beginning in September 1974, the Board furnished an automobile to the Clerk in lieu of the monthly allowance (pursuant to county ordinance No. 7-1974) . 2. The $9,417.79 excess of revenues over expenditures for the fiscal year ended September 30, 1974, as shown on the statements of revenues and expenditures and the statement of changes in fund balance for the General (Operating) Fund, was payable to the Board of County Commissioners under the provisions of Section 218.36(2), Florida Statutes. The amount was remitted to the Board on October 17, 1974. EXHIBIT - F 13 MONROE COUNTY EXHIBIT - G CLERK OF THE CIRCUIT COURT STATEMENT FROM AUDITED OFFICIAL April 1, 1974 to June 30, 1975 Audit Report Paragraph The Clerk's response to the audit findings included in this report is as follows Number (14) The $80 .00 per month salary supplement being paid the County Court Secretary has been discontinued . (21) Excess proceeds of Tax Deed sales which were unclaimed and which should have been remitted to the Board of County Commissioners on June 30 , 1975 in the amount of $11 , 274 . 28 were remitted to the Board on October 22 , 175 . This resulted from confusion between the prior Statutes which governed the remittance of these funds and the provisions of Chapter 197 . 186 and 197. 291 ( 2) . (22) Prior to January 1 , 1976 , the County Judge had been accepting Criminal Traffic Cases in his Chambers then advising the Clerk 's Office of the fine by telephone . As of January 1 , 1976 the Clerk' s Office has requested the Judge to sign and complete the information on the defendants Waiver and forward same to the Clerk ' s Office before the case is closed out. (28) 1. (1) Checks are being restrictively endorsed upon acceptance at all locations . (28) 2. ( 2) We feel that there currently exists sufficient internal controls to preclude the manipulation of cash and mail receipts alluded to in paragraph 5 (2) of the adverse findings . Further , to implement the procedures of listing all mail receipts and providing an independent comparison with deposits would require additional personnel expenses which we believe would not be com- mensurate with benefits derived from such a procedure . (28) 3. ( 3) One individual in each location has been assigned the responsibility of recording daily transactions on the registers and making change . No other employees are allowed access to the change fund. • (28) 4. (4) We feel that the functions of collecting money, preparing and making bank deposits , recording transactions , making disburse- ments , signing checks , and making bank reconcilations have been separated to the greatest extent as is practically possible with our present staffing pattern . We have implemented some of the recommendations of the Resident Auditor in this regard. All disbursements must now be pre-audited and signed by an individual other than the individual preparing the checks . (28) 5. ( 5) All checks are now pre-numbered. (29) Printer ' s Affidavits are now being obtained for all receipt blanks that are produced locally. The printers affidavit referred to in the adverse findings has been obtained. EXHIBIT - C 14