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Home My WebLink AboutMinutes_Miscellaneous_05/04/1998 � � --�'"'�--� �� ' ,�� V'ILLA�E O►F TEQ�.TE�TA �� Post Office Box 32?3 • 357 7"equesta Dr�ve �. Tequesta, Flarida 33469-0273 • (S61) 575-C2CK1 Fax:{561)575-G203 c VILLAGE OF TEQUEST"A .FINANCE .�►ND ADMI�TIS��tATIQN C{311�IMI�'7E'EE l�'IEETIi�TG MA''VU'T'�S �rI�.Y 4, 1998 . I. CALLr Tti 0�8R AND ROLL CALL The Tequesta Finance and Administration Committee held a regularly scheduled m�eting at the Vil].age. Ha].1, 357' � Tequesta Drive, Tequesta, Flor3.da, on �nda�r, May� 4, �.998. The meeCing was called �o or�der at �5:00 A.M. by Chairman Car1 C. Hansen. A rol]. Call was taken by Betty Laur, the Recording Secretary. In at�endance were the €al3�wing Committee members: Chairman Vice Mayar Carl. C. xansen, Co- Chair Joseph Capretta, and Co-Chair Ron T. M�,cl�ail. A1so in a�tendance were village Manager Thc�mas G. Bradford, village �lerk Jaann Manganie].la, and i�epa�tment x�ads. II. AFP�t4'YAT� QF ACSI�DA Under Any O�.her MaGters a reporG on the statu� of finding a new Finanee Direc�or and accoun�ants was �equested from the vi3l.age Manager. Co-Chair �cackaiZ made a matfon to approve �he ag�ada as ameaded. Co-Chair Capre�tta secoaded �he mo�i4�., �he vote oa the matian �ra.as Carl C. �iaasea - for Joseph �'. Capratta - for Ron T. �ckaf 1 - for Recycted Pap�r . � I 4 FI�VEANGE AND ADM�NI3TRPaTZ{}N �:CII�vfZTTEE ME�TING MI1�t[JTES May 4, 1998 Page � T}t� motiaa xas ��Serefare �a�ed aad adc�pted agd tb.e agead�t ws�s appraved as �m�eaded. • II2. CC�MtI��TNICA'T'IONS �'Rt� CZTISSI�i3 (N81�-AC��A IT�i3S} There were no communica�ions �rom ci�izens» IV. RS'V"�8ii OF C.`O�dP�iSZV'� ANDiIIAL FI�'A'�T�IAL R�P�ORT (cafs) FO� T8'�r �`2�CRL Y� �NDSD S�FTS��B�I: 3�, 199? a) +Overvi+er�► af CA,�"R }�y �ielae �s�11, C.B.A., Morelez�, 8alt . � �t#aear i) Fi�aacial Poei�ieaa by �und ii? �taa�a.g+e�e�t Commd.�►ats aad �tesp�Drise b) �i�cammar�datica� to vtllage Cou�ac#,1 �or Acceptaa�ce o� CA'��t Mr. F�d �iol� of Nav�tler�, �olt & Miner �+�splained his in�ent was to pravide an overview af the financ�.aZ repc�rt, w1��ch �rass �rovicied 3.n � com�srehensive fr�rmat required by the �FOA in arde�r to b� cons�.dered. for an award of excell�nce in. financial reporting, wh%ch had be�� awarded tc� th� Village every year for �he gast 1� or l'i years. r�lr. Holt e�2ained that Che abjeCtive ot an audi� was �o have an individual audi�3u� fi:ntr render an crpir�ic�a c�r� the financfal statemente as to whether the� were �'airly p�esen�ed, an,d in addition, because this was a gavernmen�. aud�.� th� auditars w�re reguzred to r�por� an int��nal cantrol �.d on comp2ianc�. 1�. �to�t e�cpressed �is firm�s opix�ion that the financial reports w+�re fairly pr+�sented in canfozm.ity with general accou�ting prin�iples. Ma�. Ht�I,� e�lained th�at €ocus in a �c�veranm��t �r�tity �ras r�n Ghe fund bal�nce, wh�.ch wa� assets minus liabi�.3.tfes, and the gener�]. ruZe was �o enc� �he year with the fund bal.a�nce being 103� of the norma�. expenc�iture� in the c�erteral fund. Mr. Hc�lt stat�d ��xat th+� fund bala�ce ■f C � I ��vc� ,�rn �u��zs�T�carr cor�srT�� MEET'I�TG MINU'1"'�S �lay 4, I996 I?ag� 3 _ __________.._______�_________�.____.. a� af S�p�embex" 30� 2997 was �su�ficient. The cushion wa� alway�� desirabl.e fcar �rgenei�� and tg prov�.de funds from the end of a fiscal. year u.nGil ��c revenues w�re received C�he n�ct January. Mr. xalt repc►rt�d apprc�x:�mately �2.9 m�.11ir�� iz� ez��erpr3:�e €ur��d.�, �hicl� he sta+�ed were an e�ctremel.y g�. c�rder, 11�. �io3.t ccu�arzen��d tha� add��g $� . rnill�on in contri�u��.ons tc� cap3.�a1 ta �he �5.8 mi2�.ion re�tained earnir�gs in the enterpriss fund for a tc�tal q� almost $�o miilian, and subtr��.n� fixed a��s af $7.5 m3.11.i�rr�, gave appra�:imately $2.5 million in funds �ot �ied u� in non-�ertdable asset�, wh�.eh pravided a level o� ec�mfort. �sr, i�olt described the general fu�.d a� having ��C37,Ot�f� i,n ��e�s of re�r�t�es o�rer ��d�.�.ures, an� tla.�t the fo�us shQuld be no� ta ha�re an e�c�ess +�f �re than v�hat was de�d �o be �n a�prc►priat� amoun.t. Mr. �€+al.G e�cp2ained it wou�+G� r�t�t b�e f�ti� to bt�ild up �0 4 a�' S t3.m�� the fund balanee unl.ess a �p+�c��'ic pur�ao�+� For ehe fu�:ds had been identi�'ied; and in some counti�s there we�� laws that prraperty t�ces could na� be raised c�ver a eer�ain am4unt �n�.es� a�. adec,�uate amou�� of fur�.d �alance �zs �irst de�errn�.ned. M�. xal� gave an e�ample tha� if the Villag� had $5 m�.113.an in �heir fund b�lance with no reas4n for it th�+y t�c�u1�3 �hen cans�c�er reduc�.nc� �a�e�, which r��ruld reduce inet�mm� �c� �ignifica��.�Zy l�sss th�.�. e�cpenditure�, but that wc�txld r�+�t nec�ss�ril�r be wrang. Ca-Chair Macka�.3 ccu�nen,�ed he had been c�n �he villag� C�ci.l Z� y�ar� and Che fncr�as� in fu�.d balan�e �ad b�en ver�r g�c�d and ��€� vill.�.ge had been able �t� maintain a very canst�ar3.t� rnrn�ini.amal tax in�rease, and �e fel.� �he V33,2age w�as f�nan��:a�.ly strong. �o�t:�,air Mackail sugc�e��d �.ncreasing tax�s far a �e�r to incre��e �he fund balanc� sc'> �he Vfllage wc�uld not hav� to w�trry a�bc�u� ta�cc�s fa� s+��ra2 yea�s. C�-Ch�tir Caprc�t�a ca�mented the Vill�.ge �a� l�een livir� lik� whit�: tra�h, l�vir�� i�hin the�r �an� bu� nfl� inve�ting in the cc>�t�un�.�� far m�r�y y�ars, and Me had advtacated iricre��ing the ass��ed value of �he Gown 3.n order �c� in�rest in �he cc�mmunity, which had n�►�a happened. Now th+� villag� had ��b� they d�.d �n+at previous�� have. and n�eded tr� m�ke sure �hey had �he money to ,pay t�tc�se deb��, . � � � �'�NfANCE 1?►tytD �P�3MI�tISTRATIt?�+i Ct�NMITTEE MB�TING M:Cl�[J°�"ES May 4, 199�8 Fage 4 ________..______________,.____________ Mr. Halt co�mented there was nc�th3.ng wrong with g�ttin� ahead a�' the g�me buG there needed to be a f ocus on the ad�quacy o� €unc� b+alance for p1a�rled needs and a focus on what the amaunt �houZd be far a cushion �Qr �mergencie�, Mr. I�oZt exglained �k�e village Council would need to make th� dec�.,�fon c�n the amc�un.t. Co-Chair Capretta �i�cussed re��r�t �onsideration c�f se3li�ng Ghe water depar�mexl� becau�e he lik�d �h� idea of r�ceiving i�.came from Trea�ury gonds. �Tillage Manager S�ad�r�rd comme��ed th�+ fund ba.lance had been ri�ing for the la�st coupl.e of y�ars artd he con�idered tirnes gt�csd naw, but the �ime wc�uld come when the Vi�.lage would need �o cut back, and he want�ed to g�et the �und bala�ce to �5�C. CP�1. Daniela �.u�a+��l ev�camented that t�,e generaZ gca�l was e�pen�es sha�.d nc�t ��e�d r�v�nu�s. Ca-Ghair .��pr�t�a , e�cpres�ed cancern whether the right amount af mc�ney� was being ca].lected from ra�.ter customers�. Mr. Hc►1� cC►ntinu�d the ra�rerview, staGing that tk�+� er��e::�prise func� net incame tataZea apprc�sima:��1y $3'�5,�c10. 1�€r. �o3.t s�a�et3 that notes to the financial �tatements were appraxi.ma�ely the game as in prior �rears. In additian to fir.tancial repor�ir�g, compliance and 3nterna2 eon�rol t�±re reper�tecl. Mr. Ha1i� e�sp�lained tk�at same �f Ch� item� had been r+�por�+�d in the pas�. Mr. Ho2t dfscussed segreg�tic�n a€ duti+��, �nd �pZained �hat anytiame �here was a �m�ll accounti,ng staff i� v�as dif�icu�.t to �egara�� pr€��edure�; however, �o the ex�enG that they et�uld k�e s�para�ed �:t wvul.d make �.r��e�nal con�rc�l s�rt�ngex, espe�c�.a11.y in area� of most �xpasure. Mr. Hai� re�omar�nded e�.th�r s�grega�ing procedur�s or hav3.ng p�c�cedure�s 3r�d�peru�ent of th� peaple perfoz�m:i.ng �he duti�� rhere test�s �f the pracedures were done. z�aziag�mer�� had re��+onded tca a11 +�f th� c�ne�2�� a�nd w�s no� a� vaa�iance �ith an�r flf the audz�or's commerrt�. 2n t��s �a��, Mar�agemer�t Ytad s�ated that to �he �tent we have geca�le on bt3�rd ar�d where it is prac�ic�l, Chat 3s, ca��. bene�i�ia�,, Gc� make thtase changes, we wi11. �r. I�c►lt stated thc� audi�ors wc�uld work wiGh N�nageme�n� �4 trie ex�ent that they cau��.. ♦ � . FINANCE A2�tIi ADMIN�$TRATIt�N CO�RwtITTEE r��xr�� r�nvcr�s r�►� �, x�9s F�qe 5 ___�_____-----..--------------------- Regarding the s�econd item, automated collection procedures, a review �ras currently underway, and it had been decided i� would be done but it was a ma�ter af getGing the righ� software. Mr. Ho1G stated that under current year ccmffn�nts� the first was finance depar�menC s�affing, azxd �hat during the past i-�.i2 years there had been significant �urnover a� a re�u2t of �rhich �he Finance UeparCment fe13, behind 3n its acco�nting work. Long-�erm emp2oyees had been lost which mad� the si�uaGion wor�e, �ince if it had be.�n someozse newer to the �ob it would have been easier �c� replace them. Mr. Holt com�nented tha� in �he ente�prise fund for the Cox�ity 1��ve�.opment I�epartment the Vi2lage was nQt crharging u��.litie� eacpense or rent for bu�.lding �pace occupied and in order t0 Op�raGe as an en�erpris� fund those charges needed to Be made, C:h�tir Hansen i�irec� ,�f this would be paid b�r � the General Fund. Mr. �Iol� responded that it would, and that this �vouid be an easy area to cc�r�ect. Another prpblen� found was tha� in a coup2e of instances there wa� ov�rpay�m�nt of expenses, which �r. Holt believed to result from �urnover and new employees not unde=standinc� the job, Pa�ent had been made �rrxc� arY �.flvoiee that was not an original, pl�s employees did na� completely ur�d�rs�and the proc�duxes� and b��cause af la�k of sta�f many errors had . resulted. Another problem was �hat voided checks were not traeked. The�e problems could be easily corrected by falZowing procedures. problems had been faund in use af the t�ave�. policy, which wa� nc►w under r�view. Same traveI. turned in had been o�� Qf Pa�nt Beach and Martcin ec�unt�.es. Mr. Holt exp�es�ed his o�inion tk�a� �his cQuld be corrected with a travel policy. Mr. Halt explai�ed that the auditor� had considered aIl of these problr�ms as nt�t being material 3.nternal contrQl weaknesses C.�at w��e report�.ble under the law. Mr. Holt � state� the audiGor� bel.ieved an annual inuentory caf tang�,ble gersanal p�aperty should be taken and tYa►a.t was not dane because 3.t was not a ha.gh enough �ri.ority on the list of S � FINANCE AND ADMINISTRP,TION CO�NIl�IITTEE MEETING MINUTES May 4, 1998 Paqe 6 ------------------------------------ items to be done. Ch�ir Hansen questioned whether there were areas where a procedure should be in place where there had never been a procedure, to which Dani.ela Russell Cagretta commented that it was understandable that more important items Yxad higher priority so that some things did not get done; havvever, he was not sure the important things were ge��ing done since they were so far behind. r�Ls. Russell commented there was definitely a catch-up period ta . get to the point where the books cauld be audited. Co-Chair Capretta con�nented there were very few differences in this year's manage�ent letter and that of last year; and expressed concern ov�r whether the village wa� getting all � the gropert�r tax�s they had co�}i�g and alI re�trenue from other sources, such as gas taxes. Finanee Direct�r Kascavel�.s expressed his opinion that all revenue_ from those sources was being received. Co-Chair Capretta inquired r�rhether there was an�r doubt �hether all water departmeMt revenue was being received, to which Finance DireCtor Kascavelis re�ponded he was sure it had been up to 9/30/97, but after that date there was a discrepancy in receivab�es which was now being researched. Mr. Holt explained that the books for 9/3a/97 were not closed until mid-December and because staff was working on closing the book� they got b�hind in oth�r account�.ng work. Ms. Russell contributed that she believed prob].ems had escalated �ince that date. Mr. �ascavelis reported problems had started in the water Department when a long-time employee, Iva, left be�ween December �.995 and January 1997, and other gec�ple had been moved around to try to get tMe work acec�plished. Co-�hair Capretta stated a staff of four was not many and it was easy to get in trouble when someane left, and to fall behind. Co-Chair Capretta �orm�nented the reason he was warried about �he water eomgany was i€ a11 the revenue was not cp�lec�ed the Village would be in trQubl� when they had to make a gaymen� of hal£ a miZlion, and wat�r , � FINANCE .AND ADMINISTRATIDIw1' COMMITTEE ME�TING MINUTES May 4, 1998 Paqe 7 ------------------------------------ revenue had been going dbwnt when with the drought i� should be gaing up. Co-Cha3r Capre�ta commented from the repc�rt it seemed everything wa� greaG but there were serious prc�bYems: the Finanee Department did not have a sta�f that was trafned� they were behind in their work �o that they c�nly did trie im�rortaf.nt things, bu� naw tY�ey were behind in the impartant things, which crea�ed a big problem. Mr. Holt sta.ted he heliev�d it wa� iY�tpartant to focus on the faCt tha.t �he s�vera.C�s of being behind w�s occurring in th� curr�n� pe�iod. and na� in the period that wae� rep�+rted; a1�G�.ough �here w�re several more �.�ems vf cc3mpliance ax�d i�terna�. ca�trc�l w�aknes� ntentioried �han in previous years. Mr, HolG sta�ed al�. the g�roblems needed �o be correcte8j ht�w�V��'r �,e would noG consider an� one of the prczblems severe e�ough �a be considered a mater�.al problem, �n t2�i� new period there were fewer Finance �taff, �arid decz�ions mus� be mad� on how ta €ocus so that the Village would nc+t h�ve a �nuch worse audit. reporC� next t�.me. , Mr. Ha2t stated ano�her problern was r�conciliatic�n �f the pa�rroll ca�h aGCour�G had no� been done, and n�eded to be done on a pexmanent basis, L�ersonnel and ga�roll I-9 farn3� wer� not co�3.eted o� could_ not be located. 941 fornns were no� reconcil�d, A.ccounts pa�able detail was not done and signi€3.cant t�.me had been spent to determine what �h� ac�ounte payable were as of the end af the g�riod:. The audi�ors rec�nded c�.oseout procedure� be zn place �pr the upcom�.ng p�ri.od. Purchase brde�s we�re used �o encumber €un�ls after Ghe period, w�ich could hav`e been a mi�sunderstanding as ta when a purchase order shQuld be used. Under ccu�liance with Flarid� 5tatutes, the Vi1�.age did �2ot submit �he �orm it should have submitGed tr� the Department of Reve�ue; artd the Village failed to provide addresses to the uti�.ity companies, which had nQw been done. Mr. Holt sta�ed none of these prol�lems made the auditors beli�ve �he vi�.lage was in a sta�e o� €inancial emerger�cy. � FINANCE AND ADMIN�STRATI4N CON�IITTEE MEETING MINCITES May 4, 1998 Fage 8 ___--------_�_____________..__------- Mr. Holt announced di�cussion of where the Village was now and where the audi�ors thought Ghe village shauld be, Mr. Halt staGed that a once a year audit was adequa�e. Mr. Holt stated �here was a lack of adequa�e people in �Ghe Finance Degar�ment, and the auditors had been requested to intervi.er�r potential new hires, c3u� of those interviewed so far they believed at Ieast twa woulc� b� patential good h3.res, Mr. xo3.t e�cplained they had just tr3ed to dete:�mi.ne if they cou].d do t�hat they said they could do and did not do further re�earch. Mr. xQlt advised the new hires should be brought . on bQ�rd a� soon ae possible, Ghat the Vill.age had t�vo . posi�ians ta �ill and if twa people Gould n4t be found ther� they should readver�ise immedia�ely tc� ��t �hat other p�rson. Mr. Holt e�plained �hat his comg�ny�s staff had been working in th� Finance Department. �tr. Hc�l� expl�ined the wanGed the n�w hires to have as much �perience as poss�.ble and wanted to assist i�.. their training. The auditors also wanGed to upda�e pro�edu�es that were curren�ly in place, such as �he one for processing disburs�ents. Mr. Holt stated training was critical, because when the emp2ayee was c►n �heir own the auditors wanted Co be sure they. knew wh�� to do. Mr: Holt also state+d the village �ras advertis3.ng for a Finance Director, who was needed as soc+n as possib�.�+. The curren� ohjec�ive ��s tv get the records �urrent �s quickly as gassible; and the audit�ors �rou].d put together a guideline �or thi� as quiek2�r a� they cc�u�d, but beZieved it wou2d 3�e unr�asonable to expect everything wauld be current before mid-�'uly. r+tr. Holt wan�ed to ha�re +�acumentec� procedur�s in plaCe by the end of �he period. WiGh the new Iaond issue, be�'+�re the e�d of the period certair� required deposits mu�s� be made, required fund� must be e�tabl�sned, anc� a ecsmp3.iance checl� �.i�t mus� be prep�red. N�. xc�2t ��ated they dici not v�rrant tt� have non-�amp2ianee 'an Che bond issue as �� 9f30J9�8. Chair Hansen inquired whether it was advisable to bring in extra gersonnel on an in�eriin basis in order to caGch up. Mr. Holt respanded they would like to get new hires on board as saan as possible and depending on thei= level of expertise FINANCE AND ADMINISTRATION CC�Il�tITTEE I�EETTNG M�NUTIaS ' Ma.y 4, 1998 Paq� 9 ______________________________�_____ to then see �vhether they thought extra help was needed for � awhile or even another german�nt person. fi�is. Russell comnen�ed that al1 p�rstings were done through March for �he period actaher �.997 through April 1998, but recancilia�ian was nat dane, and a det�rmination could not be made reg�rding ongaing requiremenGs until every�th.ing was �aught up. Co-Ch�3.r Capretta discussed what had happened, and cam� to th� ca�tclusion �hat everything went well until S�ptember, and the on�.y thirig that had happened was that key person:nel had 7.eft, and the solution wa� to re-�taff and foI.low praceduras that had been in place far some �ime. Mr. Ha�.t responded he did not think the prablem started in September, but believed work was behind then, �d stated �urnaver had s�arted i8 to 24 months ago, which would affect any accoun.t3ng staff. Co-Chair �a�pr�t�a stated �e b�lieved ehe FinanC� De�artment was in trouble in the prevfous report. M�. Russell e�cplained there were two people on ,�ta�€ then, and Mr. HaIC con�mented if the audi�ors had kriowr� th%ngs wrere . happen3.ng �hey would have brought it Go . �he Vi.11age Coun�ilis attentian. Mr. xaseave�.,is cammented the problem b�gan in �'uly af 1396. Co-Chair Capretta commen�ed that �aersc�x�nel were Zost, a�tion shc�uld have b�en taken Iang ago, morale had deteriaraGed, ssome �mployee� lefG that should not hav+� left, and a mee�ing 2ike thi� should have been h.eld a year ago. Village l�fanag�r Bradfard explained �his was Che ff.r�t time there had been an Audit Committee me�ting, wh3.ch had r�o� been authorized unt3.i �'ovember z937. Co-Chair Capretta said it wa� the ��ult of 1►�r. K�scavelis and Village Manager Bradit�r�. that they did not bring this to the at�enti4n of the Vil�.age Council; �hat Mr. K�scavelis should have brought it �a the Vi2lage Manager�s a�tention, and if Mr. Bradford knew of this situatican it Was his fau�.t. Co- Cha3,r Gapr�tta ��tated �.e int�rui�:wed some of the e�p3.oyees who I.ef� and wanted �o see if they blamed the whc�le prob].em 4n Mr. Kascavelis and they di�n�t; th�refare, �he prablem was it was the fault of both Mr. Ka��avelis and Mr. F�NANCE ANI� A�IMINISTRA.TZQN COfi�1ITTEE N,�ETING MINtJ�B l�y 4, 1998 �'age 10 _..______________________..___________ Bradford, that �hey both let the depart�rn�nt become under�a��,ffed to the ,�caint it hur�G ;Mr. Kascavela�� Shysically and �.� �hould hav� �+��n repor�et� to the Vi11,a��e Council, Mr. Ka��avelis stated heads of dep�,rtments did n�►t report to the Village Couz�ci3., C�-�hair Capretta stated h� unde�stoocl �ha�. Cc�-�air Capretta e�res�ed can��rn �aa� �h� �ater �epar�m�.t, and w�.e�her the groper am�unt of m�ne�r wa� being col]�ec1��d and wheChe�: the enterpr��e fund was ��.�l�t with the books. Co-Chair st��,�d he hoped �.:h� only prca�►��am was lack af s��f, but h� �►elieved tha�t to preven� Chis from happeri.�.r�g again �he "Village must have some pxocedure, and feZt �he auc3it ��rrn�3.t�ee mu�t �nee� �t least quaa��erl� �c� see hc>w thing�s �er`�. Chair ��n questi��ec3 hc�w Ghe '�ti3lage could not ca3lect C�he praper amount of mcaney, Mr. Kascav��a.� stated �here were un�cp].ained errc�r� on the billi�.� reports an� �.n credit ar��ustments bu� :�� believed they w�:�+� no� sign�.�'�.cant; he be1..��,r�d wat�r. cus�c�mers were being b,�lled, and tha�C the amount ��. the genera�. �,edger was j�st of�, nc�� over $8+�,t�� vne wa�r o� the other. Chair Han�er� ques��.�ned whe�h�r t�e aud3.tar� cr�uld dete�� e probl�:m, �o which M,�. Russ��3 r��ponded t�.at a� �2�e �ttomen�. the pa�+�k�Zem was that when recc►��liations w�� not done there w��s na way ��a be sure ��.+� water corn�►��r service • departn�nt was doinc� what �hey n��ded tio do, and if the records did ngt agre� then you cou�.d not be �ure, Co-C�iair C:agre�ta as1� �f �he water d�parr.mer�t �as staff�d, tc� �ich �ill.age �+�ia�r Brad�o�cd re��pond�d �hey h�ci two peo�l�, c�ne had laeen there six mr�n�hs and th� oCher nine mc►�,�h�, plus a f orme� �mgloyee w�s� �aack worl��.n� under co��:�a�ct. Ms. Russe�l �lained th�.+� because a� �,c��,�-term empla�r�+� was with the W�t�r Departmen� until Au�us� caf 1997 it r��,� believed tl�� 'Y' l�9? figures were corr�ct, hawever, af�er �.�a� ��ere �rer� untrai��3 per;�c�nnel ar�� discrepan�i�e� in th+� fig�.r�s. Co-Cha3.:� Mackail �ressed his c►p�nivn there were other prab�ems� ?�esides 2a�k of manpow�� and comYne��d �hat the Finance ��parCment �:ad �izd to t�k� c�cr�r the eacta�� duties of the pens�.on fund and �he fire deparGment. Ca-Ch�ir Mackail F�NANCE AND ADMINISTRATIC>N COIrSriITTEE MEETING MI1�IUTES . M�ey 4, 199� P�ge 11 _,._____________________,�____________ com�nented th�t the number of requir�:d personnel cc�uld nat be gauged at this pain�, and there had beez� no gr�c�ce�s by which the Fin�nce Direc�or could com►municate, whi�h was not Mr. Kascave].is' fault, and the v3,11.ac�e mus� make sure employees �ad adequa�� supervis�on and prc�per harc3ware and st�ftware tha� were needed to do �he �oh. Cc�-�air Capretta statec3 t�e vi�.lag� ��unc�.l was �.at ask�d f4r hardware an� sc►ftware. Mr. K��cavelis exg�.ained tha� the curr�nt acc�►un�ing syatem was c�n � mini cam�u��r and he and the Villa�e Manager hac� planned �4 put a. n�vr ��rstem into G�i� upcc�ni.ng year's budget, but ,befr�re a sys�em could be �anverted ta a �.ew sy�tern ��.{�y'S$#�3 l�tLtEi� � t�A �}{�3� ��13� kll8ill} '��1� C}�{� SZTS�@Ik2r St� Z1t3tA► the Finance i)egar�merr� was �t � po�.nt they could not even a�tem�� changing ta anc�ther s�r��em. VilZage Manager Brad�s�rd commented s�.�ff was a�rar.e a new sy��m was needed but a recomrnendatic�n had not pu� tr�ether. Co-Chair Capretta di.s�cussed the fa�t that nothing had been spent� 3n a lc►nc� ti.me to helg condit3.o�� be�cau�e the Vil�.age Y�ad slcswrZ� Y�een �oin� bra]c�, and it must be run mare Z�ke a busine�s. Co-Chair Mackail cammented �her� h�d b�en a €ea�ibili�� study an needs, the n�eds had been determined, but when it came �� s�ending the mcaney far n�w �ac3.�.i�ies the V�.1.l�ge Council 1�ad backed o��, and the V�.11age was fortunate to have an auditir�g fiarm wII�€� could s�eg �.ra and whc� understoQd the c�pe�atic�n. Chair Hans�en quest�.oned that t�e auditors did r�c�t men�ion n��€ ��ftware and ha�dwar� in thea.r rec�rrtddations. N�ac. i�ol� respo�,ded that th� mas� impor�ant th�.ng wa� to �et ad�quate s��ff�tr�g, sa tha� fi�.ancial. info:��ma��an woul�. b+� curren�, �nd on].y �hen shoul.d consideration be g3.ven to geC�ing new sc►ftware and hardware; an� �his wa� th� wron:g ti�ne to consiti��: that m�.�ter. Ca- Chair �apre�ta cc�mmomm�n�ed tl�e u�ers mu�t kno�t the ki�.ci of sy�t�t �hey wan�ed befca�e considering the typ� of system ta buy. 1�. Holt speGula�ed tha� v�auld be in 12 tc� 2.6 months, Mr. Hc�l� ver3.fied tY�a� for the 1999 budget the fca�us shauld be c>n em��.oye�s, and �quipment consic�er�c3. in tl�e n�ct year�s budge�, Mr. Holt e��.ained �hat th� auditors would make a FINCAA3GE AND ADMINISTRATIt�t CO1+�ITTEE MEETING MINU'i'ES Msy 4, 19�8 Page 12 ________________________.�___________ recommendaCion as �+� th� numb�er of per�anne2 needed when they were able to do sa, but tY�e decision wauld be up to the Vil�.age. Co-Chair Cagretta ��ated it mu��. be d�termined whether the Vil2age ha� any seriou� probl.em�, �o which Mr. Ifa�caveZi� resgonded there were no �er�.ous probl�s. Chair I�ansen reque�s�ed that Mr. Halt prov.�de r�alistic deadlines for item.� recommended by the audi�ors. Mr. H�►lt requ�s��+d ana�her meeting wiGh the Con4ni��ee in 64-90 �3ays tca provide a sta�us rep�rt; and commented �l�.a:t a new Finance Direc�or could nQt b� brough� on bc�ard c�vernight and would n�ed t�me to learn the sy�tem, +�c�-Chair Cagr��ta suc�ge�ted anc�ther meet�nc,� when th� audi�ors �iad �c�mething tc� repor� t4 the Coman3.GGe�. Ca-Chair Capret�a discussed the re�gonsi.bilities� of the audi�t�re �o repor� it�m� to the .�udi� Com�ittee and to the vil.lage Cc�u�.cil, and cc�rrEmented that Ghere was a lo� behind the innocuous r�.rks in the aud�.tc�rx s repar�, and he k�ew it was hard tg �ut �.I2 af the da.r�y I.inen �n wr�.ting. Mr. xolt responded the auditors w�re en�►loyed by �he village Council and if �here was an i�em �he auditors felt was seriou� �hey would no� hesztate tc+ report �ha� to Mr. Kascavelis and viilage Manager Bradfard anc� i� they v�rere nat r$t�pC}t181V�r t0 th� V2l�.c��'� �`OU�1C11 Q� the Vi3lage Attarney� dep�nd%ng �rn the nature c�f �he i�em. Cc�-Chair s�ated he was not �ure he believ+�d �hat, becaus+� Ghe�r had r�.c�t regorted any�G�ting in the p�st six manths to a year. Mr. HoIC res�pc>ndec� �he man�gem�n� letter wa� the auditar�' method raf com¢nunicating with ��e village Cc�uncil. Co-Chair Capretta stated �ha�. this y�ear' s manage��nt le�ter was nr�t mueh dif�erent f�c�an Iast yea�'s management letter, and �hey bo�h made i� loal� like every�hing �aa� f3.ne, and z� �he auditing firm wa� to cflntinu� to do Teque�ta� s audit�, the Audit Committee would e�p+�ct more of �hem. i�s. Russell stated that aGcoun�s payable no� being recc�nc.il.ed was serious. Co- Chair Capretta asl�ed to see wher� that w�s in �he regort, � FINANCE AND At?MINISTRATICEN C41�SITTEE MEETING MINUT�3 May 4, 199$ P;�ge 13 ________,�_______________......_________ and c�ammented �her�: were more serf.ous probl�ms �han the audito��s Iet on �c� �he vi2lage Council. Mr. I�ascavelis s�at�d that when pe�ple lef� and the work wou�d ge� behind for abcau� �hree monC�hs, then would ge� caught up; �a wh3ch C�-Cha�,r Capre�ta r�:�ponded Mr. Kascaveli� had knotnrn t�.at, a�d �hau3d I��ve reparted �.t to the ��I.age Ntanage�, �nc�a shc�c�ld have toZd the village Council, and if �he Vi].lage . Cauncil could nc�t r�epend on s�a�f or the v311age Manager then ��e Village w�as in troubl�. Mr. Ho�.� �tated the 9/30/9� repart, which Ca-Chair Capretta was uain� to com�aare to the 9 j3t��97 xepcart, did n�t have these prab�iems, which wa� the reasan there were �tor� co��ttt?nt� �.n t�he 9 j34 f 97 report, Cc�-�air �agr�:�ta commented there �as nc�t u�uc� in the 9,l�p/97 report, canZy a few commenCs. M'r. Scalt reviewed cc�en�s� in tl�.e 9j3o/�� repor� �rh�.�. �vere not in �he �J3o/�& repor� because the �►roblems did not exi�t �Y��n, �uch as overpayrnent c�� n�es, not trac3�i.ng vo�.ded che�ks, no ir�venCc��r c�f proper�y and equipm�nC, no recon�il,iation af cash accaunt� and a�counts gayab�.e d�ta31 nat don�, �rhich were seriou�. Mr. Hc�lt �ress�d hi� �p�.nitsn �ha� fc�cus - shou2d now be dir�+c�ed ta �he prc�b7.em af inadec�u�te staffin�, overgaymen� of hil.ls, a�counts payabl� and not having �.tems curren�, and the me��ag� being ��t was that � these �.�ems �+rere �ignifi�antly d�.ffere�t th�. the year befor�. �hair Hanc� sug�ested subm�t�a2 0� th�� r�port ta the full Villag� Councii wiC�h the nc►tat��.on �hat this Co�nmit�e� p�anne� �o meet witk� �he audi�ors again in thr+��s mvnths ar so, and that the au+��.tor�s wauld �"ormulate a p�.�.n �a have certai�. th�.ngs impl�ented in c�rtain number� of days. Chair H�s�r� reques��d input from the other Commit�ee ��mbe�s. vi�lag� �!�ager �3radfard �e�rt�ci he Y�a� �pal�en wi�h M�. Ru�se11 duar�ng the p�ic�r �ree1€ regarding making sure a mecharzism �ra.s put in place to as�zu,re �he work c�id n+�t fa12 behind again in the �uture, whi�.� be3.ng fair �o t�he new Financial Directcar and allowing t�:at person enaugh tin�e to becr�rne accla.mated, 1+!tr�. Russell had suggested tha� beginn�.n� � FTNANCE AND ADMINISTRATIQN C�ITTEE MEETING MINUTES May 4, 199�6 Fage 14 -------------..__-------_______------ January s., 1999, in�Gerim financial reports be prepared, and if the reports were not produced Ghen Management would knaw something was wrong and they were not keeping up. Chair Hansen requested a summary of what had been discussed at thi� meeting tc� be i.n the farm of a mation �or submitta.I ta �he full Village Council. Ca-Chair Capret�a summar�.�ed the events of this meeting. Viliage Manager Bradford repor��d the village wa� a�.so se�:king a person to be hired for the position o€ Personnel Specialist, for which hi�ing had been delayed when considering sale of the w�ter Depar�;ment, and thi� p+�sition wauld take over a�.l personnel relatc�d funct3gns �rom t�ie Finance Departme�.�. Co-Chai�r Capret�a rec�ended exit intervi+�ws be conduc�ed w�.th all deparGing employe�s 3.n the future �ince the� were wi�ling to provide atnformation that could po3,n� to problem�. Co-Chair Capret�a commented the newspapers wanted tc► , give 1�r. xascavelis an accounting award, bu� meanwhile 3.t was unknown what was wrpng. Mr. Kascavelis responded �e �ould not stop what peaple said and he had tri�� ta be a de�ent emgloyee for 3.8 years; that when Co-Chair Capretta .had ��ked him a question he had a�.ways answered, but he had nat had the liber��r to give Ca-Chair CapretCa unsolicited informatian. Co-Chatir Cagretta made a motio� �o svbm�it to the full village Ca�cil the regc�rt hea�d at this i�nee�tia� ,,rhie�t � ladica�ed the v3.11age did uo� kaa�r xhe�e it stood f�.naacislly, �t ��tere is iaadequate +sta��, that t�ra accoun�a�ats aad a Fia�ace Dire►c�or are ae�ded, that the audi� compsay ai11 �crrk ia-hotsar� to hel� caCch up a�td perform recomcilia�3.ans to evaluu�►►�e� ha�+ b�d �.hiags ar$ and �,rill a�eport back to t�3.s Commf.�te�► iu 60-90 da�rs or irhen t�rey iind out sc�e�hi..ag, t]�a.t the audit co�p�uy" xill assist iu trafuiag ne�r ger�o�aa�1 a�ad �rill report hack iYi 90 �ays or b�efor�. Co-Chair �ta�ka�l aecoaded the motiaa. The vote oa the mo�ioa �►as s �aa�1 C. 8sasea - �or � FINANCE AND A�MINISTRATIQN CC}MI�tITTEE MEETII�G MINUTES May 4, 1�98 Page 15 Jasegh N. Caprst�a - for �oa T. Mackail • for Th+� �►tica Mas there�fare gas8ed aad adogt�d. V. AI�iY O'�R MATTI�'RS Village Manager Bradford reparted on �he status of effarts tQ hire twa accountan�s and a new Finance Director, Applications fcrr accountants had gone to �he auditars to prepare a short lis� ba�ed an review of the r�sumes. The short list wou].d go nex� to vill.age Mana�e� Bradford, �,rha would check their criminal backgrQund�, drivers licenses, etc. , interview them, and hopefully come ug w�.�h t�vt� new hires. Village Manager Srad�ord repcarted the position of Finance Director had be�n advertised in Palzcc Beach Pa�t, Jupiter Courier, Stuart News, In�ernaCiona�. City Managers As�ociatian Newsletter, and would be aduertised statewide in the Qu�lity Cities Magazine. The clo�ing period was May 15, and it was hoped a Fin�nee Director cou�.d be: brought in during late �un�. Village �?t�arzage�r Bradford e�cplained that if a 1aca1 perscan without a current �ob crau].d be �'ound it m3.ght be soon�r. Another firm had been cantracted with tg prepare a short li�t for the position of Personnel Specia23.st, �nd was exgected to be available Chis week , accompanied by wi�h r�commendatians regarding three po�ential e�np2c>yees. village Manager Bradford reported �h� Vi2lage had contracted w�th NOW�.�Y1r xol� & Miner to have Ms. Russell and an accountan� work in the Fi.nance Department, and since the caantract exceed�d $�,�OU it would be on �,he Vi].lag� Council meeting agenda 1��+ 14 �or considera�ion of re�roactive approval. Chair xansen requested that t�e auditors not be shy about tall�ing to the Audi� Committee. Mr. Halt responded Ghe auditt�rs wantsd to cc�me back in 90 days or at another appropriate time to keep the Committee pasted. Mr. Holt y FINANCE AND ADMINISTRATION CON![riITTEE MEETING MSNUTES Ma� 4, 1998 Page 16 ---------------�-------------------- stated he did not believe this problem would have a quick fix, but expected it to take six to nine months. Co-Chair Mackail stated the audit company must remain independent, that the Committee was aware of the goals and objectives, and requested the auditors come up with a seqt,tence_of events that was available to the Committee for the Commi�tee to review at any time. Mr. Holt stated the next meeting might need to be in 120 da.ys ar after new personnel were on board, so that the auditors would have something af �ubstance to di�cuss with the Gomm3.ttee. Co-Chair Capretta reques�ed the auditors l�eep in mind there were two issues: management and, more importantly, to determine na money �vas stolen and the village was collecting sufficient money to pay their debt. Viliage Manager Bradford stated that his impre�sion was that as soon as anything was known about the water Department whether goc�d or bad, the Committee.would ].ike to hear about � it. Co-Chair Capretta �esponded yes, and that the Audit Comrnittee should be more active than usual for the next year or so. Ms. RusselZ requested cl.arification regarding the timetable de�ired by the Committe�, and aft�r discussion, concluded that a timetable shou�.d be �et uP �howing goals and stating when those goals were accomplisY�ed. va. �c��r Co-Chair �ackaii made a moti�oa to adjourn the meetiag. �o- Ch�,ir Cag�etta $econcl�d the mc�tioa. The vote oa the motioa N8B2 Ca�l C. 8aas�a - for Jo�eph N. Capretta - for The mot3on was therefore passed aac� adopte�l aad the m,eeC�.ac� was adjouraed at 6:37 p.m. s i FII'�ArTCE AND A�L�MZNI^aTRATTQN �OMMITTEE MEETING MINLXYT�S May 4, 1998 �age 17 _____________.._____--_----,�-__..____.. Resp�*ctfully submit�ed, ��::�� ::��.�....../ Betty Laur Ftecarding Sec�etary ATTE�T: soann Mangan3��.20 "Vil�.age C1.erk UATB APPFtt)VBD: