H
IGHLANDS
C
OUNTY
B
OARD OF
C
OUNTY
C
OMMISSIONERS
C
ELL
P
HONE
C
ONTINUOUS
A
UDIT
R
EPORT
N
O
.
C03-13
F
ISCAL
Y
EAR
2012-2013
September 30,
2014
Prepared by:
Robert W. Germaine
Highlands County Clerk of Courts
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Page 1 of 6
Purpose and Standards
The Compliance and Internal Audit Division identified County cell phones as a component of the continuous audit cycle. Continuous audits provide regular testing of controls and risks and result in timely notification of gaps and weaknesses to allow immediate follow-up and remediation. The scopes of these audits are very narrow and include monthly sampling over a 12-month fiscal year period. Any exceptions (i.e. findings) are reviewed and discussed with management to ensure necessary remediation. The Clerk’s Compliance and Internal Audit Department observes the International Standards for the Professional Practice of Internal Auditing, issued by the Institute of Internal Auditors. We believe the audit provides a reasonable basis for the noted conclusions.
This audit was authorized, initiated, approved and released under the direction of the Highlands County Clerk of Courts, Robert W. Germaine. We would like to thank County Administration, the General Services/Purchasing Department, the Clerk’s Payables Department and various County Departments for their cooperation throughout this audit.
Background
The Highlands County Board of County Commissioners (BOCC) adopted a Cellular Telephone Policy on December 9, 2008. The policy provides County employees who require a cell phone for performance of official County business with two (2) options:
Option 1 – A monetary allowance for employee-owned devices used for County business
Option 2 – A County issued cell phone to be used solely for County business Activation and issuance of BOCC cell phones is administered by the General Services/ Purchasing (GS/P) Department, who maintains a contract with Nextel for cellular service. Two (2) basic Nextel plans are utilized by the County and are detailed below.
Essential Plan Add-On Plan
$39.99 (before discount)
$25.00 (before discount) 400 anytime minutes
(Unused anytime minutes become “pooled minutes” and
are used to off-set account overages and anytime minutes used by Add-On
phones.)
No anytime minutes (Cell phones under this plan
rely on unused anytime minutes or “pooled minutes” remaining from the Essential
Plan.)
Unlimited nights & weekends
Unlimited nights & weekends
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During the first quarter of fiscal year 2012-2013, the County incurred $5,707.50 for Nextel services and equipment as itemized below.
Billing Period Ending: October 20 November 20 December 20 Recurring Access $1,826.46 $1,771.77 $1,763.37 411 (Directory Assistance) Call Forwarding 1.99 0.00 0.00 7.20 5.97 8.40 Direct Connect 0.00 0.00 0.00
Text (Messaging Service) 1.00 0.40 1.00
Picture mail 0.00 0.00 0.00 Data 0.00 7.05 15.00 Games 0.00 0.00 0.00 Equipment Surcharges 0.00 78.11 69.99 74.76 0.00 75.03 Total Charges $1,907.56 $1,931.17 $1,868.77
During the second quarter of fiscal year 2012-2013, the County incurred $7,122.72 for Nextel services and equipment as itemized below.
Billing Period Ending: January 20 February 20 March 20 Recurring Access $1,758.84 $1,789.83 $1,790.64 411 (Directory Assistance) Call Forwarding 0.00 4.40 0.00 21.40 1.99 17.60 Direct Connect 0.00 0.00 0.00
Text (Messaging Service) 1.00 0.60 .60
Picture mail 0.00 0.00 0.00 Data 0.00 0.00 0.66 Games 0.00 0.00 0.00 Equipment Surcharges 559.92 69.43 756.90 69.41 209.97 69.53 Total Charges $2,393.59 $2,638.14 $2,090.99
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During the third quarter of fiscal year 2012-2013, the County incurred $6,151.64 for Nextel services and equipment as itemized below.
Billing Period Ending: April 20 May 20 June 20 Recurring Access $1,768.70 $1,744.88 $1,766.13 411 (Directory Assistance) Call Forwarding 0.00 18.60 0.00 11.00 0.00 8.20 Direct Connect 0.00 0.00 0.00
Text (Messaging Service) 1.20 0.60 0.20
Picture mail 0.00 0.20 0.60 Long Distance 0.00 0.00 0.98 Games 0.00 0.00 0.00 Equipment Surcharges 629.91 67.20 0.00 66.13 0.00 67.11 Total Charges $2,485.61 $1,822.81 $1,843.22
During the fourth quarter of fiscal year 2012-2013, the County incurred $5,643.35 for Nextel services and equipment as itemized below.
Billing Period Ending: July 20 August 20 September 20 Recurring Access $1,763.63 $1,763.63 $1,818.63 411 (Directory Assistance) Call Forwarding 0.00 0.00 0.00 0.00 0.00 0.00 Direct Connect 0.00 0.00 0.00
Text (Messaging Service) Picture Mail Multimedia Message INTL Direct Connect
0.60 0.00 0.00 0.00 0.60 0.00 0.00 0.00 0.60 0.00 0.00 0.00 Data 0.00 0.00 22.95 Games 0.00 0.00 0.00 Equipment Surcharges 0.00 66.86 69.99 66.86 0.00 69.00 Total Charges $1,831.09 $1,901.08 $1,911.18
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Scope and Methodology
The scope of the continuous audit included testing of key controls identified during the documentation of the cell phone process. The period reviewed included a random sample of cell phone activity for fiscal year 2012-2013 (billing period September 21, 2012 through September 20, 2013). Cell phone numbers were sequenced and a random number formula was used to select five (5) cell phone users per month and associated back-up documentation for testing. This methodology ensures an independent and objective review of cell phone activity.
Authorization Responsibility and Criteria
Department directors perform the following (C.03.02):
Determine whether a position requires a cell phone based upon the job responsibilities
Determine which of the allowed options is most appropriate Maintain appropriate documentation to support the decision
Department directors review annually whether a business need still exists for the issuance of County-owned cell phones or monthly allowance. (C.03.03)
Monthly Review Process
Department directors review and approve the cell phone users’ monthly reconciliation and collect payment (reimbursement) for charges resulting from incidental personal use. (C.03.07)
Audit Summary/Conclusion
Cell phones have been a component of the continuous audit cycle since the second quarter of the 2008-2009 fiscal year. Since the initiation of cell phone continuous audits, the General Services/Purchasing Department has worked to address and remediate a number of the exceptions and opportunities identified. The following issues have been resolved to date:
The number of County issued cell phones decreased from 149 (in January of 2009) to 75 (in September of 2013).
The majority of cell phones have been adequately identified (by user and department) on the Nextel billing statement.
Cell phones have been assigned DAC numbers based on departments. Texting features have been restricted.
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For the period under review three (3) exceptions were identified. The exceptions related to:
Excessive personal use of county cell phone, Incorrect user name on Nextel Monthly Statement,
Unused cell phones remained activated and incurred charges,
Exception/Recommendation 1: Excessive Personal Use of County Cell Phone
During this audit there were two (2) instances of excessive personal use of county cell phones. The first personal use totaled 15 minutes, or 47% of the total usage, and was reimbursed. The second personal use totaled 18 minutes, or 56% of the total usage, and was reimbursed. County cell phones are intended to be used for county business. Management is encouraged to monitor reimbursements to ensure that excessive personal usage is not occurring and evaluate the usage and need of the noted cell phone.
In accordance with the policy, personal usage should be infrequent and non-routine. Per Section VII of the Cellular Telephone Policy, user responsibilities include:
“4. For County owned devices, ensuring that the device is used for County business only. The County recognizes that incidental use not initiated by the employee is possible but under any circumstances, it should be both infrequent and non-routine. The County also recognizes that there may be emergencies or extenuating circumstances under which the phone is needed for personal use. Those occasions also must be infrequent and non-routine.”
Management Response:
In both cases, the personal use was reimbursed by the employee. Based on the presented information, the personal use does not appear to be frequent or routine. Management will work with Departments on the policy and will also present a policy revision in the
coming year to further clarify the policy.
Exception/Recommendation 2: Incorrect User on Nextel Statement
During two (2) separate occasions, incorrect user names were showing on the Nextel Statements. Employees’ names continued to incorrectly show on the monthly Nextel invoices: one for 10 and the other for 35 months. Department management is encouraged to review the employees’ names that appear on the Nextel statements for correctness and to make updates/changes as necessary.
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Page 6 of 6 Management Response:
Management concurs.
It has been determined that the phone was passed from a separated employee to a new employee and the name change was either not requested or completed. When Purchasing receives a requested name change they contact the cell phone provider with the request, this request may take some time.
We are stressing to each department head to utilize the Separation Checklist provided by the Human Resources Department when there is a separated employee. Cell Phones are an item on the checklist and will prompt the department head to determine if the phone is still needed, it should be put on hold for the next employee and a name change request completed.
With Verizon as the new cell provider, these changes can be made as needed by purchasing through Verizon’s web site electronically.
Exception/Recommendation 3: Unused cell phones remained activated and incurred charges
During testing three (3) separate unused cell phones were not deactivated and continued to incur charges for several months. These three (3) cell phones were found to be unused for a period of sixteen (16), five (5), and six (6) months; resulting in charges of $316.80, $155.83, and $187.39, respectively. Department management is encouraged to review monthly Nextel Statements to ensure that unused cell phone numbers are deactivated and charges are not incurred.
Management Response:
Management concurs with the findings and will continue to evaluate the cell phone bill for usage issues.
The cell phone that was found to be unused for a period of sixteen (16) months was not activated for calling services, but only for Push To Talk (PTT). Therefore, that is why it did not show call usage on the bill.
With the other two instances, the end using department was not aware that they were able to put the phone on a “hold” status. The departments did not realize that it would take them as long as it did to fill the new position and issue the unused phone.
Highlands County Board of County Commissioners
Cell Phone Continuous Audit Report No. C03-13
Fiscal Year 2012-2013
Issuance Date: September 30, 20 14
Approved for Issuance
By:
Robert W. Germaine Highlands County Clerk of Courts
and Auditor to the Board