St. Charles County Auditor's Office
201 N. Second Street Room 526
St. Charles, MO 63301
(636) 949-7455 Fax (636) 949-7467
To Honorable County Council Members
Honorable Steve Ehlmann, County Executive
March 5, 2007
The Workforce Development examination opened October 26, 2006 has been completed, and the
final report is being issued today. Fieldwork for the review was completed on December 8, 2006, and
our report reflects the results of work performed through that date. Responses were requested for by
February 28, 2007 and were received on March 2, 2007.
The objectives of the review were to determine whether internal controls were adequate and
effective, operations and records were in compliance with established standards, regulations, policies
and procedures, and resources were being used efficiently.
The examination covered employer services, job seeker services, and related activities. We
reviewed the internal control environment surrounding those activities, as well as performed an
evaluation of the effectiveness and efficiency with which department objectives are being achieved. In
addition, reviews for compliance with the County Charter and Ordinances, Missouri Statutes, and
internal policies and procedures were performed.
This audit was conducted in accordance with the International Standards for the Professional
Practice of Internal Auditing, and consisted of examining, on a test basis, sufficient evidence to afford
a reasonable basis, for our opinion.
In our opinion, except for the opportunities included in this report, internal controls were
adequate and effective and operations and records were in compliance with established standards.
The issuance of this report completes the formal examination process. However, if you wish to
discuss any aspects of the audit or report, please contact me.
Brent R. Statler, CPA, CGAP
County Auditor
Attachment
Copy To
Don Holt, Director of Workforce Development
Joann Leykam, Acting Director of Administration
St. Charles County Auditor's Office
Workforce Development
Examination Report
Opened October 26, 2006
Table of Contents
I. Background and Introduction ...........................................................................1
Authority and Activity…………………………………………………………1
Funding…………………………………………………………………………2
Staffing………………………………………………………………………....3
II. Status Board……………………………………………………………………4
III. Executive Summary……………………………………………………………7
IV. Detailed Findings…………………………………..…………………………8
Compliance Opportunities……………………………………………………..8
Control Opportunities………………………………………………..………...9
BACKGROUND AND INTRODUCTION
Authority and Activity:
The Workforce Development Department provides employment and training services for
residents and businesses of the County. Using grant funds provided by the Workforce
Investment Act, the Department operates in cooperation with other agencies within the structure
of the Missouri Career Center system to provide training, job fairs, career counseling, and job
search assistance to more than 20,000 job seekers annually. Workforce Development also
provides an array of services to businesses to help them with recruitment, training, and other
employment related needs.
Workforce Development’s program mission as stated in the 2006 budget is as follows:
The mission of the Workforce Program is twofold: 1) to prepare youths and adults for entry
into the labor force by providing job training and other services that will result in increased
employment and earnings, and 2) to provide our business customers with access to a work
force that meets or exceeds their hiring requirements. 2006 budget, pg. 265.
1
Funding:
The primary funding for Workforce Development is provided by the Workforce Development
Fund (290). The historical funding for Workforce Development is presented below.
Workforce Development
Workforce Development Fund – Expenditures
Fiscal Years 2001-2006
Fiscal
Year
Salaries &
Benefits
%
Increase
Operating
Expenditures
%
Increase
Capital
Expenditures
%
Increase
Total
Expenditures
%
Increase
2001*
$663,261
N/A
$834,965
N/A
$2,393
N/A
$1,500,619
N/A
2002
$650,029
-2.0%
$692,468
-17.1%
$18,172
659.4%
$1,360,669
-9.3%
2003
$698,661
7.5%
$496,672
-28.3%
$39,081
115.1%
$1,234,414
-9.3%
2004
$725,905
3.9%
$1,019,825
105.3%
$6,241
-84.0%
$1,751,972
41.9%
2005
$771,013
5.9%
$1,101,758
8.0%
$13,309
113.3%
$1,886,080
7.7%
2006**
$907,181
17.7%
$960,170
-12.9%
$13,415
0.1%
$1,880,766
-0.3%
2
Revenues generated by Workforce Development are deposited in the Workforce Development
Fund. The historical funding is presented below:
Workforce Development
Workforce Development Fund – Revenues
Fiscal Years 2001-2006
Grants
Miscellaneous/ General
Fund Transfer
Total Revenue
Workforce Dev.
Revenue as a
Percentage of
Expenditures
2001*
$1,275,644
$0
$1,275,644
85.0%
2002
$1,169,438
$212,450
$1,381,888
101.5%
2003
$1,042,426
$215,604
$1,258,030
101.9%
2004
$1,635,829
$245,218
$1,881,047
107.4%
2005
$1,736,126
$105,755
$1,841,881
97.7%
2006**
$1,767,700
$105,000
$1,872,700
99.6%
Fiscal
Year
* In 2001, Workforce Development was funded by the General Fund.
** These are the approved budget amounts from the 2006 budget.
Staffing:
The number of full-time equivalent authorized positions for Workforce Development
increased (6.3%) from 16 full-time positions in 2001 to a total of 17 full-time budgeted
employees in 2006.
3
II. STATUS BOARD
The status board provides a summary of the Workforce Development’s functions and processes. Each cell located under a function represents an
activity that is to be completed to ensure that the process is performed in an effective and efficient manner. The color of the cells represents the
assessment regarding completion of the activity. The legend below gives a description of the definition of each color.
Red indicates management's immediate attention is required.
Yellow indicates an opportunity for improvement exists.
Green indicates there is no action necessary at this time.
Blue indicates a process that was not included in the scope of the review.
Grey indicates a County issue that should be addressed by management, but is not necessarily a direct responsibility of the audited department/office.
Application
Process
Participant
Eligibility
Screening
Job Search
Assistance
Person is greeted
by receptionist
Grant standards
are used to figure
eligibility
Job research and
job postings
Person signs in at
front desk.
Standards consist
of general,
economic, and
hard to serve
reasons
Clients have
access to
computers or
research
information.
Job Skill
Training
Personal
information
record is filled
out
Employment
Plan is filled out
Employee
Training
Quality
Performance
Function
Employer Job
Posting and
Applicant
Referral
Administrative
Department
funded by Grants
and County.
Counselors who
hold
certifications
complete 60
hours during a 3
year period.
Review of files
within 30 days of
being placed into
a program using
a checklist to
verify all
applicable
paperwork is
present
Workforce
employees work
with businesses
to fill vacant
positions.
Payroll
County pays for
all expenditures
State
appropriation
guidelines states
employee should
be prepared to
perform their
duties
A review is
performed at
year end for all
CAP cases and a
sample of other
files.
Employees
review position
qualifications to
determine status.
Purchasing
Department
Funding
4
Application
Process
Participant
Eligibility
Screening
Job Search
Assistance
Person fills out
an application
Verifies
applicant’s
information
through DFS
Client assigned
to the appropriate
function, if
applicable.
Applicant file is
then forwarded
to Career
Counselor
Career
Counselors work
with qualified
applicants in
achieving
training and/or
new
employment.
Program
Completion
Report if client
completes a
program
Workforce holds
job fairs,
workshops, and
other training
activities.
Person receives a
tour of the
facility
Telephone
Verification
Form for prior
employer if
applicant does
not have a lay-off
letter
Other required
forms received &
completed.
Application is
reviewed for
eligibility
assessment
Job Skill
Training
Department
Funding
Employee
Training
Quality
Performance
Function
Job search is
performed
Fiscal Manager
submits a cash
and progress
report to the
State
Some grants
require certain
employee
training.
Errors are
reviewed with
counselors. An
annual report is
sent to the State.
Requested cash
is wired into
General Revenue
bank account
Travel requests
are approved by
the Director of
Administration
Termination
data/follow up
form is filled out
at the end of a
program
The Fiscal
Manager
monitors the
budget
Employee
receives a travel
allowance
advance before
the trip
Follow up with
client 30, 60, &
90 days; 6, 9, and
12 months
OMB-A87 is
used to assess if
expenditures are
allowable under
grants
Employee fills
out travel
reimbursement
form after trip
Workforce also
rents space to
MO Economic
Development and
Jess Inc.
Finance
reimburses or
receives
difference
between advance
and actual
If eligible, a time
will set with
Career
Counselor.
5
Employer Job
Posting and
Applicant
Referral
Lower skill level
jobs are posted at
the Career
Center.
A recruitment
Job Order form is
completed for
high skill level
jobs.
Workforce
employees locate
qualified
applicants and
forward them to
the business.
Administrative
Performance
Measures
Workforce 2Year Plan
III.
EXECUTIVE SUMMARY
Following is a summary of opportunities for improvement which were noted during our review of Workforce Development:
A. Compliance Opportunities
1. County Cell Phone Policy: Cellular phones bills were not reviewed in accordance with the County’s Cellular Phone Policy.
B. Control Opportunities
1. Payroll Processing: There is a lack of separation of duties over payroll.
2. Rental Agreement: There is no written agreement between Workforce Development and St. Charles Community College
regarding the reimbursement amount for using resources
3. Rental Agreement Documentation: The County Executive did not sign the lease agreement with one of the tenants.
Compliance – County Cell Phone Policy
Background
Issue
The County cellular
telephone policy states that
individuals to whom County
wireless telephone equipment
has been assigned shall
review the monthly statement
and determine whether it
contains any personal calls.
Such personal calls shall be
clearly identified by circling
those appropriate line items
including the date and
telephone number called (or
incoming calls). The
individual shall then initial
and date the statement.
Each cellular phone service
invoice reviewed (4 total)
was not initialed by the
employee. In addition, one of
the employees is being
charged for internet services
that the employee does not
use.
Risk/Effect
Noncompliance
with County
policies and
potential
misuse of
County
resources.
Note: A similar issue was
noted during the last
Workforce Development
audit.
7
Recommendation
Management Response
Workforce Development
should ensure that all
employees review their
cell phone bills to ensure
that the charges are
accurate and that the
reviews of cell phone bills
are documented as
required per policy.
As we discussed there have been
changes to the County’s Cell Phone
Policy and this has had some impact
on our response. The cell phone
assigned to the Director has been
terminated (02/23/07) and an
allowance request submitted. The
phone currently issued to the Service
Initiatives Coordinator is under
contract until 04/08. In the interim, the
applicable policy has been reviewed
with the employee to insure
compliance. (As an aside, neither
phone had calls resulting in additional
charges.)
Control – Payroll Processing
Background
To process department
payroll, an Account Clerk
enters all time and leave data
into the HTE payroll module
based on approved
timesheets submitted by
employees. Once all time is
entered, the Account Clerk
prints an Hours Proof Report
for the Executive Director to
review. After the report has
been reviewed, the Executive
Director signs the report to
document his approval and
the Account Clerk then faxes
the report to the Finance
Department.
Issue
Risk/Effect
When the Executive Director Lack of
is not available to review and segregation of
sign the Hours Proof Report, duties.
the Account Clerk (who
enters payroll) is authorized
to sign off on the report and
send it to the Finance
Department.
Note 1: During a review of
the past 24 pay periods, the
Account Clerk signed all
Hour Proof reports.
Note 2: In a review of
department payroll, there
were no irregularities noted
between employee
timesheets and time entered
into HTE.
8
Recommendation
Management Response
When the Executive
Director is unavailable to
review the Hours Proof
Report, the Assistant
Director or Fiscal
Manager should review
and sign off on the report
before it is sent to the
Finance Department.
The Department Director now
reviews the Hours Proof Report and
signs to document this review. If the
Director is not available the review is
conducted by the Fiscal Manager or
Assistant Director (in that order.)
Control – Rental Agreement
Background
Issue
Risk/Effect
Recommendation
Management Response
Workforce Development
subcontracts some grant
work to St. Charles
Community College. To
perform the grant work,
College employees use office
space and other resources at
the Career Center. Each year
a College liaison notifies the
Career Center's Account
Clerk of the reimbursement
amount that will be paid for
that year. Based on the
reported amount, the
Account Clerk divides the
amount into quarterly
payments and then bills the
College.
There is no written
agreement between
Workforce Development and
St. Charles Community
College regarding the
reimbursement amount for
using resources (i.e. office
supplies, equipment, and
receptionist) at the Career
Center.
Lack of
documentation
and the
potential
inability to
recoup costs.
Workforce Development
should document (at least
in memorandum form) the
reimbursement agreement
with St. Charles
Community College.
The agreement in question is
specifically in regards to the Adult
Education and Literacy (AEL) class
held at the Career Center. Their
funding source prohibits use of funds
to pay rent. The arrangement is one
provided by their funding source
(DESE) to allow them to contribute to
the operation of the Center and is
dependent on what DESE provides
for this purpose. (This is seen as an
important service for customers of the
Center and we would have them even
if they were unable to contribute.) We
have noted the current understanding
in a memorandum, as suggested, and
forwarded this to the College.
Also, the County has no
input on the reimbursement
amount which is established
solely by the Community
College.
Note: The monthly amount
paid by the College in 2006
decreased by 50% from
2005.
9
Control – Rental Agreement Documentation
Background
Workforce Development
maintains two formal rental
agreements with entities that
use space at their facility.
The initial lease agreement
period with both entities was
for July 1, 2005 through June
30, 2006 with the option to
renew for four successive
one-year periods. The
expiration of the final option
period ending June 30, 2010.
Issue
Risk/Effect
Recommendation
The County Executive did not Lack of formal Workforce Development
sign the lease agreement with lease execution should ensure that the
and approval. County Executive
one of the tenants (JESS
approves and signs all
Inc.).
contracts, including lease
agreements.
10
Management Response
As we have been unable to locate an
original copy of the document
(beyond the copy faxed from JESS
and provided during the examination)
new originals have been forwarded to
JESS for original signatures. When
these are returned they will be
forwarded to the County Executive’s
Office for signature.