2009-01-AU Follow-up Review of the 2006 Audit of the Department of Environmental Management's Recycling and Diversion Grants Program

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EXECUTIVE SUMMARY The Legislative Auditor's Office has completed a Follow -up Review of the Department of Environmental Management's Recycling and Diversion Grants Program. This follow -up review was conducted in accordance with Generally Accepted Government Auditing Standards ( GAGAS). Criteria GAGAS Section A.1.06 provides, in pertinent part, that: • "Those charged with governance have the duty to oversee the strategic direction of the entity and obligations related to the accountability of the entity. This includes overseeing the financial reporting process, subject matter, or program under audit including related internal controls...." GAGAS Section A1.08 specifies that management of an audited governmental entity is responsible for: • ,a. using government resources legally, effectively, efficiently, economically, ethically, and equitably to achieve the purposes for which the resources were furnished or the program was established; • b. complying with applicable laws and regulations • c. implementing systems designed to achieve compliance with applicable laws and regulations; • d. establishing and maintaining effective internal control to help ensure that appropriate goals and objectives are met ... • e. providing appropriate reports to those who oversee their actions and to the public in order to demonstrate accountability ... • f. addressing the findings and recommendations of auditors ... and maintaining a process to track the status of such findings and recommendations ... • h. taking timely and appropriate steps to remedy fraud, illegal acts, violations of provisions of contracts or grant agreements, or abuse that auditors report to it." Background At the request of the Council in Resolution No. 168 -05, our office conducted a limited scope performance audit of the Department of Environmental Management's 11 Recycling and Diversion Grant Programs for fiscal years 2004 and 2005 and issued our report in June 2006. Major deficiencies identified in our original audit report included the lack of written policies and procedures related to internal and external communications, procurements, contracting, file organization, and program documentation; the lack of internal controls for accurate measurement, data reconciliation, and independent validation of solid waste commodities being claimed under each diversion program; and the lack of a County -wide commitment by the executive and legislative branches to implement a long -term solid waste management solution. Purpose In accordance with GAGAS, we are required to follow up on all significant audit findings and recommendations to determine whether issues identified in the original audit report have been appropriately addressed. The specific purpose of this follow -up review is to determine whether those County managers and elected officials charged with responsibility for and authority over areas of concern identified in the original audit report have implemented action plans to satisfactorily address program deficiencies or management and policy issues cited in the original report. Scope and Methodology Our office requested that the Department of Environmental Management provide a written update outlining what remedial measures had been planned and the timelines for and status of their implementation, and what successes had been achieved in addressing specific audit recommendations. We performed limited scope inquiry, observation, and testwork to independently corroborate and evaluate the effectiveness of actions reported as implemented by respective departmental and other County personnel.