Miami-Dade Elections Invoice Reviewtv~iiAIV\IB H
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
DATE:
AUDIT:
PERIOD:
Jorge M. Gonzalez, City Manager
Kathie G. Brooks, Budget and Performance Improvement Director
James J. Sutter, Internal Auditor:~~-·-
July 12, 2010 /
Miami-Dade Elections Department Invoice Review
October 26, 2009 through November 30, 2009
This audit is the result of the City Clerk's request to review the expenses relating to the Miami-Dade
County Elections Department's $188,138 invoice pertaining to the municipal elections held on
November 3, 2009 and the $154,967 invoice for the subsequent run-off election held two weeks
later on November 17, 2009.
INTRODUCTION
The Miami-Dade County Elections Department (MDCED) conducts elections, registers voters, and
maintains voter records and election results for Miami-Dade County and all of its municipalities.
Miami-Dade Elections Department's main offices are currently located at 2700 N.W. 8ih Avenue in
Doral and are presently under the supervision of the County's Supervisor of Elections.
Early voting for Miami Beach constituents to elect a Mayor and three Commissioners was held at
various locations throughout the City between October 26, 2009 and November 1, 2009 with the
actual election held on November 3, 2009. For those races in which a candidate did not receive
more than 50% of the votes, a run-off election was held on November 17, 2009 in accordance with
City Code Section 2.01. The following illustration shows the amounts invoiced to the City for the last
six regular and four run-off elections:
Year 2005 2006 2007 2008 2008 2009
Election 11/15/05 11/07/06 (1) 11/06/07 1/29/08 (1) 8/26/08 (1) 11/03/09 Regular Dates
El.ections Amount $ 88,879.00 $ 5,962.00 $ 95,679.67 $2,964.00 $2,892.00 $188,138.00 .. Invoiced
; Election
Ryn-Off Dates 11/29/05 11/21/06 11/20/07 N/A N/A 11/17/09
Elections Amount $ 53,286.00 $68,843.35 $71,802.16 N/A N/A $154,967.00 Invoiced
Totals $74,805.35 $167,481.83 $2,964.00 $2,892.00 $343,105.00
(1): City elections were held together with countywide elections. As a result, amounts invoiced to the City were
materially less. Since it is a county election, most costs are paid by the county.
Amounts invoiced to the City have been historically affected by two major components. One is the
increase in poll worker compensation along with inflationary factors affecting the cost of supplies,
truck rentals, etc. The second component is the number of municipalities holding elections
concurrently. According to the Miami-Dade Elections Department, there are costs incurred during
elections held by multiple municipalities that can not be specifically identified to a particular
municipality; therefore they are allocated among all municipalities using a weighted average method
based on the number of registered voters for each municipality or in some cases, by number of
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Internal Audit Report
Miami-Dade Elections Department Invoice Audit
July 12, 2010
polling places or precincts, as appropriate.
In addition to these cost incremental factors experienced historically, election costs incurred during
the 2009 elections were materially impacted by the change from the electronic voting machines
(lvotronic I 1-vote) to paper ballots and optical scanners. The new method, which complies with
State requirements, directly impacted costs incurred for printing and ballot creation/tabulation, as
well as related labor costs. Furthermore, increases in postage were influenced by the number of
absentee ballots requested and an increase in postage made effective by the U.S. Postal Service on
May 11, 2009. Other labor cost increases experienced, not related to the change in voting systems
and historical cost incremental factors experienced, were due to allocations of employer payroll
taxes and fringe benefits for seasonal employees, as well as overtime incurred from seasonal and
regular staff as a result of an election recount during the 2009 general municipal elections.
In 2006 and 2008 the City of Miami Beach held special elections concurrently with countywide
general elections. Costs invoiced for these elections as compared to city regular elections are as
follows:
Election Dates 11/15/05 11/07/06 (1) 11/06/07 1/29/08 (1) 8/26/08 (1) 11/03/09
$ 88,879.00 $ 5,962.00 $ 95,679.67 $ 2,964.00 $ 2,892.00 $ 188,138.00
(1 ): City elections were held together with countywide elections on these dates. As a result, amounts invoiced to
the City were substantially less.
City elections held concurrently with countywide elections reflect a reduction of the costs incurred by
the City. On average the City's costs have been estimated to be between $87,816 and $120,323
higher for elections not held concurrently with the countywide elections and very likely to continue to
grow.
Similar analysis have been completed and proposed by District 6 County Commissioner, Rebecca
Sosa (LTC 125-2008) and the MDC ED, with all data reflecting substantial cost savings for municipal
elections held during countywide elections. However, this is a policy decision to be determined by
City Commission, based on the best interest for the City.
OVERALL OPINION
Overall, a significant improvement, when compared to previous years, was noted from the Miami-
Dade Elections Department with respect to the availability of supporting documentation, schedules,
and calculations of election costs invoiced to the City, as a result of municipal elections performed in
the month of November, 2009. In addition, it is important to recognize the continued cooperation
and prompt attention to our inquiries from the Miami-Dade Elections Department staff assisting
throughout the course of our review.
However, despite the noticeable improvements in the overall documentation and support of invoiced
amounts, Internal Audit, as in previous reviews, was not provided with sufficient basis and
supporting documentation to reasonably substantiate overhead charges assessed representing five
percent (5%) of total revised invoiced costs for a total amount of $15,362 to the City. Internal Audit
opines that since election costs incurred by the Miami-Dade Elections Department, as a result of
non-countywide municipal elections, are passed through and therefore reimbursed by the
participating municipalities, any additional amounts charged by the Miami Dade Elections
Department based on a percentage of already reimbursed costs is unnecessary and without merit.
Accordingly, we recommend that the City attempt to recover the amounts paid for these
administrative charges. At the same time, we respectfully recommend for the Miami-Dade Elections
Department to reconsider assessing administrative overhead charges as a percentage of
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Internal Audit Report
Miami-Dade Elections Department Invoice Audit
July 12, 2010
reimbursed election costs.
Lastly, based on previous discussion with the Miami-Dade Elections Department, new revised
invoices will be issued to reflect corrections to costs previously invoiced for truck rental. Not
considering any changes that could result from our findings with respect to the administrative
overhead charges, newly revised invoice amounts should total $322,602 overall ($180,530 for the
November 3 elections and $142,072 for the November 17 elections during 2009).
Collectively and consequential from the review, costs incurred by the City from the November 3,
2009 elections and the November 17, 2009 run-off elections experienced an overall reduction of
$20,503. The following tables help to illustrate the overall cost reduction experienced per invoice:
November 3, 2009 Elections
I··· • .• ••••••...•.
~~~():ice Un~ .· ... ·... ·····
· o~scrrptidli .·· •··· ··· ·•· ·
Salary & Fringe Benefits
Polling Place Expenses
Trucks & Vehicles
Printing
Postage
Technical Support
Administrative Overhead
Total
Total
I Total Both Invoices
PURPOSE
or.iQillal ··.·
Invoice Amount
;02/23/10 . .··
$104,422
8,461
6,262
26,296
3,819
21,775
17,103
$188,138
7,515
11,978
25,399
3,363
10,300
14,088
$154,967
$104,422 $104,422 $ 0
8,461 8,461 0
6,262 $898 7,160 898
26,296 26,296 0
3,819 3,819 0
21,775 21,775 0
($8,551) 8,552 45 8,597 {8,506)
($8,551) $179,587 $943 $180,530 ($7,608)
7,515
6,406
25,399
3,363
10,300
6,765
$142,072
$343,1 os I ($1s,s9s) I $327 ,s1 o I ($4,908) I $322,602 1 ($2o,so3)
The purpose of this audit is to determine whether invoices for City held elections submitted by the
County are supported by actual costs and allocations based on reasonable supported methods and
documentation.
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Internal Audit Report
Miami-Dade Elections Department Invoice Audit
July 12, 2010
SCOPE
1. Verify that proper documentation is maintained to support invoiced amounts charged for
municipal elections in 2009.
2. Confirm that the allocation methods are reasonable and accurately applied to the municipal units
being charged.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSES
1. Finding: Insufficient information and support documentation was provided to substantiate
amounts invoiced to the City for Administrative Overhead.
Administrative Overhead have been historically billed, starting in 2006, at 20% of the total
invoiced items. However, amounts initially invoiced to the City for the November 3, 2009
elections and the November 17, 2009 run-offs elections were lowered by the Miami-Dade
Department of Elections from a historical 20% to 1 0% of the totals invoiced for each invoice line
item. The following table helps to illustrate such administrative overhead charged on the
November election invoices under our review:
Invoice ..
subto~a,, ·
$140,879
$311,914
During our initial meeting with the Deputy Supervisor of Elections, Operations Division, on March
9, 2010, Internal Audit observed a discrepancy between totals invoiced to the City and totals
reflected on the substantiating documents provided to Internal Audit for review. The difference
represented a reduction of costs in the amount of $8,551 for the November 3, 2009 elections
and a cost reduction in the amount of $7,044 for the November 17, 2009 Run-Offs; collectively a
total cost reduction of $15,595. Subsequent to our inquiry we were explained that the noted
cost reduction was due to a decrease in the administrative overhead charged under each
invoice from an initial1 0% to a 5%. Subsequent to Internal Audit requests, new invoices were
provided to be forwarded to the City Clerk Office for further reference.
Despite being more comfortable with lower percentages charged for administrative overhead,
Internal Audit, as in previous years, inquired regarding the basis for assessing any percentage
for administrative overhead. We also inquired whether any administrative or legislative guideline
exists, to be consistently followed and to establish any specific rate.
In response, we were informed that there were no documented guidelines to be consistently
followed. However, percentages charged, according to the Miami-Dade Elections Department,
seemed reasonable to ensure that incurred costs that are extremely difficult to identify and
measure were recovered by the Miami-Dade Elections Department.
Additional procedures conducted during invoice reviews for prior elections, which included
further research of county ordinances and inquiries for standard invoicing practices of
administrative overhead for municipal elections in Broward and Palm Beach counties, did not
reflect any merits for the charge. None of the two counties inquired charge any administrative
overhead to their respective municipalities when holding non-countywide municipal elections.
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Internal Audit Report
Miami-Dade Elections Department Invoice Audit
July 12, 2010
Based on results from previous procedures and considering that all costs incurred by the Miami
Dade Elections Department during non-countywide municipal elections are passed through and
allocated to the participating municipalities, including any and all cost incremental, Internal Audit
opines that any percentage assessed to each cost line item invoiced represents a fee levied on
those costs that have already been passed through and allocated to the municipality; therefore
without basis.
By passing through all costs incurred by the Miami-Dade Elections Department to the
participating municipalities of the non-countywide elections, cost recovery is satisfied. Any
percentage on top and beyond would likely represent a surplus.
Since no primary reference or supportive allocation has been provided to substantiate the merits
of a percentage charge for administrative overhead, we recommend that the City attempt to
challenge the amounts charged for these administrative charges.
2 Finding: Allocation inconsistencies were observed that resulted in an overall truck rental
overcharge and overhead cost in the amount of $4, 908 to the City.
Upon review of supporting documents for truck rental charges invoiced to the City, Internal Audit
observed minor inconsistencies in the allocations of the same that resulted in an overcharge to
the City overall in the amount of $4,908, including applicable administrative costs assessed.
Subsequently, our findings were discussed with the Miami-Dade Elections Department. As a
result, new revised invoices will be created and the over charged amount will be credited back to
the corresponding invoice. Once the new revised invoices are received, then payment can be
processed. No further action is necessary from the City with respect to this finding.
On May 5, 2010 the above invoices totaling $322,602 were paid by the City reflecting the revised
amounts. The final findings were presented to both Miami-Dade Elections Department and the City
Clerk's Office on June 15, 2010. Both agencies expressed concurrence with the findings in this
report.
JJS:FM
(Review performed by Fidel Miranda, Auditor)
F:\obpi\$AUD\INTERNAL AUDIT FILES\DOC09-10\REPORTS-FINAL\ELECTIONS DEPARTMENT INVOICE REVIEW.doc
cc: Robert Parcher, City Clerk
Patricia Walker, Chief Financial Officer
Lester Sola, Supervisor of Elections
John E. Mendez, Deputy Supervisor of Elections, Operations
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