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Audit Report 2014-5 Presentation to the BCC/CCAA
BCC/CCAAMeeting ImmokaleeRegionalAirport USDAGrant/ PowderCoatingSystem February25,2014 DwightE.Brock 1 2 Overview 2013 ImmokaleeRegionalAirport–2013 CollierCountyPropertyAppraiser–AerialImage ManufacturingIncubatorII IncubatorII •Between1999-2002,theCollierCountyAirportAuthority (CCAA)wasawardedaCommunityDevelopmentBlockGrant (CDBG)for$750,000andaUnitedStatesDepartmentof Agriculture(USDA)grantfor$250,000requiringamatchof $639,000fortheImmokaleeRegionalAirporttoconstructan incubatorfacilityandapowdercoatingsystem. •TheUSDAgrantapplicationindicatedthepowdercoating facilitywouldconsistofprimaryequipmentincluding:fire batchoven,conveyorbelts/overheadelectrichoistgantry system,rinse/diptanks,transferbooms,handpushconveyor system,powder-cartridgebooth,andpowdergunswith hopper. 3 Background •GlobalManufacturingTechnology,Inc.,wasresponsibleforthe purchaseofthesecondaryequipment(approximately $100,000)including:outsidepropanestoragetanks,holding tanks,andevaporatorsystem. •OnJune24,2003,theBCCdeclaredGlobalManufacturing Technology,Inc.indefaultfornotbeingabletoperformthe termsoftheParticipatingAgreement. –Thepowdercoatingsystemwasincompletewithsecondary equipmentnotprovided. •InFebruary/March2004,theBCCapprovedtwobudget amendmentsfor$21,000and$16,000,atotalof$37,000, fortheconversionofthepowdercoatingsystemintoawet system.4 Continued… 5 ImmokaleeRegionalAirport FieldWorkPhotographs-PowderCoatingEquipment(inuse) BatchOven 6 ImmokaleeRegionalAirport FieldWorkPhotographs-PowderCoatingEquipment(instorage) 7 ImmokaleeRegionalAirport FieldWorkPhotographs-PowderCoatingEquipment(instorage) Unusedequipmentin boxesinstorage •Approximately$163,000wasspentforapowder coatingsystemthatwasnevercompletedandwas notputtotheintendeduse,whichviolatesgrant assurances. –Grantoragencyapprovalwasnotobtainedforthechange ofuse. •Thecurrenttenantisusingaportionoftheequipment. –Aportionoftheequipmentwasrelocatedtostorageand someequipmentcouldnotbelocatedbyAirportstaff. •TheCountyhasnotcompliedwithFlorida AdministrativeCodes(FAC’s)forassetrecords.8 SummaryofFindings •Manufacturingincubatorleaseconcerns: –TheleaseexpiredonApril13,2007andnonewlease wasexecuted. –Theleaseappearstohavebeencontinuedonamonth tomonthbasis,buttheinitialcontractand amendmentsdidnotprovideatermformonthto monthcontinuation. –Rentisnotbeingchargedatfairmarketvalue. –Latepaymentsandtermsofpaymentswerenot approvedbytheBCC/CCAA. –Interestandlatepaymentfeesdonotappeartohave beencharged. 9 Continued… 10 TheCCAAshould : •NotifytheUSDAofviolationsforthe$250,000grant andworkwiththeUSDAforresolution. •ProvideClerk’sFinancewithappropriatepaperwork toaccuratelyreflecttheassetrecordsandvalue . •Reviewthe$750,000CDBGgrantforcompliance specificallyjobcreationrequirementsandprogram income. •Verifyalltenantshaveleasesandinsurance. •ResolvetheManufacturingIncubatorIIlease concerns. OverallRecommendations 11 Inthefuture,theCCAAandCountyshould : •ComplywiththeCodeofFederalRegulations (CFR’s),grantagreements,andgrantassurances. •Obtaingrantorapprovalpriortousinggrant assetsforotheractivities. •Monitorassetsandcapitalprojectstoensure assetsareappropriatelyrecordedandcomply withfederalrequirements. •Continuallymonitorandreviewleasestoensure tenantsarecompliantandmaintainproper insurance. Continued… 12 •Thepowdercoatingsystemwasnevercompleted. •Secondaryequipmentwasrequiredtohavea functioningpowdercoatingsystem.Thisequipment wasnotprovidedbyGlobalManufacturing Technology,Inc. •Oncethepowdercoatingequipmentwasinstalled, theequipmentwaspartiallydismantledanda portionoftheequipmentmovedtostorage. •Grantfundswereusedtopurchaseandinstallthe powdercoatingsystem.Thegrantorhasnot providedwrittenapprovalforthechangeofuse,as requiredbythegrantconditions. Conclusion 13 Thankyou 14