Agenda 01/24/2017 Item #16J101/24/2017
EXECUTIVE SUMMARY
To provide the Board of County Commissioners the Clerk of the Circuit Court’s Internal Audit
Report 2017-1 Job Creation Investment Program: Animal Specialty Center of Florida, LLC, issued
on January 17, 2017.
OBJECTIVE: To provide the Board of County Commissioners (Board) the issued Audit Report 2017-1
Job Creation Investment Program: Animal Specialty Center of Florida, LLC.
Internal Audit delivered the Audit Report to the Board on Tuesday, January 17, 2017. It is available
electronically on the Clerk of Courts website.
The Clerk’s website for published Internal Audit Reports, once they are no longer confidential:
Report:
<https://www.collierclerk.com/clerk-to-the-board/finance/internal-audit/published>-reports/...
Internal Audits do not become public record until the Clerk’s Office issues them to the Board.
GROWTH MANAGEMENT IMPACT: None
FISCAL IMPACT: $4,000
RECOMMENDATION: That the Clerk’s Audit Report 2017-1 Job Creation Investment Program:
Animal Specialty Center of Florida, LLC, be entered into the record.
Prepared by: Patrick Blaney, Senior Internal Auditor
Office of the Clerk of the Circuit Court
ATTACHMENT(S)
1. Final.FY14&15 pmts.ASH (PDF)
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01/24/2017
COLLIER COUNTY
Board of County Commissioners
Item Number: 16.J.1
Item Summary: To provide the Board of County Commissioners the Clerk of the Circuit Court’s
Internal Audit Report 2017-1 Job Creation Investment Program: Animal Specialty Center of Florida,
LLC, issued on January 17, 2017.
Meeting Date: 01/24/2017
Prepared by:
Title: Sr. Internal Auditor – Clerk of the Circuit Court
Name: Pat Blaney
01/18/2017 8:56 AM
Submitted by:
Title: Fiscal Technician I – Clerk of the Circuit Court
Name: Jennifer Milum
01/18/2017 8:56 AM
Approved By:
Review:
Clerk of the Circuit Court Crystal Kinzel Additional Reviewer Completed 01/18/2017 10:30 AM
Office of Management and Budget Valerie Fleming Level 3 OMB Gatekeeper Review Completed 01/18/2017 10:39 AM
Budget and Management Office Mark Isackson Additional Reviewer Completed 01/18/2017 11:24 AM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 01/18/2017 11:45 AM
County Manager's Office Leo E. Ochs Level 4 County Manager Review Completed 01/18/2017 12:02 PM
Board of County Commissioners MaryJo Brock Meeting Pending 01/24/2017 9:00 AM
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Internal Audit Department
Audit Report 2017-1
Job Creation Investment Program:
Animal Specialty Center of Florida,
LLC
Dwight E. Brock
Clerk of the Circuit Court
3299 Tamiami Trail East
Suite #402
Naples, FL 34112-5746
www.collierclerk.com
Issued: January 17, 2017
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Prepared by: Michael Harder, Senior Internal Auditor
Patrick Blaney, Senior Internal Auditor
Report Distribution: Board of County Commissioners
Leo Ochs, Jr., County Manager
Nick Casalanguida, Deputy County Manager
Jeff Klatzkow, County Attorney
Jace Kentner, Interim Director, Business & Economic Development
Cc: Dwight E. Brock, Clerk of the Circuit Court
Crystal K. Kinzel, Director of Finance & Accounting
James D. Molenaar, Internal Audit Manager
Table of Contents
Summary……………………………………………………………………...………………..………2
Objective……………………………………………………………………...………………..………2
Scope……………………………………………………………………………………...……………2
Background…………………………………………………………...………………………………..2
Observations and Recommendations………………………………...………………………………...3
Conclusion……………………………………………………………………………………………..4
Workpapers supporting the observations noted within this report are public record and can be made available
upon request once the final audit report has been issued. The files and draft versions of audit reports remain
confidential and protected from public records requests during an active audit under Nicolai v. Baldwin (Aug.
28, 1998 DCA of FL, 5th District) and Section 119.0713, Florida Statutes.
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Internal Audit provided draft Audit Report 2017-1 to the Interim Director, Business & Economic Development, for
management response on October 25, 2016. The Interim Director provided the management response on January 17,
2017.
Summary
This examination generated the following observations for the Job Creation Investment Program:
Phase Two wages did not qualify for the Job Creation Incentive in 2014.
Phase Three wages qualified for the Job Creation Incentive in 2014 and 2015.
Objective
The objective of the engagement was to validate the number and eligibility of jobs that qualified for the Job Creation
Investment Program incentive payment during the period from October 1, 2013, through September 30, 2015.
Scope
This examination consisted of validating jobs and wages, including, but not limited to, the following:
Reviewing sections 125.045, 288.075, and 688.02, Florida Statutes;
Reviewing Collier County Ordinances 2003-60, 2006-36, and 2008-46;
Examining payroll and personnel records from Animal Specialty Hospital; and
Visiting Animal Specialty Hospital and interviewing management.
Internal Audit tested 100% of applicable payroll and personnel records for Animal Specialty Hospital.
Background
The Clerk’s Internal Audit Department assisted the Office of Business and Economic Development in validating jobs
created by Animal Specialty Hospital (ASH) in accordance with the Job Creation Investment Program. This program
was a performance-based initiative authorized in Collier County Ordinance 2003-60, as amended. The program
provided general revenue funding to local businesses for the creation of jobs that met the criteria specified in the
Ordinance. Those criteria, which varied by geographic location within Collier County, included minimum numbers
of new jobs at or exceeding specific wage levels.
Collier County Ordinance 2003-60 stated that the program’s purpose was “to promote and foster economic
diversification through the retention and creation of high wage jobs in targeted industry clusters.” Ordinance 2006-
36 defined jobs as “limited to individual permanent legal residents of the United States who are employed in each
new created position of employment at a primary location in Collier County, and as applicable maintained, as a result
of the program.” Ordinance 2003-60 originally terminated this program on October 1, 2008, but on September 9,
2008, the BCC enacted Ordinance 2008-46, which extended the Job Creation Investment Program through October
1, 2013. The BCC approved a Job Creation Investment Program agreement with Animal Specialty Hospital on January
24, 2012, prior to the program’s expiration.
To be eligible, businesses had to apply to the County Manager prior to making the decision to locate or expand within
Collier County. In keeping with the Job Creation Ordinance and the BCC’s Job Creation Investment Program
Agreement with ASH, the general fund would pay $2,000 over a three-year period for each job created.
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Based on its location, the Program required ASH to create at least 10 new, eligible jobs. ASH intended to create 22
new jobs in fiscal year 2011 (Phase 1), 3 more new jobs in fiscal year 2012 (Phase 2), and another 3 new jobs in fiscal
year 2013 (Phase 3), for a total of 28 new jobs.
In its 2012 agreement with Collier County’s economic incentives, ASH proposed creating 28 new jobs with wages at
least 115% of the then-current Collier County average wage, or at least $45,178.
Observations and Recommendations
1) Phase Two wages did not qualify for the Job Creation Incentive in 2014.
Animal Specialty Hospital created qualifying jobs in three phases. Phase Two created three qualifying jobs as of
September 30, 2012. Phase Two employees’ wages qualified for Job Creation incentive payments in the 2012 and
2013 validations. The third and final validation for Phase Two was 2014. Payroll records for the 2014 validation
yielded an average wage of $43,337.42. That did not meet the contractual minimum of $45,178. Removing the three
Phase 2 employees from the 2014 validation raised the average wage to $45,953.16.
Recommendation:
Animal Specialty Hospital should not receive a Job Creation incentive payment of $2,000 for the third and final
validation year of three Phase Two employees.
County Management Response:
“I have reviewed the submitted Audit Report #2017-1 regarding Animal Specialty Hospital of Florida, LLC’s
compliance with incentive criteria established by the Job Creation Investment Program Agreement in place with
Collier County. I concur with the audit findings and consider the Animal Specialty Hospital currently eligible to
participate in the Job Creation Investment Program.”
2) Phase Three wages qualified for the Job Creation Incentive in 2014 and 2015.
In Phase Three, Animal Specialty Hospital created three qualifying jobs as of September 30, 2013, and qualified for
a Job Creation incentive payment in that validation. The second and third (final) validation years for Phase Three
were 2014 and 2015. Payroll records for the 2014 validation, after eliminating Phase 2 employees (See Observation
1), yielded an average wage of $45,953.16. This exceeded the contractual minimum of $45,178.
Payroll records for the 2015 validation yielded an average wage of $50,882.77. This also exceeded the contractual
minimum.
Recommendation:
Animal Specialty Hospital should receive a total Job Creation incentive payment of $4,000 for the second and
third (final) validations of three Phase Three employees.
County Management Response:
“I have reviewed the submitted Audit Report #2017-1 regarding Animal Specialty Hospital of Florida, LLC’s
compliance with incentive criteria established by the Job Creation Investment Program Agreement in place with
Collier County. I concur with the audit findings and consider the Animal Specialty Hospital currently eligible to
participate in the Job Creation Investment Program.”
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Conclusion
Audits do not relieve management of its responsibilities. It is the responsibility of County management to understand
and implement the proper procedural controls to limit the risk of fraud, error, and misappropriation of County assets
or revenues. Internal Audit may recommend improvements, but ultimately it is the duty and decision of County
management to formulate processes and controls that ensure compliance with applicable rules and regulations.
Internal Audit acknowledges the cooperation of Animal Specialty Hospital management and County personnel for
their support in the audit process.
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Packet Pg. 1003 Attachment: Final.FY14&15 pmts.ASH (2594 : Internal Audit Report 2017-1 Job Creation Investment Program: Animal Specialty Center)