ORDER NO. 31091 ANNUAL: COMMISSARY AUDIT Came to be heard this the 10th day of November, 2008, with a motion made by Commissioner Letz, seconded by Commissioner Williams, the Court unanimously approved by a vote of 4-0-0 to: Accept the Annual Commissary Audit, as presented. 3/D`~I ~.~a COMMISSIONERS' COURT AGENDA REQUEST MADE BY: Jeannie Hargis OFFICE: County Auditor MEETING DATE: November 10, 2008 TIlVIE PREFERRED: None SUBJECT: Consider, Discuss and Take Appropriate Action to review and acknowledge receipt of the Annual Commissary Audit to ensure compliance with Chapter 351.0415 of the Local Government Code. Audit Documents Attached. EXECUTIVE SESSION REQUESTED: {PLEASE STATE REASON} NAME OF PERSON ADDRESSING THE COURT: Jeannie Hargis ESTIMATED LENGTH OF PRESENTATION: 5 minutes IF PERSONNEL MATTER -NAME OF EMPLOYEE: Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter 551 and 552, Government Code, is as follows: Meeting scheduled for Mondays THIS REQUEST RECEIVED BY: THIS RQUEST RECEIVED ON: 5:00 PM previous Tuesday @ .M. Ail Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be appreciated and contribute towards your request being addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners' Court. MEMO ON JAIL COMMISSARY ANNUAL AUDIT DATE: November 10, 2008 TO: Commissioners Court FROM: Paula J. Hargis, County Auditor SUBJECT: Jail Commissary Annual Audit Report REQUESTED ACTION/RECOMMENDATION• I recommend that the commissioners Court review and acknowledge receipt the annual audit report of the Jail Commissary. SCOPE: The scope of this audit is to verify the correctness of the Jail Commissary and Inmate Trust accounts by examining receipts and disbursement and observing current procedures to ensure compliance with the law as stated in Chapter 351.0415 of the Local Government Code. BACKGROUND: The County's Auditor's office has submitted to the Commissioner's Court the audit report on the operations of the Jail Commissary for the year ending September 30, 2008. State law allows the Sheriff of a county to operate a jail commissary for the use of prisoners in the jail. The law also gives the Sheriff exclusive control of the money generated by commissary operations, and it establishes rules for the operation of the commissary. Per the statues, the County Auditor is required to perform annual audits of the operations and accounts of the commissary. The audits must be reported to the Commissioner's Court. Specific procedures included in the audit include: • Verification of the correctness of the accounts of the jail commissary by examining the transactions underlying those balances. • Verification of the balances of the Jail Inmate Trust Account. • Verification of the physical inventory of commissary supplies, and Examination of expenditures of commissary funds. This last step is necessary because state law places the following limitations on the expenditure of commissary funds: (1) to fund a program addressing the social needs of the prisoners, (2) to supply prisoners with clothing, writing materials or hygiene supplies, (3) to establish and fund the commissary operations, (4) to fund, staff or equip a library for the prisoners, and (5) fund physical plant improvements, technology, equipment and inmate programs. OPERATIONS AND MAINTENANCE: If needed, specific recommendations for improving the operations of the commissary are included in the audit report. The Sheriff has raised prices as recommended in last year's annual audit; however, costs have increased again this year so I recommend that he review his markups placed on items sold in the commissary. I also recommended that all items being paid out of the commissary be analyzed to ascertain whether some or all of these items need to come out of the jail budget in lieu of the commissary. The automated computer system was purchased and placed into service providing a more efficient manner of tracking the costs. LEGAL INFORMATION• Chapter 351.0415 of the Texas Local Government Code established the standards for operating, auditing and report on the Jail Commissary. The statute reads as follows: (a) The sheriff of a county may operate, or contract with another person to operate, a commissary for the use of the prisoners committed to the county jail. The commissary must be operated in accordance with rules adopted by the Commission on Jail Standards. (b) The sheriff: (1) has exclusive control of the commissary funds; (2) shall maintain commissary accounts showing the amount of proceeds from the commissary operation and the amount and purpose of disbursements made from the proceeds; and (3) shall accept new bids to renew contracts of commissary suppliers every five years. (c) The sheriff may use commissary proceeds only to: (1) fund, staff, and equip a program addressing the social needs of the county prisoners, including an educational or recreational program and religious or rehabilitative counseling; (2) supply county prisoners with clothing, writing materials, and hygiene supplies; (3) establish, staff, and equip the commissary operation and fund the salaries of staff responsible for managing the inmates' commissary accounts; (4) fund, staff, and equip an educational use and a law library for the educational use of inmates; or (5) fund physical plant improvements, technology, equipment, programs, services and activities that provide for the well-being, health, safety, and security of the inmates and the facility. (d) At least once each county fiscal year, or more often if the commissioners court desires, the auditor shall, without advance notice, fully examines the jail commissary accounts. The auditor shall verify the correctness of the accounts and report the findings of the examination to the commissioners' court of the county at its next term beginning after the date the audit is completed. PROJECT SCHEDULE: The report has already been submitted to the Sheriff. Any recommendations for improving the operations of the commissary will be reviewed and implemented within the next 60 days. After acceptance by the Commissioners' Court, the report will be forwarded to the Texas 3ai1 Standards Commission. PRECEDING COURT ACTION: As this is a statutorily required annual audit report, the Commissioners Court has taken no previous action on this audit. The County Auditor's office has been submitting annual jail commissary audit reports since the implementation of the statue. APPROVED BY: Attachments KERR COUNTY SHERIFF'S OFFICE AUDIT OF THE PROCEDURES AND OPERATIONS OF THE COMMISSARY ACCOUNT FOR THE PERIOD OCTOBER 1, 2007 -SEPTEMBER 30, 2008 PREPARED BY THE KERR COUNTY AUDITOR' S OFFICE SCOPE: The scope of this audit is to verify the correctness of the Jail Commissary and Inmate Trust accounts by examining receipts and disbursements and observing current procedures to ensure compliance with the law as stated in Chapter 3 51.0415 of the Local Government Code. SCHEDULE OF WORKING PAPERS: Schedules Prepared for Fiscal Year 2008 October 1, 2007 -September 30, 2008 Schedule Balance Sheet Income Statement Attachment Schedule A-1 Balance Sheet and Income Statement AUDIT OF THE PROCEDURES AND OPERATIONS OF THE COMMISSARY ACCOUNT FOR THE PERIOD OCTOBER 1, 2007 -SEPTEMBER 30, 2008 OBJECTIVE: The objective of the Jail Commissary is to provide the inmates confined to the Kerr County Jail the opportunity and procedures to purchase commissary and health items through their trust fund accounts. COMMISSARY OPERATION: Kerr County operates a fully staffed Jail Commissary for approximately 15 years. The staff consists of one full time employee. In addition, several inmate trustees worked in inventory handling part-time when needed. Kerr County provides space in the Detention Facility which serves as a warehouse and an office for the Commissary. 11/4/2008 Chapter 351.0415 of the Local Government Code states, "The Sheriff of a county may operate, or contract with another person to operate a commissary for the use of the prisoners committed to the county jail." • A large variety and selection of products is provided per the requirements of the Kerr County Sheriff's Office. • Commissary price increases only with the approval of the Sheriff's office. • On-site Manager to handle Commissary operations. Trustee labor is used to assist in distributing and collecting order forms and distribute Commissary packages. • Computer system-inmate account balances can be updated from Kerr County Criminal Justice Jail Software -Odyssey. • Proper accounting of all Commissary related transactions. • Responsible for all federal, state and local license and permits. • Payment of all taxes associated with the operation. OPERATING PROCEDURES: Each inmate is given an order form each week. The completed forms are collected the evening before and purchases are then delivered to the inmate the following day. Each inmate's order contains a receipt identifying the inmate, his previous balance, an itemization of his purchase which includes sales tax (sales tax is included in the price), and his ending balance. Indigent commissary is also provided once a week. FINDINGS AND OBSERVATIONS: The Jail Commissary and the Inmate Trust bank account balances were verified by reviewing bank reconciliations and by examining the reports. In addition, a Balance Sheet and Income Statement for the Jail Commissary account was prepared from the Quick Books Program for the fiscal year end. The Cash Flow Statements below reconciled all funds received and disbursed to the ending bank balance for the fiscal year. Cash Flow activity for the fiscal year is outlined below. Schedule Cash Flow for the Fiscal Year 2008 Beginning Ending October 1, 2007 Balance Deposits Disbursements Balance Sept 30, 2008 $15,320.48 $192,581.70 ($200,317.00} $7,585.16 11/4/2008 2 ANALYSIS OF EXPENDITURES Invoices paid from the Jail Commissary account during the period audited were examined by the County Auditor's Office to determine if the expenditure fell within the five categories specified by Chapter 351.0415 of the Local Government Code. In the opinion of the County Auditor's Office, the Jail Commissary's expenditures for the period from October 1, 2007 to September 30, 2008 were substantially in compliance with the Local Government Code. RECONCILIATION OF THE INMATE TRUST ACCOUNT The Inmate Trust Bank Account is reconciled by the Jail Clerk in the Sheriff s Department with the deposit slips, checks and computer generated report showing the total funds held by inmates. The County Auditor's Office receives a copy each month of the bank reconciliation for verification. The County Auditor's Office periodically audits the bank reconciliation with the Jail Clerk for internal control purposes. INDIGENT CARE PACKETS Indigent care packets are distributed to inmates who maintain $0.50 (fifty-cents} or less in their account for a period of 7 days. Weekly care packs include toothbrush, toothpaste, soap, 3 shampoo packets, 3 envelopes, pen, comb, and 4 deodorants. EDUCATIONAL PROGRAMS GED Program has been established to provide a high school diploma to those inmates Copying for inmates is done by the Sheriff's office at $0.10 (ten cents} a copy. CONCLUSION In the opinion of the County Auditor's office, the operation of the Jail Commissary is substantially in compliance with Charter 351.0415 of the Locat Government Code. Beneficial programs and services are being provided to the inmate population. The County Auditor's Office appreciates the assistance and support provided by the Sheriff s Office in conducting this audit. 11/4/2008 4:31 PM Kerr County Jail Commissary 11/03/08 Balance Sheet Accrual Basis As of September 30, 2008 Sep 30, 08 ASSETS Current Assets CheckinglSavings Security State Bank 7,585.16 Total CheckinglSavings 7,585.16 Total Current Assets 7,585.16 TOTAL ASSETS 7,585.16 LIABILITIES & EQUITY Liabilities Current Liabilities Other Current Liabilities INMATE DEPOSITS INMATE REFUNDS -50,456.52 INMATE DEPOSITS -Other 55,210.11 Total INMATE DEPOSITS 4,753.59 Total Other Current Liabilities 4,753.59 Total Current Liabilities 4,753.59 Total Liabilities 4,753.59 Equity Opening Balance Equity 15,320.48 Retained Earnings 390.40 Net Income -12,879.31 Total Equity 2,831.57 TOTAL LIABILITIES & EQUITY 7,585.16 Page 1 r d as R a O O ~ N N y N ~ N w U ,J y L '~ ~ '7 ++ O ~+ Q ~ ~ L O oo-o V N C1 O Y N N R m a ° 3 M o ~ v r Q T ~ C00 W N V'MrtAMMOGOOhGf)ln d'r O O O O r C ~O ~ ~ a00rOMMOt1900 P'd: GP ~t O) O N N N M a 00 o O 0 O O~sf'~0~~~ OQi 00~~'c0 o ~ ~ ~ CD fD fD Q1 41 M M r~ o~ o~ w ao 00 i r n ~ ~r o 00 rrNOrO r~ N ~ I~ r~ GA D) O) rn n 00 V1 N O ao r N ~ N GO M r N O v O rn w N c W W Q d w N y Q x ~~ Z c ~ O Q H W F- (+f Z R W W dU W c W WOyO Z, Gai WN r C9~W~ > H N y ~~ tdfa =fn ZW