METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY .
METROPOLITAN GOVERNMENT OFNASHVILLE AND DAVIDSON COUNTYOFFICE OF INTERNAL AUDITProfessional Audit and Advisory ServiceFINAL REPORTAudit of the Metropolitan Beer Permit BoardDate Issued: April 24,, 2013Officeffice Location and Phone Number222 3rd Avenue North, Suite 401Nashville, Tennessee 37201615-862862-6110The Metropolitan Nashville Office of Internal Audit is an independent audit agencythat reports directly to the Metropolitan Nashville Audit Committee
EXECUTIVE SUMMARYApril 24, 2013Results in BriefFiscal Data and RecommendationsAn audit of the Metropolitan Beer Boardwas performed.Operational ExpensesFiscal Years 2012 and 2011Audit Objectives Were policies and procedures as set forthby the Metropolitan Beer Board effectivelyimplemented?Yes. Policy and procedures wereeffectively implemented. No exceptionswere noted. Was revenue receipts received at theMetropolitan Beer Board real, complete,and recorded in bank and accountingrecords?Yes. All revenue was deposited andrecorded. No exceptions were ,207Variance23,444(15,807)Management of the Metropolitan Beer permitBoard should: Take steps to segregate responsibilities forthe receipt and recording of cash. Continue to pursue technological processesto replace manual efforts. Was leave time for Metropolitan BeerPermit Board employees tracked,monitored, and recorded?Yes. All uses of leave were supported byrequired documentation. No exceptionswere noted.Audit of the Metropolitan Beer Permit Boardii
Table of ContentsINTRODUCTION.1Audit Initiation.1Background .1Financial Information.2Information Systems .3Internal Control Assessment .3OBJECTIVES AND CONCLUSIONS.4A –Segregation of Duties .6B –Leveraging of Available Technology.6GENERAL AUDIT INFORMATION .8Statement of Compliance with GAGAS.8Scope and Methodology .8Criteria.8Audit Staff.8APPENDIX B. MANAGEMENT RESPONSE.9Audit of the Metropolitan Beer Permit Boardiii
INTRODUCTIONAudit InitiationThe audit of the Metropolitan Beer Permit Board was conducted as partof the approved 2013 Audit Work Plan. The audit was initiated based onthe number of years elapsed since the last audit.BackgroundThe Metropolitan Beer Permit Board has jurisdiction of the licensing,regulating and controlling of the transportation, storage, sale,distribution, possession, receipt, and/or manufacture of beer of analcoholic content of not more than five percent by weight or any otherbeverage of like alcoholic content. Also, the board is responsible forrules and regulations for the supervision of public dancehalls and publicdances. The establishment and related regulations pertaining to theMetropolitan Beer Permit Board are found in the Metropolitan NashvilleCode of Laws Chapters 6.12, 7.04, 7.08, 7.20, and 7.24.The Metropolitan Beer Permit Board consists of seven members whoserve terms of four years. Each member is appointed by the Mayor andapproved by the Metropolitan Council. The Board meets twice a monthto approve permit applicants, review violations, incur penalties made byexisting permit holders, and establish the rules and policies related tothe mission of the Metropolitan Beer Permit Board. The board employsa staff of four employees to execute established policies andprocedures. The staff consists of one director, one office supportspecialist and two inspectors. Key statistics for fiscal years 2011 and2012 are presented in Exhibit A below.Exhibit A – Beer Permit Board Statistical Information - Fiscal Years2011 and 2012Action Item20122011Beer Applications Processed393383Dance Applications Processed399481Inspections Conducted3,4113,268Inspections Passing2,6462,583Percentage Passed78%83%765685Amount of Civil Penalties Collected162 13,750141 107,750Amount of Privilege Tax Collected 162,997 165,877Total ViolationsViolations Presented to the BoardSource: Metropolitan Beer Board Internal ReportsIt should be noted that the number of violations presented to the boardare only a fraction of the number of violations documented byinspectors. This is due to the fact that some violations allow permitholders to correct the offense and call for a re-inspection; whereas,Audit of the Metropolitan Beer Permit Board1
other more serious violations (such as selling to minors) must bepresented to the board.FinancialInformationThe Metropolitan Beer Permit Board is a self-sustaining entity within theMetropolitan Nashville Government in that revenue from permits andviolations was in excess of expenses by 192,000 for the past two fiscalyears. A breakdown of financial highlights is described in Exhibits B, C,and D below.Exhibit B – Actual Financial Results - Fiscal Years 2011 and 201220122011Revenue 412,385 415,705Payroll Expenses(241,007)(260,234)Non-payroll Expenses(6,512)(6,251)Internal Service Fees(50,438)(70,723) 114,428 78,497Revenue in Excess of ExpenseSource: Metropolitan Nashville’s EnterpriseOneExhibit C – Sources of Revenue - Fiscal Years 2011 and 2012AccountAmountBeer Permit Privilege Tax 331,750Beer Law Violation Fine237,100Beer Permit240,300Dance Permit93,900Photostat & Microfilm1,283 904,333TotalSource: Metropolitan Nashville’s EnterpriseOneExhibit D– Top Four Vendors – July 1, 2010 to December 31, 2012VendorRicoh USAAmountPurpose 9,994Printing/Binding/Rental EquipmentA Z Office Resource3,921Office and Administrative SuppliesCircle K Stores Inc.2,500Refund to a Permit HolderPetty Cash1,221MiscellanousG4S Secure Solutions464Board Meetings After Hour SecuritySource: Metropolitan Nashville’s EnterpriseOneAudit of the Metropolitan Beer Permit Board2
InformationSystemsSignificant information systems used at the Metropolitan Beer PermitBoard are EnterpriseOne and Microsoft Office.EnterpriseOne: EnterpriseOne is the primary accounting softwaresystem used to record and report all financial reporting transactions ofthe Metropolitan Government. This system is used to account for allexpenditures, revenue deposits, payroll and time keeping for theMetropolitan Beer Permit BoardInternal ControlAssessmentKey staff was interviewed and relevant supporting documentationreviewed for the revenue, payroll, procurement, and operational cycles.The following internal control strengths were noted:1) Segregation of Duties: The Metropolitan Beer Permit Boardreviewed and approved application/inspection infractions using oneparty, while payments were processed by another party, and dailycollections were counted by two separate employees. All bankdeposits were made by a separate department and all activity wasreviewed and approved by the director.2) Reconciliations/Monitoring: A series of reconciliations/monitoringcontrols were found to be implemented. An employee periodicallyreconciled actual deposits to amounts posted in the manual receiptbooks. Monthly bank reconciliations were conducted by theDepartment of Finance. Inspections were conducted in a methodicalmanner to ensure permit holders complied with applicableMetropolitan Nashville Ordinances. A viable accounts receivablesystem was in place to ensure all fees, taxes and penalties weretracked and collected.3) Management Review: Activities involving the procurement, revenue,payroll, and operational cycle were monitored, reviewed, andapproved by the director. The Metropolitan Beer Permit Boardreviewed and approved all applications, inspections with infractions,conducted hearings, and issued penalties and/or citations.4) Security of Assets: Monies collected were found to be locked insecure locations. Good security was established for deposits intransit.Enhancements: Due to the small number of office staff; much of whichconduct field inspections and attend various meetings, a small numberof operations conducted were found to be incompatible functionsperformed by the same individual. For instance, the same person whoaccepts cash, prepares the deposit slip, also records the informationinto the accounting system. No single person should have control of atransaction (receive and record cash) from origination to end.Audit of the Metropolitan Beer Permit Board3
OBJECTIVES AND CONCLUSIONS1. Were policies and procedures set forth by the Metropolitan BeerPermit Board effectively implemented?Yes. A judgmental sample of 50 permits issued from July 1, 2010, toSeptember 30, 2012, was reviewed. Documentation such as cashreceipt books, board minutes, inspection reports, applications, andother items in the permit holders file were reviewed for the followingattributes with no exceptions noted. Was the application submitted by the permit holder completeand signed? Was documentation such as a completed health inspection, fireinspection, proof of ownership, Certificate of Existence, orAuthority and Use and Occupancy Permit in the permit holdersfile? Was the application presentedMetropolitan Beer Permit Board? If applicable, were any subsequent inspections completed? Were inspections reviewed and approved by the Director? Were applicable payments received from the permit holder? Were there any gaps in the receipt books?andapprovedbytheAll minutes from the Metropolitan Beer Permit Board meetingsbetween July 1, 2010, and September 30, 2012, were reviewed. Ajudgmental sample of 48 instances whereby the board issued someform of fine or penalty to a permit holder was selected. The permitfiles and other documentation such as receipt books were reviewedto ascertain that staff effectively carried out the prescribed actions.No exceptions were noted.Finally, a judgmental sample of 50 permit application issuedbetween July 1, 2010, and September 30, 2012, and approved bythe Metropolitan Beer Permit Board was traced back to thecorresponding customer payment. No exceptions were noted.2. Was revenue received at the Metropolitan Beer Permit Board real,complete, and accurately recorded in bank and accounting records?Yes. The following three audit procedures were performed tosupport this conclusion.a) 48 daily deposits from July 1, 2010, to September 30, 2012,were reviewed. This random statistical sample was selectedusing a 95 percent confidence level and seven percentAudit of the Metropolitan Beer Permit Board4
precision. Each sample item was tested for the followingattributes with no exceptions noted. Did the amount recorded in the receipt book agree to theamount actually deposited? Did the amount deposited agree to the amount recorded inthe general ledger? Was the deposit made within one business day of receipt? Was there evidence of management review? Were there any gaps in receipt numbers for the specificdeposit? Were the amounts recorded in the EnterpriseOne accountingsystem within two business days?b) 48 instances from July 1, 2010, to September 30, 2012, wherethe Beer Permit Board issued a fine or penalty for permit holderswere selected for review. This random statistical sample wasselected using a 95 percent confidence level and seven percentprecision. The penalties determined by the board were agreed topayments in the manual receipt book. No exceptions werenoted. Each instance of a permit being issued was tied back to apayment made by the permit holder for the application feeand applicable privilege tax. No exceptions were noted.c) Liquor by the drink permit entities were furnished by the State ofTennessee Department of Finance and compared to permitholders under jurisdiction of the Metropolitan Beer Board. Theobjective of the test was to determine if anyone with liquor by thedrink permits would not have a beer permit, and if so, was thesituation justified.This procedure produced 115 initial unmatched entities. Ajudgmental sample of 54 of the entities was selected for review.Further investigation revealed that each sample entity was notrequired to obtain a permit or had a permit through theMetropolitan Beer Board. No exceptions were noted.3. Was leave time for Metropolitan Beer Permit Board employeestracked, monitored, and recorded?Yes. A review of the leave time for two employees was analyzed forfiscal years 2011 and 2012. For each instance of employee leavetime, supporting documentation was obtained to ensure leave timehad been approved by management and recorded inEnterpriseOne. No exceptions were notedAudit of the Metropolitan Beer Permit Board5
OBSERVATIONS AND RECOMMENDATIONSA –Segregation of DutiesThe Metropolitan Beer Permit Board lacks segregation over receipt andrecording of cash. The same employee who receives cash prepares thedeposit slip also records the entry in the general ledger. While thedepartment is small and has seen a reduction in staffing over the pastfew years, adjustments are required for these functions.Criteria: The COSO Internal Control - Integrated Framework establishes acommon definition of internal controls, standards, and criteria bywhich organizations can assess their internal control systems.Ensuring incompatible functions are properly segregated enhancesthe control activities and monitoring component of a strong internalcontrols framework. Internal Control and Compliance Manual for TennesseeMunicipalities – Title 5, Chapter 14, Section 1 states “responsibilityfor each step of cash handling and recording should be clearlyestablished. If possible, the employees who receive cash collectionsshould be different from those who maintain the books and records(bookkeepers)”. Prudent Business PracticeRisk:Properly segregating incompatible functions reduce the risk of theftand/or fraud.Recommendation:Management of the Metropolitan Beer Permit Board should take stepsto segregate responsibilities for the receipt and recording of cash.B –Leveraging of Available TechnologyExpanding the use of information technology could enhance servicedelivery to beer and dance permit holders, and improve the efficiency ofback office operations. We understand that the Metropolitan BeerPermit Board is currently working with the Metropolitan NashvilleInformation Technology Systems Department to determine thefeasibility of using technology such as the existing Kiva application or itspending replacement system to improve daily processing and customerservice. Potentially, this system could be configured similar to permitsissued and renewed by the Department of Codes and Building Safety toprocess beer permit applications and renewals.Audit of the Metropolitan Beer Permit Board6
The staff is commended for implementing document managementtechnology with its recent office relocation to the Metro Office Building.Criteria: The COSO Internal Control - Integrated Framework establishes acommon definition of internal controls, standards, and criteria bywhich organizations can assess their internal control systems.Leveraging technology enhances the Information Systemscomponent of a strong internal controls framework. Prudent Business PracticeRisks:Customer complaints due to prolonged processing time due to lost filesand inherent manual inefficiencies.Recommendation:Management of the Metropolitan Beer Permit Board should continue topursue technological processes to replace manual efforts.Audit of the Metropolitan Beer Permit Board7
GENERAL AUDIT INFORMATIONStatement ofCompliance withGAGASThis audit was conducted from January 2013 to March 2013 inaccordance with generally accepted government auditing standards.Those standards require that we plan and perform the audit to obtainsufficient, appropriate evidence to provide a reasonable basis for ourobservations and conclusions based on our audit objectives. We believethat the evidence obtained provides a reasonable basis for ourobservations and conclusions based on our audit objectives.Scope andMethodologyThe audit focused primarily on the period July 1, 2010, throughSeptember 30, 2012. The methodology employed throughout this auditwas one of objectively reviewing various forms of documentation,conducting interviews, observations, performing substantive tests, andtests of internal controls on the entity’s financial information, writtenpolicies and procedures, contracts, and other relevant data.CriteriaIn conducting this audit, the existing processes were evaluated forcompliance with:Audit Staff Metropolitan Nashville Code of Laws Chapters 6.12, 7.04, 7.08,7.20, and 7.24. Metro Nashville Civil Service Policies The COSO Internal Control- Integrated Framework Internal eeCarlos Holt, CPA, CFF, CIA, CFE, CGAP, Quality AssuranceBill Walker, CPA, CIA, Engagement ManagerSharhonda Cole, CFE, Engagement TeamAudit of the Metropolitan Beer Permit Board8
APPENDIX B. MANAGEMENT RESPONSE- Management’s Responses Starts on Next Page -Audit of the Metropolitan Beer Permit Board9
Audit of the Metropolitan Beer Permit Board10
Metropolitan Beer Permit BoardManagement Response to Audit RecommendationsAudit RecommendationResponse to Recommendation / Action PlanAssignedResponsibilityEstimatedCompletionA. Management of the Metropolitan Beer permitBoard should take steps to segregateresponsibilities for the receipt and recording ofcash.Accept. An employee who does not prepare thedeposit or reconcile the amount in the manual receiptbook to the amount actually deposited will now verifythe deposit as entered into the accounting system.Terrence DarbyCompletedB. Management of the Metropolitan Beer permitBoard should continue to pursue technologicalprocesses to replace manual efforts.Accept. We have and will continue to work withMetro ITS regarding the pursuit of technologicalprocesses to replace manual efforts.Jackie EslickUnable to determineat this timeAudit of the Metropolitan Beer Permit Board11
Audit of the April reports directly to the Metropolitan 24, 2013 Office of Internal Audit is an independent audit agency METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY OFFICE OF INTERNAL AUDIT FINAL Metropolitan Professional Audit and REPORT Beer Nashville Audit Committee Permit Office Location and Phone Number 222 3 Board rd Avenue .
METRO - The Metropolitan Government of Nashville and Davidson County, or its designated representative. MPW - The Metropolitan Government of Nashville and Davidson County Department of Public Works. PEDESTRIAN EASEMENT - A right-of-way easement dedicated to the Metropolitan Government primarily for pedestrian movement. Any activity by the
Christ Church Cathedral—Nashville March 10-11, 7:00 PM Choir Tour Fundraiser/Dinner Theater: Godspell 30 (tickets available from church office) Laudate Youth Choir and Choral Interns Westminster Presbyterian Church—Nashville March 12, 4:00 PM The Nashville Flute Choir First Presbyterian Church—Nashville March 19, 3:00 PM Nashville .
St. Luke, Nashville Dr. Barbara Crawford Keith Pitts St. Paul, Nashville Andre Washington Shirley Wylie New Salem, Nashville Anica Howard JoAnn Millon St. Phillip, Nashville Joe T. Southall Carolyn Snorton Ebenezer, Nashville Wanda Payne Josephine Jackson St. Peter, Nashville Nathan Frey William Posey
Marina Henry - Metropolitan Nazifa Mim - Metropolitan Cypress Lakes . 2014 Metropolitan, Opportunity, School Art, Military, . Sam Rayburn DeAngelo Jackson - Opportunity Genesis Jimenez - Metropolitan Jose Perales - Metropolitan South Houston Luzdivina Ruiz - Metropolitan Pearland ISD
Nashville Technology Council (lead entity), Nashville State Community College (fiscal agent), Workforce Essentials, Nashville Area Chamber of Commerce, Dickson County Schools, Clarksville-Montgomery County Schools, Metropolitan Nashville Public Schools, and 29 local employers. Tech
1 State of Tennessee 1 2 Metropolitan Government of Nashville & Davidson County 2 3 US Federal Government 3 4 LifeWay Christian Resources 4 5 The Tennessean 7 m o c e l e T h t u o S l l e 6B 5 7 Nashville Electric Service 6 8 US Smokeless Tobacco 10 9 United Methodist Publishing House
industry on Nashville and Middle Tennessee. The Nashville Area Chamber of Commerce’s research center has devel-oped this study to serve as a foundation for the Council’s work and to illustrate the unique relationship between the Nashville music industry and the regional econom
Quand un additif alimentaire est autorisé au niveau européen, celui-ci bénéficie d'un code du type Exxx. Les additifs sont classés selon leur catégories. Cependant, étant donné le développement de la liste et son caractère ouvert, la place occupée par un additif alimentaire dans la liste n'est plus nécessairement indicative de sa fonction. Sommaire 1 Tableau des colorants .
