The End Thank you. and get the budget and finance meeting started. I apologize for everyone tuning in for the delay. Many of us were at the, or all of us actually, were at the State of the Merge Government Address, and so we are slowly but surely moving back to the Government Center and able to get started now. I want to thank my fellow committee members for the election of chair today, and at this time I'd like to also ask Council Member Lane to be my vice chair, if he would so do. Thank you very much, Mr. Chairman. I'll be happy to help you out. Well, thank you. I think first up today, we have actually two-month financial report, so to speak, from Commissioner Kina Coe. Commissioner, I'll let you give us the optimistic news. Yes, I'd be happy to do that if I had any. Actually, I'm going to jump straight to December because what is really important to us is what we're doing cumulatively, not what we do month to month. You know, if you kind of dissect our big four sources of revenue right now, you would have to conclude that things are looking pretty good. We are pretty much on track both against budget and against last year overall. But we've been doing some additional analysis of the numbers, and while, I mean, I think we just should all feel really blessed that our revenue is as strong right now as it is, because clearly a lot of cities have already felt the one-two punch, and we haven't felt it yet, and, you know, I'm grateful for that. I would say, though, that I continue to be pessimistic in that I just can't believe that Lexington could be an island in this storm of the economy and survive it unscathed. When I was talking to the mayor about these numbers, I said, you know, I want to be excited because we are holding true to what we thought we might do. but it's kind of when's the other shoe going to drop or when's it going to happen and how bad is it going to be and what do you do to plan for it. But I'll take that quandary over the one of already having hit the wall on numbers. In employee withholdings, we're seeing that they are still holding, but there are a few cracks in the armor when you get down deeper into the numbers. And I think if I use LFUCG as an example of the government sector, that you would probably share my pessimism, particularly in that sector, in that in the November, December, January timeframe, there have been an exceptional number of payouts for retirees. And withholdings are held out against those payouts, both for us and any other governmental entity that pays out. And, of course, the state government just had the retirement window just as we did. So the strength of our numbers really in the government sector right now, we fear, is in those extra payments that were made to employees as they left government. So I think February will be our first month of revenue that the government sector should actually kind of be what the real government sector is going to present to us. And there are a few other things. When you look at some of the other major employers, some of the other sectors, but they're all similar to that in that our revenue folks, Bill O'Mara in particular, are extremely concerned about our payroll withholdings being able to make budget. In the business returns, if you look just at the big numbers, we are, I mean, you would have to call us a high flyer right now. But in those numbers, we have almost a million dollars that was collected for the $100 minimum license fee. That's a million dollars that is budgeted, but if you look at compared to last year, it's a million dollars that you wouldn't have seen in the numbers last year. The other thing that we have going on with those net profits business returns is that all of the larger employers pay estimated taxes. And we're told by both some folks at UK and at the University of Louisville that we can expect very substantial refunds as they begin to file for their year-ended December 2008. So we are expecting to have to give back a substantial amount of the money that we have collected on net profits, but there's absolutely no way to estimate what that refund rate might be. I mean, it's just we don't have access to anybody's records until they file with us, and so that gives us cause for concern, particularly because it will be so late in the fiscal year when we know how hard we've been hit on refunds. If it's very extreme, it's going to be very hard to recover. I'll get to that in a minute, but it is great cause for concern. Insurance premiums and franchise fees are tracking higher than last year, and it appears that we will make budget. Thank you to Council Member Stenet and others in the insurance business. We seem to be trucking right along with the insurance premium tax. All that said, we are making preparations in government for substantial reductions. We have asked division directors to submit reduction plans. They've done that. We're in the process of implementing those plans. We've already issued instructions for next year because we will be taking the position when we bring forward a budget to you that we will not expect any new revenue for 2010. So, you know, there are expenditures that we will have to make in 2010, just like the mayor said in his speech today. If we're going to continue to do business the same way we're doing business today, there are things that we have to fund. We have a new debt service coming on. We have the cost in the bargained contracts and those kinds of things. So we're doing what we can to prepare. We still believe we can manage our way through 2009. If something should happen mid-month between budget meetings, we will get some kind of communication to you. if we implement anything more drastic than I'm telling you right now. There are some accounts in government, and you may have heard from some of the folks, that we have frozen or at least are taking a very cautious look at professional services being one of those that new expenditures against professional services will have to be approved at the commissioner level. So we've asked people to stop spending money on food. We thought that was a pretty appropriate thing to do given the situation that we're in. So again, there are exceptions even to the purchase of food in that we run after-school programs and any number of other things that would be essential purchases for government. All that said, we're being very, very cautious. and, you know, if you have suggestions for what you think we ought to do above and beyond what we're doing right now, we're certainly open to those suggestions. That's all. That's all. Good. Thank you, Commissioner. Any council members have any questions about the report itself? Councilman James. Thank you, Chair. Kina, under business returns, can you remind us what was budgeted for the license fee? What were we expecting? I don't have that breakdown with me. I'd be happy to email you this afternoon. I just don't have the breakdown. Okay, and you may be able to answer this now or maybe you can respond later, but when that amount was budgeted, did we take into account any refund, or how do you add that refund in if we don't know what it is? Well, we use a trend from prior years. Okay. And the trend usually holds. This happens to be an exceptional period of time when we're told by many of the accounting firms that the software that's used to do some of those business returns automatically defaults to the prior year profit. And so if they've paid on prior year profit and are not as profitable this year, then our trend on refunds won't hold true. But we have budgeted knowing that we would have to make refunds, but we budgeted for what we have traditionally had in the past, and we just think that it could very well exceed that this time. Okay. And I can probably look up in my budget book. I didn't bring it with me what we budgeted for that. And my last question is you mentioned that the directors have submitted reduction plans. Yes, ma'am. Is that for a fiscal year 09? Yes, ma'am. Okay. Thank you. Thank you. Vice Mayor Gray. Kina, thank you. Earlier you mentioned the net profits tax. Yes, sir. Can you just give us what's, do you remember, order of magnitude in absolute dollars, what that represents, how much of the, that's in the, I assume that's in the licenses and permits detail. Yes, it is. Okay, so that's in the 86, cumulative through November of 2008 is $86,771,000. So we're up 3.4%. And of that, you're saying that inside those numbers are what you characterize as a balloon associated with the government, both local and state retirees, perhaps. That's in the payroll withholding, not in the business returns. It would be in the occupational license fee, and that's all wrapped up in license and permits. Okay. I'll just do a little chart this afternoon and send you an email to all of you of the breakdown, what we have budgeted for each of those, and where we're tracking against budget by the individual units within that license and set permits. Categories within the license? Yes, I'd be happy to do that. Okay. So that will give us the net profits tax, how much that represents, and what you're saying is of that number that there's some refunds that are very likely going to occur because of losses that are going to be, that are going to materialize this year. Right. What does that go, are we on the same as federal and state in terms of going back, look back? Yes. Three, two, what is it? Now it's two years, isn't it? Five. Five, it is. For us, it's five. I don't think it's five. Okay, I'm sorry, I misspoke. For us, it's five. I didn't think, okay. So my other question relates to the, you may have mentioned this and I didn't hear it. I apologize if I didn't. And the property tax, the line item? Yes. Property tax, it's up 438% from $2.6 million to $14 million. What's that again? What's that bump associated with? I'm sorry. I'm sorry. What page are you on? I'm on page, is it page 14? Page 5. Page 5. You're on November. You're looking at November. I'm sorry. Okay, okay. I think that might be where you want to be. Okay, okay. So we're up 9.3% for the whole, for the year to date. Okay, I got you right. Yeah, I was, year to date November 30th. Yes, we're up. So you just, okay, all the property taxes were collected in December, or a lot of them were, right? Right. Okay. All right. Thank you, Chairman. Councilman Gorton. Thank you, Chair. Commissioner, you mentioned that we've frozen food and professional services. Are there others? And if there are, could you email a list of those accounts that are frozen? I'd be happy to. I'm pretty sure it's just those two. Okay. And where people are taking their reductions, of course, is, well, one other one that would be frozen would be grant match. Because we can't allow people to take their reductions out of grant match. So it's not really frozen. It's just that it's one of those accounts that won't be used in the calculation for a budget reduction. And that's really a completely different thing. But the true frozen, I'm pretty sure, are just food and professional services. If it's more than that, I'll let you know. Okay. And so for grant matches, if a grant comes in and we've already approved. Yes, I got confused there. There were a number of accounts that we should, when we asked the division directors for their budget reduction plans, we should have told them there are certain accounts that you can't take that reduction away from, and grant match would be one unless you have expressed knowledge that you're not going to need that money. There were several accounts like that, utilities, because they're paid centrally, some of those things. So that's why we're still working with the budget reduction plans because we need to work director by director to go over their plan to ensure that what they have submitted as a reduction is something that won't adversely affect the rest of government. Okay. Thank you. Council Member Lane. Thank you, Chairman. Commissioner, would it be a big problem if we broke out the license fees and then the corporate tax fees and put them on two line items? since those are areas that are going to be looking at fairly closely this year? Actually, we're working on a new report. And I know I sound like a broken record because we've been working on this new report forever. But Mary's out of state today, and I was on vacation last week, and we kind of crossed and didn't exchange that report. And in the report, it's broken down, in the new report. And we hope to be able to bring that to you in January for your review to see if it's something that you might find a bit more useful than the way we're reporting now. All right, that's good. And the other thought I had is in the personnel cost, would it be possible to pull out any funds that were paid to retiring members, or can you break that out so we could, in other words, to make the data more significant, we could look at the actual salaries and payroll expenses and then look at the retirement cost as a separate line item also? I'm pretty sure we can break that out. That was just a couple of ideas I think would help make more clarity to the numbers. Well, right now the retirement payouts are, you know, across government, but we did budget for that centrally. So as soon as we get all that processed, we'll be bringing a budget amendment to you to reimburse each of the divisions for what they spent. So we'll know if we don't have the number today, we'll know very soon what that number is. That's good. Thank you very much. Keep that money rolling in. Thank you, Mr. Lane. Councilman Ellinger. Thank you, Chair. Thank you, Kenan. When we built this budget for fiscal year 2009, we put assumptions in there on retirees, and we're going to sell certain property, and there were certain different assumptions. How are we coming along with all those assumptions that we had based on making? You say we're going to make our fiscal year 2009, and we should be able to do that. Do you have a list of that that we could probably see where we stand? Where we stand against the – Against our assumptions. Assumptions. I don't have that, but I do have that list, so it would be fairly easy to go through the list and get something to you like that. It would be good just to see how we're doing. Right. Okay, thank you. Anyone else? Any other questions? Councilman Beard. Thank you, Chair. Kena, we had originally budgeted for $170, I think I remember, retirees. In the last count it was 107. So would not the, from a budgetary point of view, would not the retirement costs be less than budgeted? Well, there are a couple things that work there. And first of all, I think we had $2 million budgeted in the general fund for payouts. And we're not going to use anywhere near that because we didn't have as many retirements as we anticipated. You're right, we had budgeted actually for 170 retirements, 50 other attrition, and only adding back 45, as I recall. Before I left for vacation, I think we had 102 funded vacancies in government, and that's the way we're making it right now, that we have 100 positions, and some of those are retirements. In fact, the bulk of those are retirements that are vacant, but we budgeted money for those positions. We've been doing every kind of projection that we can possibly do against these personnel numbers, and I think with the combination of the money that we're going to pick up from the payouts and the fact that we have these vacant positions, and, I mean, we're watching these position by position, that we will be able to manage our way through 09. What that does to us, though, is that we were expecting to go into 2010 with a much lower, what you might call, personnel base. And that's not going to happen. So we'll have to build a budget around a bigger personnel base than we were anticipating when we were looking at the 170 retirements. A couple other questions. The food account you'd mentioned. Yes, sir. Is there some document that indicates what is defined as a proper expenditure for food versus what is not? We have situations, for instance, where we have committees, we have partners for youth, We have all kinds of things like that where traditionally we've fed outside folks lunches and things of that sort. Now, surprise, surprise, you don't get any lunch at this meeting. Well, as the individual requests are coming in, we're trying to be reasonable about that. If the expectation is that you've asked these people to contribute their time and for their contribution of their time, you're providing their lunch, that's one thing. But to provide food for an internal staff meeting or those kinds of things, that's what we're trying to get a handle on. is those of us who can bring our own snacks or bring our own coffee if we're meeting internally and really just to start trying to nibble away at the culture of the expectation that food will be provided. No pun intended, right. Right. I didn't even catch it until you said that, so clearly it wasn't intended. Well, there may be some confusion on the fifth floor. Okay. And we'd kind of like to go along with the game, but at the same time, we don't know what all the rules of the game are. Well, I would say to you that I don't think – right now, Brian Markham and I are just – and his staff are just kind of passing things back and forth. And, you know, do you want me to talk to this division director about this particular thing? If the council chooses to use its money that way, no one from the administration is going to stop that. I understand, but I think we'd like to be partial players. Okay, I'd be happy to talk to your staff. I'd be speaking for everybody else, but some of it's common sense and some of it isn't. I'll speak to Rebecca about that. One last thing. Who gets free parking or partially subsidized parking? How does the parking situation work? I know we get free parking, but beyond that, I'm not sure who else does. Well, I mean, I don't think any LFUCG employees pay for parking. Everybody has free parking. That's what I was afraid of. Yes, sir. because the private sector learned 20 years ago that their employees needed to contribute something. And that might be something we can look at. I'd be happy for you to look at that. I bet. I'm not looking for anything to gouge the employees about. I understand. But at the same time, we're short on parking right now anyway. It is part of our benefit structure right now, I would say. I mean, it's – An inviolable contract? Pardon me? An inviolable contract? No, it's not in the inviolable contract. So, you know, we would hate to have to go to that length, but I would have to say right now that everything has to be on the table. We hated it, too, across the street when I worked there. and we did it anyway. Right. Just so if employees are watching right now, there is no proposal from anyone to have employees. I can't quantify what that means. Right. Nor can I quantify what the food account means. Well, we have quantified what the parking means, but I don't have those numbers with me today. Commissioner Cole and her staff put that together as we were looking at the 2009 budget. So those numbers have been quantified. Okay, thank you. Thank you, Chair. Anyone else? I have a couple of questions myself, Commissioner. One, on page 13, or the monthly budget report, we show the budget column versus the FYI 2009 column. Yes. Is there any way to change that? I know you're working on a new format. Are you looking at changing that budget so it reflects what we budgeted in 2009 versus taking the average of 06, 07, 08? I mean, why are we taking the average of those three years to get that column? Why not just use the actual thing we budget so we can get a better understanding of where we're at on our budget? Well, this is a monthly budget. Right. And you don't budget monthly. You budget annually. And the way we have figured a budget for the monthly is to do those averages. Well, then we add a yearly page that shows what we budget. I think Councilman James hit it on the habit. Okay. Because we have no idea looking at this. I understand. Right. That would help us tremendously as we talk about getting a new format. And then the other thing, we voted this year not to put money into our rainy day fund, correct? We have not been doing that. Well, we put money. $50,000 monthly. The $50,000 monthly we did not budget for, but we did make the contribution because of the carry forward being in excess of the budget. Can you give us a current balance of that fund? It's right at $13 million. And are we still planning on taking money out of that, or are we waiting? We do not have any. Now that we know that we won't need them for employee payouts, that was the only, retiree payouts, I'm sorry. That was the only thing that we had contemplated. Now, certainly, if we get to May 31st and the bottom falls out and we can't recover in a month, that's where we will have to go. But that's why we're trying to do these things proactively in January so that if we do get hit hard in May, we would like to not have to make a withdrawal from the Rainy Day Fund. Okay. And then two other things kind of looking forward. As you all prepare the budget, I know last year we had asked to have a different format of the new budget when it was presented to us, the mayor's proposed budget, and that wasn't adhered to, not by you or anybody, but it just didn't come out that way. Can we expect a different format for this upcoming budget? Are we working on that? Yes, sir. And we'd be happy to share that with you at the January meeting to see if it meets your needs so that we don't prepare something that you still are not happy with. You'll have it by the next meeting then? Mary will have it, yes. Great. And then last but not least, when you're preparing the budget, I know we've asked and we've kind of struggled with a lot is looking at LFUCG's fixed expenses versus, I guess, variable expenses so to speak, have we begun looking at what our true fixed costs are to run government? Have we begun compiling that list so that if we do have to do cuts, we can know things we absolutely cannot touch, such as utilities, things like that, versus? We don't have that right now, but Mary and I have scheduled meetings, beginning with police and fire, to start trying to, for people centrally, not just the people in the fire department, to know more about their budget. And we're hoping, actually, to be able to model what it costs to staff a fire station and those kinds of things. But right now, to get that kind of information, we would have to rely on the divisions. And clearly, when it's my division, it's something that can't be cut. But if it's somebody else's, it probably could. So we're hoping to gain a better central knowledge of the individual budgets so that we can start to put that kind of cost analysis together. I don't think that we can put a good budget together for 2010 if we don't have that kind of knowledge and resources available to us. And that's where I was getting to. We don't have it now, but we're working toward it. Okay. Very good. Anybody else? Anything else? Councilman Henson. Thank you, Chair. Would it be possible for us to get a breakdown of each division of their year-to-date expenditures? Sure. And how they're running, you know, within budget? Yes, ma'am. Okay. We actually can run that right out of PeopleSoft. Now we have to run individual divisions, but we can do that, yes. Okay. if it's not too difficult no it'll take some time because it's about you know you have to run it's not one single report that you can run it's it's by division so but we can do that certainly okay be happy to all right thank you vice mayor gray i was i was just going to say mr chairman you've done such a great job with this today it seems like you've been in this role forever you know and commissioner co's smiling you know things couldn't be better. My question is actually has to do with perhaps maybe possibly putting the ICMA update on our regular agenda. I know that the administration's been doing some some test test runs with some departments and actually being led by your staff by Paul. I think Paul's involved in it, right. I'm hopeful that we're not running it. Well, I just think he's been coordinating the effort. Right, right. Anyhow, I think some of these questions that you were asking earlier related to the fixed and variable costs that takes us to the measures, measurements that ICMA might be able to help us with. So we might be able to get an update on that. maybe at the next meeting is that okay just a suggestion thank you sir may i assume that is paul would paul be the one to do the update or are you asking well i think joe i think joe kelly is okay active in it from the administration side and i believe that all the departments that are the test sites are administration yes absolutely yes we can help of course i mean paul will be able to help but i think the heavy lifting is going to come from the administration side okay thanks anyone else have any questions about the financial report for commissioner cole Thank you, ma'am. Thank you. All right. Up next is our internal audit report. Mr. Salee, a couple of items. I believe you're going to start with the internal audit process first and go through that briefly? That's correct, sir. Are we going to jump to the audit results? I'd like to comment just briefly on the internal audit process. Yeah, if you could, given the late start, I know several of us want to get to your results as well. All right. Thank you, sir. I appreciate the opportunity to come here and speak before the Budget and Finance Committee, and my congratulations to you, Council Member Senate, for being the new chair, and Council Member Ed Lane for being the vice chair. The mission of internal audit, as I always state here for the public's understanding, as well as for any new council member we may have, is to provide independent objective assurance and consulting services designed to add value and improve the urban county government's operations. It's important to understand that internal controls are the responsibility of management, and the objectives of the Office of Internal Audit are to insist urban county government in the effective discharge of their responsibilities by performing audits that provide analysis, recommendations, counsel, and information concerning activities reviewed, and by promoting effective internal control at a reasonable cost. I want to emphasize to the Council, as I always do, it should be noted that findings are a common result of an audit, and they do not in and of themselves indicate carelessness or negligence on the part of management. Deficiencies identified during an audit can be the result of many factors, some of which may be only partly controllable by management. In addition, internal audit reports are designed to draw attention to opportunities for improvement, and therefore they do not address the areas of satisfactory performance that may be noted during audit. Therefore, Council is encouraged to maintain a balanced perspective regarding the nature and extent of internal audit findings. In the summary of audit results, this is for the Community Corrections Purchasing Audit. The Office of Internal Audit completed an audit of Division of Community Corrections Purchase Activity on January 14, 2009 in response to an LFUCG senior management special request. The general control objectives for the audit were to determine that purchases made outside the PeopleSoft system were reasonable and appropriate including phone prisoner account fund and community action program a community alternative program. Expenditures were properly approved, tracked for receipts of goods or services and assets were properly safeguarded. Purchases of goods and services were adhered to bid or other LFUCG purchasing guidelines and the purchase activity complied with applicable laws, regulations, and SOPs. The following findings were reported to senior management. Ordinance 196-2004 approved community correction standard operating procedures retroactive to October 26, 2000, which included language stating that use of the phone revenue account would be at the discretion of the director of community corrections. Ordinance 276-2006 superseded that ordinance but retained the same discretionary account language for the phone account. As a result, the phone account expenditures occurring over a period of approximately eight and a half years and exceeding 2.8 million dollars were not subject to standard LFUCG purchasing policies and procedures but these were instead approved internally by the Director of Community Corrections or authorized subordinates and paid via checks written from that account. As of December 31, 2008, the phone revenue account had a balance of $1,237,524. It is our recommendation this account be closed and the revenue be included in LFUCG's general fund. Cap expenditures were not subject to standard LFUCG purchasing policies and procedures, but these were approved internally by authorized cap personnel and paid via checks from that account. As of June 30, 2008, the CAP account had a balance of $643,048, and as of December 31, 2008, this had increased to a balance of $789,152. It is recommended that CAP be set up as a self-sustaining fund similar to the extended school program, where revenue generated by that program provides the funding for its personnel, operating, and insurance appropriations. The LFUCG Division of Computer Services has never conducted a review of the Community Corrections jail management system, configuration, documentation, system security, data security, penetration testing, change management practices, disaster recovery capabilities, or any other type of review necessary to ensure that jail management system information technology risks are properly identified and managed. The Division of Computer Services should evaluate the business risks associated with the use of a small local developer to upgrade and maintain the jail management system. Jail management system related expenditures were approved by community corrections personnel who lack sufficient expertise in information technology system configuration, data and system security, change management, and other technical areas requiring specialized information technology knowledge. Computer services personnel should be responsible for approving jail management system and any other community correction information technology development and upgrades. A file within the community corrections jail management system contained several thousand rows of sensitive inmate data from the St. Lucie, Florida jail, including full name, social security numbers, dates of birth, and complete addresses. The Director of Community Corrections executed several memorandums of agreement between Community Corrections and the JMS developer. The LFUCG charter specifically states that the Mayor shall sign all written contracts or obligations of the LFUCG. Community Corrections personnel did not follow the request for proposal process when a $120,000 project was awarded to the JMS developer in October 2005. And no license agreement or maintenance agreement existed between the jail management system developer and the urban county government. Management's responses to the findings indicated appropriate action would be taken to correct the deficiencies identified. And I'd like to particularly compliment Director Bishop's closing comment to the audit report, where he stated that he looked forward to implementing the changes recommended by the Office of Internal Audit so that the public's confidence in LFUCG's finances would be enhanced. With that, I would take any questions. Ms. Sully, thank you for the overview. And just so everyone's clear that there's a lot of information in the audit report itself. Did everyone get a copy of the corrections audit? Do I have a copy of that? Just to be clear, do we want to go through each record? There are seven different sections to this. Do we want to go through each one and ask questions on each individual one, or do you just want to have general questions open it up? Does anybody have a preference? I know there's a lot of information here. Okay, well, Councilman Ellinger, you were up first. Thank you, Chair. I want to first go back before we get into this and just when you went about the process, could I ask you a couple questions about that? Because I know in the years I've been here, we've just how you go about requesting an audit, if you could kind of, because I know sometimes we've come in directly to you, and I think you kind of have a procedure you'd prefer us to do. And for the new council members, it might be a good opportunity, if you could just take a couple minutes just to what we need to do to go about requesting an audit. And then from there, I'll go into this specific one, if you don't mind. All right. Each year, I go through a process where I do my own risk assessment. I meet with senior management. I meet with the chairman of budget and finance, for example, and also key directors. And I set up what I consider areas that I feel should be on an annual audit docket. After that is approved by my board, we also have a process to take any special requests. The way that process works is a special request would be brought to me as the director of internal audit, and I would evaluate that request based upon the merits of the information presented to me at that time. Typically, what we would do, if it seems to have merit, we would perform a small preliminary review, try to validate the facts the information that's given to us and see if the audit is warranted if that audit is warranted then my board has authorized me to go ahead and and move forward with that if it I consider it to be necessary and appropriate if it's something that would be particularly sensitive I would go ahead I would certainly speak with my board chair about this my board chair is fully aware of all such special projects and I would also bring that to the whole board for a vote if I thought it was something that was very, very sensitive in nature. Thank you. And now, again, more specific here, the last, you said management's response to fines indicate appropriate action will be taken. You make recommendations, and then they're going to take action. What process do you go to make sure that their actions that they said that they're going to take that then are fulfilled? And I guess if we could, after you talk and then if the director could come maybe give his responses here on what they're going to do in response to the the different issues that were addressed here well I think it may have been the last budget and finance committee I spoke to the members about the action plan tracking matrix that I have developed it's an excel spreadsheet where I go back after a period of about six months or so and I basically through email typically through an email I will ask the director for the responsible division what progress have you made on the action plan you said you would put in place. It is my responsibility to make recommendations for corrective action. It's management's responsibility to come up with often with the specifics of how they're going to accomplish that and then is there of course their job to to follow through with that. So I would follow up after a period of six months or so if the responses seem adequate then then we may follow up on that with a small follow-up audit. If the situation is particularly important in nature or entails particularly significant risk to the urban county government, then that one would probably get an actual on-site review within the next year or so. Thank you. And then, Director Bishop, if you could, could you give us your appropriate action responses that you're going to do for these issues, if you would, please? Sure, I'd be glad to. Thank you. Some of these processes have already begun. We have had, I know, a couple of meetings with members of the, Ms. Mary Pfister, Commissioner Bennett and I, to begin the process of transitioning some of these funds that have been clearly and pretty much under the discretion of the director into the general fund and into a more, if you will, transparent process. process, so that has begun. We've also had meetings with folks from IT to begin that process of what might be necessary to bring some of the oversight that was mentioned in the audit and and so those those are a couple of steps that are already underway. The information on the St. Lucie inmates that were on our server that has been removed so that's been completely taken care of that was an oversight on our part. I'm looking through some of these others. We back to the one with IT and the oversight we certainly we certainly stand ready to work with them they're welcome and and we will kind of be guided I think by their their timetable on that because that's where we're there whenever they want to come in kind of advise us on what they're wanting to do but we have had some preliminary discussions on that so a number of these a number of these are already in process and some have already been taken care of. Thank you Director, thank you Chair. Thank you Councilmember Gordon. Thank you Mr. Chair. I have a couple questions first for Bruce and then Mr. Bishop. The first one on page 20 of the packet relating to purchasing policies it's the third bullet in the findings I was curious about and mr. Bishop said they're already working with purchasing are there other divisions in LFUCG that do not use standard purchasing policies I guess I had thought they were standard throughout government. Are some divisions out there that are exempt or for some reason are not, are given leeway in following our purchasing policies? None are exempt and as far as any leeway, I'm not aware of any other particular circumstance. I will tell you that if we conduct an audit in the future of another division and something of this nature arises that will receive the same reporting that the situation has received. I think that's a great idea. It seems to me we ought to always include that when you do an audit. The next question I had was the last bullet on that same page about the jail management system. Does computer services, I'm trying to understand the procedure, is there a normal procedure in place for LFUCG computer services to review other systems within government or is this the only other system that's out there? Do we even know? I would like to defer to our Chief Information Officer for that. We started the review process I think a few months ago after we collected the information for our disaster recovery process and we are putting a strategic plan that would address all these. Throughout government? Throughout government, yes. So you're identifying what might be out there and then plugging that into some sort of a process for review or even change? Sure. If the change is necessary, certainly. The review process is we're trying to, well, historically IT has been decentralized at LFUCG, so part of it is they all, each division had the authority to go forward and implement their software or hardware, whatever they saw necessary. So we're bringing some standards across the city for application development and for hardware, So we're doing our review, you know, each division at a time. Okay, very good. And then I wanted to ask on page 21, this is also computer services should evaluate the first bullet up there, the business risk associated with the use of a small local developer. I'm assuming that's, is that a software developer? Not a real estate developer. Yes, in this case it would be a software application developer, that's correct. Okay, to upgrade and maintain the JMS. How do we, what's our process for doing that now? Do we have a process for evaluating a business risk of, or are you, is that something that you have become aware of and you're going to work on that? Sure. In fact, we did a baseline assessment study back in March last year. A lot of that, I think, was made available on our intranet and to members of council. I'll be glad to bring that up again. Management controls, there are a number of issues we're addressing that have been brought to our attention in that assessment. Okay. And how we develop software in the future or the principles we're going to follow are some of the things we're addressing in our strategic plan. If you suddenly want to move towards a new IT project, at this point you have to make a business case. There's a vetting process and it goes through some stages where you have to make a justification on the financial side. There's a return on investment we look for. So all those are being done currently which wasn't in place before. Okay. I don't know that you know the answer to this but probably Mr. Solley or Mr. Bishop would know. Was this software developer, did that go through a bid process? We found no information or no records that there was actually any bid process that took place there. Do you know, do you have any other information on that? Would that be something that should in the future be looked at as a bid process or, I mean? We're actually looking at, the chief information officer has told me that they're actually right now looking at an RFP to begin that process. Okay. All right. And then the final question I have, which might possibly be for Mr. Bishop, is the third bullet on page 21, which talks about this sensitive information for inmates from a Florida jail. I am curious about why that would be on our server. And do we have other information from other jails on our server? The answer to your second question is no. The reason that information was on our server was in 2005, our system had begun to slow down and malfunction and lose data, and people would be working and all of a sudden they're, especially down in the intake area, their data would be lost. They might have to book a person in three times to get it successfully completed. It was time for a rewrite of the system and to update it. So our vendor who also did work for St. Lucie County, Florida, had a much more state-of-the-art system. I had some folks go and look at it and take a look at it firsthand. They came back and we saw some things there that could help us significantly. And because this is kind of a customized system, it's not a canned system, It is one that's customized especially for us and our needs. He began to rewrite that JMS system for us. The St. Lucie files were put on our server, which expedited that process and saved us a significant amount of money by not having to replicate all of that work. And I'm certainly not a software expert. But by using those files, he was able to save this government a significant amount of money and make the process go a lot faster. That data was scrambled. Those Social Security numbers and names were scrambled in a fashion that it would have been very difficult, I believe, to utilize. And we have no information that leads us to believe that any of that information was accessed inappropriately. So the information should have been deleted at the end of the project. The provider acknowledges that it was an oversight on his part. He forgot to delete it, and so that's the reason the files were still on there. But they have been deleted, and there are no other sensitive data like that. That's not LFUCG data on our servers. Okay. Thank you. Okay. Council Member James. Thank you, Chair. My first question is for Mr. Sally. In our packet is just a summary of the audit results. Yes. We also have the full audit report. Is that public information, the full audit report? That is public information. It is on our internal audit webpage. Okay. Chair, can I make a suggestion that within our packet for permanent record that the full report be included in the packet, just the results? Absolutely. Thank you. Thank you. My next question is for Rama. And as you come up, just my question is based on, I guess you're going to do some auditing or taking a look at their system. Are you looking to see if components of PeopleSoft or something that we're doing could be utilized by Community Corrections? Well, from a financial standpoint, the finance accounts, yes. The account that's referred to, I think we are looking at that. But the jail management system, there is no PeopleSoft module that I'm aware of that's going to address this problem. Okay. That's why we think we need to go out to an RFP and get the responses and go from there. That's probably the best way to address it. Okay. But you already knew that there was not really a component of PeopleSoft, because I'm sure when we were looking at bidding that out or contracting it or looking for a system, we were looking for something that would cover all divisions of government if possible, but we knew that community corrections was a separate item. We knew that they didn't have a component and that they had their own system there. They did have their own system, and PeopleSoft, yes, while we look at a government-wide implementation, I mean, comprehensively, whatever can come into that, we are looking at that. But the jail management system is pretty unique. Okay. And typically enterprise resource planning software doesn't have those as a module that's available currently. Okay. So it's common for community corrections divisions in local municipalities to be separate from their other computer services. Sure. Okay. I mean, in the past it has been. And if you go back 98, 99, whenever this was done, it had to be custom built to tailor to whatever their application was at that point. So and that's why I say while we did look at out of the box or whatever vendors can bring, the guidelines are such that we have to go out and put it out to a bid at this point. Okay. Thank you, Rama. And Mr. Bishop, if you'll come forward, I've got a couple of questions for you as well. I kind of, when I read through the full audit report, I kind of sensed a sense of relief from your response that you'd kind of been asking for this audit and you kind of knew that some things were kind of quirky in the way that it was being managed. So do you see this as helpful? Absolutely. As I stated in my response in 2004, shortly after I arrived, I requested that an audit of all those accounts be done for two reasons. One, to ensure that all the assets were in place and that there had been no inappropriate action. Essentially, this was going to come on my watch, so I wanted to know what I was inheriting and to ensure that everything was in place. The second concern I had was that having been there for a few months, I began to realize that some of the controls were not as strong as they should have been. I really believe that I had good, honest people there, and I do. I was concerned that the safeguards that were in place weren't strong enough to protect them in the event of someone making an allegation. So we were able to start to build those safeguards and those checks and balances and get some of our protocols and procedures down in writing to strengthen that process after the first audit was done in 05. But those were the two primary reasons that I asked for that audit. The ordinance, as I interpreted, gave the director a great deal of discretion. Yeah. And once again, we're proud to report that all the assets seem to be in place and all the money that was expended was for the jail. Okay. So we're extremely proud of that over the years. But once again, the transparency, the oversight is something that I think can only help strengthen the process and bring comfort to all of the folks who are responsible for this government. Okay. And out of all the recommendations, do you see any harm in any of the recommendations as far as, you know, access to certain funding and the way that we deal with our general fund and our budgeting? Do you see any harm in that? I would certainly like to take this opportunity to make a pitch for it. I hope that that money that we generate can be accessible to the jail because we have utilized that money, and I think appropriately, to hold down our budget request. And I think we've used it in a very judicious manner. It's a considerable income stream. It has grown significantly. And we're proud of the way that we've managed it. We have no concerns about that. But I think that if we can develop a system that allows us to handle the volume, the volume of the PAF account, That's the accounts when individuals are leaving, their checks are cut to give them their money. That will be crucial to an efficient system. And also if we can hopefully still have access to those funds, it would greatly help our operation. Okay. Well, as this process continues, I hope that you'll be very vocal about any negative impact that you feel like something would have with any major changes. be very vocal and expressing that with the reasoning and rationale that goes behind it. Because although many of us aren't affiliated with community corrections on a daily basis, you're seeing it, and we need to make sure that it's being run as efficiently as possible. So even though we need that oversight or do some changes. And my last question had to do with privacy standards. Kind of tagging on with Council Member Gordon was asking about, I know in health care there's a privacy standard. Is that similar in the jail system with access to information and what people see and authorized users and that sort of thing? There are some privacy standards. A lot of our information is subject to open records. Okay. Law enforcement agencies have a little bit more access than the general public. Some of the things are fairly standard, such as medical information, social security numbers, those types of things. That's fairly consistent with other types of industries. But much of our data is subject to open records. Okay. And with that, with the tracking available for us, so if somebody's logged in, they're logged in as an individual user, and if they tap into somebody's account, you know who's been there, who's viewed it for how long, and kind of what they did with the data if it was electronic. You don't have that type of monitoring? I'm not sure that we have that type of monitoring. Okay. If you could check on that and Rama as well, when you're working on the new software or what needs to happen in cases where privacy could be tampered with. I think the security of the entire database is a priority that we all see because we see the horror stories. There's some awfully skilled people out there who have a lot of time on their hands to look at hacking into databases. And we certainly want to develop a system that will eliminate or prevent that as much as possible. Absolutely. Okay. Thank you, Director. My last thing is for the Chair. One of the recommendations in the audit talked about a revision to an ordinance. Would that be the charge of this committee or another? That was one of the questions I was going to ask if somebody else did. I believe the Administration is going to bring to us the revisions to that ordinance and probably do it through a blue sheet process where we could all discuss it because I think it's going to have several ramifications across government. If I'm not mistaken, I think that's what you were going to do. It'll be through a blue sheet process. The authority you gave the director was through your adoption or approval of the policy and procedures manual for the jail. So we'll be bringing you an updated policy and procedures manual this year anyway, and we'll make that change in it, highlight it for you so you can see what we're proposing. I don't think this would have any ramifications for anywhere else in government. I'm not aware of any, but we can certainly talk about that as we go along. I think there's a couple of changes mentioned here. So you will be bringing those to us sometime this year? Yeah, and really we might not even have to do that because by bringing those accounts into the PeopleSoft system, they're going to have those controls and those approvals required anyway. But we still want to affirmatively have it in the policy procedures manual that the approvals are required and that the other purchasing procedures be adhered to. So we'll try to clean it up several ways. We can put that into Intergov because that's where it would be long and appropriate if we're going to change our procedures. and we maybe still can do that once they get the new manual developed we can discuss that manual through intergov committee probably and I think that might be a good idea just just to vet it in case there are other divisions that feel like that they would be impacted that'll give them the opportunity to talk sure thank you thank you and next on the list is councilman Elaine but before he takes it I'm going to turn the chair over to him briefly and step out for a minute but I think he also has some questions as well he was next on the list since I'll be serving as interim chairman I'll call mr. beard go ahead thank you chair I'm not sure who to address this question to but I'm intrigued by this development of the system and the the use of the term small local developer was this Bruce I guess the original developer of this that you reference? It is the original developer, yes sir. Is it a one-man shop? No sir, they listed four employees on their website. All of them conversational with this piece of software? I can't answer that sir, I did not get to speak to all the individuals. And then I guess one question you mentioned that the mayor had not signed it does not have something like this have to come to council for approval also that would be my understanding yes that's what I thought I mean we have to come for to accept a $50 gift to paint a park bench I'm sure we have to come for $120,000 that's all I needed thank you thank you mr. Myers thank you chair yes could I start with mr. Salley first I want to say I'm on your board and you do a fantastic job and appreciate what you do thank you I have a couple questions if you could kind of give the public and understanding as well as a council and myself what is a normal process for your organization bringing forward either recommendations to changes in ordinances or in policies because we've all kind of talked about there's a couple in here what is the process do you rely on the division that you've audited to do that the commission you need to develop the recommendations well a large part of it really comes from my own years of experience in the internal audit profession in auditing internal controls and a variety of functions and businesses also I have three staff members who have bring a great deal of experience to the board as well does that answer your question sir I misunderstood you no I'm getting more to the point where you have a recommendation that an ordinance needs to be changed or a policy needs to be changed. What is your process for getting that to the council so that we take a look at that? My process is to introduce that to the council through my internal audit report. Okay, so we're to look at this report and see that you have these recommendations and then we would as we read out your report put that into the proper committee or whatever the process would be? Yes, sir, that is the Council's will. Okay. Thank you. Director Bishop. I want to thank you for coming today and commend you. A lot of things that have already been several questions I had or comments that I had but going back to your report, your response in here where back in 2004 you asked for these accounts to be audited. Yes. I appreciate that and the way that you're looking out to see that you know once you took over the ship that things were going to be right. Could you give the public a quick overview of the different accounts that are discussed here and what the purposes of those accounts are and maybe where the money comes from as well? There are three primary accounts, Council Member Myers. The first one is the PAF account. That's the account that basically when an individual is booked in and they have money on them, that money is put into an account for them so that they can make purchases out of the canteen, commissary, to send money home, to pay child support, court costs, basically anything to conduct their business while they're there. Upon their release, they are able to withdraw that money, just almost like a bank. So that's one of the accounts, and that's the one that has the most volume, as you can imagine, with our average length of stay being about 14 days and some people there less than that. That's a high-volume account, but that's the basic process for that one. Can I ask a question about that one? Certainly. If a person were detained for the 14 days or, say, three weeks or whatever, is it possible for family members or friends to bring money in and put it into that account so they have money for commissary and those things? And I'm glad you mentioned that. That was something that I forgot. People can come and put money on their accounts to assist them. If individuals happen to be on work release, their salaries go into those accounts. So it's almost like a bank, very similar to a bank account. Withdrawals are made, deposits are made, and then the person closes it when they leave. Okay. The second account is the CAP. That's community alternative programs. That account is basically funded through two primary sources, and that's the revenue that we collect off of drug testing, which is ordered by the court, and fees that we collect for individuals who are on electronic monitoring. That account has much less volume in it. That account has been operationally self-sustaining for the four years that I've been here. We've made all of the purchases that sustain that operation with the exception of personnel. The ability for it to become completely self-sustaining, my honest opinion is it would be very doubtful because we don't control how fast that grows. Judges put people on probation. Judges put people on electronic monitoring. Judges order drug testing. So the courts pretty well control the growth of that program. It would take considerable growth for it to be able to sustain handling all the personnel costs. But it has been operationally self-sustaining for at least the four years that I've been here. Okay. The third account is the phone account, which is the focus of this audit. That is the largest account. And that account basically is revenue that's generated from a commission on phone calls that inmates make while they're housed out of the jail. We get a commission off of that, and it's negotiated in a contract with Evercom, our service provider. And there's a considerable revenue stream from that, as you can imagine, for it to accumulate the way it has. And that's the one that we believe was governed by this particular ordinance that's in question here. That one, as was indicated, had the most discretion on the part of the director. And it, again, does not have a lot of use, much like the CAP account, and neither one close to the volume of the PAF account, which is just constantly turning over. Okay. So it would be your recommendation that the accounts that are being recommended to move over to the general fund would still be dedicated and earmarked back to your operation? It would be my recommendation, and it would be extremely helpful for us not only to address the kinds of issues that come up because of the kind of operation that we have. A huge physical plant. Things happen sometimes, and sometimes the ability to act quickly has helped us on a number of occasions with mechanical systems, equipment. That's been a real benefit of the account the way it has. But I think it can be set up such that if we can still access that account, that the oversight and the controls are in place. If it moves quickly enough, we can still do what we need to do. Okay. My final question for you is, is there anything else that you would like looked at in your shop, or do you have any other recommendations that are outside of this audit? I can't imagine we can be more scrutinized than we have been in the last couple of years, Councilman Myers. But we're constantly looking at the organization and the operation. We're in the process right now with the budget process and the retirements that we've had to kind of look at our whole command structure, if you will. That's something that we can do internally. I think as far as the outside assistance, I think that this audit addresses a lot of those things with IT and purchasing. and the relationships that we have which I think are very positive and very strong. But we definitely are looking at, as we continue to look at our internal controls and how we might handle our command structure and our ability to staff the facility and operate it more efficiently. Okay, thank you. I think Commissioner might. Yes. Commissioner just reminded me that one of the things that we have been looking at and are very close to implementing with the assistance of the IT department is a Kronos system. And for those of you who are familiar with Kronos, it's a timekeeping system. And basically what it will allow us to do is to automate and modernize our, right now, rather laborious and paper-driven timekeeping process. We still have paper time cards that everybody fills out every pay period. It will be biometric so individuals, their thumb prints will be able to be recorded and it will log in individuals when they come in, when they leave for the day, when they go to lunch, when they go on breaks. So it's going to once again help us tremendously with our payroll process, with our timekeeping process, make it more efficient, less laborious and less paper driven. And so that's a big project that we think is going to help us a lot. Okay. Thank you. And I have one question for Rama, please. Thank you for coming up. Thank you for the input that you've had in the audit with respect to the different things that IT can and will do to strengthen this whole process. The question hasn't come up yet of funding. Do you have any ideas as to how much the changes may cost? and then where the funding may come from? Well, not at this point. That's why we need to do an assessment of the software there and what the upgrades that are required. We have already funded the security audit there because we had planned on doing that government-wide anyways. So we're going to start it at the corrections facility as opposed to other places we had in mind. Okay. So we'll put that together in the next few months. Okay. That's it. Thank you. Thank you, Mr. Myers. Mr. Meard, you had a follow-up question? Yes, I do. Rama, before you leave, real quickly, is there an annual maintenance fee that we pay for support on this piece of software? Not to my knowledge. So it's – I think it was – it's fee-for-service. When they needed something, they called. And either, I believe, a statement of work or something to that extent was agreed upon. and the money was paid. I just was curious. You generally see the maintenance? That's correct. Typically you see about 20% to 25% as the maintenance agreement going forward. Now I need Director Bishop if I could. This phone account thing, explain how that works. Is there money spent by the inmates for telephone calls? All calls that are going out are collect. So the individual who receives the call is charged. Okay. And you're talking about long-distance calls or local calls? Both. Huh? Both. why would we be a party to a profit center operation for something like that for somebody to use the telephone that's a that's a very common practice in detention centers across the country councilmember beard it is it is something where there's just been just a general partnership between governments and the phone company to get revenue off of that. It's been around as long as I can remember. Which doesn't necessarily mean it's right. No. Okay, I just... But we didn't invent it, and we certainly aren't the only individual. Well, no, I'm not implying that. It's just that it looks like, well, we got you, so now we've got an opportunity to make some money off of you. And I understand we also expend a lot of money keeping these people housed and fed and guarded. But at the same time, it just seems strange that we'd have that much money. Is there an agreement, a signed agreement, that is evidenced with this other company that is providing this service? Yes, with Evercom. Is it renewable? Yes. Every so often, every year or two years? Yes. Okay, because I don't remember seeing it. Would that be a contract that we would normally see? I would think so, and it goes through the normal process. I just don't happen to remember it. Okay, thank you. Council Member Henson. Thank you, Chair. Mr. Bishop, I just have one question. that on the inmate accounts, are there fees charged to the inmates for the services you provide for distributing money? There's no fee for that account, like a service charge or anything like that. There are some fees by statute that we are required to collect. collect, there's a booking fee. And there are probation fees, but those individuals are not incarcerated. But the only one for those individuals that are incarcerated is the booking fee. That's by state statute. Anything else is pretty much discretionary. There are certain things that an inmate can do, such as there's over-the-counter medication like aspirin and things that they can purchase, but there's no fees. Okay. So the booking fees, does that show as revenue for the detention center? I believe it does, and I believe that fee... It's not like it goes to the state or anything like that? I think that goes back into the general fund here. Okay. Yes. It's not money that we have. And you've often been more innovative with coming up with revenue ways of, I've noticed, I thought there's fee reimbursement for certain inmates that are being held federal. Yes. Things that you hadn't been getting. Is that correct? Yes. Okay. So, all right. Well, thank you. Council Member James, do you have a follow-up question? I do. Mr. Bishop, don't leave yet. Just real quick, on the phone account, when Council Member Myers was asking about that, something triggered. Does within that contract include service and maintenance of the equipment? Yes. Okay. So that wouldn't be anything that we'd have to pay additional out later. Okay. Thank you. Thank you. Thank you, Council Member. If everybody has spoken, would it be all right if I ask a couple questions now? Sure. Okay, good. Mr. Bishop. Yeah, my questions are just some procedural questions I wanted to ask you about. The first one is on the phone service that we currently have, do we ask for competitive bidding from other companies on that? So we don't stick with one company all the time? Okay, have we changed vendors since you've been commissioner? Evercom's had it since I've been there, Councilmember Lane. But I think there have been other companies besides them. I'm not 100 percent sure, but it's bid out. It's a competitive bid process. Okay. Earlier on you said that it was nice to have a cash fund available so if you had an emergency repair. Does not the jail have some type of an ongoing relationship with vendors that provide repair services so that in an emergency they can come out and you don't have to pay them in advance, do you? I mean, wouldn't they allow them getting a check from us? No, but we have, as you can imagine, fairly sizable expenditures on a piece of equipment or something about our mechanical system that on occasion has been handled out of that account. No, it's no payment in advance, but we have access to that account on occasion for that. Okay. You mentioned that in 2005 you had an audit done of these accounts. Who was the auditor that did the audit for you? The audit division, the internal audit division of LFUCG audited two of the three accounts. The phone account was not audited. And did they do a written report on that to your recollection? Yes. Okay. I think that might be helpful if we can maybe send a copy of that to council members and try to look at the audit process back in 2005. The other question I have is, is any cash handled at the jail or is all the money credits that come in from the phone service and you don't receive cash from any prisoners or anything? Yes. Yes. If an individual is arrested and brought into the jail at the booking station, if they have cash on them, yes, it is taken at that point. A receipt is given to them and it is credited to their account. Is that the only time that they would hand you cash? In other words, they don't give you cash to put in any funds or anything? No, that would be the only time. During the several years that you were sort of looking over these accounts, did you ever advise the finance or the revenue department of the ongoing balances in these accounts so they had some idea of what cash was on hand? And how did you normally do something like that? Yes, the account division was aware of the balances of these accounts and the purchases that were made from these accounts. The data had to be entered manually by the account division as opposed to the PeopleSoft system, which does a lot of it electronically. These accounts didn't come online when PeopleSoft was originally brought online. but we were able to make sure that the accounting division had the data and they entered the data and they saw the purchases. In your current budget, do these expenditures show on any budget line items in our county government? I don't believe so. These are all off the budget items? Yes. So all expenditures were off budget? Yes. So we're not accounted for our standard procedure there? Okay. The urban county government issue, when we set up the office of the chief information officer, I believe we sent out a directive saying that all computer systems should be evaluated by the CIO. When that memorandum was received, did it set off a thing, well, maybe I should get them to look at our computer system over here at all, or it didn't register with you that much? I'm afraid it didn't. I'll be honest with you, I'm afraid it didn't. All right, when you did the approval to spend $120,000 with JMS Developer back in 2005, was that your final decision on sending that money? Yes, that was my final decision. But one thing I do need to point out, Council Member Lane, that was three separate agreements. Okay. It was a total of $120,000 when those were put together, But it wasn't one project of $120,000. It was three separate projects. Okay. Well, since we didn't have a competitive bidding process and you've admitted that you're not a computer expert and, you know, the report indicated that you didn't have money on your staff, did you feel uncomfortable in approving $120,000 expenditure, you know, not having gone through some more of a sophisticated process to expend the funds? I felt reasonably comfortable that the work that we were paying for was done because I was involved enough to know and knowledgeable enough of our system that when things were fixed and they worked, and we put processes in place to outline the scope of the work. We call them memorandums of understanding where we would identify for the vendor what we needed done. He would estimate what that work would cost and then when those projects would be done. Also, after the projects were done, there was a built-in time lag to ensure that they were in fact working and our staff could confirm, yes, they're working, yes, they're in place, yes, it's doing what we asked them to do and what was in the memorandum of understanding. So I was comfortable that the work that we were paying for had been done. What I am certainly not an expert on is the type of work, if you will. And I would say that we did have a very knowledgeable person on there. And while their background and their formal training was not in computers, a lot of people that I've come in contact with over the years are pretty skillful and they're self-taught. And this was an individual who was very, very knowledgeable, worked very closely. I relied on them heavily to kind of review in detail and give me some assurances that this was something that we needed to do. And I feel comfortable that that was, in fact, being done. Okay. If you were going to, you know, looking sort of retrospectively now, would you have handled some of these aspects of this matter a little bit differently? I would not have handled any of the purchases that we made or any of the agreements that we entered into any differently, given what I believe to be the discretion that I had in the ordinance. But I will say that based on my experience in other governments, I have not ever had that much discretion in any position that I've ever held. That was one of the things that I wanted to make sure when we requested the audit in 04 that everything was by the numbers because I had so much discretion and because there was so much money in those accounts. So I was comfortable with what we were doing. I have no qualms about anything that we bought or anything that we did with the money and anything that it was used for. But the amount of oversight was there or the lack of oversight based on our interpretation of the ordinance is something that gives one a little pause. Well, thank you very much. I've asked some tough questions. I wasn't trying to pick on it or anything. No, that's okay. I think the general public is interested to know your rationale and your procedures on that. Thank you very much for your comments. I'm turning by itself over to Chairman Stenet. Are there any other council members that would like to ask any questions in regards to this report? Anybody at all? Sir, I would like to make a clarification here. What Mr. Bishop has said about the request in 2004, his statement is accurate. Let me explain for the council and for the public the situation. Community correction is a very large division with many complex operations. When this request was brought to me by Mr. Bishop, and correct me if I misquote here, it was come into Community Corrections and examine basically all our processes. Now, there were two people in the Division of Internal Audit when that request was given. The report, and I'll be glad to give this to all of the members here, is out on our webpage. That report basically became three audits in one. And in order to somehow control the scope of what we were looking at and not spend virtually six to eight months looking at one division, when I have a responsibility to audit all the divisions, the decision was made, and if I remember correctly, it was approved by my board, but I could be wrong about that, that we would focus on the accounts that had significant receipts of cash. Not checks from a particular vendor, but cash. That's why the Prisoner Account Fund and the Community Alternative Program were audited in those processes because there was a great deal of cash coming in from the public, cash outlays to the public, to the inmates. And so the sense there was there is a tremendous exposure here, not just in terms of the dollar amount but also in terms of the risk to urban county government for public relations if If that process is not done properly and therefore the decision was made, these are the two we need to look at at this time. So I just want to clarify that so that would be understood. Thank you for that clarification. I think we have Councilman Myers wants to ask a quick question and then we're going to wrap up because we have a 3 o'clock work session. Mr. Sally, while you're there, I think it's a great opportunity for you to talk about your budget for this next year. You've always requested more staff than you've ever been given. Could you just give us a little update on what you need to fill the job that you have before you? Well, honestly, I can always use more auditors, obviously. We have three empty offices at this time that actually are furnished because the expectation was in prior fiscal year budget that we were going to be able to have three auditors, unfortunately because of the financial situation that was not able to occur. I have been told that I should put by the administration, I have been told that I should request another auditor for fiscal year 2010 and I am going to make that request. Okay. And that will certainly help in our endeavors here. And as your board member I certainly always want to give you the opportunity to make that plug when you're before the council but I would hope that the council really look at that because you are a division of government that saves us money. Thank you. And eliminates risk as well so I applaud that and thank you very much. Thank you sir. And thank you Director Bishop. Thank you and thank you Director Bishop and Rama for coming today and being candid with your answers and thorough with your responses. We certainly appreciate that. Any other items before this committee today? I will ask that my committee members, if there's any items you wish to be on our next agenda, please contact me or Jerry Southerz and we'll get those items added. Do I have a motion to adjourn? So moved. Second. All in favor? Aye. All right, we're adjourned. Thank you.