First Coast No More Homeless Pets, Inc. Audit of the SpayJax Program December 8, 2003 REPORT #586

First Coast No More Homeless Pets, Inc. Audit of the SpayJax Program December 8, 2003 REPORT #586

First Coast No More Homeless Pets, Inc. Audit of SpayJax Program Report #586 TABLE OF CONTENTS Executive Summary Audit Report Appendix A: Department of Neighborhood s Response Appendix B: First Coast No More Homeless Pets, Inc. (FCNMHP) Response

OFFICE OF THE COUNCIL AUDITOR Suite 200, St. James Building EXECUTIVE SUMMARY November 13, 2003 Report No. 586 INTRODUCTION On December 20, 2002, the City of Jacksonville and First Coast No More Homeless Pets, Inc. entered into a one year agreement, not to exceed $250,000, for professional services associated with the creation and implementation of a no-cost spay and neuter program (the SpayJax Program). The Agreement provided the City with the option of extending the program for up to one (1) additional year, which was exercised in FY 2003/2004. First Coast No More Homeless Pets, Inc. (FCNMHP) has enlisted 13 local veterinary offices to participate in the SpayJax Program and receives a $7.50 administrative fee for every surgery that is performed and reimbursed through the Program. During FY 2002/2003, 2,910 procedures were performed through the SpayJax Program at a total cost to the City of $206,808. STATEMENT OF OBJECTIVES The objectives of the audit were as follows: 1. To determine whether applicants whose pets were altered through the SpayJax Program administered by First Coast No More Homeless Pets, Inc. met the requirements of the SpayJax Contract. 2. To determine whether First Coast No More Homeless Pets, Inc. is operating in compliance with the SpayJax Contract and to ascertain whether reimbursements submitted to the City and the participating veterinary offices for alterations performed through the SpayJax Program were accurate and properly supported. AUDIT CONCLUSIONS 1. We cannot ensure that all applicants whose pets were altered through the SpayJax Program met the requirements of the Program due to a combination of missing and insufficient documentation. Of the 159 SpayJax certificates reviewed during our audit, we noted exceptions on 30 of the certificates (18.9%), with a combined value of $2,250. If we extrapolate these results to the total population of 1,876 alterations performed and reimbursed through the SpayJax Program during our audit period it is estimated that 354 alterations would be questionable. These alterations would amount to a total estimated cost to the City of $26,261. 2. First Coast No More Homeless Pets is not operating in full compliance with the SpayJax Contract with regard to program administration. However, it was noted that reimbursements submitted to the City and made to the participating veterinary offices were properly supported by a voucher and invoice and accurate, in most instances. 117 West Duval Street Jacksonville, Florida 32202-3701 Telephone (904) 630-1625 Fax (904) 630-2908

SIGNIFICANT OBSERVATIONS, WEAKNESSES AND FINDINGS Pet owners are not required to license their pet through the City at the time of the alteration. Neither the City Contract with FCNMHP nor FCNMHP s internal policies address how alterations should be provided to pet owners of multiple pets. Based on information provided by FCNMHP, it was determined that 79 individuals had a combined total of 850 pets altered through the Program. This represents 29% of the total alterations performed through the Program. We cannot ensure that all applicants whose pets were altered through the SpayJax Program met the requirements of the Program due to a combination of missing and insufficient documentation. FCNMHP no longer verifies income or residency or acts as the administrator of the SpayJax Program, but rater as a pass through billing agency between the City and the participating veterinary office. Executive Summary 2

OFFICE OF THE COUNCIL AUDITOR Suite 200, St. James Building November 13, 2003 Honorable Members of the City Council City of Jacksonville Report No. 586 INTRODUCTION Pursuant to Section 5.10 of the Charter of the City of Jacksonville and Chapter 102 of the Jacksonville Municipal Code, we examined the activities of the SpayJax Program administered by First Coast No More Homeless Pets, Inc. and present this report thereon. On December 20, 2002, the City of Jacksonville and First Coast No More Homeless Pets, Inc. (a non-profit organization) entered into a one year agreement, not to exceed $250,000, for professional services associated with the creation and implementation of a no-cost spay and neuter program (the SpayJax Program). The Agreement provided the City with the option of extending the program for up to one (1) additional year, which was exercised in FY 2003/2004. The SpayJax Program was established to provide no-cost pet alterations to low income residents of Duval County. In order to participate in the Program, an individual must prove that they are a resident of Duval County and that they meet the low-income standards of the SpayJax Program. They can meet these standards by showing participation in a state or federally run assistance program such as Food Stamps, Medicaid or Women, Infants and Children (WIC) or by proving household income lower than SpayJax guidelines. First Coast No More Homeless Pets, Inc. (FCNMHP) has enlisted 13 local veterinary offices to participate in the SpayJax Program and receives a $7.50 administrative fee for every surgery that is performed and reimbursed through the Program. During FY 2002/2003, 2,910 procedures were performed through the SpayJax Program at a total cost to the City of $206,808. STATEMENT OF OBJECTIVES The objectives of the audit were as follows: 1. To determine whether applicants whose pets were altered (spayed and neutered) through the SpayJax Program administered by First Coast No More Homeless Pets, Inc. met the requirements of the SpayJax Contract (City of Jacksonville Contract #8441). 2. To determine whether First Coast No More Homeless Pets, Inc. is operating in compliance with the SpayJax Contract and to ascertain whether reimbursements submitted to the City and the participating veterinary offices for alterations performed through the SpayJax Program were accurate and properly supported. 117 West Duval Street Jacksonville, Florida 32202-3701 Telephone (904) 630-1625 Fax (904) 630-2908

STATEMENT OF SCOPE Our audit scope for detailed testing included all spays and neuters performed and reimbursed by the City through the SpayJax Program from December 2002 through September 2003, all payments made by FCNMHP to the participating veterinary offices during December 2002 through September 2003, and all reports submitted to the City by FCNMHP during December 2002 and September 2003. STATEMENT OF METHODOLOGY The methodology varied depending on the audit objective. Sample sizes and selections were made using the statistical sampling function in IDEA, our data analysis software package. We performed additional analysis as necessary to assure compliance with the contract. STATEMENT OF AUDITING STANDARDS We conducted our audit in accordance with generally accepted government auditing standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to afford a reasonable basis for our judgements and conclusions regarding the organization, program, activity, or function under audit. This audit also included an assessment of applicable management controls and compliance with requirements of laws and regulations when necessary to satisfy audit objectives. We believe that our audit provides a reasonable basis for our conclusions. AUDIT CONCLUSIONS We noted the following conclusions for each audit objective, respectively: 1. We cannot ensure that all applicants whose pets were altered through the SpayJax Program met the requirements of the Program due to a combination of missing and insufficient documentation. Of the 159 SpayJax certificates reviewed during our audit, we noted exceptions on 30 of the certificates (18.9%), with a combined value of $2,250. If we extrapolate these results to the total population of 1,876 alterations performed and reimbursed through the SpayJax Program during our audit period it is estimated that 354 alterations would be questionable. These alterations would amount to a total estimated cost to the City of $26,261. 2. First Coast No More Homeless Pets is not operating in full compliance with the SpayJax Contract with regard to program administration. However, it was noted that reimbursements submitted to the City and made to the participating veterinary offices were properly supported by a voucher and invoice and accurate, in most instances. The Department of Neighborhood s responses to our findings and recommendations are attached as Appendix A and First Coast No More Homeless Pets, Inc. responses to our findings and recommendations are attached as Appendix B. Overall Observation #1 According to Section 462.302 of the Municipal Code of the City of Jacksonville, unless otherwise exempted by this part, every owner maintaining a dog or a cat over the age of four months is required not less than annually to have it inoculated against rabies and licensed by the city. Violation of this section shall constitute a class B offense against the city. 2

Individuals who have their pet altered in the SpayJax Program are receiving a free inoculation, but are not required to license their pet through the City at the time of the alteration. The City of Jacksonville is, in effect, paying to have these animals altered and many, if not the majority, of these animals will not be licensed. Recommendation to Overall Observation #1 We recommend that the City s contract with FCNMHP be amended to include a requirement that the pet owner be required to purchase a City pet license from the veterinarian s office at the time of the spay or neuter. Overall Observation #2 Neither the City Contract with FCNMHP nor FCNMHP s internal policies address how alterations should be provided to pet owners of multiple pets. During our review of the SpayJax certificates randomly selected for detailed testing, we noted several instances where individuals have had multiple pets altered through the SpayJax Program. In addition, information received from FCNMHP indicated that from December 2002 through September 2003, 79 individuals had a combined total of 850 pets altered through the Program, with three individuals having over 40 pets (each) altered through the Program during this time period. Theses 850 alterations represent twenty-nine percent (29%) of the total number of alterations performed through the SpayJax Program during the 2002/2003 fiscal year. Recommendation to Overall Observation #2 We recommend that the City develop a policy that addresses how ownership of multiple pets is handled through the SpayJax Program. AUDIT OBJECTIVE #1 To determine whether applicants whose pets were altered (spayed and neutered) through the SpayJax Program administered by First Coast No More Homeless Pets, Inc. met the residency and income requirements of the SpayJax Contract (City of Jacksonville Contract #8441). Internal Control Weakness #1-1 To qualify for services through the SpayJax Program an individual is required to be a resident of Duval County and meet established low-income requirements. The income requirements include proof of participation in a State or Federal Aid Program; including Food Stamps, Medicaid, Women Infants Children (WIC), Supplemental Security Income (SSI), Section 8 Public Housing, Aid to Families with Dependent Children (AFDC) or Temporary Assistance to Needy Families (TANF), or meeting certain gross household income requirements. During our review of the SpayJax certificates randomly selected for detailed testing, we noted several instances where the required documentation was available; however, we found it difficult to determine whether the documentation adequately justified low-income status and qualification through the Program. Recommendation to Internal Control Weakness #1-1 We recommend that the City review the various forms of income documentation currently accepted and specify the documents acceptable to verify the residency and income requirements. As a recipient of public funds, it is imperative that FCNMHP make every effort 3

to reduce or eliminate fraudulent claims of low-income status. Having requirements that are too stringent may deter some from having these surgeries performed on their animals, but by making qualifying overly simple, one may unknowingly invite fraudulent activity or abuse into the Program. Finding #1-1 Of the 159 SpayJax certificates randomly selected for detailed testing, we were unable to locate two (2) of the certificates (1.3%) with attached documentation. FCNMHP was able to provide a copy of the certificate, however income documentation to support qualification in the SpayJax Program was not available for these certificates. Recommendation to Finding #1-1 We recommend that FCNMHP ensure that all SpayJax procedures to be reimbursed through the Program be supported by a completed certificate and filed in numeric order with the appropriate documentation attached before payment is made. Finding #1-2 Of the 159 SpayJax certificates randomly selected for detailed testing, two (2) surgeries were provided to individuals who were not residents of Duval County. Recommendation to Finding #1-2 We recommend that FCNMHP ensure that all SpayJax surgeries invoiced to the City meet the residency requirements established in the Contract. In addition, we recommend that Animal Care and Control randomly review the certificates submitted by FCNMHP for reimbursement, in order to ensure that the requirements of the Contract are being met. Finding #1-3 Of the 159 SpayJax certificates randomly selected for detailed testing, 16 certificates (10.1%) did not have income documentation attached to support qualification in the SpayJax Program. Recommendation to Finding #1-3 We recommend that all certificates which are presented to FCNMHP without appropriate income documentation be returned to the veterinarian s office for additional documentation. If the appropriate documentation cannot be obtained, the certificate should not be reimbursed through the SpayJax Program. In addition, we recommend that Animal Care and Control randomly review the certificates submitted by FCNMHP for reimbursement, in order to ensure that the requirements of the Contract are being followed. Finding #1-4 Of the 159 SpayJax certificates randomly selected for detailed testing, eight (8) certificates (5.0%) had income documentation attached, but the documentation did not appear sufficient to justify low-income status for the individual. Examples of insufficient documentation noted during our audit included a letter from a roommate, a blank bank statement, and other various documents of indeterminate origin. 4

Recommendation to Finding #1-4 As noted in the Recommendation to Internal Control Weakness #1-1, we recommend that the City specify the various forms of income documentation acceptable to document the income of the applicant. Finding #1-5 Of the 159 SpayJax certificates randomly selected for detailed testing, required signatures were missing from four (4) of the SpayJax certificates. One (1) SpayJax certificate was missing the signature of the veterinarian and three (3) certificates were missing the signature of the pet owner. Recommendation to Finding #1-5 We recommend that all certificates that are presented to FCNMHP without appropriate signatures be returned to the veterinarian s office for correction. If the appropriate signatures cannot be obtained, the certificate should not be reimbursed through the SpayJax Program. In addition, we recommend that Animal Care and Control randomly review the certificates submitted by FCNMHP for reimbursement, in order to ensure that the requirements of the Contract are being followed. AUDIT OBJECTIVE #2 To determine whether First Coast No More Homeless Pets, Inc. is operating in compliance with the SpayJax Contract and to ascertain whether reimbursements submitted to the City for alterations performed through the SpayJax Program are accurate and properly supported. Finding #2-1 The Contract between the City of Jacksonville and First Coast No More Homeless Pets, Inc. is based on a voucher system, whereby FCNMHP provides SpayJax vouchers to qualified pet owners for the surgical sterilization of their pet at a participating veterinary office. In addition to reviewing an applicant s qualifications and distributing SpayJax vouchers, FCNMHP is responsible for compiling veterinary invoices and billing the City for the monthly services performed. For administering these services, the Contract provides a $7.50 administrative fee to FCNMHP for every animal that is altered through the Program. However, during discussions with FCNMHP and our review of the SpayJax Program, it was noted that the Program is no longer operated in accordance with the Scope of Services outlined in the City of Jacksonville Contract #8441. As currently operated, the responsibility of qualifying individuals for the SpayJax Program has been transferred to the participating veterinary offices. FCNMHP no longer verifies income or residency or acts as the administrator of the SpayJax Program, but rather as a pass through billing agency between the City and the participating veterinary office. Recommendation to Finding #2-1 We recommend the administration review the Contract with FCNMHP and determine whether it would be more economical for the City to perform the billing functions that are currently being handled by FCNMHP. 5

Finding #2-2 The participating veterinary offices bill FCNMHP for services performed. FCNMHP in turn bills the City. During our review of the invoices submitted to the City by FCNMHP, one (1) instance was noted in which the City was under billed by $50.00 due to an error in the invoice. Recommendation to Finding #2-2 We recommend that FCNMHP take the necessary actions to correct the underpayment. Finding #2-3 During our review of all payments made to the veterinary offices by FCNMHP for Invoices #1 through #12, we noted two (2) instances where payments to the veterinary offices differed from the amount invoiced to the City. A $50.00 overpayment was made to one veterinary office and a $100.00 underpayment was made to a second veterinary office. It should be noted that these payments did not affect City funds. Recommendation to Finding #2-3 We recommend that FCNMHP take the necessary actions to correct the over/underpayments to these two (2) veterinary offices. We wish to thank both the Neighborhoods Department and First Coast No More Homeless Pets, Inc. for the courtesy and cooperation they have extended to us during the course of our audit. Respectfully submitted, Richard Wallace Council Auditor Audit Performed by: Tasha Morgan, CPA Adam Mathews 6