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HomeMy WebLinkAboutMINUTES - 09171996 - D2 D.2 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA DATE: September 17, 1996 MATTER OF RECORD SUBJECT: Office of the Auditor-Controller Annual Performance Report for Fiscal Year 1995-1996 Kenneth J. Corcoran, County Auditor-Controller, presented both a narrated slide show and a written report to the Board of Supervisors on the performance of the Office of the Auditor-Controller during Fiscal Year 1995-1996. THIS IS A MATTER FOR RECORD PURPOSES ONLY NO BOARD ACTION TAKEN D. Z OFFICE OF THE AUDITOR-CONTROLLER t I dp J l� ANNUAL PERFORMANCE REPORT Fiscal Year 1995-96 September 17, 1996 KENNETH J. CORCORAN AUDITOR-CONTROLLER STEPHEN J. YBARRA ASSISTANT AUDITOR-CONTROLLER SECTION DEPARTMENT OVERVIEW Department Responsibilities: The functions and duties of the Auditor-Controller Office primarily are defined by law. It is the Auditor-Controller's responsibility to serve as the chief accounting officer for the County and to ensure that the functions established for the Auditor-Controller in the California, various California codes and by the Board of Supervisors are effectively performed. Additionally, the Auditor-Controller Office has assumed other duties that are not statutorily required. The Auditor-Controller serves as one of the key players on the County's Financial Team and has greatly contributed to the Financial Team's efforts. The responsibilities of the Auditor-Controller Office include the following: maintain the County's accounting records; prepare financial reports and audits for departments and special districts governed by the Board of Supervisors; authorize and account for all deposits and withdrawals from the County Treasury; monitor the County budget; perform property tax calculations and allocations; and control fixed assets. The Auditor-Controller Office has 6 divisions: 1 . Administration 2. Property Tax/Cost Accounting 3. Payroll & Budgets/Special Districts 4. General Accounting/Accounts PayableMelfare 5. Internal Audit 6. Accounting Systems (See Attachment A-Organizational Chart) The programs currently carried out by staff in the Auditor-Controller Office can be broken down into four categories. These categories are as follows: i STATUTORY RESPONSIBILITIES IN SUPPORT OF COUNTY OPERATIONS This category includes the core financial services provided to all County departments that are basic to the functioning of the County. Some of the core activities included in this category are paying the County's employees, paying the County's vendors and service providers, maintaining the County's financial records, auditing the County's records, etc. Various California Codes statutorily mandate the Auditor's role in these activities. AUDITOR'S STATUTORY RESPONSIBILITIES IN SUPPORT OF ALL COUNTY JURISDICTIONS This category basically includes the services provided by the Property Tax unit in allocating and accounting for property taxes and assessments. The Auditor's mandated responsibilities in the tax area are clearly defined in the Revenue and Taxation Code. The largest single source of discretionary County revenues is dependent upon the functioning of the Tax unit. COUNTY'S STATUTORY RESPONSIBILITES HANDLED BY THE AUDITOR The Auditor-Controller Office has assumed responsibility for certain activities, which although are absolutely necessary, do not statutorily need to be done in the Auditor's Office. Prime examples are the Welfare Accounting unit and accounting support provided to the Child Support Receipts Processing unit in the District Attorney's Office. AUDITOR'S NON-STATUTORY RESPONSIBILITIES The final category includes activities the Auditor-Controller Office has become involved with over the years that provide positive benefits to the County but are not legally mandated of the Auditor. Examples include production of the Comprehensive Annual Financial Report (CAFR), and the Auditor's involvement with the Tax and Revenue Anticipation Notes (TRANS) program. a Qualifications for Auditor-Controller.- Government uditor-Controller:Government Code Section 26881 No person shall hereafter be elected or appointed to the office of county auditor of any county unless the person meets at least one of the following criteria: ♦ The person possesses a valid certificate issued by the California State Board of Accountancy under * * * Chapter 1 (commencing with Section 5000) of Division 3 of the Business and Professions Code showing the person to be, and a permit authorizing the person to practice as, a certified public accountant or as a public accountant. ♦ The person possesses a baccalaureate degree from an accredited university, college, or other four-year institution, with a major in accounting or its equivalent, as described in subdivision (a) of Section 5081 .1 of the Business and Professions Code. ♦ The person possesses a certificate issued by the Institute of Internal Auditors showing the person to be a designated professional internal auditor, with a minimum of 16 college semester units, or their equivalent, in accounting, auditing, or finance. ♦ The person has served as county auditor, chief deputy county auditor, or chief assistant county auditor for a continuous period of not less than three years. Duties of Office: Government Code Section 26881 "The County auditor, or in counties that have the office of controller, the auditor-controller shall be the chief accounting officer of the county." 3 SECTION II RESOURCES Financial & Personnel Resources: The Auditor-Controller Office has a total of 77 allocated positions. The budget for fiscal year 1996-97 is appropriated at a net county cost of $2,075,877. The following shows the budget history and percentage ratio of net county cost to net expenditures over the past six fiscal years. BUDGET HISTORY FY 1990-91 FY 1991-92 FY 1992-93 FY 1993-94 FY 1994-95 FY 1995-96 (Actuao (Actual) (Actual) (Actual) (Actual) (Actuao Net County Cost $3,1139979 $3,239,564 $2,308,817 $1,932,630 $2,208,308 $1,925,060 Total Net Expenditures $4,665,132 $5,001,101 $4,354,279 $4,250,561 $4,619,519 $4,515,337 Full-time Permanent Positions 84 82 79 77 77 77 Ratio of NCC&Net Expenditures(NCC/Net Expend.) (Actual Budget) 70% 6> f i z �sy 60% ' if 50% F go% } ` } C U ` a0% 20% z 10% 0% 90-91 91-92 92-93 93-94 94-95 95-96 Fiscal Year (See Attachment B for Specific Information on Funding Sources and Staff Allocation by Program) 4 Affirmative Action: In compliance with the commitment of Contra Costa County's Board of Supervisors to an Affirmative Action Program and in accordance with the Equal Employment Act of 1972, the Auditor-Controller Office fully adopts and supports Contra Costa County's Affirmative Action Policy. It is the Office's primary objective to ensure equal employment opportunity for all employees to achieve their highest level of productivity and professional growth. The Auditor-Controller Office has established and will continue to provide an environment where equal opportunity exists for all people in all aspects of employer/employee relations without discrimination because of race, color, religion, sex, national origin, marital status, sexual orientation or disability. The Auditor-Controller Office ensures each employee fully understands the County's Affirmative Action Policy and acts in a manner that ensures a working environment where all employees are treated with dignity and respect. The Auditor-Controller Office's Affirmative Action Plan & Implementation Plan, which include the Office's workforce data, were submitted to the Equal Employment Advisory Council and the County Administrator Office. The Equal Employment Advisory Council is in the midst of reviewing and evaluating all County Plans. Although hiring activity has been limited during the past two years, the Auditor-Controller Office has been able to maintain staffing levels. Additionally, several promotional transactions occurred in the Office. Eleven (11) employees were reclassified from administrative support positions to professional/paraprofessional classifications. Female representation in the Professional Occupational Category increased by 10%. Representation of Asian/Pacific Islanders increased by 2.1% and Filipinos by 1.5%. (See Attachment C for Workforce Data) 5 Sick Leave: The policy of the Auditor-Controller Office is governed by Administrative Bulletin 411 .6 and Local 2700's Memorandum of Understanding. All employees are aware of the guidelines set forth in these documents, and each manager and supervisor is responsible for ensuring compliance with his/her division and addressing misuse accordingly. The Office has had a 9% reduction in sick-leave usage over the past eight months. Staff Development: Evaluations The Auditor-Controller Office recognizes the importance of conducting annual-performance evaluations of employees. The Administrative staff supports the County Administrator Office's and Board of Supervisor's philosophy that formal, written-performance evaluations provide an excellent opportunity to review an employee's performance and to establish future goals and objectives for the upcoming year. All represented and management employees receive annual-performance evaluations even after reaching the top step of their classification. All new employees and transfers also receive a written evaluation after three months of employment and their probationary period, which usually is six months. Professional Development The Auditor-Controller Office expects managers and supervisors to support the development of their staff and to assist them in obtaining their highest level of productivity and professional growth. Ongoing communication and interaction are provided by all managers and supervisors. Each manager conducts monthly division meetings and some units, such as Payroll, conduct ongoing problem-solving work sessions. Employees are strongly encouraged to participate in the training courses offered by the Training Institute to enhance their professional development. 6 The Office also encourages employees to pursue the necessary course work requirements to promote into higher-level classifications. The classification series in the Auditor-Controller Office is set up to allow account clerk staff to enter into paraprofessional and professional accounting classifications. The Office has shown its support of professional development by ensuring all employees are aware of the training reimbursement policy and allowing some flexibility in work hours. A few years ago the Affirmative Action Committee also coordinated a college governmental accounting course, which was open to all County clerical and professional accounting staff. The course was offered through University of California Berkeley, but conducted at the Training Institute in Martinez as a convenience to employees. Employees who become Certified Public Accountants and Certified Internal Auditors receive a 5% monthly differential. Presently, the Office is in the midst of installing new computers. All employees will have access to a computer and receive 32 hours of in-house computer training on the new Windows 95 software package, which includes training on Windows, Word, Excel and Access. The Office also supports the professional development of staff by obtaining annual memberships to various professional accounting associations, such as the American Payroll Association, National Association of Local Government Auditors, Association of Government Accountants, Information Systems Audit and Control Association, etc. The Department also subscribes to the Government Accounting Standards Board (GASB) to receive the updated accounting pronouncements and receives the Constitution and California updated codes. Employees also have access to numerous other accounting, auditing, and system publications. Staff members are encouraged to attend seminars and meetings and to participate on a variety of professional accounting/auditing committees. For example, many of the Internal Auditors serve in leadership roles within the local and national Association of County Auditors. The Auditor-Controller and Assistant Auditor-Controller are recognized as experts in their field. The Assistant Auditor-Controller is considered as one of the primary technical experts in the area of property-tax administration and served on the Proposition 172 Implementation Committee. The Auditor-Controller chaired the statewide Tax Managers' Committee and served on the Tax- 7 Shift Guidelines Committee. This month the Auditor-Controller was asked, on behalf of the State of California and the State Controller, Kathleen Connell, to serve on the Controller's Advisory Committee on County Accounting Procedures. AUTOMATION: As mentioned, the Office is installing new computers. The implementation of a Local Area Network is underway, and all employees are receiving training in the Windows 95' software package. Each division is reviewing and analyzing its operations and, where feasible, automating its processes. (See Section V for Additional Information on Automation) SECTION III CUSTOMER SERVICES Customer Profile: The Auditor-Controller serves all the citizens of Contra Costa County by ensuring the fiscal integrity of the overall financial operations of the County. As an elected official, the Auditor-Controller's first consideration is to serve his countywide constituents by carrying out the multitude of statutory requirements that are imposed on the Auditor-Controller. In carrying out these statutory requirements, County departments, employees as well as other jurisdictions,such as the school districts, special districts and cities are served. The Auditor-Controller Office also provides services to the Contra Costa Transit Authority and Metropolitan Transportation Commission and cooperatively works with the County's Taxpayer Association and City Finance Directors. Customer Relationships: It is the Auditor-Controller Office's objective to provide its customers with timely, accurate and personable service. The Office is committed to achieving customer satisfaction and continually looks for ways to streamline processes and improve services. This year the Accounts Payable unit 8 streamlined the "employee demand" process, providing faster reimbursement to employees. Additionally, this year staff from Human Resources and the Auditor-Controller formed a Payroll/Personnel Process Committee. The Committee is identifying and reviewing the payroll/personnel processes, procedures, and time frames to develop guidelines and training material for line departments. In 1994, the Internal Audit Division developed a performance survey to measure the satisfaction of its customers. This survey is completed by the client and is used as a means of assessing the performance of the Division. One of the goals of Administration is to develop similar type surveys for each division. The objective is to define each division's customers and expected level of service and then to develop surveys and other tools to measure performance and customer satisfaction. SECTION IV ANNUAL PERFORMANCE Performance Indicators by Division: GENERAL ACCOUNTING/ACCOUNTS PAYABLEMELFARE DIVISION The General Accounting/Accounts Payable/Welfare Division provides services to all County departments, fire districts and some special districts. The Division is responsible for maintaining the computerized general accounting records and for processing demands, purchase orders and contracts. This Division also is responsible for handling the County's Welfare Accounting unit. ♦ Financial Record Keeping 30+Dpts./35 Districts ♦ Vendor Payments $596,874,000 ♦ Vendor Checks 84,628 9 ♦ Demand Payments $11954,000 ♦ Demand Checks 18,643 ♦ Welfare Payments $163,287,127 ♦ Welfare Checks 403,884 ♦ Food Stamps ATP's $42,5881678 ♦ Food Stamps Coupons 284,798 PAYROLL & BUDGETS DIVISION The Payroll and Budgets Division is responsible for processing payroll for all County departments, most fire districts and some non-county regional agencies. The Division also is responsible for assisting in preparing the budget documents for the County and special districts, including compilation and generation of all schedules and monitoring expenditures for budget compliance. Recently, the Division also has assumed the responsibility for administering the Tax and Revenue Anticipation Notes program, and providing accounting support to the Child Support Receipts Processing unit in the District Attorney's Office. ♦ Payroll Payments $360,300,000 ♦ Payroll Checks & Direct Deposit 198,000 ♦ Wage Attachments & Levies $1,139,000 ♦ W-2s Issued 10,140 10 INTERNAL AUDIT DIVISION The Internal Audit Division is responsible for developing and executing audit programs for the examination, verification and analysis of the financial records, procedures and internal controls of County departments, special districts and other agencies governed by the Board of Supervisors. This Division provides reports to management that include objective analyses, appraisals, comments, and recommendations on County financial operations. In addition to performing required and discretionary financial audits, the Internal Audit staff has participated in some operational reviews with staff from the County Administrator Office. The Internal Audit Division recently has assumed the responsibility for producing the Comprehensive Annual Financial Report. ♦ Completed Audits 30 Including: Retirement Association; Airports Treasurer's Cash (quarterly); Municipal Courts; and Special Districts. PROPERTY TAX/COST ACCOUNTING DIVISION The Property Tax Division is responsible for allocating and accounting for property taxes and assessments. This Division also is responsible for coordinating SB90 claims and preparing the countywide Cost Allocation Plan. ♦ Distributed Taxes 200 Jurisdictions ♦ Property Taxes & Assessments Allocated $861,000,000 Distribution: County 12.1%; Special Districts 20.7%; Cities and City Districts 8.4%;Redevelopment 8.3%; Schools 50.5%. PRIMARY ACCOMPLISHMENTS 171 Continued consolidation of Tax Rate Areas, reducing system and manual process time. Automated supplemental, unsecured, and secured refunds, resulting in the following operational improvements: eliminates refund claiming process, reduces time needed to pay refunds, and reduces manual labor. Expanded Internal Audit's services to include participating in some specific operational reviews with staff from County Administrator Office. 17P Received Certificate of Achievement for Excellence in Financial Reporting. 171 Implemented a streamlined employee demand process resulting in faster reimbursement to employees, and a more efficient work process. Started implementation of a Local Area Network and standardization of software throughout the Office. 171 Completed financial analysis of the effect of the Pension Obligation Bonds Program and Prepayment to the Retirement Board for Fiscal Year 1995/96. W/P.O.B. & Pre-Pay 469712,000 ,W/Out P.O.B. & Pre-Pay 5199669000 Interest Earnings Lost (5509000) Net Benefit to County's 4,704,000 General Fund Participated in the Tax and Revenue Anticipation Notes $600,000/Yr. 12 17P Initiated Teeter Borrowing to Enhance the TRAN $400,000/Yr. SECTION V CHALLENGES AND NEW DIRECTIONS Challenges/The Future: The Auditor-Controller Office's continual challenge is to keep current with the evolving advancement of technology. There are three primary mission- critical systems: 1) Payroll System, 2) Finance System, and 3) Property Tax System. These systems are extremely antiquated and run on the mainframe. One primary objective of the Office is to install new systems to improve operations, increase efficiency, and ensure that the statutory requirements of the Auditor-Controller continue to be met, and the Year 2000 programming issues are resolved. The Auditor-Controller Office has been working on this objective for several years. One of the first goals is to implement a new Human Resources/Payroll System that will be capable of meeting the needs and requirements of federal, state, and county governments and the Year 2000 programming issues. In March of 1996, the Board of Supervisors approved a contract with PeopleSoft, a software firm located in Walnut Creek. The PeopleSoft System is a client/server software approach with a "relational data base", which means that the information necessary for all functions of Human Resources and Payroll will be located in a common-shared data base. This will eliminate the current duplication of effort between our the Auditor- Controller Office and Human Resources Department and provide for purer and more accurate data. Additionally, the entire County will benefit from the new System; departments will have on-line access to reports and be able to process new hires, promotions, and pay-rate changes faster and easier. Implementation of the new system is scheduled for May of 1997 for Human Resources, and January of 1998 for the Auditor's Office. The Auditor-Controller Office also has begun the initial research and planning stages for a new Finance System, which hopefully will be implemented in 1999. Additionally, the Department is in the midst of implementing a Local Area Network (LAN). Although the LAN absolutely is 13 necessary to support the new Human Resources/Payroll System, it also has several other benefits as follows: • The Auditor-Controller Office will have access to the County's Wide Area Network, which allows a shared data communication infrastructure. • Ability to standardize software and ensure all critical files are backed-up on the main server. * Security will be improved by maintaining files on the main server. 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Our department will continue to work with Human Resources when developing a recruitment plan to fill vacancies in our department. Although hiring activity has been limited during the past two years,the Auditor's Office has been able to maintain staffing levels. Additionally, several promotional transactions occurred in the Office. Eleven (11) employees were reclassified from administrative support positions to professional/ paraprofessional classifications. Female representation in the Professional Occupational Category increased by 10%. Representation of Asian/Pacific Islanders increased by 2.1% and Filipinos by 1.5%.