HomeMy WebLinkAboutMINUTES - 12101996 - D.1-D3 D. 1
THE BOARD OF SUPERVISORS
OF CONTRA COSTA COUNTY, CALIFORNIA
DATE: December 10 , 1996 MATTER OF RECORD
SUBJECT: First Quarter Budget Report
On this date, the Board of Supervisors considered the report
from the County Administrator on the First Quarter Budget Report .
THIS IS A MATTER FOR RECORD PURPOSES ONLY
NO BOARD ACTION TAKEN
1
TO, BOARD OF SUPERVISORS - _ Contra
FROM: Phil Batcnelor, County Administrator Costa
County
Ei3.w a
DATE: December 10 1996
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SUBJECT: FIRST QUARTER BUDGET REPORT
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
1. ACCEPT this report and DIRECT the County Administrator to continue to monitor
the budget and implement corrective plans, where necessary.
BACKGROUND:
Since 1984, the County Administrator's Office has prepared quarterly reports which
analyze the status of the budget and highlight the budget units which deviate from the
budget plan in terms of expenditures and revenues. Actions which are necessary to
ensure a healthy budget by the end of the year are recommended as part of the quarterly
reporting process. Other items which have major fiscal impacts are also reviewed as part
of this period report. The Administrator's Office review of budgets over this three month
period revealed that all Departments are projected to comply with their budget
authorizations, except as noted below.
General County Revenue
It is too early to determine the overall status of revenues relative to the budget plan. The
status of property tax revenues, which make up 53% of general county revenues, will not
be known until January when distributions are made to all taxing agencies. The other
major revenue sources are showing mixed results at this point in the fiscal year. Motor
vehicle registration fees, property transfer tax and transient occupancy taxes are above
targeted levels at the first quarter period. On the other hand, interest earnings and sales
taxes are below target and below last year's level for this period
� of time.
E-9-0,CONTINUED ON ATTACHMENT: _YES SIGNATURE: `'—9-0,
—RECOMMENDATION OF COUNTY ADMINISTRATOR —RECOMMENDATION OF BOARD COMMITTEE
_APPROVE _OTHER
SIGNATUREM:
ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED
Contact: PHIL BATCHELOR,CLERK OF THE BOARD OF
cc: Auditor-Controller, Social Services SUPERVISORS AND COUNTY ADMINISTRATOR
County Administrator, Community Services
Sheriff
Probation
Coordinated Trial Courts By DEPUTY
D . (
Page 2
General County Revdnue continued
A continuing concern about property tax revenue remains the significant amount of
property tax assessments being appealed by private industry. Billions of dollars of property
assessments are currently under appeal by business and industry which has the potential
of millions of dollars in revenue losses to various units of local government. Over the last
11 months,the Assessor has allocated significantly more resources to assessment appeals
and is carefully monitoring this critical area.
Sheri
The She,3f-Coroner Agency is at slightly lower than expected expenditure levels for the
first quarter of fiscal year 1996-97 because approved employee cost-of-living expenses are
not reflected in the first quarter cost figures. Consideration of these costs would put the
Sheriffs Agency on target for the first quarter.
Actual revenues are significantly lower than a straight line budget plan primarily because
of the lag time associated with the receipt of state and federal revenues. The Department
has received, for example, only one month's allocation of Proposition 172 funds as of
October. Contract city revenues, another significant funding source for the Department,
also lag about one month behind resulting in an artificially low projection.
Based on first quarter finance figures, the Department is expected to achieve a balanced
budget by the end of the fiscal year.
Probation
Probation Department expenditures are at anticipated levels for the first quarter of fiscal
year 1996-97. Actual revenues, however, appear low due to the customary lag time in the
receipt of state and federal revenues. For example, the Department has not yet received
its ranch subsidy revenue from the state nor the revenues associated with several grants.
However, all of these revenues are anticipated to be received before the end of the fiscal
year.
Other operational indicators which have historically predicted potential budget woes are
currently at budgeted levels, such as the Juvenile Hall population and the number of
youths in private placement. These indicators bode well for the Department budget in the
first quarter. With continued prudent fiscal management, the Department is expected to
end the year with a balanced budget.
The Probation Department recently submitted its application for the planning phase of the
Juvenile Crime Enforcement and Accountability Challenge Grant Program, which could
ultimately gain up to $2 million in grant funds for juvenile probation programs. The
Department has hired a consultant to assist in the preparation of the Local Action Plan
which will be used as the basis for the application for implementation funds.
Coordinated Trial Courts
Expenditures in the Superior and Municipal Courts are lower than the straight line budget
plan, reflecting the tenuous budget situation between local trial courts and the state. The
state's failure to take action on AB 2553, the trial court funding restructuring bill, has left
the courts without the necessary state funding to function for fiscal year 1996-97. Although
the courts' budget uncertainties are expected to be resolved when the 1997 Legislature
convenes in January, the level of state trial court funding may result in a funding gap up
to $5 million, which would have to be addressed through expenditure reductions or new
revenue sources.
D,
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Coordinated Trial Courts continued
In recognition of the budget uncertainties, the courts, through the Presiding Judge, have
agreed to operate in a manner consistent with last year's spending levels. The County
Administrator continues to work with the Coordinated Trial Courts to prepare contingency
cost reduction plans which would enable the courts and the County to take swift corrective
action to balance the courts' budget.
Health Services
The Health Services Department is currently projecting a budget shortfall of$1.5 million,
excluding cost-of-living adjustments. It is anticipated that a supplemental Medi-Cal
adjustment may become available to the SB 1255 program that will address the shortfall.
A decision regarding the availability of funding will be made by the California Medical
Assistance Commission in March or April of 1997. The Department will continue its
stringent cost control measures to ensure a balanced budget by year end.
Social Service
The Social Service Department is currently projecting an overall balanced budget. Two
areas are of particular concern: In-Home Supportive Services (IHSS) and the impact of
Welfare Reform on General Assistance.
The IHSS program faces a budget deficit of up to $870,000 due to increases in the
minimum wage and a state audit exception. Minimum wage increases from $4.25 to $4.75
per hour have increased the County's share of cost by an estimated $526,000. The state
minimum wage increase to $5.00 per hour on March 1, 1997 will add another $87,000 of
county costs. In addition, a poorly written state policy led to program "over payments" in
all California counties. The state now wants repayment of$257,000 from Contra Costa
County. The County has joined with other counties to protest the audit exception. if the
protest is successful, the IHSS program deficit will still be an estimated $613,000.
At this ti-. e, it is impossible to predict the full impact of welfare reform on General
Assistance, since the state has not yet developed its welfare reform implementation
strategy. Counties are advocating a state plan that holds the counties harmless from
General Assistance cost increases. Currently, two groups will no longer be eligible for
federal aid: SSI recipients qualified under substance dependency and legal aliens. The
Department has made a concerted effort to assist the 1350 Contra Costa SSI recipients
to requalify under other criteria. However, the response to date has been disappointing.
The Department will continue to closely monitor its budget and will recommend program
reductions as necessary to ensure a balanced budget by year end.
Community Services
The Community Services Department ended last fiscal year with a $858,601 deficit, which
was absorbed by the General Fund. The budget and financial issues identified last fiscal
year and this fiscal year are the subject of a state fiscal audit currently underway.
Additionally, a financial review by KPMG Peat Marwick has been completed and is
discussed as part of a separate Board agenda item to follow this item. Finally, an
investigation is being conducted by the Federal Department of Health and Human Services
regarding a former contract agency with Head Start.
Budget deficits in the Community Services Department have been presented to the Board
at various times including July 25, August 13 and September 24. Also, the matter is on
referral to the Finance Committee and the Community Services Block Grant and Head
Start portions of the Department budget is under review by the Family and Human Services
Committee.
Page 4
Community Services continued
Community Service Department budget problems continue as the Director of Community
Services estimates the 1996-97 budget deficit to approximately $300,000. This estimate
anticipates various audit disallowances, known at this time, for costs incurred in this and
last fiscal years and potential added expenses for Head Start. Greater budget overruns
were avoided in August when the Board approved the recommendations of the Director
to eliminate ten positions.
A2
TO: FOARD OF SUPERVISORS Contra
FROM: SCOTT TANDY, DIRECTOR 3 „ Costa
COMMUNITY SERVICES DEPARTMENT County
DATE: DECEMBER 10, 1996
SUBJECT: STATUS REPORT ON DEPARTMENT
SPECIFIC REOUESTIS)OR RECOMMENDATION(S)b BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
1. ACKNOWLEDGE receipt of the KPMG Peat Marwick report independently
observing and reviewing selected department activities and
identifying areas of serious concern, dated November 15, 1996.
2 . ACKNOWLEDGE receipt of report from State Department of Community
Services and Development Monitoring Visit, identifying ten contract
compliance concerns and issues, dated October 28, 1996, and
AUTHORIZE County Administrator and Community Services Department
Director to prepare response.
3 . ACKNOWLEDGE request from Office of Inspector General, Federal
Department of Health and Human Services, requesting access to
review all records, demands, contracts and correspondence regarding
United Council of Spanish Speaking Organizations.
4. ACKNOWLEDGE receipt of final closing FY 1995-96 department accounts
and department budgets for Head Start, Energy and Weatherization,
Community Action Programs and Child Care in Community Services
(0588) , and Child Development (0589) , recognizing year-end deficit
of $858, 601.
5. DIRECT Community Services Director to work with KPMG Peat Marwick
and Auditor-Controller to correct areas identified in their review.
6. DIRECT Community Services Director to respond and work with State
Department of Community Services and Development to resolve
identified contract compliance issues.
�
CONTINUED ON ATTACHMENT: _YES SIGNATURE: � (�/,t It ;
_RECOMMENDATION OF COUNTY ADMINISTRATOR _RECOMMENDATION OF BOARD COMMITTED'I
_APPROVE __OTHER
SIGNATURE(S): -- -
ACTION OF BOARD ON December 10,..1996 - APPROVED AS RECOMMENDED X OTHER X
ACCEPTED report from the Community Services Director on the current status of the Community Services
Department and APPROVED recommendations as set forth above; REFERRED to the 1997 Family and Human
Services Committee for monitoring the Community Services Department programs and budget; and DIRECTED
the Community Services Director to provide a departmental status report to the Board of Supervisors
in the first quarter of 1997.
VOTE OF SUPERVISORS
1 HEREBY CERTIFY THAT THIS IS A TRUE
—UNANIMOUS(ABSENT I AND CORRECT COPY OF AN ACTION TAKEN
AYES: I, IV, V and II NOES: None AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: None ABSTAIN: III OF SUPERVISORS ON THE DATE SHOWN.
MQ�T; Scott Tandy 313-7369
ATTESTED December 10 1996
CC: CAO
IL CHELOR,CLERK OF THE BOARD
CSD ISORSANOCOU AD INIS ATOR
County Counsel
M362 (10/88)
7. DIRECT Community Services Director to continue cooperation with the
Federal Office of the Inspector General and provide additional
information requested to assist in the ongoing investigation of the
United Council of Spanish Speaking Organizations contract.
8. DIRECT staff to take all necessary steps to bring all programs in
the Community Services Department into compliance and to complete
investigation of any improprieties identified in any County, State
or Federal review, audit or investigation and report back to the
Board.
BACKGROUND
Since April, 1996, I have provided you information and status
reports on the fiscal and operational conditions regarding the
Department of Community Services. My prior reports to you included
the following:
• 30-day report to County Administrator, May 7, 1996
• 90-day report to Board of Supervisors, July 25, 1996
• Status report on department budget, August 12, 1996
• Periodic reports to the Family and Human Services Committee on
department activities and contracts with Pittsburg Preschool
Coordinating Committee and United Council of Spanish Speaking
Organizations, CSBG and Head Start
KPMG-Peat Marwick Review and Observations
The Board authorized the hiring of the County's independent audit
firm of KPMG-Peat Marwick to conduct an independent review and
report of observations involving department activities from January
11 1995, through June 30, 1996. The report dated November 15,
1996, has been completed and is attached for your review. (See
Attachment 1. )
The report's observations, I believe, verify many of the concerns
brought to your attention over the past few months. While an
executive summary is included, I recommend that the 21-page report
be read fully.
State Community Services and Development Monitoring Report #B96-016
and Fiscal Audit Review #AR96-002 (Attachments 2 and 3)
The State Department of Community Services and Development (State
CSD) provided the result of its August monitoring visit on October
28, 1996. The review focused on administrative and programmatic
activities and procedures for 1995 and 1996 Community Services
Block Grant, Weatherization, and Homeless Program contracts. The
11-page report contains ten (10) findings and recommendations.
The findings of this report substantiate many of the concerns that
I originally brought to your attention over the past four or five
months. A total of $106,506 has either been disallowed by the
State or must be returned as of this date.
The problem contracts are the Community Services Block Grant,
Weatherization, Emergency Homeless Program (Stewart B. McKinney)
and inappropriate consultant contract charges against CSBG funds.
Additional findings are the following:
1. Corrective action has not been taken to clear prior year
findings regarding board vacancies on the Economic Opportunity
Council and improving the timely submission of required
reports and contracts.
2 . Economic Opportunity Council bylaws and operation issues have
been ignored.
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3 . A policy has not been established with regard to assisting
department employees with weatherization services and avoiding
potential conflicts of interest.
4. The State has suspended CSBG and Weatherization payments
pending the receipt of corrected reports and contract amend-
ments. The amount at risk exceeds $200, 000 at this time.
5. The State was unable to verify $24,959 of expenditures in the
Stewart B. McKinney homeless contract that department staff
had claimed for expenditure. This matter is currently being
investigated.
The State requested an initial response on November 25; however an
extension until December 14 was granted. Now that the State fiscal
audit review team has arrived and additional findings may surface,
an additional 30 day extension for the County's response has been
requested. (See Attachment 4. )
Federal Investigation by Office of Inspector General
I was contacted on November 8 by the U. S. Department of Health and
Human Services Office of Inspector General requesting information
regarding several issues surrounding the contractual involvement
with United Council of Spanish Speaking Organizations for the Head
Start Program. (See Attachment 5. ) Agents from the San Francisco
Field Office of Investigations are currently on site conducting
their investigation.
We are cooperating fully in their request for information and their
request for a secure room in which records and pertinent documents
are being held. A copy of my memo to all staff regarding the
County, State and Federal reviews, audits and investigations is
attached. (See Attachment 6. )
COMMUNITY SERVICES PROGRAM UPDATES
Read start Division
On May 28 a federal review team authorized the County to continue
as the grantee for the federal Head Start program. Since that time
significant organization and personnel changes have taken place
leading to the hiring of a new permanent Director who will take
charge on January 13 , 1997. The program is in a period of recovery
and is being restructured to better accommodate the needs of
families and children at 14 Head Start sites serving 1200 children
throughout Contra Costa County. The Regional office has advised
that it will be conducting another on-site program review instru-
ment (OSPRI) in March 1997 similar to the one done a year ago. The
purpose of the review is to gauge the progress we have made in
correcting deficiencies and eliminating non-compliance issues.
The 1995 Deficit of Head Start Local Match of $253, 000 reported
earlier this year to the Board has been identified and resolved.
Weatherization and Energy Division
There was a significant deficit created in the Energy and
Weatherization Division due to failure to appropriately control
expenses. This imbalance first became apparent in late 1995.
However, no corrective action was taken in a timely manner, which
resulted in a year-end deficit of $200, 820. These excess expendi-
tures and low productivity required suspension of the program and
layoff of employees effective September 3, 1996.
We are currently looking at feasibility of restructuring the
program to either subcontract work to a non-profit corporation or
integrate the contract with the Housing Preservation Program
administered by the County Building Inspection Department.
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Community Action/CSBG Division
The Community Services Block Grant and the associated contracts
have been beset with delinquent reports and unauthorized expendi-
tures. This program has become the focus of the State review and
audit.
Child Development Division
The Child Development Program receives money from the State
Department of Education and provides child care and preschool
service both directly and through delegate agency contractors. The
FY 95-96 ended with a deficit of $100,214, of which $95, 000 was
funded by the County General Fund due to inadvertent overspending
by the Division.
SUMMARY OF DISALLOWANCES AND DEFICITS
1. FY 95-96 Deficit Covered by County General Fund
The County General Fund absorbed the Community Services
Department's deficit for FY 1995-96 in the amount of $858, 601,
which was divided between Budget Units 0588 Community Services,
$758, 387 and Budget 0589 Child Development, $100,214 , respectively.
2 . Projected Deficit for FY 1996-97
At this time, we tentatively forecast a budget deficit in FY 1996-
97 in the range of $304, 064 . This estimate anticipates various
audit disallowances known at the time for costs incurred in this
and last fiscal years as well as potential additional expenses for
both the 1996 and 1997 Head Start grants. Greater budget overruns
were avoided in August when the Board approved the elimination of
ten positions. Since the State fiscal audit and Federal investiga-
tion have not been completed, additional issues may arise which
will require General Fund support.
The current list of known issues that will or may require General
Fund support is:
A. Disallowance of Charges for Paradigm Innovations
The October 28, 1996, monitoring report from the State CSD
requests return of all charges billed by the department to the
1995 and 1996 Community Services Block Grant contracts in
connection with unauthorized contract services provided to the
department by Paradigm Innovations. Paradigm's contract with
the department expired October 31, 1996. The County General
Fund in the amount of approximately $32 , 000 will be required
to cover these unauthorized and disallowed costs.
B. Disallowance of Charges for the Stewart B. McKinney Contract
(FY 94-95)
The October 28, 1996, report from the State CSD indicates that
the State reimbursed the department $24, 598 in connection with
the Steward B. McKinney Emergency Homeless Program. Depart-
ment reports submitted to the State appear to be incorrect, as
the State was unable to verify that expenditures for this
program actually occurred. The State found that a departmen-
tal employee was instructed to report to the State that all
funds had been expended. The State is requesting the return
of these funds. The County General Fund will be required to
repay this amount. Further review of this matter is pending
since it may involve falsification of reports.
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C. Questioned Charges for the Steward B. McKinney Contract
(FY 95-96)
The October 28, 1996, report from the State CSD indicates that
$11,749 in Stewart B. McKinney Emergency Homeless Program
funds were reported to the State as being expended, but the
State was unable to confirm that homeless services were
provided. County General Funds will be required to repay any
amount disallowed. State fiscal auditors are reviewing this
matter now and will determine if these costs are disallowed.
D. CSD Director's Salary
On April 10, 1996, the Director of the Community Services
Department was placed on paid administrative leave. The cost
for the Director's salary, fringe benefits and car allowance
for the period of April 10, 1996, through October 31, 1996, is
$54,624, of which $46,717 has been charged to the department's
Community Services Block Grant, Expanded State Preschool and
Child Development contracts.
We believe that it is inappropriate to charge leave to program
contracts for this length of time. The County General Fund
should cover the $46,717 and assume the costs of any addition-
al administrative leave payments from November 1, 1996,
forward at approximately $8, 100 per month.
The department will attempt to offset a portion of these costs
by allocating and charging a portion of the interim Director's
salary who is on assignment from the County Administrator's
Office.
E. Other Administrative Leave Charges
Two other employees working in the Housing and Energy Division
were placed on administrative leave in February of 1995. One
returned to work in March, 1995; the second individual
remained off work for a period of four months. Costs for both
employees for the period they did not work were billed to the
State's Weatherization contracts. Again, it is inappropriate
to charge these programs for administrative leave of this
length, and we recommend that the County General Fund be used
to reimburse the State CSD in the amount of $14 , 000.
F. FY 96-97 Housing and Energy Program Losses
As I previously reported, the Department was forced to suspend
the Weatherization and Energy programs due to significant and
ongoing program losses. Losses for the first two months of
the fiscal year were approximately $31, 000 before the program
was suspended and employees were laid off. The County General
Fund will be required to cover this deficit.
G. Unbudgeted Contractor Costs for Weatherization
A recent independent review of the weatherization program was
conducted of dwellings weatherized by the Housing and Energy
Division in July and August of 1996. The review found that of
the fourteen (14) houses inspected, six (6) failed to meet
State contract requirements, and two (2) more were failed and
labeled as hazardous. In accordance with contract require-
ments, the department must correct all contract-related
deficiencies noted in the review report. Arrangements are
being made with independent contractors to complete this work.
The County General Fund will be required to cover this cost,
which may be as high as $4,000.
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H. Administrative Charges for the 1996 and 1997 Head Start
Programs
Current projections of the department's central administration
office charged to Head Start will exceed the amount budgeted
by approximately $72, 000. While surplus funds from unfilled
1996 Head Start positions are available to cover this amount,
formal approval from both the Head Start Policy Council and
the Federal Regional office must be obtained prior to payment.
The department is projecting a similar administrative short-
fall in 1997. Unlike 1996, Head Start funds are not currently
planned in the 1997 budget to cover these costs. At this
point, it would be prudent to recognize that up to $140, 000 in
General Fund may be required to cover these charges. Every
effort will be made to reduce or eliminate this amount.
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ATTACHMENT ONE
Peat Marwick L'LP
Three Embarcadero Center Telephone 415951 0100
San Francisco,CA 94111
November 15, 1996
Mr. Scott Tandy, Acting Director
Community Services Department
County of Contra Costa
1220 Morello Avenue, Suite 101
Martinez, California 94553
Dear Mr. Tandy:
We have completed Phases I and II of our engagement for the County of Contra Costa
(the County). Our services were requested due to the County's concerns over certain
operations of the Community Services Department(the Department) which have, or may,
jeopardize prior, current and/or future funding from granting agencies.
Phase I encompassed very preliminary discussions with various Community Services
Department personnel to gain an overview of the general operations of each Division and
the general processes to account and report their operations.
Phase II encompassed a preliminary assessment of potential financial exposures
specifically related to the Community Action, Child Development, and the Housing and
Energy Divisions of the Department during the period of January 1, 1995 through June
30, 1996 in regards to their funding from grantors and the County. As agreed, adequate
time was not provided to address the other Community Services' divisions (i.e. Head
Start and Child Nutrition) or to conduct a complete assessment of the divisions reviewed.
The results of our work performed during Phase II of this engagement are included in this
report.
The work we performed in Phases I and 11 did not include all aspects of the Department's
operations. Additionally, as discussed with County personnel, this report's due date did
not allow us sufficient time to perform a detailed analysis of the Divisions. Accordingly,
other matters may have been identified had more time been allotted for Phase II.
The procedures of Phases I and 11 were not performed as part of, or in connection with,
an audit, review or compilation (as those terms are defined in the pronouncements on
professional standards issued by the American Institute of Certified Public Accountants)
of the financial statements of the County, nor do we express any audit, review or
compilation opinion with regard to our procedures. Additionally, we have not performed
any agreed upon procedures as defined in such pronouncements.
G�Peat Marwick LLP
As a result of the work performed, we are reporting to you certain findings, observations,
and recommendations that address disallowed and/or potentially disallowable costs,
compliance with grants and grant amendments, and problems with respect to grant
reporting which are summarized in the Executive Summary in Section I of this report and
which are covered in greater detail in Sections II through IV of this report.
This report is intended solely for the use of the specified user to which this report is
addressed. This report should not be used by those who have not agreed to the
procedures performed and taken responsibility for the sufficiency of the procedures for
their intended purposes. ,
We have discussed with County personnel our recommendation that a Phase III project
should be considered. We believe that Phase III should include, at a minimum, a detailed
evaluation of the financial exposures and internal controls over the expenditure, reporting
and budgeting processes of the entire Community Services Department including more
comprehensive recommendations for improvements. Based upon our observations during
Phase II of this engagement, we strongly recommend that the County consider
authorizing the completion of Phase III of this project in order to more fully assess its
funding risks and in order to identify steps to improve its internal controls and reporting
to the various funding agencies.
The attached report has been structured into the following sections:
• Executive Summary
• Observations of the Community Action Division
• Observations of the Child Development Division
• Observations of the Housing and Energy Division
We appreciate the opportunity to have undertaken this engagement and appreciate the
cooperation of the Department's staff. Please feel free to call us if you need any
additional information and/or assistance.
Very truly yours,
2
ARM Peat Marwick LLP
I. EXECUTIVE SUMMARY
The Community Services Department (the Department) is one of twenty-eight (28)
departments of Contra Costa County (the County). The Department was created by the
Economic Opportunity Act of 1964 and charged with the responsibility to develop
programs that eliminate poverty. The Department is organized into five divisions:
Community Action, Child Development, Housing and Energy, Head Start, and Child
Nutrition. The Department also maintains an Administrative Services unit which is
designed to support the five divisions in areas such as contracts, facilities, personnel,
labor relations, grant development, and surplus property acquisition. Until recently,
Administrative Services also provided accounting support to the five divisions.
Currently, each division maintains its own accounting function. The Department
currently operates on an annual budget of approximately $13 million primarily funded
through State and Federal grants.
An Economic Opportunity Council (EOC) organized under the Economic Opportunity
Act of 1964 and the Community Services Administration Act of 1974 serves as an
advisory board to the Department. The EOC is comprised of representatives from low-
income, public, and private sectors of the County. The EOC is mandated to direct the
Department in its vision. The EOC develops, through a public process, an annual
Community Action Plan. This plan determines the scope of services which need to be
provided to the low income community such as jobs, education opportunities, and
services. Regular meetings of the EOC are required to be held monthly at a time and
location convenient for the members and the general public in accordance with EOC by-
laws.
The focus of this report is on the operations of three of the five divisions (i.e. Community
Action; Child Development; and Housing and Energy). A brief description of these three
divisions follows:
The Community Action Division works directly with the EOC to develop
the Community Action Plan. A Community Services Block Grant,
through the State Department of Community Services and Development,
is the primary revenue source for this Division.
The Child Development Division is responsible for providing quality child
care and development programs to eligible families. Funding for this
Division is obtained through several grants, contracted primarily through
the California Department of Education.
The Housing and Energy Division is designed to provide programs to low
income households with weatherization and housing rehabilitation to make
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Peat Marwick LLP
their homes more energy efficient, promote energy conservation and
education, and provide crisis financial assistance and referrals to pay
utility bills for services that are or may be disconnected. Funding for this
Division is obtained through two grants contracted through the California
Department of Economic Opportunity: the Low Income Home Energy
Assistance Program (LIHEAP) and the Department of Energy Low-
Income Weatherization Assistance Program(DOE).
The two divisions not within the scope of Phase II of this project are: Head Start and
Child Nutrition. The Head Start Division provides programs to assist families in the
areas of nutrition, mental health, health, education, disabilities, parent involvement and
social services, and child care. The Child Nutrition Division administers programs which
provide meals on a daily basis to children enrolled in the Head Start and Child
Development programs.
As a result of our work during Phase II of this project, we identified 20 observations. This
report is based upon facts as stated or stipulated by Department, County and/or State
personnel as identified by title in this report and our review of certain documentation as
provided to us by Department personnel. Other information may exist which would have
caused us to comment differently on these observations had such information been
obtained. Our 20 observations are discussed in detail in Sections II through IV of this
report. An Executive Summary of these observations follows:
• Disallowed costs are refundable to granting agencies due to:
- failure to provide documentary evidence for activities which were claimed to
have been performed
- funds spent on activities not previously approved by granting agency(and
which were subsequently disallowed)
- funds spent subsequent to the allowed contractual time period.
As a result, the County pays the disallowed costs out of its General Fund. In
addition, activities not evidenced as having been performed as provided under the
terms of the contract with the granting agencies places the County at risk that, at a
minimum, additional funds could be exposed. This should be investigated because
there is a concern that the weaknesses identified in this report are indicative of serious
breakdowns in internal controls and reporting processes that could result in material
errors in reporting by these divisions.
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MPT Peat Marwick LLP
• An amendment to a grant contract was not made, or was not made timely, in order to
utilize unspent funds. As a result, funding must be returned to the granting agency
and the community is not provided services that could otherwise have been
provided.
• In one instance, grant money available from the granting agency in advance of the
contract period was received three months late due to the grant contracting process
being completed and filed late. Accordingly, other State, Federal, and/or County
moneys must have been used to fund the activities of the program. This'could
pose an issue with other funding agencies and should be investigated by the County.
• Funds have been spent on activities that have not been pre-approved by the granting
agency. Accordingly, the Department has placed the County at risk that such
activities could be disallowed in the future and have to be refunded. If this occurs, the
County will incur the costs out of its General Fund.
• Spending in excess of contractual amounts has occurred. As a result, the County is
funding the programs out of its General Fund.
• Salaries and benefits of certain employees on administrative leave have been charged
to grants. Accordingly, the granting agencies may disallow such costs and the cost
will have to be paid out of the County's General Fund. Appropriate steps should
be taken immediately to identify the dollar amount of this exposure and the
appropriateness of these expenditures being charged against the various grants.
Reports filed with granting agencies should be amended, if required.
• Salaries and benefits of employees who work on more than one program have been
charged to grants based upon allocations which may not represent the employees'
actual effort of work. Accordingly, the granting agencies may disallow certain
amounts of salaries and benefits charged to the grants and the costs will have to be
paid out of the County's General Fund. Appropriate steps should be taken
immediately to identify the dollar amount of this exposure and require employees to
document and report actual effort of work performed on a program by program basis.
Reports filed with granting agencies should be amended, if required.
• Continuous delinquency in reporting to the granting agencies has been occurring. As
a result, the County could be at risk that programs will not receive future
funding from granting agencies.
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• There is a lack of documentary evidence that the Economic Opportunity Council
(EOC) has been providing oversight in accordance with EOC by-laws. Copies of
meeting minutes were requested for the year ended December 31, 1995; however,
none were provided. Program personnel were able to only provide agendas for five
meetings during the year. Accordingly, the County could be at risk of not
receiving future funding for programs from granting agencies. There is also the
possibility that the programs are not providing the expected community support
contemplated.
In addition, we understand that State and Federal auditors are scheduled to review the
operations of the Department due to deficiencies recognized by granting agencies. A
recent State monitoring visit was conducted and a report was produced citing operational
deficiencies and notification that funding has been temporarily suspended pending
corrective actions by the Department. A letter from a Federal granting agency was also
received in June 1996 indicating that certain improvements identified during the agency's
1995 and 1996 site visits remained to be implemented for the Head Start program,
including a proposed organization structure being put into place.
KPMG's observations and recommendations based on the work completed to date,
grouped by Division, are discussed in more detail in Sections II through IV.
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II. OBSERVATIONS OF THE COMMUNITY ACTION DIVISION
Division Overview
The Community Service Block Grant provides the primary revenue source for the
Community Action Division. This grant is renewable annually with a term extending
from January 1 through December 31. The 1995 grant, totaling $391,930, provided for
quarterly advance payments each equal to twenty-five percent(25%) of the total contract.
The Division also receives funding from the Emergency Homeless Program grant. This
grant is renewable annually with a term extending from July 1 through June 30. The
1996 grant, totaling $24,488, was structured to provide funding on a cost reimbursement
basis.
A. Program Funding and Expenditures
Observation: The 1995 first quarter payment of$97,983 from the Community
Service Block Grant was received late.
The check received for the 1995 first quarter payment in the amount of $97,983 was
dated March 23, 1995. This check was sent to the County's General Accounting Division
for deposit on April 4, 1995. An accountant with the State Department of Community
Services and Development indicated to KPMG that such check was not issued in advance
of the first quarter because the Division had not finalized the 1995 grant contracting
process until March 1995. Accordingly, other State, Federal, and/or County moneys
funded the Community Services Block Grant program expenditures during the first
quarter of 1995.
The Department should ensure that the contracting process is complete in sufficient time
to obtain funds as soon as they are available. The County should assess whether this
occurrence has jeopardized requirements of other granting agencies and provide
notification to the agencies as necessary.
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Observation: A refund of$57,908 is owed by the Division back to the State for
unspent 1995 Community Service Block Grant money. Services that would have been
provided by these funds were not made available to the community.
The 1995 Community Service Block Grant included a budget of $100,000 to pay sub-
contractors to provide services such as job-training, education, and food delivery to the
community. The Division's year end contract close-out report reflects that only $14,328
was paid to sub-contractors for services they performed during 1995.
KPMG was informed during a meeting on November 14, 1996 with the Division's
Administrative Services Officer, the Program Manager, and the Department's Acting
Director that the following factors contributed to the full $100,000 not being paid to sub-
contractors:
• During the first three months of the contract year, January through March
1995, members of the Economic Opportunity Council (EOC) had not come to
a consensus as to whether the $100,000 should fund six versus seven sub-
contractors.
• The Division was suffering from cash flow problems. Moneys not paid to
sub-contractors (because the contracts had not been let) were used to fund
other program activities.
It should be noted, however, that only four, instead of six or seven sub-contractors were
actually funded by this contract. These four sub-contractors were paid $14,328 during
the months of January and February 1996 for services they provided to the community in
November and December of 1995 which was at the end of the grant year.
Of the remaining $85,672 budget, $27,764 was used to pay for other types of allowable
services budgeted separately in the contract which resulted in overspending the budget for
those types of services. The remaining$57,908 was not spent and is due back to the State.
A Senior Field Representative for the State Department of Community Services and
Development (the State Field Representative) informed KPMG that the Division is
allowed to redirect amounts budgeted in the grant to other budgeted services as long as
the total grant award is not exceeded. She indicated that such redirection does not require
prior approval by the State, however, the necessity of such redirection may be subjected
to audit by the State at some future date. Accordingly, such expenditures are at risk of
being disallowed.
The contract states that an amendment may be submitted to the State no later than 45
days prior to the end of the contract to request rebudgeting of unspent grant fiords to
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expenditures not previously budgeted for. An amendment was not submitted to the State
within the 45 day deadline(which would have been November 15, 1995) for the $57,908.
The grant stipulates that the Division is to submit to the State a cashier's check within 90
days after expiration of the contract (which would have been March 30, 1996) for all
funds advanced and not spent. As of November 15, 1996, the Division had not remitted
the $57,908 to the State.
A Monitoring Visit Report dated October 28, 1996 prepared by the State Field
Representative indicates that the Department Acting Director requested (subsequent to
the contractual deadline) authorization to utilize the unexpended funds on other activities.
Such report states that the request has been denied and recommends that the Division
return the$57,908 to the State no later than November 29, 1996.
We recommend, at a minimum, that actual expenditures versus grant approved
expenditures be monitored to ensure that all available funds are expended for maximum
benefit of the community.
Observation: The Division received $24,598 and $11,749 from the Emergency
Homeless Program grant for contract years ended June 30, 1995 and 1996, respectively.
The State has requested that the $24,598 be refunded. In addition, the $11,749 is
currently being questioned by the State for possible disallowance offunding.
During the year ended June 30, 1995, the Division received $24,598 from the State under
the Emergency Homeless Program grant. A memo dated November 8, 1996 written by a
Department Accounting Supervisor to the Department's Acting Director recommends
that $24,598 be returned to the State due to lack of documentation to support the
expenditures claimed for the year ended June 30, 1995. The memo states that quarterly
fiscal and programmatic reports required to be submitted during the contract period to the
State were not submitted at that time because the program activities to support the claims
were never received from the Program Manager. (This Program Manager is no longer an
employee with the Department, however, he is an employee with the County in another
department.)
The memo states that in August 1995 the Director instructed the Accounting Supervisor
to complete the contract close-out report which is also a State reporting requirement. The
Accounting Supervisor informed KPMG that the amounts he entered on the close-out
report, which should represent the amount spent on program activities, was the amount
which was budgeted for in the grant contract. The Accounting Supervisor informed
KPMG that he was not, and has not to date, been provided supporting documentation
evidencing that work was performed in accordance with the grant document.
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During the year ended June 30, 1996, the Division received $11,749 from the State under
this same grant. The same memo from the Accounting Supervisor also indicates that the
$11,749 was claimed based upon budgeted amounts.
The Accounting Supervisor informed KPMG that he received no documentation to
support the $11,749 claimed. KPMG was informed by the current Program Manager in
the presence of the Accounting Supervisor that the specific work had been performed,
however, was not documented as being rendered under this contract.
The Monitoring Visit Report indicates that the State was unable to verify that
expenditures for the year ended June 30, 1995 actually occurred and suggests that the
Division refund the State the $24,598. The Monitoring Visit Report indicates that the
$11,749 is also being questioned and may be disallowed.
KPMG was informed by an Auditor with the State Department of Community Services
and Development that the $24,598 and $11,749 would be further investigated during a
State audit which is scheduled to occur in December 1996.
KPMG did not request the Division to produce any documentation to support the
expenditures since the State had previously made such request for which the Division
could not provide and because the State Auditor is planning to investigate this matter
further in December 1996.
At a minimum, we recommend that the County investigate immediately whether
documentation can be accumulated to support these expenditures and whether other
instances of reporting to granting agencies without adequate supporting documentation
has occurred. Amended reports, if required, should be filed with the granting agencies for
unsupported costs.
Observation: Two contracts between the Division and Paradigm ('Paradigm')
were not approved in the Community Action Plan and, accordingly, $24,405 paid to
Paradigm was disallowed under the grant.
The Division entered into two contracts totaling $54,255 with Paradigm one for the
period September 1, 1995 through October 31, 1995 and a second for the period
November 1, 1995 through October 31, 1996, to provide consultation regarding the
acquisition of the Balboa School as a Head Start Child Care Center and preparation of
grant proposals to secure funding for services provided through the Community Action
Division. The Division has paid Paradigm $24,405 as of November 15, 1996 for such
services.
The Monitoring Visit Report states that such activities by Paradigm were not approved in
the Community Action Plan and, accordingly, amounts paid to Paradigm for such
services are disallowed under the grant.
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The Department should implement controls to verify that actual expenditures are not
charged against grants unless they are allowable under the grant terms.
Observation: Salaries and benefits of certain employees who work on more than
one program have been charged to various grants on a basis that is not supported by
documented evidence of actual effort of work
KPMG was informed by the Administrative Services Officer and the Division Program
Manager on November 14, 1996 in the presence of the Department's Acting Director that
salaries and benefits of certain employees who work on more than one program are not
always charged to grants based upon actual time worked on specific programs. The
Administrative Services Officer and the Division Program Manager are aware of
employees' salaries and benefits being charged to grants based upon an established
allocation which is not changed for short or long-term changes in work assignments
between programs funded by different grants.
KPMG was informed that it was only in recent months that certain employees, however
not all employees, have begun to maintain records of actual hours of work effort by
program. KPMG was also informed that the Department does not have a written policy
requiring employees to maintain records of actual hours worked by program.
Accordingly, it is possible that one or more grants have been charged for salaries and
benefits that are not related to the actual efforts of the employees. KPMG was not able to
determine the monetary effect, if any, on the grants because of the lack of specific and
appropriate documentation.
We strongly recommend that the County obtain affidavits from all employees covering
all periods worked and not documented as to which programs they were working by pay
period. Appropriate amendments, if any, in grant reports previously filed should be
made. On a go forward basis, we recommend that all employees whose salaries and
benefits are charged to grants be required to submit detailed time sheets each pay period
which document actual hours worked by program.
Observation: The salary and benefits of the Department Director, who is on
administrative leave, is being charged to grants.
The Department's Director has been on administrative leave beginning in April 1996
through the present. The Director's salary and benefits are being paid from and charged to
Community Services Block Grant, Child Development, and County General Fund
moneys.
It is our understanding that the current Acting Director's salary and benefits are not being
charged to grants.
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The County should undertake to determine whether any adjustments should be made to
reports previously filed with the granting agencies and file amended reports, if required.
B. Reporting
Observation: The 1996 Community Action Plan (CAP) was sent to the State
approximately six months late.
The CAP for the period January 1, 1996 through December 31, 1996 is required to be
sent to the State postmarked no later than June 30, 1995.
A letter dated December 18, 1995 from the California Department of Economic
Opportunity indicates that the 1996 CAP was returned to the Program Manager because
of marginal and/or incomplete CAP sections. The letter states that the CAP was
unacceptable in its present format and that it was agreed that a deadline of November 7,
1995, would provide sufficient time for the Program Manager to resubmit the CAP. The
letter states that over a month had passed since the November 7, 1995 due date and that
the Program Manager promised on several occasions to submit the CAP. The letter
indicates that the State still had not received the CAP and that the program could be in
jeopardy of not being funded for 1996 if the State did not receive the CAP by December
22, 1995.
A transmittal letter from the Department Director dated December 22, 1995 indicates that
the CAP was transmitted to the State on that date. The CAP, accordingly, was submitted
approximately six months late.
The Department should establish a reporting calendar for grants. The calendar should be
monitored and controlled by someone in the Administrative Services unit to ensure that
required reports are filed timely.
Observation: Work Plan Progress Reports/Client Characteristics Reports were
submitted late to the State.
The 1995 Community Services Block Grant requires the Division to complete and submit
to the State its Work Plan Progress Reports/Client Characteristics Reports no later than
the thirtieth(30th) day of the month following each calendar quarter. The following table
presents the period of such reports, the date indicated on the reports as having been
signed and the date reflected on the transmittal letter accompanying each report. The
table also shows the number of days the report was delinquent. The number of delinquent
days is the difference between the 30th day following the quarter ending date and the date
on the transmittal letter. Actual number of days delinquent may exceed the number
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shown below because the actual date of physical receipt by the State and mode of
transmission was not documented.
Work Plan Progress Report/Client Characteristic Report
Transmittal
Period of ReIL Date Report Signed letter Date Days Delinquent
1/1/95 - 3/31/95 4/27/95 5/15/95 15
4/1/95 -6/30/95 7/31/95 8/3/95 4
7/1/95 - 9/30/95 11/30/95 12/4/95 34
The report for the period October 1, 1995 through December 31, 1995 is signed as of
August 19, 1996. No transmittal letter for this report was provided to KPMG. Based
upon the report signature date, this report was at least 202 days delinquent.
The Department should establish a reporting calendar for grants that should be monitored
and controlled by someone in the Administrative Services unit.
Observation: Expenditure Reports were submitted late to the State.
The 1995 Community Services Block Grant requires the Division to complete and submit
to the State its Expenditure Reports no later than the thirtieth (30th) day of the month
following each calendar quarter. The following table presents the period of such reports,
the date indicated on the reports as having been signed and the date reflected on the
transmittal letter accompanying each report. The number of days delinquent is the
difference between the 30th day following the quarter ending date and the date on the
transmittal letter. Actual number of days delinquent may exceed the number shown
below as the actual date of physical receipt by the State and mode of transmission was not
documented.
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Expenditure Reports
Transmittal
Period of Report Date Report Signed
Letter Date Days Delinquent
1/1/95 - 3/31/95 4/27/95 5/15/95 15
4/1/95 - 6/30/95 7/31/95 8/3/95 4
7/1/95 - 9/30/95 10/25/95 10/30/95 0
10/1/95 - 12/31/95 1123/96 1/23/96 0
The Department should establish a reporting calendar for grants that should be monitored
and controlled by someone in the Administrative Services unit.
Observation: The Financial and Programmatic Close-out report package was
submitted 110 days late to the State.
The 1995 Community Services Block Grant requires the Division to submit to the State a
Financial and Programmatic Close-out report package within ninety (90) days after
expiration of the term of the contract.
A transmittal letter dated July 19, 1996 from the Department's Acting Director to the
Department of Community Services and Development of the State of California,
indicates that the close-out report package for the period ending December 31, 1995 was
submitted on that date. This would indicate that the close-out report was at least 110 days
late.
The Department should establish a reporting calendar for grants that should be monitored
and controlled by someone in the Administrative Services unit.
C. Other
Observation: The Economic Opportunity Council (EOC) did not meet monthly
as required by the EOC by-laws.
The EOC by-laws require the EOC to meet monthly. When KPMG requested copies of
the EOC minutes for the year ended December 31, 1995, none were provided. The
Program Manager did provide agendas for meetings for the months February, March,
April, and July of 1995. KPMG was not provided documentary evidence to support that
meetings might have been held during the remaining seven months of the year.
A letter dated July 18, 1996 from a Council member informing the EOC Chairperson of
this individual's resignation from the Council indicates that during the period the
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individual served, the Council met seldom and no communication had been received for
months. KPMG did not inquire as to how long the member served on the Council.
The Program Manager informed KPMG that there was lack of interest by the members
and that the membership was not stable. The Program Manager also told KPMG that, in
his opinion, it is possible that the Division did not provide the communication and
support necessary to maintain the members' interests.
Appropriate steps should be taken by the Department to ensure that EOC by-laws are
followed and that appropriate community input is received. Minutes of all meetings
should be maintained.
Observation: The Division did not have the most current Community Services
Block Grant Reference Manual.
References were made in various areas of the Community Services Block Grant
indicating that the Division must comply with certain State code sections defined in the
Community Services Block Grant Reference Manual.
The reference manual on site at the Division was dated November 1987. The State Field
Representative informed KPMG that the State provided a training session during 1995 on
a newly issued 1994 reference manual. She indicated that Division personnel from the
County were invited to the session, however they did not attend. The Program Manager
indicated to KPMG that the Division did not obtain a copy of the 1994 reference manual.
Division personnel attendance at grant administration training should be mandatory and
current reference manuals should be maintained and used.
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III. OBSERVATIONS OF THE CHILD DEVELOPMENT DIVISION
Division Overview
The Child Development Division is funded by several grants which are renewable
annually with terms generally extending from July 1 through June 30. A portion of the
funding is received during the first few months of the contracts as an advance with the
remaining funds remitted to the Division based upon child days of enrollment adjusted
for amounts previously advanced.
Observation: Certain expenditures have not been recorded in the proper
accounting period on the County's financial system.
In June 1995, the Board of Supervisors approved a cost of living adjustment to be paid to
employees for services provided during the year ending June 30, 1995. Employees were
paid the COLA, totaling approximately $92,000, in October 1995. The expenditure was
not accrued for at June 30, 1995. The expenditure was recorded, instead, on the County's
financial system in the fiscal year ended June 30, 1996. Generally accepted accounting
principles require the accrual of this obligation in the accounting period in which the
services were provided.
In addition to the COLA transaction, the following expenditures were noted as being
recorded in an incorrect accounting period on the County's financial system:
VendAmount Date of Service Period Recorded
YWCA $ 3,487 June 1995 Year ended June 30, 1996
Kaplan School
Supply Corp. $ 4,587 June 1995 Year ended June 30, 1996
Lakeshore Learning
Materials $ 4,388 June 1995 Year ended June 30, 1996
Martinez USD $ 3,067 May-June 1995 Year ended June 30, 1996
YWCA $49,000 June 1996 Year ended June 30, 1997
Pittsburg $23,315 May 1996 Year ended June 30, 1997
The above transactions were identified by the Division Accountant for KPMG. They do
not represent all transactions recorded in an incorrect accounting period on the County's
financial system. KPMG reviewed the supporting documentation for the above items and
did not review any other transactions of the Division for proper cut-off.
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Each Division is responsible for notifying the County's general accounting office of
obligations which the Division has incurred as of June 30 in order for the liabilities to be
properly recorded on the County's financial system. For obligations known to have been
incurred, but for which the exact amount is not currently known, the Division should
reasonably estimate the amount of the liability and report such estimate to the County's
general accounting office.
While the above identified cut-off errors are not significant to the County's
comprehensive annual financial statements taken as a whole, steps should be taken to
improve communication by the Division to the County's general accounting office to
ensure that transactions are recorded in the proper period.
Observation: $95,000 was funded by the County's General Fund which could
have been funded by State grant money had the expenditures met the contractual time
requirements.
During the year ended June 30, 1995, the Division was provided an additional $292,000
from the State, a portion of which the Division planned to spend on playground
equipment. The State stipulated that the funds had to be spent during the year ended June
30, 1995. The Division ordered the equipment during the year ended June 30, 1995,
however, the equipment was not received, installed, or paid for until the following fiscal
year. Total expenditures for the equipment were approximately $165,000. The Division
spent the entire$292,000 on other types of goods and services.
The Division went back to the State to request approval to charge the $165,000 to the
grant year ending June 30, 1996. The State gave the approval, however, the Division
only had $70,000 in unspent grant money to apply towards the playground equipment.
The remaining $95,000,accordingly, was funded by the County's General Fund.
The Department should ensure that planned expenditures meet contractual time
requirements.
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IV. OBSERVATIONS OF THE HOUSING & ENERGY DIVISION
Division Overview
The Low Income Home Energy Assistance Program (LIHEAP) and the Department of
Energy Low-Income Weatherization Assistance Program(DOE) contracts which fund the
Housing & Energy Division are renewable annually with terms extending from January 1
through December 31 and from April 1 through March 31, respectively.
The LIHEAP grant for the year ending December 31, 1995 contractually provided
funding of $434,383. The DOE grant for the year ending March 31, 1996 contractually
provided funding of $79,166. Both grants provided funding on a reimbursement basis.
A. Program Funding and Expenditures
Observation: The Division spent $38,914 in excess of the LIHEAP contract and
$31, 715 in excess of the DOE contract for the twelve months ended December 31, 1995
and March 31, 1996, respectively.
The Community Services Block Grant(CSBG) Program Manager and the Administrative
Services Officer informed KPMG in the presence of the Department Acting Director that
the over spending in the Housing & Energy Division was in part due to insufficient
oversight during 1995 and 1996. Later, the Department Personnel Officer informed
KPMG that the then current Housing & Energy Division Manager and a Division
Supervisor were both on administrative leave and/or personal leave during the year ended
December 31, 1995. The CSBG Program Manager was asked to serve as the temporary
Division Manager in addition to continuing to serve as the CSBG Program Manager.
Also during the year ended December 31, 1995 a Head Start Program area manager for
the grantee operated program in West County was terminated. The CSBG Program
Manager was also asked to serve as a temporary area manager for the grantee operated
program. The CSBG Program Manager informed KPMG that the area manager position
is responsible for 60 employees at five facilities.
The Department should establish controls to monitor program expenditures in relation to
availability of funding on a real-time basis.
Observation: KPMG was informed that during 1995, two employees were on
administrative leave during which time their salaries and benefits were charged to
LIHEAP and DOE contracts.
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The Administrative Services Officer informed KPMG that two employees were on
administrative leave during the year ended December 31, 1995. The salaries and benefits
of these employees were charged to the LIHEAP and DOE contracts during this period.
The County should determine if these charges are appropriate under the grant contracts
and, if not, amended reports should be filed with the granting agencies.
B. Reporting
Observation: The Division was delinquent in filing its LIHEAP Monthly
Expenditure/Activity Reports and Monthly Earned Measures Report package to the
State.
The LIHEAP contract requires monthly reports consisting of Monthly
Expenditure/Activity Reports and Monthly Earned Measures Report to be received by the
State on or before the 15th calendar day of each following month, irrespective of the level
of activity or amount of expenditure in the preceding month.
The following table presents the period of such reports and the date reflected on the
transmittal letter accompanying each report. The number of days delinquent is the
difference between the 15th day following the month end and the date on the transmittal
letter. Actual number of days delinquent may exceed the number shown below as the
actual date physically received by the State and mode of transmission was not
documented.
LIHEAP Monthly Expenditure/Activity Reports
& Monthly Earned Measures Report
Transmittal Days Transmittal Days
Mont h Letter Date Delinquent Month Letter Dat Delinquent
January 2/17/95 2 July 8/21/95 6
February 3/14/95 0 August 9/19/95 4
March 4/20/95 5 September 10/20/95 5
April 5/18/95 3 October 12/28/95 43
May 6/21/95 6 November 1/12/96 28
June 7/28/95 13 December 1/19/96 4
The Department should establish a reporting calendar for grants that should be monitored
and controlled by someone in the Administrative Services unit.
Observation: The Division was delinquent in filing its LIHEAP Financial and
Programmatic Close-out report with the State.
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The LIIIEAP contract requires a Financial and Programmatic Close-out report within
ninety (90)days after expiration of the contract.
A transmittal letter dated July 19, 1996 from the Department Acting Director to the State
Field Representative indicates that copies of the Close-out report for the period ending
December 31, 1995 were filed on that date. This report was filed 110 days late.
The Department should establish a reporting calendar for grants that should be monitored
and controlled by someone in the Administrative Services unit.
Observation: The Division was delinquent in filing its three-part Monthly
Expenditure/Activity/Earned/Measures Report, to the State.
The DOE contract requires its three-part Monthly Expenditure/Activity/F,arne-d/Measures
Report to be received by the State on or before the 15th calendar day of each following
month, regardless of the level of activity or amount of expenditures during the previous
month.
The following table presents the period of such report and the date reflected on the
transmittal letter accompanying each report. The number of days delinquent is the
difference between the 15th day following the month end and the date on the transmittal
letter. Actual number of days delinquent may exceed the number shown below as the
actual date physically received by the State and mode of transmission was not
documented.
DOE Monthly Expenditure/Activity ReportslEarrigil Measures Report
Transmittal Days Transmittal Days
Month Letter Date Delinque Month Leer Date Delinquent
April 8/2/95 77 October 12/28/95 43
May 8/2/95 47 November 1/4/96 19
June 8/2/95 17 December 1/19/96 4
July 8/2/95 0 January 2/16/96 1
August 10/20/95 35 February 5/14/96 59
September 10/20/95 5 March 5/14/96 29
The Department should establish a reporting calendar for grants that should be monitored
and controlled by someone in the Administrative Services unit.
Observation: No indication on the DOE Financial and Programmatic Close-out
report as to when it was submitted to the State.
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The DOB contract requires a Financial and Programmatic Close-out report to be
submitted to the State within ninety (90) days after expiration of the contract. The Close-
out report for the period ending March 31, 1996 provided to KPMG was not signed or
dated by the Department Acting Director and no transmittal letter was attached. KPMG
was not able to examine any evidence to indicate when, or if, such report was transmitted
to the State. The report, however, was dated as having been prepared by the Department
Accountant on July 12, 1996. Accordingly, the report was at least 13 days delinquent.
The Department should establish a reporting calendar for grants that should be monitored
and controlled by someone in the Administrative Services unit. Records should be
maintained to document the date that reports are filed.
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ATTACHMENT TWO
STATF OF CAI IFORNIA-HEALTH AND WELFARE AGENCY
DEPARTMENT OF COMMUNITY SERVICES AND DEVELOPMENT
A Quality Management Department
700 North 1 Oth Street,Room 258
Sacramento, CA 95814
(916)322-2940
(915)327-3153(FAX)
(916)327-6318(TDD)
October 28, 1996
Mr. Scott Tandy, Director
Contra Costa Community Services Department
1220 Morello Avenue, Suite 101
Martinez, CA 94553-4711
RE: Monitoring Visit Report#B96-016
On August 28, 1996 though August 30, 1996, I conducted a monitoring site visit to Contra Costa
Community Services Department(CCCSD)to conduct a review of the 1995/1996 Low Income Home
Energy Assistance(LMAP) and Department of Energy(DOE) contracts issued by the Department of
Community Services and Development(DCSD). The review focused on administrative and
programmatic activities and procedures for the 1995/1996 EHP, CSBG, DOE and LIH AP contracts
Discussion with CCCSD staff and the review of appropriate documents provided me with the
opportunity to analyze administrative and programmatic performance. Results of these analyses are
discussed in the enclosed desk review report.
CSD appreciates the time and cooperation you and your staff provided during my visit. Please
call me at (916) 327-6320, if you have any questions or concerns regarding this report.
Sincerely, /f -�-
u-p Urrutia
Senior Field Representative
cc: Pablo Rosales, Manager, Unit B
CSD Audit Division
CSD Financial Services
verccamL.w
(Formerly,THE DEPARTMENT OF ECONOMIC OPPORTUNITY.)
MR-B96-016
CCCSD-8Y2M6
CONTRA COSTA COUN'T'Y CSD
MONITORING REPORT NUMBER B96-016
ENTRANCE CONFERENCE
In preparation for the site visit, I performed a review of all contract files, prior monitoring reports,
fiscal and programmatic reports, prior close-out and audit reports, and related correspondence.
During the entrance conference with Mr. Scott Tandy, Executive Director, Mr. Al Prince,
Supervising Administrative Service Officer, Darnell Turner, Program Manager and Mr. Sam
Mendoza, Accountant, the following items were discussed:
1. An introduction of the Home Energy Assistance Program(HEAP) staff and
purpose of their visit to CCCSD. Ms. Diana Molina and Ms. Patsy Esposito
presented information regarding the training schedule of HEAP intake issues.
2. Schedule of HEAP training and monitoring review of fiscal and program activities.
3. An update of program and fiscal evaluation performance and issues regarding
HEAP, Weatherization and CSBG.
4. Mr. Tandy provided information on the problems facing the financial situation of
the CCCSD and his role as recently appointed Executive Director.
Prior Findings:
• Board Vacancies, Two in the Low-Income Sector
• Late Reports, CSBG, EHP
• Other Late Contract Documents
CCCSD responded to the findings identified by CSD. However it appears that no corrective
action was taken by CCCSD as recommended by CSD. A review of the Board's activities,
requirements and most current Board Roster shows that the board vacancies identified in 1995
appear to be the same as the current vacancies. In addition, CCCSD did not improve the timely
submission of required reports as recommended by CSD in the 1995 Desk Review Report.
CCCSD staff informed CSD that a verbal waiver to submit required reports was granted by CSD
Management in the 1995 program year. This type of waiver cannot be granted by CSD unless a
contract amendment is executed to change any or all of the requirements in CDS's contracts.
1
l7. �
M2-B96-016
CCCSD-8/28/96
ADMINLSTRATIVE/PROGRAMMATIC PERFORMANCE
During the site visit, I consulted with various staff members of CCCSD and made certain
observations to assess administrative and programmatic performance and to verify contract
compliance. The following issues and concerns were discussed with CCCSD Executive Director
during an exit conference conducted by telephone on September 3, 1996:
GENERAL ADMINISTRATIONBOARD OPERATIONS:
CCCSD is currently receiving the following contracts/funding from CSD to administer the
the 1996 programs:
CSBG $389,188
EHP 24,488
LIHEAP 2299930
DOE 83,000
TOTAL $726,606
CCCSD is a Public-Non Profit Community Action Agency(CAA)located in Contra Costa
County. CCCSD is Governed by the County Board of Supervisors and the Economic
Opportunity Council(EOC). The EOC is an advisory board formed of member representatives of
the Low-income, Private and Public sectors of Contra Costa County. On April of 1996, the
Board of Supervisor appointed Mr. Scott Tandy as the new Executive Director of CCCSD.
It is not clear to CSD if the EOC was involved in the selection process and/or decision making to
appoint a new Executive Director at CCCSD. The EOC By-Laws state that:
Article VI., Section 1.
A. "POWERS OF THE BOARD" "To participate in, and advise the Board of
Supervisors regarding, the selection of the Executive Director."
CSD realizes that the EOC acts as an advisory council to the Governing Board and that final
decisions are made by the Governing Board Officials. However, the EOC By-Laws should be
used a guide to direct CCCSD's Mission and Vision and were developed in the spirit of
Community Action. Decisions which may impact the delivery of services to low-income
households in Contract Costa should not be overlooked by the EOC Board. The County Board
of Supervisors have appointed representatives to the EOC for the purpose of community input
and program design recommendations. It appears that the EOC Board By-Laws have been
ignored. These By-Laws which have been approved by Public Officials, which also represent the
communities in Contra Costa County.
CSD recommends that the current By-Laws be reviewed by the EOC Board and the County
Board of Supervisors to determined if the current Articles are applicable to CCCSD. Provide
2
MB-B96-016
CCCSD-8/28/96
CSD with a written plan describing the action taken to correct this deficiency.
Response due: November 29, 1996.
Review of the latest EOC Board Roster on file with CSD shows the following vacancies:
Four(4) of five(5) seats representative of the Low-Income Sector are vacant and have
been vacant since 1995.
Three(3) of(5) seats representative of the Private Sector are vacant and have been vacant
since January of 1996.
One (1) of five seats representative of the Public Sector is vacant due to health problems.
It is not clear how long this seat has been vacant. However, this vacancy requires
appointment by the Governing Board,
Article Four(IV)., A, B, and C., of the EOC By-Laws requires that vacancies be filled within
sixty(60) days. It appears that these vacancies have existed for as long as one year.
CSD recommends that extensive recruitment be done by the current members with the assistance
of CCCSD staff and the Governing Board. Please submit to CSD a written plan of action
describing the action taken by CCCSD to comply with this requirement.
Response due: November 29, 1996.
CSD was unable to verify that the EOC Board has been reviewing and evaluating the CSBG fiscal
and program performance/activities conducted by CCCSD and Delegate Agencies. Section vI.
D. of Section VI., D. of the EOC By-Laws states that:
"The EOC's Board is to review reports submitted by staff and the performance of
Community Services Block Grant contractors".
CSD recommends that the EOC Board Members comply with this requirement and become more
involved in the evaluation/approval process of the CSBG program fiscal activities at CCCSD. In
addition, the EOC Board should provide ongoing information to the Governing Board regarding
the status of programs and fiscal operations at CSD. Please provide CSD with a written response
describing the action taken by CSD to comply with this requirement. Response due date
November 15, 1996.
CSD was unable obtain information regarding the EOC Board Standing Committees as required
in Section VI., E, F and G of the FOC By-Laws. CSD recommends that staff at CCCSD work
closely with the EOC Board to ensure that the following Standing Committees be established as
3
TD
W-B96-016
CCCSD-8/28196
required in. Section VI, of the EOC By-Laws:
E. Selection of Officers and Executive Committee.
F. Make recommendations to the Board of Supervisors on all programs, proposals
and budgets related to CSBG.
G. To maintain, through the Executive Director,proper records of all business
transactions.
Provide CSD with a written plan of action describing the action taken by CCCSD to correct this
deficiency.
Response due date November 29, 1996.
FINANCIAL MANAGEMENT:
CSBG activities in 1995 were not implemented by CCCSD early in the year as required in the
CSBG contract. CCCSD agreement with the CSBG Sub-Contractors took place October 1,
1995. The late start up of the program resulted in unexpended CSBG fiords of approximately
`�— $57,908. As of result of this, CCCSD extended the 1995 contracts with the delegate agencies
--IAC through October 31, 1996. It appears that 1996 funds were used complete the 1995 contract
commitment with CCCSD delegate agencies.
The new Executive Director at CCCSD has requested CSD's authorization to utilized the
unexpended funds on CSBG activities implemented in 1995. CSD is unable to approve this
request due to uncertainty of CCCSD's deficit fund balance and the lack of documentation to
support this costs.
CSD recommends that the 1995 CSBG fiords$57,908 be returned to CSD by no later than
November 29, 1996.
Emergency Homeless Program(EHP) 1994/1995 Program Year.
A review of CCCSD fiscal records show that approximately$24,598 reimbursed by CSD have
not been expended. The reports submitted to CSD appear to be incorrect. CSD was unable to
verify that expenditures against the EHP activities actually occurred. CSD was informed that
accounting staff at CCCSD was instructed to complete the close-out report by showing that all
funds had been expended. The EHP funds received by CCCSD have been deposited at the
County Auditors Office. This information is to be verified by CSD Auditors. However, CSD
recommends that CCCSD return the unexpended$24,598 EHP funds to CSD by November 29,
1996,
Emergency Homeless Program(EHP) 1994/1995
4
MR-B96-016
CCCSD-8/28/96
A review of the 1995 Emergency Homeless Program(EHP) activities indicates that 48% of
program activities have been accomplished with$11,748.92 (48%) of funds. CSD was unable to
confirm direct program services during the monitoring visit. Therefore, funds claimed against the
1995/1996 contract($11,748.92) are being questioned at this time and may may be disallowed by
CSD Auditors.
CSD recommends that unexpended EHP funds be returned to the State by November 29, 1996.
LIHEAP Weatherization Program:
CCCSD suspended the LIHEAP and DOE -Weatherization Program activities on September 1,
1996. CSD was informed that the suspension of the weatherization program was done due to a
deficit fund balance of approximately$216,252 in the Housing and Energy Division at CCCSD.
CSD was unable to verify the reported deficit. The close-out reports submitted to CSD on the
1995 LIB AP and DOE programs do not show a deficit. However, it appears that the deficit has
been rolled over year-after-year. Approximately seven(7)individuals were placed on temporary
leave as a result of this deficit and the re-organization of the Energy, CSBG and Head Start
Programs. This issue will be further reviewed by CSD Auditors during the recommended on-site
audit to CCCSD.
Reporting Requirements:
CSD records show that CCCSD has been late in submitting the required reports for the EHP,
CSBG, DOE, LII3EAP contracts. Due to this deficiency, CSD has temporary suspended CSBG
payments pending corrected reports and corrections to the 1996 CSBG budget in order to
complete the processing of the 1996 contract amendment, #1. Payments against the LIfIIEAP and
DOE claims have also been put on hold pending the submittal of revised reports from CCCSD.
CSD recommends that:
1. CCCSD review and/or improve the current procedures for preparing and
submitting required reports to CSD.
2. That Fiscal, Program and Executive staff coordinate the information needed to
complete reports.
3. That staff assigned to prepare and submit reports to CSD be trained on CSD's
contract reporting requirements.
4 Data contained in the reports be verified by the appropriate Supervisor/Manager
prior to submitting the reports to CSD.
Provide CSD with a written plan describing the action taken by CCCSD to correct this deficiency.
Response Due: November 29, 1996.
5
L7. oZ—
Mtt-$96-616
CCCSD-8/28/96
Sub-Contracting Activities
CCCSD has entered into a sole source CSBG contract agreement(#38-702) for$49,920 with
J Paradigm Innovations(PI). The purpose of the contract is to provide general consultation
regarding the acquisition of the Balboa Head Start Center and preparation of grant proposals to
secure funding for services provided through the Community Action. These activities were not
approved in the 199511996 Community Action Plan(CAP) and any finds expended in this activity
will be disallowed by CSD.
Because of the term of the contract, November 1, 1995 through October 31, 1996, it is not clear
to CSD how much of the 1995 and 1996 CSBG funds have been paid to PI. Payments to PI
started November 9, 1995. CCCSD records show that approximately$24,000 CSBG funds have
been paid against this contract. During the monitoring visit CSD recommended to CCCSD
Executive Director that payments to PI from CSBG funds be discontinued and that funds already
paid to PI be returned to the CSBG account. Provide CSD a written response describing the
action taken by CCCSD to correct this finding.
Response due: November 29, 1996.
PROGRAM ACTIMIES/PERFORMANCE
A review of program records shows that in 1995 program year CCCSD assisted its own
employees with energy weatherization services. Employees appeared to be categorically eligible
for services. However, CCCSD does not have a policy/procedures to assist employees with
program services.
Please note that Section 25., A and B of the 1996 LU-IEAP contract states that:
A. Contractor certifies that its employees and the officers of its Governing body shall
avoid any actual or potential conflicts of interest and that no officer or employee
who exercise any function or responsibilities in connection with this agreement
shall have any personal financial interest or benefit which either directly or
indirectly arises from this agreements.
B. Contractor shall establish safeguards to prohibit its employees or its officers from
using their positions for the purpose which could result in private gain or which
gives the appearance of being motivated for private gain for themselves or others,
particularly those with whom they have family, business or other ties.
CSD recommends that a policy/procedure for assisting employees and/or Board Members be
developed and approved by both, the EOC and Governing Board. The policy must be developed
in accordance with Section 25., a. and B and must be specific as to who will do the intake and
6
NM-B96-016
CCCSD-8/28196
who approves the services. A copy of the approved policy/procedure should be submitted to
CSD for review and comments. Please provide GSD a written respond describing the action
taken by CCCSD to correct this deficiency.
Response due: November 29, 1996.
NEW FINDINGS/RECOMMENDATION
Finding 1:
It is not clear to CSD if the EOC was involved in the selection process and/or decision making to
appoint a new Executive Director at CCCSD. The EOC By-Laws states that:
Article VI., Section 1.
a. "POWERS OF THE BOARD" "To participate in, and advise the Board of
Supervisors regarding, the selection of the Executive Director".
Recommendation:
CSD recommends that the current By-Laws be reviewed by the EOC Board and the County
Board of Supervisors to determined if the current Articles are applicable to CCCSD. Provide
CSD with a written plan describing the action taken to correct this deficiency.
Response due date November 29, 1996.
Finding 2:
A review of the latest EOC Board Roster on file with CSD shows the following vacancies:
Four(4) of five (5) seats representative of the Low-Income Sector are vacant and have
been vacant since 1995.
Three(3) of(5) seats representative of the Private Sector are vacant and have been vacant
since January of 1996.
One (1) of five seats representative of the Public Sector is vacant due to health problems.
It is not clear how long this seat has been vacant. However, this vacancy requires
appointment by the Governing Board,
Article Four (IV)., A, B, and C., of the EOC By-Laws requires that vacancies are filled within
sixty(60) days. It appears that these vacancies have existed for as long as one year.
7
MR-1196-016
CCC8D-8/28/96
Recommendation 2:
CSD recommends that extensive recruitment be done by the current members with the assistance
of CCCSD staff and the Governing Board. Please submit to CSD a written plan of action
describing the action taken by CCCSD to comply with this requirement.
Response due date: November 29, 1996,
Finding 3:
CSD was unable verify that the EOC Board has been reviewing and evaluating the CSBG fiscal
and program performaneelactivities conducted by CCCSD and Delegate Agencies. Section VI.
D. of Section VI., D. of the EOC By-Laws states that:
"The EOC's Board is to review reports submitted by staff and the performance of
Community Services Block Grant contractors".
Recommendation 3:
CSD recommends that the EOC Board Members comply with this requirements and become more
involved in the evaluation/approval process of the CSBG program fiscal activities at CCCSD. In
addition, the EOC Board should provide ongoing information to the Governing Board regarding
the status of programs and fiscal operations at CSD. Please provide CSD with a written response
describing the action taken by CSD to comply with this requirement.
Response due date: November 29, 1996,
Finding 4:
CSD was unable obtain information regarding the EOC Board Standing Committees as required
in Section VI., E, F and G of the EOC By-Laws.
Recommendation 4:
CSD recommends that staff at CCCSD work closely with the EOC Board to ensure that the
following Standing Committees be established as required in Section VI, of the EOC By-Laws:
E. Selection of Officers and Executive Committee.
F. Make recommendations to the Board of Supervisors on all programs, proposals
and budgets related to CSBG.
G. To maintain,through the Executive Director,proper records of all business
transactions.
8
NM-B96-016
CCCSD-8/28/96
Provide CSD with a written plan of action describing the action taken by CCCSD to correct this
deficiency.
Response due date: November 29, 1996.
Finding 5:
CSBG activities in 1995 were not implemented by CCCSD early in the year as required in the
CSBG contract. CCCSD agreement with the CSBG Sub-Contractors took place October 1,
1995. The late start up of the program resulted on unexpended CSBG funds of approximately
$57,908. As of result of this, CCCSD extended the 1995 contracts with the delegate agencies
through October 31, 1996. It appears that 1996 funds were used complete the 1995 contract
commitment with CCCSD delegate agencies.
The new Executive Director at CCCSD has requested CSD's authorization to utilized the
unexpended funds on CSBG activities implemented in 1995. CSD is unable to approve
this request due to uncertainty of CCCSD's deficit fund balance and the lack of
documentation to support this costs.
Recommendation 5:
CSD recommends that the 1995. CSBG funds$57,908 be returned to CSD by no later than
November 15, 1996.
Response Due Date: November 29, 1996.
Finding 6:
CSD was unable to verify expenditures reported to CSD of approximately$24,598. This amount
was again reported in the 1994 EBP close-out report submitted to CSD.
Recommendation 6:
CSD recommends that the full amount $24,598 EBP funds be returned to CSD by November 29,
1996.
Response Due Date: November 29, 1996
Finding 7:
A review of the 1995 EIiP activities indicates that 48%of program activities have been
accomplished with$11,748.92 (48%) of funds. CSD was unable to confirm direct program
9
MR-R96-016
C0C8D-8/2M6
services during the monitoring visit. Therefore, fiords claimed against the 199511996 contract
($11,748.92)are being questioned at this time and may may be disallowed by CSD Auditors,
Recommendation 7:
CSD recommends that unexpended EHP fiords be returned to the State by November 29, 1996.
Response Due Date: November 29, 1996.
Finding 8:
CSB records shows that CCCSD has been late in submitting the required reports for the EH1',
CSBG, DOE, LIHEAP contracts. Due to this deficiency, CSD has temporary suspended CSBG
payments pending corrected reports and corrections to the 1996 CSBG budget in order to
complete the processing of the 1996 contract amendment, #1. Payments against the LIHEAP and
DOE claims have also been put on hold pending the submittal of revised reports from CCCSD.
Recommendation 8:
CSD recommends that:
1. CCCSD review and/or improve the current procedures for preparing and
submitting required reports to CSD.
2. That Fiscal, Program and Executive staff coordinate the information needed to
complete reports.
3. That staff assigned to prepare and submit reports to CSD be trained on LSD's
contract reporting requirements.
4 Data contained in the reports be verified by the appropriate Supervisor/Manager
prior to submitting the reports to CSD.
Provide CSD with a written plan describing the action taken by CCCSD to correct this deficiency.
Response Due Date November 29, 1996,
Finding 9:
CCCSD has entered into a sole source CSBG contract agreement (#38-702)for$49,920 with
Paradigm Innovations(PI). The purpose of the contract is to provide general consultation
regarding the acquisition of the Balboa Head Start Center and preparation of grant proposals to
secure finding for services provided through the Community Action. These activities were not
approved in the 1995/1996 Community Action Pian(CAP)and any funds expended in this activity
will be disallowed by CSD.
10
MR-B96-016
CCCSD-8/28196
Recommendation 9:
Recommends that payments to PI from CSBG fiords be discontinued and that finds already paid
to PI be returned to the CSBG account. Provide CSD a written response describing the action
taken by CCCSD to correct this finding.
Response due: November 29, 1996.
Finding 10:
CCCSD does not have a policy/procedure to assist its own employees with program services.
Please note that Section 25., a and B of the 1996 LMA-P contract states that:
a. Contractors certifies that its employees and the officers of its Governing body shall
avoid any actual or potential conflicts of interest and that no officer or employee
who exercise any function or responsibilities in connection with this agreement
shall have any personal financial interest or benefit which either directly or
indirectly arises from this agreements.
B. Contractor shall establish safeguards to prohibit its employees or its officers from
using their positions for the purpose which could result in private gain.or which
gives the appearance of being motivated for private gain for themselves or others,
particularly those with whom they have family, business or other ties.
Recommendation 10:
CSD recommends that a policy/procedure for assisting its own employees and/or Board Members
be developed and approved by both, the BOC and Governing Board. The policy must be
developed in accordance with Section 25., a. and B and must be specific as to who will do the
intake and who approves the services. A copy of the approved policy/procedure should be
submitted to CSD for review and comments. Please provide CSD a written respond describing
the action taken by CCCSD to correct this deficiency.
Response Due Date: November 29, 1996
In closing, CSD appreciates the time and cooperation provided by CCCSD staff during the
monitoring site visit. Please insure that responses are submitted by the response due date.
MRT 101
MRCC.96
11.
ATTACHMENT THREE
STATE OF CALIFORNIA-HEALTH AND WELFARE AGENCY PET!WII cON �`
ovam r
DEPARTMENT OF COMMUNITY SERVICES AND DEVELOPMENT
A Quality Management Department
700 North 10th Street, Room 258
Sacramento, CA 95814
(916)322-2940
(916)327-3153(FAX)
(916)327-6318(TDO)
November 12, 1996
Scott Tandy, Executive Director
Contra Costa County Community Services Department
1220 Morello Avenue, Suite 101
Martinez, CA 94553
Subject: AUDIT REVIEW 1M AR96-002
Contract Nos . 94BD-6013 , 94C-7012 , 94F-1107, 94F-1173 ,
94J-9808, 95BD-7013 , 95C-8012 , 95F-2207, 95J-1008, 96B-8003 ,
96C-9003 , 96F-1333
Mr. Tandy:
The State of California, Department of Community Services
and Development (CSD) will conduct an audit review of Contra
Costa County Community Services Department (CCCCSD) , commencing
on 12/2/96 . The review will be performed by two members of the
CSD Audit Services Unit . This review will take a minimum of five
days . Please have a working area available for the duration of
this review.
The agency will be contacted by a CSD auditor to arrange for
the time of the entrance conference. To minimize the
interruption of the daily activity, please make available for our
auditors the financial records and supporting documentation, as
listed below. The review will include, but not limited to, the
following financial records and supporting documentation :
o Documentation of accounting system being used by the agency
e
o General ledger, journal , and * chart of accounts (1/94 -
10/96)
o Cash receipts and disbursements registers with supporting
(Formerly,THE DEPARTMENT OF ECONOMIC OPPORTUNITY.)
Scott Tandy
November 12, 1996
Page Two
documentation (1/94-10/96) relating to CSD contracts
0 Petty cash policies
0 Workpapers, worksheets, and other summaries to support
monthly claims to CSD (1/94-10/96)
0 Summary schedules for Weatherization (WX) and ECIP
activities for the months of 1/94-10/96
0 Supporting WX and ECIP client files
0 Payroll records (including employee timesheets and fringe
benefit charges to CSD contracts)
0 Agency travel policies and travel expense rates
0 Duty Statements for fiscal/accounting office employees
0 Monthly bank statements and bank reconciliations (1/94-
10/96) related to CSD contracts
0 Remittance advices and copies of checks received from CSD
and/or State Controller' s Office for CSD contracts
0 Monthly Reconciliations of Due To/From Programs (Funds) for
the months of 1/94-10/96
0 Procurement/Purchasing and Inventory policies
0 Inventory and property records related to CSD contracts
0 Prepared monthly and year-end financial statements
0 * Copies of agency organization charts
0 * Copies of . general liability insurance including bonding
0 Program correspondence files related to CSD contracts
0 Aging of accounts payable (1/94-10/96)
0 Recent audit reports and other reports on CCCCSD
0 Copies of contracts (including leases) with subcontractors,
consultants, auditors, etc . [related to CSD contracts]
Scott Tandy
November 12 , 1996
Page Three
* = copies needed for CSD Audit Files
Also find enclosed our Audit Survey Ouestionnair nclu ' n
the Internal Control Q—e-ationnairel which must be com le ed by_
CCSD prior to our review. Please mail and/or fax a copy of the
completed Audit Survey Questionnaire to CSD Audit Services Unit
by 11/25/96 . Upon arrival, the CSD auditors will discuss this
questionnaire and the remaining parts of the audit review.
If the timing of the review will cause significant problems,
or if the agency has any questions, please contact me at
(916) 323-8653 .
Sincerely,
-A-01w.cw' 115.L''
Wayman Yee, M.B.A. , C.G.F.M.
Management Auditor
Audit Services Unit
Enclosures (17 Pages)
cc : Jeff Smith, Board Chairman, County of Contra Costa
Norm Siegel, HHS
1262301.
ATTACHMENT FOUR
STATF OF CALIFORNIA-HEALTH AND WELFARE AGENCY PETF WII mN r,.a..,,..
DEPARTMENT OF COMMUNITY SERVICES AND DEVELOPMENT
R Quality Management Department
700 North 10th Street,Room 258
Sacramento, CA 95814
(916)322-2940
(915)327-3153(FAX)
(916)327-6318(T00)
November 18, 1996
ly ( 1� is
Mr. Scott Tandy, Director
Contra Costa Community Services Department NOV 19 1946
1220 Morella Avenue, Suite 101
Martinez, CA 94553-4711MM JI1'
^�Gtnn 7
Subject: Monitoring Report HB96-416
Dear Mr. Tandy:
The Department of Community Services and Development (CSD) received your letter of
November 13, 1996 requesting an additional 30 day time extension to respond to the
findings/recommendations identified in the above mentioned monitoring report#B96-016.
Your request has been approved by CSD. December 14, 1996 is the new due date for your
agency to respond to the subject report findings/recommendations. CSD will maintain an open file on
this matter until responses to all findings/recommendations are reviewed and approved by CSD.
Sincerely,
f`c 1±a-
Lupe Urrutia
Area Field Representative
cc: Pablo Rosales, Manager, Unit B
CCSDEXT WPD
(Formerly,THE DEPARTMENT OF ECONOMIC OPPORTUNITY.)
T). �-
Community Services DepartmentContra Child Development 374-3994
Child Nutrition 374-3850
Administration Comm
Co Sta unty Action 313-7363
1220 Morello Avenue, Suite 101 Head Start 646-5540
- Martinez, California 94553-4711 Count` ' Housing and Energy 646-5756
(510)313-7350 �/
Fax: (510)313-7385 sE
�c v
Scott Tandy, +�
Director
o:
�Tq COU4(y
November 13 , 1996
Lupe Urrutia, Senior Field Representative
Department of Community Services and Development
700 North 10th Street, Room 258
Sacramento CA 95814
Dear Ms. Urrutia:
Thank you for your letter of October 28, 1996, regarding your
Monitoring Visit Report #B96-016.
I have advised the County Administrator of your letter and the
serious nature of its findings and recommendations.
Your visit occurred in late August and we received your report
sixty days later. Therefore we would request that a time extension
be provided of thirty days in order for the County to provide the
responses you are recommending.
Thank you for your attention to this request.
Sincerely,
Scott Tandy
Director
ST/jm
cc: Phil Batchelor, County Administrator
Ken Corcoran, County Auditor-Controller
Affirmative Action/Equal Opportunity Employer
-M b.
ATTACHMENT FIVE I
I �
i
U.S. Departme4tof health and Human Sery joeL
Office of Inspector General,
Office of Investigations
j
OFFICE #: 415-4:V-7960 FAX #: 418-437-796,t,
4
I
LAVE:
0FFICE:
OFFICE 90. Sf 0 �f 3 -736-;o
pAX No. 5't o -3 `2-3 E,57
a
FROM• ' , !
DlfHS, OIG) OI - San Frau oisco i
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COVER PLS PAGES �
cotes:
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COt7Rr's COSTA COUNTY
RECEIVED j
NOV: - 8 1996
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OFFRCE OF I
COUNTY ADMINISTRATOR
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cox 422516
+ San firanci$ 4, CA 9,'
R8QUEST FOR TMFORMP-TION
i OR ASSISTANCE
To : Sc Ott Tandy, Direjtor
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Contra Costa County Department of Community, Services
3.224 Morello Avendef Suite i0i ' !
Martinez, California 94553
The Inspector General of the Department of Health and human
Services, pursuant to the authority contained in� S USC Appendix
3 , et seq. , requests that you furnish information or assistance
as follows: i I
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Tho following records pertain to the time period of July, '
1994, to present unless otherwise noted_
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i. i Any and all demands and associated =.upliorting documents
submitted toIthe county by the Un- 1 Council of �
Spanish Speaking organizations (UCSSO) including any
revisions orjamendments -
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2 , , Any and all >-ecords of payments made to UCSSO and the
supporting documents for the payments, including copes
of county checks or warrants .
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3 . Any and all internal reports evaluating or otherwisel
commenting upon the performance of UCS80 as a delega e
agency. Repents include internal memoranda and/or
correspondende regarding the performance of i7CSSO.
4 . � Any and all deports addressing the UCSSO budget or
payments mads to or expected to be made to UCSSO fort
performance cif its work.
5 - i Any and all payroll records furnished to the county by
UCSSO and any and all listings of UCSSO employees .
6 , The names of ;former UCSSO employees now in the employ,
of the county-
7 . 1
ounty_7 . ! Any and all s'p urce documents for drawda{wns on KES grant
funds provideU to the county (associated with the bank
account to wh�i.ch federal headstart grant funds are
deposited) .
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8 . 1 Any written contract to administer thelheadstart
program betweien UCSSO and the county.
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9 . Any and all accounting records of head.ptart expense
and revenues' including ledgers and journals and
supporting documents .
10 . Any and all Internal documents addressing UCSSo
employee timecards and any ane all UCS timecards in
the possession of the county.
11 . Any and all 'records and source documens showing thi
disposition o
f all monies released in connection with
the $431 , 902; claimed to ACF on September 20, 1995 .
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12 . Monthly banking statements associated }vith the
headstart bafk account maintained by the county ands
holding federal headstart grant funds _i
13.. Written minutes of any meetings between UCSSO and tl!e
county.
We would also request interviews with appropriate county staff'
members.
Pertinent sections of i.he United States Code arejset forth on
page 3 .: The request i� made for law enforcementlpurposes and lin
connection with an official investigation being conducted by the
Department . i
CAUTION: Representatives of the Office of Inspector General axe
requir6i to show their official identification wher_ personally
requesting information! or assistance. I
Requested by: Norntz,l sieael,_Sv¢cial Agen-t i
I _ Name and Title
San rr6ncisco Field Office of Investigations
office l j
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Pursuant to the authority cont-41aed in 5 USC Appendix 3 et seq_ ,
the Inspector General ;(or his delegate) is authorized to :
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(1) have access to all records, reports, Audits, reviews,
documents , pIopers , recommendations, o other materi'.l
available toj the applicable Depawtmen which relatelto
programs andloperatious with respect to which the
Inspector General has responsibilities under this A t
(section 6 (a�) (1) ) ;
(z) request such information or assistance as may be i
necessary fo carrying out the dutiesland
responsibilities provided by this Actltrom any Fedexal ,
State, or loIal government agency or unit thereof
(section 6 (a (3) ) ;
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(3 ) require by subpoena the production of Iall information
documents, roports , answers, records, ccounts, papgrs ,
and other data and documentary evide4 necessary in
the performance of the functions assigazed by this Act,
which subpoena, in the case of cont � y or refusalito
obey, shall be enforceable by order of any appropri4te
United States District Court (section ,6 (a) (4) ) - -
other provisions stater I
(Iq Upon requestiof the Inspector General dor information
or assistance under subsection (a) (2) i, the head of Jany
Federal agency involved shall, insofarlas is
practicable end not in contravention of any existing
statutory restriction, or regulation o� the Federall
agency which the information is requested, furnish to
the Inspector" General, or to an authorized designee,l
such informa�.iou or assistance .
(2) whenever information or assistance requested under
subsection 6 ! (a) {1} or 6 (a) (3 ) is, in the judgement
of the Inspector General unreasonably ire£used or not
provided, the Inspector General shall report the
circumstances to the head of the establishment i.nvolTed
without delay . j
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ID •a ATTACHMENT SIX
Community Services DepartmentContra Child Development 374-3994
Child Nutrition 374-3850
Administration Costa Communty Action 313-7363
1220 Morello Avenue, Suite 101 Head Start 646-5540
Martinez, California 94553-4711Count ,
Housing and Energy 646-5756
(510)313-7350 LY
Fax: (510) 313-7385 tit
E G AA
Scott Tandy,
Director
of a
Ea _o
November 8, 1996
TO: ALL STAFF
FROM: Scott Tandy, Director
SUBJECT: County, State and Federal Investigations
County, State and Federal Investigations are presently pending into
past operations of the Community Services Department. You are
directed to fully cooperate with all of said investigators and
provide them copies of all records that they request for the
purposes of their investigations.
All documents of the Community Services Department are to be
preserved and maintained in proper order. No documents are to be
altered, removed or destroyed.
Failure to follow this directive may result not only in
disciplinary action but also in potential criminal liability for
obstruction of justice.
Thank you for your cooperation.
cc: County Administrator
Auditor-Controller
Affirmative Action/ Equal Opportunity Employer
.va•-.• vran�ran uarm niuw„ „ ..., �-n-- • - .-• �.�
to from
crrl.
PRLXsRAM ACCOUNT: 20 8 72 r tago I
Poll -
CONTRA COSTA COUNTY COMMUNITY:;rAVICESVEPAHIMENT F" r
HE/10 START POLICY COUNCIL FINANCIAL REPORT l�(,��1/V pU�',"iy.•}'`✓1
Nl;
January 1996 through September 1998
UESCRIPTION 1/96-9115 YT.D, BUUbET BALANCE %
PERSONNEL 1,762.139.46 1,762,130 46 2616.966 686.826.54 6652%
FR1NuL+0ENEFITS gi, iR RE, IVED. 527'76235 6,--1 .35 *,932 339,14965 64,9396
OCCUPANCY
31 Rent 70,045.85 70,645.85 41,bB0 60.14015 53.84%
3.1 Rant to mmungs UEC 1 0 19% 2.311.00 2311,u1 2.110(1 (311,00) 115.557E
3.3 Utilities 501059 60,059.16 c/3.856 23.79644 67.78%
3.4 Tataphone 41.W216 41,639.'61 88,154 (3.405.16) 109.13%
3.6 Child LlpM4ty b%LN&nc CLIM(BOARD OF SUPERVISORS 2,351.00 2.561.00 ; 1.750 (811.00) 146.34%
3.7 Maint(Rmwim CONTRA COSTA CO. 53.019,34 53,019.34 88.403 (14,61634) 138.06%
3.1 Ma(nUFLpaA(Custodw 43.386.78 43„705,/8 74,972 29,565.24 GO b4')1.
3.8 Rsnovatin(I-Two On 0.00 0.00 24,250 24,25000 000%
3.9 Other Occupancy(Bisso VccultancyA4mse Mgmt) 35.342.56 35,342.581 41,901 8.556.42 54.35%
3,9 Other occupensy(Security) 12,931.30 12,831 30 .WSW 3,966.70_ 76 389L
TOTAL OeCUPANCY -3 3. 1 Y 313.9%16 4'43,674 _ 7f,,M.S `rd'77%
CHILD TRAVEL I I
4.2 Vehklo Malntenace/Repair 16,689.37 16,899.37 h&406 1,696.63 91.36%
4.4 Vehlciv Operating Expenses 14,040.55 14,840.56 ;14.200 (640 56) 104.51%
4,6 Field Trips 3.045.23 3,045.23 ! 2,905 (60.23) 102.71%
4.6 Diebtli6es Travel 0.00 _ 0.00 950 910.00 O.W%
tOTALCHI1hTRAVEL -$4.77T.I6 34,77516 36601 1,BtS84 950T16
STAFF TRAVEL
5.1 IMoiTown(S1all Treves 9.891.76 9,091,76 125,309 15,417.24 39.08%
5.2 Lo Al Travel 61611 35,761.94 $5,761.94 24,605.. (11,15694_145.34%
TOTAL STAFF TRAVEL ,653.70 45.653.70 114 .30 Q1,16%
NUTRITION AND FOOD I
6.1 ChlMran's/ood 207,569.29 207,569.29 ,;.491 155,92171 57.10%
CCFP 6 USDA Reimb (92,053,09) (92,053.89 (25%447) (167,393 11) 35.48%
6.2 Adult Food 0.00 0.00 9,150 9,150.00 0.0%
64 Other Nu►ltion 17,237.80 17,237.60 !36,654 21,416.20 44.60%
TOW NUTRITION AND FOOD 132,755720 13 753.20 151,846 10,094,00 87.4
EQUIPMENT l
7.3 Classroom/Outdoor (1-Time OF) 0.00 0.00 ' 8.914 6,914.00 0.00%
7.4 Kitchen(1.-Tlma OF) 0.00 0,00 , 3,805 3,605.00 0.00%
7.5 Eouip/mainVrepair 2.422,05 2,422.56 i 6.850 4,42714 35.37%
/Ii Wheelcholr/Radip,Anterno(1 -Ti,nr:OH) 0.00 0.00 i 11,100 11.100.00 0.00%
7.6 Other lumiture/ecluip-rent6.543.38 _ 8,543.38�__! 8,000 566 09.34%
TOTAL E0UIPMEN7 0,96624 109 ' T �'�50.060 "fl.ib2.)6 Ir-o�d9
}
SUPPLIES 1
6.1 UMiCa/C:npyingM01Wwv 93,176.12 23.170.12 27,957 4.7146R 89.01%
8.2 Gearing 3243,97 3.243.97 5175 1,931.03 62.bv%
8.3 Classroom 26.462.64 s^8,402.64 30,861 2,450,36 92.03%
8.4 Madical/DaINBI 1,82709 1,827.09 2.435 60891 75.00%
8.5 IGlchen 500.14 506.14 0 (506.14) ERA
6.6 Disabilities BBB,96 688.98 3,100 2.211.02 9666%
87 CU,ar 5,367.61 __ 6,381.51 1 5.190 730.49 67.097E
TOTAL FOR SUPPLIES 63.408.45 63,40645 -73629 12 2n9"�83.841(.
I,I
OTHER CHILD Sti11VICES
0.4 MedcaLrDental EyAml°uc:reening 125.00 725.00 I 268 143.00 000%
9.6 Men%l HSdih As69 %mwriVCma 47,757.86 47,757.0,.. 43,555 (4.202.86) 109.65%
9.8 Disabilities Service __ 0.00 _ _ 0 W' 21 304 211104.00 000%
TOTAL OTHER CHILD SERVICES 4 2. 6 47,662 1'��-� 5327 17444.14 75.IrT%
OTHER PARENT SEHVKaS I 1
10.1 Parer4 Adivltire 2 n78 91 2.878.21 7,618 4,739,79 37.78%
10,2 Qt7151 IOwn(Parents) b,4/47,41 5.D47.41 12,399 6,451.59 479/1,
10.3 Looel T.eel Pererss 617.88 617.ea1 3,646 3.02832 1694%
10,4 Other Parent Services 4,03510 4 35.10 6,200 3,564.90 66.63%
OTHER PARENT SERVICES - 16 •0 - ia, 40 _ ,''37.863 T�,78a.S8 44 1891;
Community Services DepartmentContra Child Development 374-3994
Child Nutrition 374-3850
_ Administration Communry Action 313-7363
1220 Morello Avenue, Suite 101 Costa Head Start 646-5540
Martinez,California 94553-4711 1-% n}` , Housing and Energy 646-5756
(510) 313-7350 l�/ RECEIVED
Fax:(510)313-7385
Scott Tandy, " t \ DEC 1 0 19%
Director
BOARD OF SUPERVISORS
CoffM COSTA CO.
November 8, 1996
TO: ALL STAFF
FROM: yZ Scott Tandy, Director
SUBJECT: County, State and Federal Investigations
County, State and Federal Investigations are presently pending into
past operations of the Community Services Department. You are
directed to fully cooperate with all of said investigators and
provide them copies of all records that they request for the
purposes of their investigations.
All documents of the Community Services Department are to be
preserved and maintained in proper order. No documents are to be
altered, removed or destroyed.
Failure to follow this directive may result not only in
disciplinary action but also in potential criminal liability for
obstruction of justice.
Thank you for your cooperation.
cc: County Administrator
Auditor-Controller
Sheetl
Analysis of Proposed Versus Funded FY 1996-97 Occupancy Costs for Community Services
Department(by site). REVISED MARCH 22, 1996
Site Child Child Head Start Other I TOTALS
Development I Nutrition
West drove _ 12,228.00 Q 21,573.00 18,202.00 65,269.00
Morello 25,494.00 0.00
-- ! 6,58400 4.00 18,812.04
Silver 0.000 1 0.00 12,070.00 1 0.00 12,070.00
Crestview 0.00 i 610 15,355.00 . 0.00 15,355.00
Leland Ave. -- 0.00 _. - -
O.00 Q-Qa : 0.00 0.00
Bisso Lane 0.00 0.00 ' 31,9904.00n I 0.00 31 994.00
g� 0.00 O.OQ L 54,422.00 54,422.00
_ 0_00 ! 0.00 0.00 6,364.04
Port Chicago 0 0
Brookside"A" 6,364 00
Brookside"B' 3,011.00 27,586.0_0 65,761.00 : 777.001 T97,135,00
J Street - 0.00 0.00 14,714.00 0.00 14,714.04
Sunset Q.OQ 0.40 19,359.00 ! 4.00 i 19,359.04
10th Street 0.00 0.00 20,932.00 0.00 I 20,932.00
Bolton Road 0.00 0,00 14,639.00! 0.00 1 14,639.00
t--- ---- -- -- ---- -
Second_Street 0.04 0.00 12,504.00 Q.OQ 12,504.00
First Street 0.00 0.00 12,504.00 0.00 ! 12,504.00
Folsom(Davis) 0,00 0.00 12,308.00 0.00 ! 12,308.00
Groom 0.00 0.00 0.00 0.00 0.00
Harbour Way _ 0.00 0.00 0.00 0.00 _ 0.00
Balboa 56,572.40 ! OA0- 86,311.00 0.00 142,883.00
--- ------- ------- - - - --_ ___-
Orchard O.OQ 0.00 19,708.00 0.00 i 19,708.00
Lacey Lane 0.00 0.00 16,480.00 0.00 16,480.00
Medanos Ave. 0.60 0.00 30,228.00 ! 0.00 i 30,228.40
Grant 0.00 0.00 22,65200 0.00 '� 22,652.00
11th Avenue 41,143.00 0.00 0.00 0.00 41,143.00
------------ -- -
Florida Avenue 58,271 40 4.00 0.00 0.04 ' 58,271 00
- - -- _ - -
Maine Street 65,719.00 0.00 _ 0.00 0.00 - 65,719.0Ha0
--_-nett Ave -.
t - 0.00 31,638.00
Pullman Ave 22,$63.00 O.OQ 0.04 000 22,863.00
Giaramita _ 36,822.00 1 0.00 0.00 0'7 0.0 - 36,822.00
Jones 10,595.00 440-; - 0.90 10.5959Q
PROPOSED 370,720.00 27,586.00 435,676.00 73,401.00 907,383.00
__-. - 0 -- -- -
FUNDED 366,338.00 ''� 27,604.00 269,829.00 '_ 30,092.00 693,869.00
DIFFERENCE _ (¢,$$�QO�__ . 14.00_ (165.847.00) T (43.309.00)1 (213.524.00)
Post-it Fax Note 7671 1 -7 a ogest
Date t
From A_
CoJDept. Co.
Phone# Phone x
Fax N Fax M
DATE: March 29, 1996
TO: Joan Sparks, Director
FROM: OKAI Prince, ASO
SUBJECT: Consolidated Financial Report For The Period Of
July 1 , 1995, through February 12, 1996
ORG 0588
Here is the latest Consolidated Financial Report for ORG 0588 for
the period of July 1 , 1995, through February 12, 1996:
Description Month of 1/96 Year-To-Date
Expenditures: $ 643,543.77 $4,035,574.11
Revenues: $ 70,978.49 $1,477,178.79
Fund Balance: ($ 572,565.28) ($2,548,228.83)
Current Fund Balance as of February 12,1996: ($ `91,023.15) --
Planned Fund Balance as of February 12,"1996: ($ 42,625.33)
* The "Cash" method is employed without use of encumbrances.
* With 58.33% of the County Fiscal Year elapsed, the
Department's Year-To-Date Expenditures represent 52.90 %
of the Department's FY 95-96 budget. Again, given the usual
lag time, this percentage indicates to me that we are going to
exceed our budget. Given the number of outstanding
1
Appropriation Adjustments that have yet to be entered into the
system, this may solve the problem. I will look into it and report
to you next month,
The "paper" Fund Balance of $2,548,228.83 remains too high. I
spoke to Head Start staff about the substantial difference, most
of which (82.01%) is from the Head Start Division. I was
advised that delays in booking Revenues are not the fault of
the Department, but are due to continued sick leave problems
will several staff at the Auditor-Controller's Office. There is just
no one available to process our claims any quicker.This factor,
combined with (1) the usual one month delay; (2) outstanding
1995-96 accrued revenues accounts; and (3) the existing Fund
Balance deficit accounts for most of the problem.
We need to begin considering the possibility that the current
Fund Balance deficit of $91,023.15 needs to be adjusted to
reflect outstanding claims from prior periods that to date remain
uncollected. Rather than continue to reflect them as a Grants
Receivable, which means that the Department anticipates that
at some time they will become a source of revenue, I believe it
appropriate that we should acknowledge that our probability of
collection for the entire sum is low, which, if not resolved, will
result in our actual Fund Balance deficit for FY 1995-96
becoming greater. _ ---
Here are the potentially uncollectable accounts currently in
question:
Year Alleged Debtor Amount
1992 Housing Authority ($29,611.14)
2
1993 State Department of ($25,384.74)
Community Services
(1993 DOE Contract)
1991 CCC Transit Occupancy
Tax ($20,000.00)
TOTALS ($74,995.88)
1 do not want to imply that we have no chance of retrieving
these funds. If we begin some creative/aggressive collection of
these debts, we certainly have a chance to collect these funds
if they remain available. It is just my belief that probability wise,
our chances of collecting dollar for dollar is somewhat low, and
we should continue to reflect conservatively this probability in
our estimated FY 1996-97 Fund Balance to reflect this
possibility.
I will provide to Darnell again a copy of the outstanding
receivables and ask his assistance in hopefully resolving these
outstanding claims. Since we are still working on the 1993
CSBG final report, we can do some work on the 1993
outstanding DOE claim of $25 K, which, if 1 remember correctly,
the former H & E Program Manager was working on before she
left County service.
The Department's current Fund Balance for ORG 0588 as of
February 12, 1996 is comprised of the following figures:
Housing & Energy Deficit $ 43,318.88
Charges to ORG 1427 $ 47,704,,27
Current Fund Balance $ 91,023.15
Given that the County's FY 1995-96 planned Fund Balance for the
Department is ($72,072), we are facing quite a potential deficit
3
problem. Again, if we can resolve the uncollectables and cure the
Housing & Energy deficit , we will be fine. If we cannot, we will
problems.
Please see me if you have any questions. Thank you.
4
D.3 se '
Contra
Costa
TO: BOARD OF SUPERVISORS ai ,, +n y
County
FROM: HARVEY E. BRAGDON •, v`
DIRECTOR OF COMMUNITY DEVELOPMENT ocsra-------
DATE:
-----DATE: December 10, 1996
SUBJECT: Request by Ms. Diana Patrick of the Board of Supervisors to Reconsider
its November 19, 1996 Decision to Modify Shell's Land Use Permit
Allowing Shell to Ship Petroleum Coke by Truck (LP962024)
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
Deny the request made by Diana Patrick on November 25 , 1996 of the
Board to reconsider its November 19 , 1996 decision which modified
Shell ' s Clean Fuels Project Land Use Permit and thereby allowed
Shell to routinely ship petroleum coke by truck.
FISCAL IMPACT
None.
BACKGROUND/REASONS FOR RECOMMENDATIONS
A. Previous Hearings and Actions:
On October 12 , 1993 the Contra Costa County Board of
Supervisors certified the Environmental Impact Report (EIR)
for the Shell Oil Company's Clean Fuels Project and approved
its Land Use Permit #922009 . This permit allows Shell to
transport coke by rail during normal operations and by truck
during emergencies.
On February 25, 1996 Shell proposed a change in its project to
ship coke by truck during normal operations. This proposal
involves no other change in Shell' s Clean Fuels Project, as
described in the existing EIR, except the addition of truck
washing apparatus to its Coke Handling Facility to remove
pieces of coke from the truck' s top, sides, undercarriage and
wheels. /
CONTINUED ON ATTACHMENT: X YES SIGNATURE rl
_ RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION��O'F�F BOARDl COMMIT E
APPROVE OTHER
SIGNATURE(S) :
ACTION OF BOARD ON December 10, 1996 APPROVED AS RECOMMENDED OTHER X
See attached Addendum.
VOTE F SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
_ UNAN OUS (ABSENT TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
Contact:Debbie S derson - 35-1208
Orig: Community De lop nt Department ATTESTED December 10 , 1996
cc: Public Works - ch Avalon PHIL BATCHELOR, CLERK OF
Shell Oil Co n THE BOARD OF SUPERVISORS
Diana Patr ' AND C UNTY ADMINISTRATOR
B.1 DEPUTY
D, 3
2 .
On August 27 , 1996 and September 10, 1996 the County Planning
Commission accepted public testimony on Shell' s proposed
change in coke transport mode. At the August 27 , 1996
hearing, Commissioners asked several questions, which staff
responded to in the September 10, 1996 staff report.
At the September 10, 1996 meeting, the Commission unanimously
adopted the "Addendum . . . " to the Shell Clean Fuels Project
EIR and approved Shell's Land Use Permit #962024 to allow
transport of coke by truck during normal operations. " Staff
reports for these two hearings summarize the issues raised
and staff responses and are included with this order. Also
included are all new permit conditions; highlighted text
represents all changes from its original Clean Fuels Project
#922009 .
On September 20, 1996 Ms. Diana Patrick appealed this
Planning Commission decision allowing Shell to transport
petroleum coke by truck. Ms. Patrick submitted additional
documentation on September 23 , 1996 .
On November 5, 1996 and November 19 , 1996 the Board accepted
public testimony on the appeal . At the November 19 , 1996
hearing, the Board denied the appeal and adopted staff
recommendations, thereby modifying Shell' s permit to allow
the routine shipment of coke by truck.
On November 26, 1996 Ms. Patrick asked the Board to
reconsider its November 19 , 1996 decision (letter attached)
B. Grounds for Reconsideration
Ms. Patrick bases her requests for reconsideration on two
points, identified and evaluated below:
1. " . . the County failed to consider the risks identified
in a report by J. Phyllis Fox, Ph. D. of Russell
Resources, Inc. . . .dated November 19 , 1996 and submitted
to the Board at the November, 1996 hearing on this
issue" ;
Staff Response: The document referenced above was
submitted to the Board as part of the hearing testimony,
prior to the Board's deliberation and, therefore, is not
new information previously unavailable to the Board.
Therefore, staff does not consider this point as
sufficient grounds for reconsideration.
2 . " . . . information on a coke truck accident was not
presented and is now available. "
Staff Response: The "Addendum. . . " adopted by the Board
acknowledges that coke truck accidents might occur and
evaluates the potential impacts of such accidents (see
the Addendum, page 11) . The occurrence of one coke
truck accident is not inconsistent with the impact
analysis presented in the "Addendum. . . " and, therefore,
staff does not consider this point sufficient grounds
for reconsideration.
C. conclusions and Recommendations
Staff recommends that the Board of Supervisors deny Diana
Patrick's request that the Board reconsider its November 19 ,
1996 decision that allows Shell to transport petroleum coke
by truck.
DS/aa
b. 3
ADDENDUM TO D.3
December 10, 1996 Agenda
The following persons presented testimony on this matter:
Richard Duncan, 1312 Marina Vista, Martinez;
Daniel R. Arellano, City of Brentwood, City Hall, 708 Third Street,
Brentwood;
Diana Patrick, 1310 Marina Vista, Martinez;
Jim Miller, 1906 Newell Avenue, Martinez;
Steve Kaspar, 29 Goree Court, Martinez;
Steven Young, P.O. Box 973, Martinez;
All persons desiring to speak having been heard, the Board discussed the
issue.
Due to the lack of a vote by the Board of Supervisors, or continuation of
the appeal of Shell Oil Company's "Clean Fuels Project", Land Use Permit
#96-2024, the motion for reconsideration of the Board of Supervisor's
November 19, 1996 decision failed, and therefore was denied by operation of
law.
1
1310 Marina Vista 40ONTRA
Martinez, 94553
November 26, 1996 96 NOV 26 PM 2: 27
c , ' `,iY
Jeff Smith, Chair t7EV€L WT
Contra Costa County Board of Supervisors
651 Pine Street
Martinez 94553
Dear Chairman Smith and Members of the Board,
re: Amendment to Shell Oil Co Clean Fuels Project Land Use Permit
County File #2024-96
1 hereby request reconsideration of the County's decision to modify Shell's permit to
allow up to 100 truck trips a day of coke transport on Marina Vista to 1-680 without
benefit of an Environmental impact Report.
The grounds for this request is that the County failed to consider the risks identified in
a report by J. Phyllis Fox, Ph.D. of Russell Resources, Inc., Environmental
Management dated November 19, 1996 and submitted to the Board at the November
19, 1996 hearing on this issue; and also information on a coke truck accident was not
presented and is now available.
This is new information upon which the Board should grant a new hearing on a motion
for reconsideration.
incerel��y,
/ l ' 1 . .
Diana Patrick,
appellant
cc: Mayor M. Menesini
Shell's Neighbors
Citizens for A Better Enfironment
D3
1310 Marina Vista t�fftA
Martinez, 94553
96 NOV 26 PN 24. 27
November 26, 1996
Jeff Smith, Chair WT
Contra Costa County Board of Supervisors
651 Pine Street
Martinez 94553
Dear Chairman Smith and Members of the Board,
re: Amendment to Shell Oil Co Clean Fuels Proiect Land Use Permit
County File #2024-96
1 hereby request reconsideration of the County's decision to modify Shell's permit to
allow up to 100 truck trips a day of coke transport on Marina Vista to 1-680 without
benefit of an Environmental impact Report.
The grounds for this request is that the County failed to consider the risks identified in
a report by J. Phyllis Fox, Ph.D. of Russell Resources, Inc., Environmental
Management dated November 19, 1996 and submitted to the Board at the November
19, 1996 hearing on this issue; and also information on a coke truck accident was not
presented and is now available.
This is new information upon which the Board should grant a new hearing on a motion
for reconsideration.
incerely,
Diana Patrick,
appellant
cc: Mayor M. Menesini
Shell's Neighbors
Citizens for A Better Enfironment
Comidl✓r wi D. 3
Shell Martinez Refining Company
P.O.Box 711
Martinez,California 94553-0071
Teieph n : (51Cl31343WO
November 27, 1996
Jeff Smith, Chair
and Members of the Contra Costa County Board of Supervisors
651 Pine Street
Martinez, CA 94553-0095
Dear Chairman Smith and Members of the Board:
SUBJECT: Request for Reconsideration of the November 19, 1996
Board of Supervisors' Decision
On November 19, 1996 the Contra Costa County Board of Supervisors heard and denied Ms.
Diana Patrick's appeal of the September 10, 1996 Planning Commission unanimous approval
adopting an addendum to the EIR for Shell's Clean Fuels Project and approving a change in the
Land Use Permit allowing Shell to transport coke by truck. Ms. Patrick is now requesting a
reconsideration of that decision. This request for reconsideration should also be denied. The
report, authored by Russell Resources Inc., and referenced in Ms. Patrick's request for
reconsideration, was included as part of the record at the time the Board's decision was reached
on November 19, 1996. Furthermore, the issues raised in the report were addressed by the County
in staff's reports presented to the Planning Commission and Board of Supervisors in conjunction
with the application and appeal.
While the proponent has no information on a "coke truck incident", such an incident could not
have any material impact on the result of the traffic studies done in conjunction with the EIR
addendum prepared by the County.
If there are additional questions concerning this matter, please contact Edward Swieszcz at
(510) 313-3695.
Sincerely,
e. MAL"'C. Miller
Vice-President, Major Projects
Shell Martinez
Refining Company
P.O.Box 711
Martinez,Cali(omia 94553-0071
TMepl (510)3134000
December 5, 1996
Jay Carey
City Manager
City of Brentwood
VIA FAX: 510/634-6930
Claudia MacDonald
Chair, Discovery Bay MAC
1152 Beach Street
Discovery Bay, 94514
Aaron Meadows
Chair, Oakley MAC
P.O. Box 2121
Oakley, CA 94561
Dear Community Representatives :
I understand that some questions have been raised regarding the County's approval of
Shell's application to transport petroleum coke by truck instead of rail. For this reason,
and due to inaccuracies in the Brentwood News article, I would like to provide some
additional information.
In October 1993 Shell received a land use permit for its Clean Fuels Project designed
primarily to produce cleaner burning gasoline required by new state and federal
regulation. A by-product from one of the new processes is petroleum coke, a non-
hazardous, coal-like material. This type of petroleum coke is typically exported to the
Pacific Rim and Europe for use as a fuel.
Shell's original plan for the coke was to transport it by rail to the Part of Stockton.
Recently, a coke terminalling facility was permitted and is being built in Pittsburg, CA.
Shell has changed its plans and will now ship from the new Pittsburg facility.
Unfortunately the new facility will not be completed until sometime next summer. As a
result, Shell needs to transport the coke, on a temporary basis, to Stockton.
b, 3
Page Two
While we are permitted to transport an average of 82 trucks per day, we anticipate only
40 -50 truck loads per day during the timeframe we will be going to Stockton.
The time of day and the traffic conditions will dictate the route these trucks take to
Stockton. In addition, until we begin shipping to Pittsburg Shell will agree to limit the
number of coke trucks from this project on highway 4 through area communities to no
more than eight trucks per hour.
Shell has taken a number of additional steps to reduce potential community impact.
For example, we have agreed not to transport coke during both morning and afternoon
peak traffic hours. In addition, Shell is proud to have employed the very latest
technology in truck and truck loading design. The trucking company who won the bid
for our business has designed a state of the art, leakiess, fully covered coke truck. The
new loading facility is equipped with a coke truck wash which includes a high pressure
water tire wash. These measures have been implemented to prevent leakage of coke
particles along the roadway in the surrounding communities.
We are confident that the systems we have described represent the state of the art and
set a new standard for coke transport throughout the county. We would be happy to
answer any questions regarding this matter that you may have now or at any time in the
future. Please feel free to contact Tomi Van de Brooke at 313-3462.
Sincerely,
f�
Jim Miller
Vice President
Major Projects
12/06/1996 11:19 516-8706 CITY OF BRENTWOOD
PAGE 04
December 6, 1996
Contra Costa County
Board of Supervisors
651 Pine Street, IIth Floor
Martinez,CA 94553
Subject: Shelf Cake Trucks-Contra Costa County Land Use Permit 02009-92
Gentlemen:
We are in receipt of Shell Oil Refinery's letter and are requesting that Contra Costa County seriously consider
our concerns which follow,
We understand the Shell coke trucks have begun transporting coke along the 1-680 to I-580 route. State Route
4 has not yet been used. We recommend Shell continue using the 1-680 to 1-580 route and that the permit be
modified so that coke trucks are prohibited from using State Route 4. Although a traffic study was conducted
by Fehr& Peer Associates, it seems only the streets connecting the Shell Refinery to 1-680 were studied,
The City of Brentwood is concerned that a large number of trucks have been approved to travel on Brentwood
Boulevard (Highway 4) from Pittsburg through downtown Brentwood to Stockton, We are concerned because
those trucks will be traveling through downtown Brentwood, As you know, Brentwood Boulevard (SR 4) is
only two lanes for a larger portion through Brentwood,
Trucks, especially large trucks, have quite an impact on the operation of streets and highways. One large truck
is equivalent to 3 or 4 cars. Should State Route 4 continue to be a permitted route, the volume of trucks should
be limited to no more than eight trucks per hour during the off-peak traffic hours. The truck volumes must be
metered in order to reduce the congestion and noise impacts. There shall be no truck travel during commute
hours of 6:00 a.m. to 9:00 a.m. or from 2:30 p.m. to 6:30 p.m, daily due in large part because of high school
traffic considerations in downtown Brentwood.
Thank you in advance for your support and cooperation.
Very truly yours,
Gregory Sherman
Councilman
GS:DRA:bd
cc; Mayor and City Council
Jay M.Corey,City Manager
r•nwoanniuok.wm 0"Moa-705 Third$Vssl Brentwood,California 94519-1396
Admkilstration Offices-(510)634SM • Planning.(510)534.9945
Public Works-(510)534.5920 • BWkung-(510)5345940 • Fax.(510)5348930
377 (010)034-6911 • Fax-(510)534.5919