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TO: BOARD OF SUPERVISORS ;:• _
FROM: INTERNAL OPERATIONS COMMITTEE o', � _ �-��� � ��`
Costa
DATE: DECEMBER 20, 2004
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SUBJECT: COUNTY ADMINISTRATOR'S 2005 MANAGEMENT AUDIT PLAN
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SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1. ACCEPT status report on the management oversight activities of the County
Administrator's Office for 2004.
2. ACKNOWLEDGE that the County Administrator's Office has been reduced in
management staff by 37% over the past three years and does not have presently have
the resources that would be required to conduct and sustain a formai program of rotating
departmental management audits.
3. CONCUR that, absent the required level of professional management staff, management
audit resources must be targeted as needed to address perceived or alleged problems in
the operational practices or management of a department or program.
4. APPROVE the program of management audits and policy reviews proposed by the
County Administrator for 2005.
5. DIRECT the County Administrator to seek and pursue outside revenue sources to fund
management audits.
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CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR COMME A ON OF BOARD COMMITTEE
PROVE OTHER
SIGNATUR k ;..� �
AYLE B.IKKEMA, Chair MARK DeSAULNIER
ACTION OF BOARD ON -j A-A txy t W 19CULS'�APPROVE AS RECOMMENDED
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
UNANIMOUS(ABSENT AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AYES: NOES: SHOWN.
ABSENT: ABSTAIN:
ATTESTED: JANUARY 18,2005
CONTACT: JULIE ENEA(925)335-1077 JOHN SWEETEN,CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
CC: INTERNAL OPERATIONS COMMITTEE STAFF
COUNTY ADMINISTRATOR
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BY DEPUTY
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s County Administrator's 2005 Management Audit Program December 20, 2004
Internal Operations Committee Page 2
BACKGROUND:
On June 27, 2000, the Board of Supervisors reviewed the County's audit program and directed
that each December, the County Administrator and Auditor-Controller report to the Internal
p
O erations Committee on the proposed schedule of internal financial and management audits
for the following year, including those studies requested by the Board of Supervisors.
In previous years, the Board of Supervisors agreed to suspend the program of regular
management audits to allow the County Administrator's Office to focus its resources on the
more pressing matters of budget and public safety. These matters continue to require
significant commitments of staff time and energy. Budget reductions over the past three years
have reduced professional staff resources in the County Administrator's Office by 37%, requiring
the department to eliminate some functions and assign additional work to remaining staff to
maintain critical services.
Despite severe staff reductions, the County Administrator's Office was able to complete most of
the tasks scheduled for 2004 (reference attached report). For 2005, the County Administrator
has proposed a program of countywide management audits to address concerns identified by
the Board of Supervisors and administrative staff. The program comprises:
A Pension Reform Study—Work with statewide committees to identify strategies
for pension reform.
> Retiree Health Benefits Study— Explore cost containment strategies.
➢ Community Services Department Management Audit—To build on the state
and federal audit findings related to program issues at Head Start sites and
identify appropriate corrective action
➢ Human Resources Department Organizational Review— in light of the
significant period of transition in senior level personnel, a study of how existing
staff can be deployed in the most effective manner
➢ Review of Protocols for Reporting Public Safety Hazards on County Roadways
—to develop the necessary lines of internal communication to ensure rapid
response and mitigation of public safety hazards.
➢ East Contra Costa Fire Protection District Master Plan—develop a
comprehensive long range master plan for the new district
Our Committee endorses the proposed program and also recommends that the County
Administrator investigate potential new revenue sources that might be used to supplement the
audit program.
It should be noted that the Auditor-Controller is scheduled to make his report to the Internal
Operations Committee on the proposed 2005 financial audit program in February 2005.
County of Contra Costa
OFFICE OF THE COUNTY ADMINISTRATOR
MEMORANDUM
DATE: DECEMBER 15, 2004
TO: INTERNAL OPERATIONS COMMITTEE
SUPERVISOR GAYLE B. UILKEMA, Chair
SUPERVISOR ARK DeSAULNIER, Member
FROM: JOHN SW N, Re
Administrator
SUBJECT: 2005 MANA ENT AUDIT PLAN
On June 27, 2000, the Board of Supervisors directed that each December, the County
Administrator and Auditor-Controller report to the Internal Operations Committee on the
proposed schedule of internal financial and management audits for the following year, including
those studies requested by the Board of Supervisors. What follows is a discussion of the tools
available to provide oversight and control of departmental activities, how those tools were
employed by the County Administrator in 2004, and the plan for management oversight for
2005.
Management Tools. The County Administrator's Office has a number of management tools
and processes at its disposal to provide guidance on and control of the many diverse
departmental activities that make up County services. These tools include policies and
procedures as documented in County Administrative Bulletins, quarterly budget monitoring and
forecasting, succession planning, financial audits, ongoing program and strategic planning, daily
problem solving, and the management audit. Judicious use of these tools can ensure
appropriate levels of oversight and support to departmental operations, at the same time
maintaining departmental focus on providing services.
The Management Audit is designed to address perceived or alleged problems in the operational
practice or management of a unit/division/department. As such, management audits are
targeted as needed and not conducted on a routine or predetermined time schedule. A
management audit may be initiated by a Board of Supervisors member, the County
Administrator, or a Department Head. The proposal should include a clear statement on the
perceived or alleged problem and the facts or circumstances surrounding the issue.
Management Audit proposals initiated by Board members are normally referred to the Internal
Operations Committee for its review and recommendation to the Board of Supervisors.
Management Audit proposals from a department head or County Administrator are customarily
initiated after consultation between the County Administrator and the Chair of the Board of
Supervisors. Evaluation of management audit proposals generally consider such factors as the
appropriateness of the management audit tool in addressing the particular issue; the severity
and/or urgency of the issue; and the workload of the County Administrator's Office and relative
priority of the proposed audit, as compared to other activities.
Unless otherwise specified by the Board of Supervisors, the scope and method of conduct of
any management audit is defined by the County Administrator, recognizing that the scope may
require adjustment during the course of the audit. The County Administrator will designate a
management audit team to conduct the audit, consisting of members of his office and, as
2005 Management Audit Plan December 15, 2004
Internal Operations Committee Page 2
appropriate, representatives of departments and/or experts in the subject matter of the audit.
The Management Audit Team presents its initial findings and recommendations to the County
Administrator, who is responsible for appropriate follow-up.
2004 Management Oversight Activities. The following management oversight activities were
conducted by the County Administrator's Office in 2004:
> Sick Leave Usage—Convened a committee of departmental representatives that identified
issues regarding sick leave, resulting in a report with findings, conclusions and
recommendations addressing the issues of sick leave usage levels, sick leave policy,
management tools, training and education, data on sick leave usage and sick leave
incentives. The Sick Leave Committee's report is currently scheduled for review at the
department heads' meeting in January 2005.
> Cell Phone Usage—Convened a committee of departmental representatives to examine
policy, practices, and costs associated with County employee cell phones. The committee
developed a comprehensive survey on these issues, which identified a wide variance in
policy, practices, and costs. The committee is currently working on clarifying issues and
developing findings and recommendations.
> Travel Policy— Issued Administrative Bulletin#111.5, Travel, which updated and clarified
standards, policy, and procedures in the review, approval, and reimbursement of travel
requests.
> Siting of Sensitive Facilities—Convened a committee of departmental representatives that
developed detailed information on the County's facilities occupied by sensitive programs,
including facility location, site characteristics, program requirements by facility, County policy
on siting facilities and associated information, including a GIS map of facilities by city, type,
and proximity to public transportation. This internal staff work was a precursor to the
County-City Managers Committee convened to foster better understanding and agreement
on siting of sensitive facilities by the County.
> Fiscal Forecasts for Fire Protection Districts- Produced a 10-year forecast of costs and
revenues for the Contra Costa County Fire Protection District and East Contra Costa Fire
Protection District that modeled annual increases in the base assessment due to projected
land development and "turnover" (sale) of real estate. The fiscal forecast evaluated the
ability of the two districts to meet their projected operational obligations with their future
projected revenues, a precursor to the establishment of priorities for expenditures that
maintain service levels in the most cost effective manner.
> Structural Analysis of Budget—Analyzed historic and near-term revenues compared to
costs, identifying a structural imbalance in the County budget due to a combination of
factors: depressed general purpose revenues, lower year end fund balances, health
insurance costs for both current and retired employees and necessary increased charges by
the Workers Compensation Trust Fund. The evaluation resulted in identification of key
areas of action necessary to align spending with revenues.
> Retirement Costs—Conducted a comprehensive study of the driving forces behind
increasing employer retirement costs, including actuarial assumptions and Retirement Board
portfolio management practices, to identify areas of future financial liability to the County.
2005 Management Audit Plan December 15, 2004
Internal Operations Committee Page 2
➢ Workers Compensation Costs—Undertook a comprehensive analysis of the workers
compensation program, including long term cost projections if no actions were taken to
change the program. Identified priorities for program modifications.
➢ Capital Facilities and Utilities—Conducted a comprehensive analysis of current and
projected capital facility needs, taking into account not only program requirements but also
facility operational costs. Established criteria for the review and approval of future capital
improvements. For energy usage, adopted a strategic energy plan.
> Locally Generated Revenues—On an ongoing basis, project sales tax, property tax, vehicle
license fees, utility and solid waste surcharges, business license tax, transient occupancy
tax and tax increment pass-through revenues for the budget year.
> Library Financial Projection- Prepared a five-year forecast to assess the level of additional
resource necessary to maintain current"open hours" at the 23 branch libraries. Identified
the need for backfill from reserves until FY 2007-08, at which time revenue growth will again
meet/exceed expenditure requirements.
> Administrative Bulletin Review—Began a comprehensive review and update of all County
Administrative Bulletins.
2006 Management Oversight Plan. For 2005, the County Administrator's Office has planned
the following management studies and audits:
➢ Pension Reform Study—Work with statewide committees to identify strategies for pension
reform.
> Retiree Health Benefits Study—Explore cost containment strategies.
➢ Community Services Department Management Audit—To build on the state and federal
audit findings related to program issues at Head Start sites and identify appropriate
corrective action
> Human Resources Department Organizational Review—in light of the significant period of
transition in senior level personnel, a study of how existing staff can be deployed in the most
effective manner
➢ Review of Protocols for Reporting►Public Safety Hazards on County Roadways—to develop
the necessary lines of internal communication to ensure rapid response and mitigation of
public safety hazards.
➢ East Contra Costa Fire Protection District Master Plan—develop a comprehensive long
range master plan for the new district
For 2005, the County Administrator proposes to continue its practice of conducting studies and
policy reviews to address concerns identified by the Board of Supervisors and which have broad
impact on all County departments; and to conduct targeted management audits to address
specific problems or issues.
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