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HomeMy WebLinkAboutMINUTES - 06271989 - 1.108 ®a TO: BOARD OF SUPERVISORS �`..s - --- Contra Phil Batchelor, County Administrator ", l FROM: Costa �� DATE: June 27, 1989 . `T4o gsTq couK'� County y Grand Jury Management Letter Responses SUBJECT: SPECIFIC REQUEST(S)OR RECOMMENDATION(S)8 BACKGROUND AND JUSTIFICATION RECOMMENDATION ACKNOWLEDGE receipt of responses to the Letter to Management from the Grand Jury Audit conducted by Peat, Marwick, Main and Company for the year ending June 30, 1988, which were submitted by various departments, and DIRECT County Administrator to monitor implementation of responses. BACKGROUND The firm of Peat, Marwick, Main and Company submitted its report to the Grand Jury on February 27, 1989. It consisted of an examination of the combined financial statements of Contra Costa County for the year ending June 30, 1988. The departments addressed in the report were asked to respond to the findings, and those responses are attached. —h CONTINUED ON ATTACHMENT: X YES SIGNATURE: -RECOMMENDATION OF COUNTY ADMINISTRATOR _RECOMMENDATION OF BOARD COMMITTEE APPROVE -OTHER SIGNATURE(S): ACTION OF BOARD ON June 27, 1989 APPROVED AS RECOMMENDED _ OTHER i 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. \ cc: County Administrator arTEsreO �' JUN 27 7988 County Auditor-Controller Community Development Director PHIL BATCHELOR,CLERK OF THE BOARD OF Data Processing Director SUPERVISORS AND COUNTY ADMINISTRATOR Grand Jury Foreman Health Services Director M382 (10i88)Peat, Marwick, Main and Co. BY I' ,DEPUTY Public Facilities Corp. Attn: D. Bell Retirement Administrator MILI wlvl%j Peat Marwick Certified Public Accountants Peat Marwick Main&Co. 2121 No.California Blvd.,Suite 840 Walnut Creek,CA 94596-3572 February 27, 1989 The Honorable Board of Supervisors The Honorable Grand Jury County of Contra Costa: We are presenting for your consideration, comments and recommendations regarding internal accounting control and other matters that came to our attention during our examination of the combined financial statements of the County of Contra Costa (County) for the year ended June 30, 1988. We have also reviewed the current status of recommendations and comments made in our prior year's management letter, and repeat herein any comments which merit reconsideration. As a result of our examination, we again are pleased to report that we did not identify any condition that we believed to be a material weakness in internal accounting control. This information should be considered in light of Appendix A to this letter, which describes the purpose of our study and evaluation of internal accounting controls. The comments and recommendations presented in this letter are intended to improve the system of internal accounting control or result in other operating efficiencies. Our comments and recommendations have been discussed with responsible County management personnel to obtain their concurrence as to their factual accuracy. We would like to take this opportunity to acknowledge the courtesy and assistance extended to us by personnel of the County during the course of our examination. �� jej • Member Firm of CONTRA COSTA COUNTY Letter to Management 1988 Fiscal Year E!(PLOYEE RETIREMNT SYSTKK (ERS) Bank Reconciliations As we described in our prior year's management letter, reconciliations of ERS cash and investment bank accounts to their related general ledger accounts were not prepared and evaluated in a timely manner. In the current year, we noted that reconciliation procedures had been established. However, not all reconciliations had been completed. Specifically, a trust account and the operating cash accounts were not reconciled at year end. We reemphasize the importance of timely reconciliations of all bank and investment accounts upon receipt of a bank statement by a person who has no authorization or custodial responsibilities over the cash or investments. Implementation of this procedure will allow management to identify and correct any discrepancies that might arise between ERS records and bank information on a timely basis and would ensure the accuracy of recorded ERS cash and investment amounts. County- Finance and Retirement System Reconciliations Accounts for the Retirement System are maintained in the County Finance System and the Retirement System. The two sets of ledgers were not reconciled as of June 30, 1988, and discrepancies have arisen. 'We recommend the Retirement System accounts be reconciled to the County Finance System accounts on a monthly basis. The reconciliations should be . documented and any discrepancies resolved promptly. This procedure will allow the identification and correction of any discrepancies arising between the two separate systems on a timely basis. HOSPITAL Patient Accounts Receivable • The patient accounts receivable processing system does not allow collections personnel to easily obtain a history of a patient's account. Questions from patients, intermediaries, and insurance companies regarding the dates and amounts of payments require extensive research, particularly when the account has been removed from the system. The extensive time required to respond to the inquiries has caused delays in other areas of the system. • Delays are occurring in transferring amounts not eligible for Medicare and Medi-Cal reimbursement to other financial payor categories. These delays are partially responsible for the increase in accounts receivable at year end. We also noted that some accounts had been coded incorrectly. -2- Patient purge cards for those accounts that have reached a zero balance were not always filed with the billing statements in a timely manner. We also noted one account on the books that was dated 1975. The importance of timely, accurate patient account records cannot be overemphasized. Although management is aware of the problem and has tentatively planned to purchase a new microfilm package that will address the deficiencies noted above, due to the significant size and activity of the accounts,- management should continue to consider allocating more resources to the processing system. Timely processing of patient's accounts receivable may increase cash flow and provide for more timely and relevant information for management decisions. Third Party Reimbursement The current Medicare system requires hospital management to estimate the amount of reimbursement anticipated for receivables on the books at year ,end. The calculation for the year . ended June 30, 1988, did not include a settlement account that impacted the reimbursement balance. The year-end estimate should take into account all elements impacting Medicare, reimbursement in order to obtain more accurate financial information. Due to the highly complex and subjective nature of the calculation, the Hospital should consider having the Accounting Hospital Administrator and/or representatives of the Auditor-Controller's office review all year-end calculations for reasonableness and propriety. OTHER AREAS Accounts Receivable System During fiscal year 1988, the accounts receivable accounting function was transferred to the Office of Revenue Collections (ORC), the agency primarily responsible for County collections. We noted the following: • The County General Ledger and the ORC Accounts Receivable System are currently not in agreement and have not been reconciled. • Receivable balance listings summarized on ORC internal reports were not in agreement. • An analysis of the reserve for bad debt account was not performed at fiscal year end. -3- We recommend that reconciliations between reports and the general ledger be performed monthly. Identified variances noted in the reconciliations should be resolved promptly. A bad debt analysis should be performed quarterly. Implementation of these procedures would enhance the accuracy of the County and ORC records by ensuring receivables and payments received are properly recorded. Contra Costa County Redevelopment Agency The County is limited in the incurring or paying of obligations to the appropriated budgeted amounts. Amendments to the budget are currently reviewed and approved by the County's Board of Supervisors. We noted that (1) two expenditure line item amounts exceeded the budgeted amounts, and (2) the detailed budget had not been updated by Redevelopment Agency personnel to reflect amendments to the original budget. Although Redevelopment Agency personnel were aware of revenue and expenditure levels in relation to the budget on an aggregate basis, the Agency's position in relation to its budget on a more detailed basis was not readily apparent. We recommend the Redevelopment Agency's budget be prepared on a timely basis and reflect all approved budget amendments on an on-going basis Current budget information will assist Redevelopment Agency management in analyzing and monitoring the current status of various Redevelopment Agency projects in relation to its budget and will readily provide budgetary data necessary for review by the Auditor-Controller's office. Written EDP Disaster Recovery Plan The County has developed a written EDP disaster recovery plan and is in the process of implementing the components of that plan. We recommend that the plan be implemented at the earliest possible date. Maintenance of an EDP disaster recovery plan is a critical feature of the County's overall accounting control. Such a plan will minimize the disruption to County operations which may be associated with the sudden loss of EDP processing capabilities. -4- Inclusion of Financial Assistance Programs in County Financial Statements The financial results of three federal financial assistance programs are only partially reflected in the County's Consolidated Annual Financial Report. Revenues and expenses related to the Community Development Block Grant program, the Community Services Block Grant program and the Head Start program are reflected in the County's financial statements only as they relate to the administrative expenses of the various programs. All revenues received from the federal government which are immediately disbursed to community-based organizations are not reflected in the County's financial statements. We recommend that the revenues and expenditures related to these federal financial assistance programs, and any other programs which are similarly not reflected in the County's financial statements, be reported in their appropriate fund type in the County's Consolidated Annual Financial Report. Inclusion of the results of these programs in the financial statements would help ensure that all County-related activities are appropriately reflected in its financial report. Public Facilities Corporation The County maintains a public facilities corporation which is used to raise funds for the acquisition and development of certain real estate and equipment. Such assets are typically leased to the County. In accordance with generally accepted governmental accounting standards, the financial information of the public facilities corporation is included in the overall combined financial statements of the County of Contra Costa. Currently, the financial operations of the public facilities corporation are monitored by a Board of Directors established to, direct its activities and are audited annually by an independent certified public accountant. We noted that the financial operations of the public facilities corporation are not reviewed periodically by individuals of the Auditor-Controller's office. We recommend that the Auditor-Controller's office increase its review and oversight of this operation. This should include, at a minimum: o Internal audits of the corporation's operations. o An evaluation of the controls over cash receipts and expenditures. • A review of cash management procedures. In addition, the role of the County's independent auditor in reviewing the activities of the corporation may have to increase as the activity level of the public facilities corporation becomes more significant in relation to the overall financial statements of the County. -5- Accounts Payable System The County is in the process of installing a new accounts payable system to process payable transactions. The new system will computerize several functions previously performed manually. As is the case with the computerization of any significant accounting cycle, the controls in place over capturing of accounts payable information and the paying of expenditures will be modified. We recommend that the internal audit department review the new system prior to and soon after. the implementation date. Performing this review will ensure that adequate controls are being incorporated into the system and that such controls will be monitored in the future. Appendix A INTERNAL ACCOUNTING CONTROL As part of our audit of the 1988 combined financial statements of the County of Contra Costa (County), we made a study and evaluation of the County's system of internal accounting control to the extent we considered necessary to evaluate the system as required by generally accepted auditing standards. The purpose of our study and evaluation was to determine the nature, timing, and extent of •the auditing procedures necessary for expressing an opinion on the combined financial statements of the County of Contra Costa. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole. The management of the County is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and judgments made by management are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any system of internal accounting control, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with procedures may deteriorate. Our study and evaluation made for the purpose described in the first paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, we do not express an opinion on the system of internal accounting control of the County of Contra Costa taken as a whole. However, our study and evaluation disclosed no condition that we believed to be a material weakness. This report is intended solely for the use of the County of Contra Costa and should not be used for any other purpose. The matters commented upon in this letter and appendix have not been reviewed subsequent to December 2, 1988, the date of our auditors' report and, therefore, we are not aware of any changes subsequent to that date. Office of Revenue Collection Costa 2020 North Broadway Costa Suite 100 (415) 646-6140 Walnut Creek, CA 94596 County Contra Costa County RECEIVED MAY 17 1989 Office of County Administrator To: Scott Tandy, May 16, 1989 Chief Asst. Administrator From: Nancy L. Bischoff, Director, ORC Subject: Fiscal Year 1988 Management Letter The Peat Marwick Main & Company report has been reviewed and steps have been taken to correct the items noted. The following is the action taken by ORC: The Office of Revenue .Collection' s receivable system is a computerized collection system and not an accounting system. The system has limitations on the accounting side and with the reports required to facilitate in the balancing of the County general ledger with the Office of Revenue Collection system. The office has requested the assistance of the Auditor' s Office, who is currently analyzing all reports and information to assist in the resolution of the problem. All data entered is balanced on a daily basis (cash, adjustments, cancellations and input) . The reports which are generated by the system are not geared towards the general ledger system and information needed does not appear which complicates the problem. The computer company which services the ORC system has developed an enhancement for the accounting component of the system. The enhancement should provide ORC with information and reports needed to resolve our current limitations. It is expected that the enhancement will be on-line in July, 1989. In the meantime, we will continue to work with the Auditor' s Office to reconcile the general ledger with the resources available. cc: Kerry Harms-Taylor, Asst. County Admin. -Finance Office of COUNTY AUDITOR-CONTROLLER Contra Costa County Contra Costa County Martinez, California RECEIVED May 9, 1989 MAY 10 1989 office of TO: Scott Tandy, Chief Assistant County Administrator County Administrator FROM: Donald L. Bouchet, Auditor-Controller By: J. Weber, Accounting Services Of i_. SUBJECT: FY 1988 Management Letter This response to your memo dated April 20, 1989, same subject, addresses those items you had highlighted: COUNTY FINANCE AND RETIREMENT SYSTEM RECONCILIATION We have been in contact with the Retirement System accounting chief and understand that they are preparing a response to these comments. .We are assured that all the reconciliation procedures are in place and are operating effectively on a current basis. There remain some old differences that are in the process of being identified and resolved. ACCOUNTS RECEIVABLE SYSTEM During 1987-88, the County's General Accounts Receivable function was transferred to ORC. ORC' s system and staff operate on. a cash basis and were not prepared to handle accounts on an accrual basis, providing for a bad debt reserve. It is ORC's responsibility to keep the subsidiary ledger in balance with the control account in the County's General Ledger, and to .ensure there is an adequate reserve. By copy of this memorandum we offer to assist the Director of ORC to set up accrual and reconciliation procedures. CONTRA COSTA COUNTY REDEVELOPMENT AGENCY The Auditor-Controller' s Office has the procedures in place to review budgetary data. The problem has been that the budgets for the Redevelopment Agency have not been prepared and submitted for Board of Supervisors' adoption on a timely basis, in the opinion of the grand jury auditors. Pertinent legislation does not specify a date for budget adoption but we would like to see them adopted by August 30, along with the other special districts and agencies: INCLUSION OF FINANCIAL ASSISTANCE PROGRAMS IN COUNTY FINANCIAL STATEMENTS The recommendation is being implemented. These programs are being included in the General Fund' s 1989-90 budget, and will be accounted for in the General Fund effective July 1 , 1989. -2- Scott Tandy, Chief Assistant County Administrator May 9, 1989 FY 1988 Management Letter PUBLIC FACILITIES CORPORATION The books of the Corporation are kept by a trustee (bank) . The trustee receives the money from bond sales and pays the bills after the bills are approved for payment by the Administrator's Office and the General Services Lease Management Division. At the end of the year, a CPA firm takes the trustee's reports and prepares financial statements which are then incorporated into the County's financial statements. The Auditor's Office has no part in this operation, and' the grand jury auditors feel the program, at $70 million and growing should receive more attention. They are recommending that Internal Audit spend some time at this, and the Auditor's Office agrees. However, as we have frequently pointed out, Internal Audit has not been able to expand in order to keep pace with decentralization and new programs. ACCOUNTS PAYABLE SYSTEM The Purchasing/Accounts Payable system implementation team includes a Supervising Accountant I , a Supervising Accountant II (Assistant Accounting Manager) and the Systems Accounting staff Supervisor. We believe this is sufficient firepower to ensure proper internal controls are in place. .We will , however, have Internal Audit review the system, time permitting. JW:mp ' CONTRA COSTA COUNTY HEALTH SERVICES DEPARTMENT DATE: May 9, 1989 TO: Scott Tai y, Chef As County Administrator FROM: Mark Fi cane, ector Health Services apartment SUBJECT: Grand Jury Response ----------------------------------------------------------------- ----------------------------------------------------------------- We have reviewed the 1988 Peat, Marwick, Main and Company management letter. Our response to the various recommendations are as follows: 1. RECOMMENDATION The patient accounts receivable processing system does not allow collections personnel to easily obtain a history of a patient's account. Questions from patients, intermediaries, and insurance companies regarding the dates and amounts of payments require extensive research, particularly when the account has been removed from the system. The extensive time required to respond to the inquiries has caused delays in other areas of the system. RESPONSE History maintenance and retrieval is not a feature of the current PHS billing system. Management .has recently purchased a microfilm retrieval and indexing system which will alleviate the situation in the future. 2. RECOMMENDATION Delays are occurring in transferring amounts not eligible for Medicare and Medi-Cal reimbursement to other financial payor categories . These delays are partially responsible for the increase in accounts receivable at year-end. We also noted that some accounts had been coded incorrectly. RESPONSE The delays referred to in transferring amounts, to other payor sources, due to staffing shortages, has been corrected in all areas except Medi-Cal Share of Cost (SOC) processing. Remittances for Medicare and Medi-Cal are being worked A-41 3181 -2- RESPONSE (CONT. ) currently and amounts are being moved to the secondary pay= source. Share of Cost continues to be a problem when the patient does not provide a completed form. Delays are encountered trying to obtain eligibility and SOC amounts from Social Service. These are not large dollar amounts and carry the lowest priority for processing. The incorrect coding of accounts will always be a problem. One hundred percent accuracy in this area is not possible since patients either do not provide correct-information or obtain program eligibility on a retroactive basis . 3. RECOMMENDATION Patient purge cards for those accounts that have reached a zero balance were not always filed with the billing statements in a timely manner. We also noted one account on the books that was dated 1975 . RESPONSE By definition, once an account has reached a zero balance and been purged from the data processing system, historical account transactions must be retrieved from an unrelated closed account archive process . The secondary process could either be manually maintained as is the current case in the Department, or it could be automated through use of a microfilm process. The manual retrieval process currently in-place relies upon "closed" patient account folders, filed in alphabetical order within the Fiscal Year that the account was purged from the D.P system. Given the storage space limitations of the Department, only two years of files are maintained on-site. Inquiries into this manual filing system require research to determine in what year an account was purged, where the file is located (either on-site or off- site) and physically sorting through the files to locate the specific folder. Implementation of the recently-purchased microfilm system will eliminate this problem. 4. RECOMMENDATION The current Medicare system requires hospital management to estimate the amount of reimbursement anticipated for receivables on the books at year-end. The calculation for the year ended June 30, 1988, did not include a settlement account that impacted the reimbursement balance. -3- RECOMMENDATION (CONT. ) The year-end estimate should take into account all elements impacting Medicare reimbursement in order to obtain more accurate financial information. Due to the highly complex and subjective nature of the calculation, the Hospital should consider having the Accounting Hospital Administrator and/or representatives of the Auditor-Controller's office review all year-end calculation for reasonableness and property. RESPONSE ` The year-end adjustment, proposed by the Grand Jury Auditors, represented establishment of a Medicare cost report receivable for FY 1987/88 activities and income statement recognition of tentative/final cost settlements for prior periods . The adjustment was the result of the recording of activities which occurred subsequent to the preliminary close of the County books, but prior to the end of the auditors field work. This timing difference, which results in the auditor's "roll-back" of activities recorded by the Department as FY 1988/89 revenue into the prior year, has occurred every fiscal year and will continue to occur given the current Medicare reporting system and the county' s year- end closing date. The Department strongly concurs with the Grand Jury Auditor' s recommendation that the Department's year-end reserve calculations be reviewed. It is for that expressed purpose that the Department has always shared its year-end reserve analysis with both the Internal Audit and Auditor- Controller's Office to insure the accuracy and adequacy of the County's patient accounts receivable reserves. MF:PG:dc WFLM CONTRA COSTA COUNTY REDEVELOPMENT AGENCY DATE: April 28, 1989 TO: Scott Tandy Chief A s is A ini rator FROM: Jim Ke Deput - edevelopment SUBJECT: FY98ent Letter - -- - ------------------------------------ -------- This is in response to your memo of April 20, 1989 in which you have asked for a response from this office regarding a recommendation and comment provided by Peat Marwick, Main & Company in their Grand Jury management letter. Please be advised that the Agency acknowledges the need for a more accountable financial management system and is in the process of developing such a system. One of the goals of the financial management system being designed would be to provide the Agency with timely information with respect to expenditures and budgeted amounts. The Agency staff is working with the Auditor Controller' s office in devising this financial management. system. JK/jb CC: Phil Batchelor Harvey Bragdon Ron deVincenzi Don Steinweg Jim Webber ra35/tandy.mem Contra Costa County RECEIVED MAY 0 1.1989z Office of Cou^?y Admir+istrator CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION COUNTY ADMINISTRATION BUILDING 12TH FLOOR 651 PINE STREET Contra Costa County P.O. BOX 191 RECEIVED MARTINEZ,CALIFORNIA 94553 (415)646-4137 APR 28 1989 Office of To: Scott Tandy, Chief Assistant Administrator County Administrator From: Patricia Wiegert, Retirement Administrator By: Rick Koehler, Retirement Accounting Manage Subject: Response to Grand Jury Management Letter FY 1988 Date: April 27, 1989 ******************************************************************************* In response to the Management Letter of the Grand Jury Auditors pertaining to the Employees' Retirement System (ERS), the following comments address the ERS procedures. The ERS cash and investment bank accounts are being reconciled to their related general ledger accounts on a monthly basis and have been completed for the calendar year 1988. Reconciliations of prior periods are being done as well as the current period to clear up any past or present discrepancies. Internal controls and procedures are in place for proper handling of these reconciliations. Specifically, the trust account was reconciled as of December 31, 1988 and is maintained on a continuing basis. Accounts maintained in the County Finance System and the Retirement System are also being reconciled on a monthly basis. The reconciliation of these two sets of ledgers is done in conjunction with the procedures listed in the preceding paragraph. We are current with our reconciliation in the cash accounts for the prior year and the current year. All procedures had been implemented prior to the audit, however not all reconciliations had been completed. We have targeted December 31, 1989 to complete all past reconciliations and are providing the Retirement Board with a monthly Status report on the progress of these items. OFFICE OF THE COUNTY ADMINISTRATOR CONTRA COSTA COUNTY SYSTEMS & PROGRAMMING May 3 , 1989 TO: Scott Tandy, Chief Assistant Administrator County Administrator's Offi e Contra Costa County FROM: Marinelle G. Thompson~` RECEIVED Director of Data Processing Services MAY 051969 SUBJECT: Response To Grand Jury Management Letter Dated April 20, 1989 Office of County Administrator The only item addressed in the Grand Jury Management letter which is the direct responsibility of Data Processing Services is the EDP Dis- aster Recovery Plan: WRITTEN EDP DISASTER RECOVERY PLAN: The Disaster Contingency Plan is a volatile document requiring contin- ual update. The Planning Group meets each week and updates to the plan are published each month as hardware and software change. Staff from the Group are assigned tasks to assist in further refining the documentation and procedures as new developments arise. Implementa- tion of the complete plan is governed by the funds available for con- tracts and staff costs. Other items included in the letter which touch on systems run by DP Services for customer departments are noted as follows: ACCOUNTS PAYABLE SYSTEM: Staff from Internal Audit have participated in the steering committee meetings and will continue to be involved with the implementation process. COUNTY FINANCE AND RETIREMENT SYSTEM RECONCILIATIONS: Data Processing Services ' staff have discussed this area with both Craig Loop of the Auditor' s Office and Chuck Barron from the Retire- ment Department. Craig said one problem was discovered when they were converting from the previous report software to the new report writer. The problem occurred if an employee retired or was terminated in the middle of a payroll cycle, creating a difference in the contribution Scott Tandy - 2 - May 3 , 1989 amounts reported to Retirement and Finance. Craig corrected the prob- lem and reviewed it with Betty Lanoue and Chuck Barron. Chuck Barron has told us that there are a couple of other intermittent problems that have prevented Retirement from completing a full recon- ciliation with Payroll and Finance. These problems are currently be- ing researched and defined and will be addressed in the rewrite of the Sub-Ledger System that is currently being discussed with Data Process- ing Services . Chuck feels once these problems have been corrected they will be able to successfully reconcile the Retirement Sub-Ledger System manually each month. INCLUSION OF FINANCIAL ASSISTANCE PROGRAMS IN COUNTY FINANCIAL STATE- MENTS: Dick Nation and Ron Saari reviewed the recommendations in this area. Dick feels the concerns mentioned are normal Grand Jury findings that the Auditor' s Office must address each year. In the past, the Audi- tor' s Office has submitted requests to modify the manner in which re- ports are presented in the Finance System. In reviewing the items listed this year, Dick feels they will fall into standard requests from the Auditor' s Office. MGT'/pch OFFICE OF COUNTY ADMINISTRATOR CONTRA COSTA COUNTY Administration Building Martinez, California To: Scott Tandy Date: April 21, 1989 From: D. Bell Subject: 1988 Management- Letter The comments in the Peat Marwick Main & Company 1988 Management Letter concerning the Contra Costa County Public Facilities Corporation are directed at the increased importance of the Corporation in the total County finance picture and that the Corporation is outside the normal County review process. The Corporation is very tightly structured and controlled by the legal documents prepared by the Bond Counsel for each transaction. Funds for each project are strictly controlled by the terms of the Trust Agreement for each issue and the Trustee can only do what is allowed within the documents. An annual audit is prepared by an outside, independent CPA firm each year. . The audit is reviewed by the County' s independent auditor. The Corporation and the Trustee have virtually no discretion over cash receipts and expenditures aside from what is structured within the controlling documents. Any additional assistance from the Auditor-Controller and review by the County' s independent auditor can only strengthen and improve the already well controlled corporation management. The Corporation would be pleased to implement any suggestions for improvements to further protect the Corporation and the County. DB:lmj cc: K. Harms-Taylor Don Bouchet