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HomeMy WebLinkAboutMINUTES - 05221990 - I.O.5 I .O.-5 TO' BOARD OF SUPERVISORS Contra FROM: INTERNAL OPERATIONS COMMITTEEo; s Costa DATE: May 14/ 1990 County <<!)'jq_.; �P� CUUN SUBJECT: REPORT ON THE STATUS OF EFFORTS TO GET ALL COMMUNITY SERVICE DEPARTMENT CONTRACTORS OFF OF THE PRE-AUDIT BY JUNE 30 , 1990 SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1. Agree as a matter of Board policy that no agency contracting with the Community Services Department is to remain on pre-audit following June 30, 1990 . If, in the opinion of the Auditor-Controller, the agency is unable to responsibly handle the finance and accounting issues relating to the contract with the County, then either the Community Services Department should provide additional technical assistance to the agency, or take over direct operation of the program or cancel the contract with the existing agency and contract with another agency which is able to handle the program. 2. Request the Community Services Director to determine which of the above alternatives is most appropriate for each of the contract agencies which remains on pre-audit and make recommendations to our Committee on what action should be taken on each such contract at our meeting on June 25, 1990. 3 . Request the Community Services Director to insure that each of the contract agencies which remains on pre-audit is advised of the date, place and time of our Committee' s June 25 , 1990 meeting. CONTINUED ON ATTACHMENT:VPC YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOAR COMMITTE APPROVE OTHER __-- SIGNATURE(S): S TNN . WRT Hm M .PEAK T M POWERS ACTION OF BOARD ON May 2 - ,_ 1990 APPROVED AS RECOMMENDED Y OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT 1 ) 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 ATTESTED �a _ /990 Com un1 ty S e T1T.1 C_e_S__. __ . _. PHIL BATCHEL R,CLERK OF THE BOARD OF County Counsel ..____-_ _.__- _ _ SUPERVISORS AND COUNTY ADMINISTRATOR Auditor-Controller Agencies on pre-audit (via CSD) M382 (10/88) BY DEPUTY BACKGROUND: On December 19, 1989 the Board of Supervisors asked the Community Services Director to report to the Internal Operations Committee on the efforts which were underway to get the remaining contractors off of the pre-audit by July 1, 1990. At our meeting on May 14, 1990 our Committee received and reviewed the attached report from the Community Services Director. Also present were staff from the Auditor-Controller' s Office and several of the contract agencies. Our Committee is firmly convinced that we can no longer afford to spend the funds which are being spent to perform the pre-audit of expenditures for contract agencies. In our view, contractors must be responsible for the accounting necessary to insure that adequate records of expenditures are maintained or they should be replaced. We are suggesting that the Community Services Department provide some technical assistance to each of the contractors for the next several weeks and then evaluate whether the contractor will be able to function adequately without the pre-audit. If an agency is unable to meet the standards necessary in order to meet federal requirements then the Community Services Director must take one of the following steps: 1 . Remove the fiscal responsibilities from the contractor and allow the contractor to continue to operate the program with the Community Services Department operating the fiscal portion of the program. 2 . Cancel the contract with the agency and contract the program out to another agency. 3 . Cancel the contract with the agency , and take over direct operation of the program. Implementing recommendation # 1, which may be the direction recommended by the Community Services Director, may require the addition of an accountant or comparable position in the Department, as recommended by the Auditor-Controller. However, this can be done less expensively than continuing agencies on the pre-audit. We have asked the Community Services Director to review the situation with each of the contract agencies which remains on the pre-audit and return with a recommendation to our Committee on June 25, 1990 , following which we will make final recommendations to the Board. Commu ty Services Department Contra Community Services 646-5544 Head Start. 646-5540 2425 Bisso Lane,Suite 120 Costa Energy Programs 646-5544 Concord,California 94520 Costa Human Services 646-5540 (415)646-5544 County o Imy Joan V.Sparks, FL Ccntra Comet^ r^ ty Director ,�, ;\ fi1cCc.; i •:�_ � 0 194 rJ DATE: May 9, 1990 CCu�*�I � •-• •••yFr~+c. TO: Internal. Operations Committee. FROM: Joan V. Spark irector, Community Services' Department SUB: Status report - pre-audit ------------=---------------------------------------------------- This memorandum is to provide a status report to the Internal Operations Committee on the status of discussions with Head Start contractors, and the efforts of the Department in removing all contractors off .of the pre-audit by June 30, 1990 . Continued progress has been made to decrease the number of agencies presently on pre-audit. As of January 1, 1990, only three of the ten contracts on pre- audit had been removed. Contract Amendments have now been distributed to an additional three contractors for the purpose of removing them from pre- audit, leaving only four Departmental contracts ;where the pre- . audit is still a requirement. It is the opinion of the Auditor-Controller' s Office that the accounting systems and/or personnel for the remaining four agencies, Bayo Vista/Tiny Tots, First Baptist ' Church, North Richmond Neighborhood House, and Southside Community Center are not ready at this time to be taken off of the pre-audit . This decision was based on a review by Auditor-Controller staff of the documentation submitted for pre-audit. In each of the four cases, staff reportednumerous ,:errors in the documentation submitted, errors, that in the Auditor' s opinion, may result in future audit disallowances that the County would ultimately be responsible for. While the Auditor-Controller ' s Office and the Community Services Department are in agreement with the Internal Operation Committee ' s recommendation to remove all agencies off of pre- Affirmative Action / Equal Opportunity Employer Page Two audit, it should only be done at that time each agency has adequately demonstrated the fiscal capacity be able to independently administer grant funds without risk to the County. This issue prevents a problem. The prohibitive cost of pre-audit, which at present is costing the Department approximately $ 4, 600. 00 a month, exceeds the amount budgeted for this service, presenting a potential future deficit problem. It also places the administrative budgets for both the Head Start and Community Services Block Grant in jeopardy, as the combined administrative costs exceeds the amount permitted by both funding sources . In addition, the Administration for Children, Youth, and Families (ACYF) the funding source for Head Start, has addressed in previous monitoring visits the inequity of. the pre-audit process, and has informally told staff that they may require the County to remove the pre-audit requirement from Head Start contractors as a condition to receiving future Head. Start funds . The Department, in conjunction . with the Auditor-Controller' s Office and the County Administrator' s Office, has met with three of the four agencies to discuss their accounting problems, and the necessity on the part of the each agency to improve .their accounting systems and procedures to a level that is deemed acceptable by the County. A meeting with the fourth agency is in the works . Agencies have been put on notice that the Department will consider the implementation of disciplinary action unless these problems are corrected. To assist with this process, the Department has requested Head Start Program Improvement grant funds in the amount of $ 10, 000 . 00 from the ACYF to provide technical assistance and training in assisting all Head Start Contractorsin the development of their accounting systems and procedures . A similar request for funds is being developed with CSBG funds . It is the intent of the Department to have all agencies off of pre-audit by July 31, 1990 . In mid June, the Department, in conjunction with the Auditor- Controller' s Office, will review the progress achieved to date by each of the four contractors towards the improvement . of their accounting systems, and whether or not, in the opinion of the Auditor-Controller ' s Office, these improvements are adequate to permit the agency to be taken off of pre-audit at that time. a Page Three The Department will keep the Internal Operations Committee posted on this matter. CC: Phil Batchelor, County Administrator Donald L. Bouchet, Auditor-Controller is i.