HomeMy WebLinkAboutMINUTES - 06121990 - IO.5 0.
TO: BOARD OF SUPERVISORS -----
Contra
FROM, Internal Operations Committee j Costa
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P� County
DATE: June 12, 1990
SUBJECT: Proposed Response to the Report of the 1989-90 Grand Jury:
"Elder Abuse"
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
1. Adopt this report of our Committee as the Board of Supervisors'
response to the Report of the 1989-90 Grand Jury: "Elder Abuse."
2. Remove this item as a referral to our Committee.
BACKGROUND
On March 16, 1990 the 1989-90 Grand Jury submitted the report entitled
"Elder Abuse" which was subsequently referred to the Internal
Operations Committee. On June 11, 1990 our Committee met with members
of the Grand Jury, the Sheriff-Coroner, District Attorney, and Social
Services Director and staff to discuss the recommendations and review
proposed responses. At the conclusion of these discussions we
prepared the attached response utilizing a format suggested by a
previous Grand Jury which requested that responses clearly specify:
A. Whether the recommendation is accepted or adopted;
B. If the recommendation is. accepted, a statement as to who will be
responsible for implementation and a definite target date;
C. A delineation of constraints if a recommendation is accepted but
cannot be implemented within the calendar year; and
D. The reason for not adopting a recommendation.
Responses to Grand Jury recommendations coming from our Committee will
follow this format as closely as possible.
CONTINUED ON ATTACHMENT: X YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR -RECOMMENDATION OF BOARD COMMITTEE
APPROVE OT ER
SIGNATURES: SUNNE WRIG McPEAK T M RS
ACTION OF BOARD ON June 1 2, 1990 APPROVED AS RECOMMENDED X OTHER .
VOTE OF SUPERVISORS
_ I HEREBY CERTIFY THAT THIS IS A TRUE
X UNANIMOUS(ASSENT AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS O HE DATE SHOWN.
CC: County Administrator ATTESTED - � /a. 1x/'90
G,-and Jury Foreman PHIL ATCHELOR,CLERK OF THE BOARD OF
Social Service Director SUPERVISORS AND COUNTY ADMINISTRATOR
District Attorney
Sheriff-Coroner
M382 (10/88) BY _DEPUTY
The District Attorney's Office prosecutes major (felony level) elder abuse
cases through vertical prosecution in the Sexual Assault-Child Abuse Unit and
misdemeanor level cases in the branch offices. The District Attorney
disagrees with the finding that elder abuse cases are not prosecuted
energetically.
The office monitors and maintains a file on citations issued to nursing and
board and care homes. If the State Department of Health fails to adequately
follow-up on the more serious cases, the District Attorney does.
C. None of the $4.3 million in funds allocated in this county for adult. services
is budgeted for the District Attorney to prosecute elder abuse.
Recommendation No. 5
A. We concur.
B. The Social Services Department plans to develop resources as best they can.
C. This implementation depends upon the availability of private sector grants or
services and the Department's success in competing for them.
Recommendation No. 6
The Area Office on Aging carry on a continuing public information campaign to
acquaint elders, their families and the public at large with the, availability of
adult protective services. The campaign should utilize the facilities of senior
citizens centers whenever possible and should employ other media - such as direct
mailing of informative brochures - to reach elders who do not patronize organized
senior activities.
Response
A. The East Bay Consortium for Elder Abuse Prevention has as one of its primary
charges the dissemination of information to acquaint elders, their families,
and the public at large with elder abuse issues which includes the
availability of adult protective services. Moreover, the Senior Information
Program of the County Office on Aging, through its staff and gatekeeper
program with PG&E, is already expending much effort in this area.
B. Launching a new campaign using senior centers and the media above and beyond
existing efforts really needs to be considered very carefully given the very
limited staffing available in the Social Service APS program.
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A REPORT BY
THE 1989-90 CONTRA COSTA COUNTY GRAND JURY
1020 Ward Street
Martinez, CA 94553
(415) 646-2345
FINAL REPORT ON ELDER ABUSE
APPROVED BY THE GRAND JURY:
DATE• 4
DONALD G. HAYDOCK
GRAND JURY FOREMAN
ACCEPTED FOR FILING:
DATE:
DOUGL E. SWAGER
JUDGE OF THE SUPERIOR!COURT
SECTION 933(c) OF THE CALIFORNIA PENAL CODE
Sec. 933. Findings and recommendations; com-
ment of governing bodies, elective officers,
or agency heads
(c) No later than 90 days after the grand jury submits
a final report on the operations of,any public agency
subject to its reviewing authority, the governing body of
the public agency shall comment to the presiding judge of
e supenor court on the findings and recommendations
pertaining to matters under the control of the governing
body,and every elective county officer or agency head for
which the grand jury has responsibility pursuant to
Section 914.1 shall comment within 60 days to the
presiding judge of the superior court,with an information
copy sent to the board of supervisors,on the dings and
recommendations pertaining to matters under the control
of that county officer or agency head and any agency or
agencies which that officer or agency head supervises or
controls. In any city and county, the mayor shall also
comment on the findings and recommendations. All
such comments and reports shall forthwith be submitted
to the presiding judge of the superior court who impan-
eled the grand jury. A copy of all responses to grand
jury reports shall be placed on file with the clerk of the
public agency and the office of the county clerk, or the
mayor when applicable, and shall remain on file in those
offices. One copy shall be placed on file with the
applicable grand jury final report by, and in the control
of the currently impaneled grand jury, where it shall be
maintained for a minirnom of five years. (Added by
Stats 1961, c 1284, §L Amended by Staml963, a 674,
§ 1; Stars 1974, c 393, § 6; Stats 1974, c 1396, § 3;
Stats 1977, c 107, § 6,• Stats 1977, c 187, § 1; Stats
1980, c. 543, § 1; Scars 1981, c 203, § 1; Stam 1982, c
1408, § S; Stats 1985, c 221, § 1; Stats 1987, c 690,
§ 1; Stats-1988, c 1297, § 5.)
Former § 933, added by Stats.1982, c. 1408. § 6, amended by
Stats.1985,c.221,§ 2,operative Jan. 1.1989,was repealed by Stats.1987,
c_ 690, § 2.
Former § 933, added by Stats.1959, c Sol, § 2, was repealed by
St2ts.1959. C. 181?., § 3.
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CONTRA COSTA COUNTY 1989-90 GRAND JURY',
FINAL REPORT ON ELDER ABUSE
Summary
Approximately 4,500 elderly persons in
Contra Costa County are likely to suffer
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some form .of abuse in 1990.
Some preventive and protective services
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are provided by the county government;
but these services are not sufficient to
address the actual and potential need.
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Since it is unlikely . that. any sub=
stantial amount of additional funding
is likely to be forthcoming, any
enlargement of preventive and protective
services will have to be achieved
through the enlistment of a sizeable
group of volunteers, and some re
allocation of existing funds.
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INTRODUCTION The abuse of elderly persons is a social problem that
has only recently been publicly recognized. Professional
studies on the subject did not appear until the late 1970's
and preliminary steps by federal and state governments to
address the problem were not taken until the 1980's.
Attention by the national media did not begin until the late
1980's.
Elder abuse is generally defined as abuse inflicted by
other than accidental means on an elder by someone the elder
knows, trusts and/or may be dependent on for care. Elder
abuse . may take many forms, including: physical abuse,
neglect, psychological abuse or neglect, financial exploita-
tion or sexual abuse.
A publication of the American Public Welfare Associa-
tion reported in the Spring of 1988 that one in 25, or four
percent, of the elderly suffer from moderate to severe
abuse.
Increasing longevity is a major factor in the growth of
elder abuse. It is the frail elderly who are most at risk,
and frailty most often comes with advanced age. Thus,
elders 75 years of age or more are most likely to be
victims.
Abuse of elders takes place wherever elders live. This
is usually in one of two places: private homes or institu-
tions, either nursing homes or board and care homes. In
private homes family members are most likely to be the
abusers. In institutions care providers are usually the
abusers.
The extent and steady growth of elder abuse prompted
the 1989-90 Contra Costa County Grand Jury to inquire into
the matter.
FINDINGS
1. The Welfare and Institutions Code of the State of
California requires the reporting of physical abuse of
elders to a local law enforcement agency, the long-term
care ombudsman or the county Adult Protective Services.
Those required to make such reports are care custod-
ians, health practitioners and employees of local law
enforcement agencies and adult protective services
agencies. Reports of other types of abuse such as
neglect, intimidation, fiduciary abuse and abandonment
may also be made to these agencies. (Sections
15600-15630) .
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2. Th e .State of California mandates counties to;!operate an .
adult - protective services agency, which shall
investigate and report promptly on any qualified report
or referral containing an allegation of danger.
(Sections 15750-15753 of the Welfare and Institutions
Code and Section 30-810 of Social Service Regulations. )
3. 'In fiscal year 1989-90 Contra Costa County was
allocated a County Services Block Grant by the State of
California in the amount of $1,769,899, supplemented by
County matching funds of $607,044.. to provide services
to adults. Of this amount, $862,000 was budgeted for
the adult protective services function in ,,the County
Social Services Department.
4. In fiscal year 1989-90 Contra Costa County was
allocated $1,945,241 in federal and state funds under
the Older Americans Act to provide services ..:to elders.
Programs directly related to elder abuse funded by this
grant . are the long-term care Ombudsman ($7!3,804) and
Legal Assistance for the Elderly ($71,953) : Both of
these programs are operated by non-profit agencies
.under contract to the county.
5. Other programs which may offer support ' to abused
elders, .but are not specifically targeted toward them,
are the County's in-home services. program;!, and legal
conservatorship program, County-contracted case manage-
ment and . in-home services programs and independently
operated "bill payer" and visitation programs.
5. The State of California is responsible for ',the licen-
sing of nursing homes and board and care homes. County
experts have stated that state officials are too
cursory in carrying out their responsibilities.
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7. In 1989 there were 34 nursing homes and 19d board and
care homes for the elderly operating in Contra Costa
County, with a total population of about 6,000.
8. In Contra Costa County in 1990 there are approximately
115,000 persons 65 years of age or older. If the
national average of four per cent applies-"-and it. is
considered- by elder abuse professionals in 'i County
to be valid for Contra Costa County--approximately
. 4,500 of these will suffer some degree of abuse in
.1990.
9. . In. calendar year 1989 County Adult Protective Services
received 581 reports of elder abuse.
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10. In, calendar year 1989 the long-term care! Ombudsman
received an additional 165. reports of elder 'abuse.
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11. Statistics on the number of reports of elder abuse to
local law enforcement agencies were not obtainable and
appear not to have been kept. as a separate category.
12.. Specialists in the field believe that large numbers of
elder abuse cases are not reported because (1) elders
fear reprisal; (2) family members fear _publicity; and
(3) many people are unaware of the protective services
available. As a result the vast majority of elder
abuse cases are unreported.
13. A report of elder abuse does not automatically provide
police with right of access to the place of abuse, in
contrast to reports of child care abuse.
14. There is no emergency shelter for abused elders in the
county, making removal of an elder from a place of
danger extremely difficult.
15. Professionals in the field generally agree that the
major causes of abuse in nursing homes and board and
care homes are (1) inadequate numbers of care pro-
viders; (2) care providers not suited to the task due
to lack of training, language limitations and cultural
differences in attitudes toward elder care, all of
which are directly related to the low wages offered
care providers; (3) desire ' of some care providers and
operators to exploit elders financially; and (4) the
innate callousness of some care providers.
16. The professionals also agree that the major causes of
elder abuse in private homes are (1) the exasperation
and frustration that accompany unending .responsibility
for the care of incompetent people; (2) desire to
extract money from the elderly; and , (3) drug use by
abusers.
17. It is generally believed by practitioners in the. field
that complaints of elder abuse are not investigated or
prosecuted energetically by police and prosecutors, due
partly to the poor credibility of victims as witnesses
and by the lack of corroborating evidence.
CONCLUSIONS
The 1989-90 Contra Costa Grand Jury. concludes. that:
1. Preventive programs in the county are staffed at about
one-third the necessary level and are not adequate to
the task confronting them. The long-term care Ombuds-
man program has the equivalent of two paid staff
persons. Adult Protective Services has 5-1/2 workers;
the legal assistance program has 1-1/2 attorneys and
one paralegal.
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2. The existence of adult protective programs are largely
unknown to the non-professional public.
3. The funding level for this area of activity cannot
reasonably be expected to increase significantly in
coming years.
4. Improvement in the situation. will come largely from
improved training and increased volunteer effort.
RECOMMENDATIONS
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The 1989-90 Contra Costa Grand Jury recommends:
1. The Area Agency on Aging allocate funds to operate a
continuing volunteer recruitment and training program.
The program should serve all programs related to elder
abuse - ombudsman, legal assistance, cases management
and "bill payer." The successful Health Insurance
Counseling and Advocacy Program, strictly '. volunteer,
could serve as a model. Consideration could also be
given to focusing the effort of the Retired Senior
Volunteer Program (RSVP) on the elder abuselarea.
2. The Social Services Department prepare, promote and
conduct sensitivity training programs fori care pro-
viders in nursing and board and care homes. :
. 3. The police departments of the County's 18 incorporated
cities and the Sheriff's Department reevaluate their
approach to the documentation and handling of elder
abuse ' complaints to ensure that comprehensive reports
of elder abuse complaints. are maintained and that full
investigations of possible criminal activity are made.
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4. The District Attorney's Office work closely with the
police departments and the Sheriff's Department to
develop investigative methods that will enable more
vigorous prosecution of abusers of the elderly.
5. In the absence of government funds, the Social Services
Department seek private sector grants or services to
provide emergency shelter for endangered elders.
6. The Area Office on Aging carry on a • contihuing public
information campaign to acquaint elders, their families
and the public at large with the availability of adult.
protective services. The campaign should 'utilize the
facilities of senior citizens centers whenever possible
and should employ other media - such as direct mailing
of informative brochures . - to reach elders; who do not
patronize organized senior activities.
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March 20, 1990
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Donald G. Haydock
Foreman, Grand Jury
Contra Costa County
725 Court Street
Martinez, CA 94553
Re: Grand Jury Final Report on Elder Abuse
Dear Mr. Haydock:
Pursuant to your request of March 16, 1990, the following response is submitted:
1. My office prosecutes major (felony level) elder abuse cases through vertical
prosecution in the Sexual Assault-Child Abuse Unit and misdemeanor level cases
in the branch offices. We see very few referrals even though' we have maintained
liaison with the appropriate groups and have conducted training with the county
adult abuse staff.
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The belief held "by practitioners in the field" (whoever they are) that elder
abuse cases are not "prosecuted energetically" is nonsense. ;Check with Superior
Court Judge Patricia Sepulveda who ran the Sexual Assault-Child Abuse Units
until her recent judicial appointment..
2. My office monitors and maintains a file on citations issued to nursing and board
and care homes. If the State Department of Health fails to adequately follow-up
on the more serious cases, we do.
3. None of the $4.3 million in funds allocated in this county for adult services is
budgeted for the District Attorney to prosecute elder abuse. i
Very truly yours,
GARY T. YANCEY
District Attorney
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GJOI.LTR/MAR90
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Sheriff-Coroner Richard K. Rainey
Contra Costa County ' SHERIFF-CORONER
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Warren E.Rupt
P.O. Box 391 Assistant Sheriff
Martinez, California 94553-0039 Gerald T.Mitosinka
(415)646- .i Assistant Sheriff
Rodger Davis
To: Date: ;i Assistant Sheriff
Phil Batchelor, County Administrator May 10, 19901
Attn: Dean Lucas, Deputy County Administrator
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From: Subject: i
Richard K. Rai y, eriff-Coroner Grand Jury Report
By: War:.en E. Iupf, ssistant Sheriff On Elder Abuse
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The Sheriff's Department supports the Grand Jury's premise that elderly abuse
of any kind requires special consideration. We are unable, however, to provide
as much support to the elderly as we would like. I have outlined 'below what I
consider to be the most salient parts of our current policy regarding response to
this problem.
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Prevention and Education
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It is quite probable, as the Report suggests, that many cases go unreported for a
number of reasons. To counter this, the Department has taken several steps.
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Training
Since 1986, all Patrol personnel have received formal training in elderly abuse,
including:
*.Recognition and types of abuse
* Protective Services referrals
* Reporting requirements and penalties for failure to report
* Why elderly abuse occurs
* Resources for victims
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AN EQUAL OPPORTUNITY EMPLOYER
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Since 1985, Investigations Division has provided all personnel wit information
regarding:
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* Types of elderly abuse which may be encountered
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* Reporting requirements
* Investigations protocol
* Responsibilities of all involved agencies
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Prevention
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Since 1983, the Community Relations Bureau has provided programs in
prevention of and protection against elderly abuse. These programs, developed
through considerable time and effort, address: ji
* Victim's rights
* Reporting requirements
* Available support services
* Prevention and early recognition training
In response to specific comments included in the report, I am providing the
following information:
Statistics
Statistics on cases involving the elderly as victims are kept separately and are
readily available through our Support Services Division ( data for the last two
years has been attached ). However, these cases are often not defined as
"abuse" but rather in terms of specific crime. For example, if an elderly person is
the victim of a theft, even if committed by a member of the victim's family, the
crime would be classified as a theft, not an abuse case. This is doine in order to
meet standard reporting requirements of the State and Feder;lal Bureau of
Investigation.
Right of Access iY
With the exception of special legislation enacted to provide access'to children at
public schools, it is our belief that our "right of access" is the same, regardless of
whether we are working with a minor or elderly victim. The State Evidence
Code provides legal authority to collect evidence. Generally speaking, that
authority is constant and independent of the nature of the crime or the profile of
the victim. Our investigators report no significant difference encountered.
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Investigation
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It is the standing policy of the Sheriff's Department to investigate; all reports of
elderly abuse as fully as possible. Contrary to what the Report implies, we
investigate as "energetically" as circumstances and resources allow. Our efforts
are not based on how successful we believe we will be. However, the
practitioners quoted are correct that evidence is often hard to obtain in such
cases and that many elderly victims are not able to provide credible" testimony.
Volunteer Assistance
The Report suggests that funds be allocated to operate "a continuing volunteer
recruitment and training program" to serve "all programs related tolelder abuse -
ombudsman, legal assistance, case management and billpayer,:" It pointedly
excludes any mention of assistance to prevention and education programs such
as those offered by the Sheriff's Department and other law; enforcement
agencies. Current fiscal constraints leave our Department as understaffed as
other public agencies involved in this issue. Acquiring and training' volunteers to
augment present staff could greatly improve the level of service now offered to
the elderly.
Reevaluation of Documentation and Handling of Cases II
As already mentioned, the Sheriff's Department does, in fact, ildocument all
reported cases involving elderly victims and does, in fact, investigate to the best
of our collective abilities. As a standing practice, we.also routinely evaluate all
procedures and policies in affect to determine if they continue to be appropriate
and effective in light of contemporary needs, laws and resources. ;I
Summary
As previously stated, the Sheriff's Department concurs with the, Grand Jury's
findings that crimes against the elderly need special attention. However, there is
more effort being made in this area than the Report reflects. In point of fact, the
Sheriff's Department has, for many years, recognized the special nature of
such incidents and, in my opinion, has addressed related needs in a
responsible manner given resource constraints.
We also concur with the recommendations made by the Report, b; t note certain
specific concerns. These include: ,
* The exclusion of any recommendation for funding volunteers for
prevention and assistance programs operated by law enforcement, even
though similar programs operated by other support agencies are
included. It is our belief that such programs are extremely important in
prevention and should be targeted for expansion. Given current fiscal
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constraints, this is only likely through the use of volunteers and/or private
grants. ii
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* The expressed concern that the Department does not aggressively
pursue such cases is unwarranted. While it is true that incidents of this
nature are often hard to prove, it is our standard policy to investigate as
aggressively as circumstances allow.
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* The suggestion that these incidents be better documented is one that
we support. However, this is not a matter that the Department can solve
locally. It is our belief that any significant change in incident
documentation must be initiated on the State and/or Federallevel.
We encourage open dialogue on this matter or any other of mutual. interest, and
would support a forum for discussion of such issues.
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SOCIAL SERVICE DEPARTMENT ii CONTRA COSTA COUNTY
TO: County Administrator's Office DATE: 5/4/90
ATTN: Scott Tandy
FROM: James Rydingsword, Director CC: Y. Bullock
Social Services Department Dean Lucas
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SUBJ: RESPONSE TO GRAND JURY REPORT: ELDER ABUSE
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Attached is our response to the recent Grand Jury report .on Elder
Abuse.
As we stated in our summary remarks, we have found the Grand Jury
recommendations helpful and will implement as many as we can, given
our resource limitations. We remain committed to providing Adult
Protective Services and look forward to a time when l resources to
expand our services will be available.
To this end, we recommend that the Board of Supervisor's support the
current APS funding bill, SB83 (Rosenthal) .
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We also wish to express appreciation to the Grand Jury., for bringing
this subject to the attention of the media.
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Gen 9c (New 3/86)
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RESPONSE TO THE 1989-90 GRAND JURY
REPORT ON ELDER ABUSE
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I. Introduction
The Social Services Department wishes to express appreciation
for the work the Grand Jury has done in focusing publicity and
attention on the plight of citizens in need of services to
protect them from abuse and exploitation.
The extent of this problem is just now being examined by the
state legislature. The end result of an analysis of reported
incidents of abuse will hopefully be the establishment of an
adequately funded emergency response system for Elders and
Dependent Adults along the lines of that currently existing
for Children.
Until this happens, Elders and Dependent Adults ;1will continue
to suffer abuse and exploitation and resources; available to
deal with the problem will continue to be inadeiquate.
Media attention must be kept focused on the existence of Elder
and Dependent Adult Abuse and reports such as yours are a key
element in educating the media and all our citizens to the
needs of those who are abused and exploited.
II. General Comment
The title of the report implies that only Elder abuse (i.e.
abuse suffered by those age 65 and over) is being addressed.
This ignores the Dependent Adult population (age 18 through
64) which also suffers a significant incidence of abuse and
exploitation, much of which is categorized asi self-neglect
rather than abuse perpetrated by others. r
If restricting the report only to elders was intentional, then
there may be some statistical error built into the report
since we believe data provided to the grand jury during its
investigation included both the elder and dependent adult
categories.
III. Specific Comments on Findings
1.. Item 3 , p.3: We were surprised at the budgeted amount
for Adult Protective services. It is probable that the
amount indicated included not only the activities of the
5. 5 APS workers but also activities of the Interim
General Assistance Reimbursement (IGAR) workers and the
Conservatorship workers. The actual amount of resources
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available to investigate elder/dependent! adult abuse
would be smaller.
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2. Item 4, p.3: None of the AAA-funded programs under the
Older Americans Act are specifically targeted at elder
abuse-services. The LTC Ombudsman program is responsible
for mediating and conciliating problems of residents of
skilled nursing and residential care facilities. However
the program is charged with reporting abuse allegations
and has certain investigative responsibilities under
state and federal legislation.
The Legal Assistance program provided by United Council
of Spanish Speaking Organizations and Contra Costa Legal
Assistance for the Elderly deal primarily with public
benefit and legal representation issuies and only
occasionally with elder abuse situations. ;l
3. Item 5, p.3: Programs listed only havll an indirect
impact on elder abuse clients.
4. Item 8, p.3: The official California Department of
Finance projections for July 1, 1990 arelapproximately
89,600 persons age 65+ residing in ContralCosta County.
Accepting the stated national figure of 4% of the older
.population suffering abuse annually, approximately 3,600
persons age 65+ would be estimated to suffer some form
of abuse in the County in 1990.
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5. Item 9 , p.3: The figure given for the number of reports
received. in 1989 may include dependent adult as well as
elder abuse.
6. Item 10, p.3: Our management information system (MIS)
reports show a figure of 154 abuse complaints, not 165.
The breakdown is 62 physical abuse, 20 sexual abuse, 35
-neglect, 2 abandonment, 10 fiduciary abuse and 25 mental
suffering.
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7. Item 12, p.4: We agree that large numbers !!of abuse cases
are not reported. We hope this is beingilconsidered by
the legislature as they analyze the extend of abuse in
the State.
8. Item 13 , p.4: We believe it is the social workers who
lack the .right of access to the place of ;abuse, not law
enforcement officers.
9. Item 14, p.4: We cannot overemphasizo- the significance
of the lack of emergency shelters for abused elders.
This is a critical resource that is lacking. We were
please to see this as one of your recommendations.
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10. Item 16, p.4: Lack of respite for relatives and other
care givers is another important resource 11 that is not
available but is essential to prevent "burnout". This
is a large cause of abuse. . We believe this should be
added to your list of recommendations,
IV. Specific Comments on Conclusions
1. Item 1, p.4: Until we have a viable, !state funded
program in place, with established caseload !'standards and
specific mandated worker activities, we will find it hard
to determine to what extent we are below the necessary
level of staffing, however, the point is weil taken that
our current level of staffing is inadequate.
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2. Item 2, p.4: It is true that outreach has been lacking,
but this is true (unfortunately) of many programs we
operate on fixed allocations. The social services
programs, unlike income maintenance programs, are not
funded in a way that we can serve everyone who is in
need. We are placed in the unenviable pos1tion of being
mandated to provide services but being concerned about
the number of people who might request them.
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3. Item 3 , p.5: The Department would support the State
increasing funding for Adult Protective Services with
some minimal level of funding guaranteed to each county.
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4. Item 4, p.4: We are concerned that this oversimplifies
the problem. Workers certainly need improved training
in order to provide better services, but ;this does not
address caseload size. The use of volunteers would be
welcomed, but certainly not in the areas pf assessment
and investigation, which takes formal education and
expertise. Unfortunately, these are the areas which
demand the most time of a worker.
The most appropriate role for volunteers would be in the
areas of providing information to the public and clients
and in providing supportive personal relilationships to
clients and/or family members.
V. Specific Comments on Recommendations
1. Item 1, p.5: The Area Agency on Aging Is not free to
allocate funds to a new program because of ongoing
planning committments and legislative and regulatory
requirements to - fund existing programs. ii Considerable
volunteer recruitment resources are already in place in
the Retired Senior Volunteer Program (RSVP) , Health
Insurance Counselling and Advocacy Program (HICAP) ,
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A:\GRNDJURY.RPT 3
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Friendly Visitors, and the LTC Ombudsman program.
Perhaps once the role of volunteers inl elder abuse
prevention and/or intervention is clearly defined, these
existing resources can be more effectively targeted.
However, we first must define the purpose of recruiting
volunteers for elder abuse services.
2. Item 2; p.5: The Social Services Department is not
responsible for training staff of. licensed facilities.
This unrelated activity would channel limited resources
away from our mandated activities. Moreover, there are
already existing efforts underway outside .lof the social
Services Department that can be enhanced acid encouraged.
I
3. Item 5, p.5: We agree with this recommendation and plan
to develop resources as best we can, within our fiscal
limitations.
4 Item 6, p.5: The East .Bay Consortium for Elder Abuse
Prevention has as one of its primary charges the
dissemination of information to acquaint elders, their
families, and the public at large with elder abuse issues
which includes the availability of adult protective
services. Moreover, the Senior Information Program of
the County Office on Aging, through its staff and
gatekeeper program with PG&E is already expending much
effort in this area.
Launching a new campaign using senior centers and the
media above and beyond existing efforts really needs to
be considered very carefully given the ! very limited
staffing available in the Social Service! APS program.
We would run the risk of overwhelming an'. already very
limited staff capability.
VI. Summary
.1. The Department continues to be committed to providing
adult protective services to prevent .the abuse, neglect
or exploitation of its elder and dependent adult
population despite increasing caseloads and shrinking
resources.
2. The Department will seek to expand services, by maximizing
the resources available to us through use of volunteers,
but only for appropriate activities as an adjunct to our
professional casework services.
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3. The Department wishes it recognized that staff assigned
to provide Adult Protective Services to Elders and
Dependent Adults are dedicated and committed and carry
out their work in a professional manner !despite high
caseloads and a lack of a defined, fully ! funded State
program.
4. The Department wishes to acknowledge that the Grand Jury
recommendations have been helpful and we will implement
as many as we can, given our resource limitations. We
invite the Grand Jury's continued interest; in the adult
services area.
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TO:. BOARD OF SUPERVISORS I
Contra
FROM: Internal Operations Committee
Y -� Costa
County
DATE: June 11, 1990 n'"' '-�"-
SUBJECT: Grand Jury Management Letter Responses
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SPECIFIC REOUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION
ACKNOWLEDGE receipt of responses to the Letter to Management flrom the Grand Jury
Audit conducted by KPMG Peat, Marwick for the year ending June130, 1989, which
were submitted by various departments, and DIRECT the County Administrator to
monitor implementation of responses.
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BACKGROUND
The firm of KPMG Peak, Marwick submitted its Grand Jury Management Letter to the
Board of Supervisors on April 10, 1990. It consisted of an examination of the
combined financial statements of Contra Costa County for the year ending June 30,
1989. The departments addressed in the report were asked to respond to the
findings, and those responses are attached.
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CONTINUED ON ATTACHMENT: XX YES SIGNATURE:
_RECOMMENDATION OF COUNTY ADMINISTRATOR -RECOMMENDATION OF BOARQ COMMITTEE
-APPROVE OTHER _
SIGNATURE(S): Z4SUNNE WRIGHT McPEAK TO POWERS
ACTION OF BOARD ON June 1?. 1990 APPROVED AS RECOMMENDED X OTHER-
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS Ar
:TRUE
`Y UNANIMOUS(ASSENT 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: See Page Z ATTESTED
PHIL TCHELOR,CLE RK OF THE BOARD OF
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SUPERVISORS AND COUNTY ADMINISTRATOR
M382 (10/88) BY "--� "' .DEPUTY
cc: Presiding Judge, Superior Court
Donald.G. Haydock, Grand Jury Foreman
County Administrator
County Auditor-Controller
Data Processing Services
Community Development
Health Services
Office of Revenue Collections
Public Facilities Corporation (D. Bell)
Retirement Administrator
Risk Manager
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GRAND JURY MANAGEMENT LETTER 1988-1989
GENERAL COMMENTS
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I. 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. In our prior letter to management dated
February 27, 1989, we noted the following conditions whichjhave not yet been
corrected:
♦ The County General Ledger and the ORC Accounts Receivable System are not
in agreement and have not been reconciled since the function was
transferred in 1988.
♦ An analysis of the reserve for bad debt account was not performed at
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fiscal year end. is
Reconciliation of signif icant.accounts to related subsidiary (detail) ledgers
is a crucial internal accounting control. We again recommend that
reconciliations between ORC reports and the general ledger� be performed
monthly. 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 and
allowing appropriate action on a timely basis to correct any discrepancies.
,Implementation of this recommendation would be facilitated1 by the County
assigning responsibility for reconciliation and analysis of the account to an
appropriate individual at ORC.
Response
The Office of Revenue Collection and the Auditor's Internal Audit and
Accounting Divisions have been working to resolve the conditions related to
the accounts receivable system since they were brought to ;their attention in
February, 1989.
To resolve the reconciliation process and analysis of thereserve for bad
debt accounts, the Auditor's Office recommended that ORC convert accounts
that were on an "accrual method of accounting" to a "cashbasis." This
conversion was accomplished in March, 1990. The conversion to a cash basis
is expected to simplify the reconciliation process. The accounts receivable
systems and the general ledger are reconciled on a monthly, basis.
.The analysis of the reserve for bad debt will be done by the individual
departments at fiscal year end. ORC and the Auditor's Office will assist the
departments as needed in this process.
These changes will accomplish the recommendations as suggested.
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II. Reserves for Self Insured Claims and Judgements
We recommended that the Auditor-Controller's Office receive a draft of the
actuarial study and participate in the evaluation of its contents. The
Auditor-Controller should ascertain the reasonableness oflthe assumptions and
of the methodology used by the actuary and evaluate the County's loss
exposure. This process should be performed in coordination with the County's
Risk Management Department, which provides information tol:the actuary and
reviews and evaluates the results. Upon gaining an understanding of the
process used by the actuary and the assumptions used, theiAuditor-Controller
should use the report to determine the liability which should be recorded for
financial reporting purposes.
Response
We concur. Each year the County has an actuarial study conducted to
determine liabilities against its self-insurance trust funds. In the past,
the County's liabilities on the annual reports were shownlas actual total
reserves on claims. The actuarial reserve estimate, which includes
unanticipated adverse loss development, more accurately reflects the County's
true liabilities.
A concern with using the actuarial reserve estimate is the timely
availability of that report. Loss data, payroll figures, land trust fund
balances are submitted to the actuary approximately two months after the end
of each fiscal year. The actuary performs the study, submits a draft to the
Risk Manager for review, and then prepares a final report. That report might
be received after the auditors have completed their examination. In those
instances, an alternative is to use reserve estimates from the prior year's
actuarial report modified with an inflation factor. However, those reserve
estimates are not as accurate as the reserve estimates from the most recent
actuarial report.
III. Public Facilities Corporation
The County maintains a public facilities corporation (PFC) which is used to
raise funds for the acquisition and development of certain real estate and
equipment, which in turn are typically leased to the County. In accordance
with generally accepted governmental accounting principles, the financial
information of the public facilities corporation is included in the overall
combined financial statements of the County.
Currently, the financial operations of the public facilities corporation
(PFC) are monitored by a Board of Directors established t direct its
activities and are audited annually by an independent ceritified public
accountant. We noted that the financial operations of the PFC are not
reviewed periodically by individuals of the Auditor-Controller's Office even
though the financial position and results of operations of the PFC are
included as a component unit of the County.
We recommend that the Auditor-Controller's Office increase its reviews and
oversight of this operations. This should include, at aminimum:
♦ An evaluation of the controls over cash receipts and expenditures.
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• A review of cash management procedures.
Response
The Office of the County Administrator manages the recordsiand daily activity
of the PFC with the assistance of the General Services Department. All cash,
payment to vendors and preparation of monthly reports is accomplished by the
Trustee. The County staff, including the Treasurer-Tax Collector's staff,
provide some direction to the Trustee on investment of funds within the
various accounts managed by the Trustee. 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.
Regarding cash management, the Trustee has control of the funds and must
follow the requirements contained within the extensive legal documents
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prepared by Bond Counsel for each issue of securities for the Corporation.
The staff involved with the PFC will cooperate in whateverrway necessary to
assist the Auditor-Controller and will direct the Trustee to. make available
any information required.
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IV. Airport Enterprise Fund
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The airport enterprise fund is audited annually by the Internal Audit
Department. Our review of Internal Audit's work indicated that the financial
statements audited and reported on by Internal Audit did not agree with the
County's general ledger. We noted specific discrepancies 'in that General
Accounting's detail of fixed asset additions to the airport fund was not in
agreement with Internal Audit's fixed asset additions schedule and .in the
revenue recognition policies for Federal grants..
We recommend meetings between Internal Audit and General Accounting be held
prior to and subsequent to the internal audit of the Airport to ensure the
beginning numbers audited are appropriate and the final balances obtained as
a result of the audit are incorporated into the CAFR. The,' airport audit
should be completed prior to September each year to avoid 'delays in producing
the CAFR.
Response
Each year the preliminary Airport Enterprise Fund account balances produced
by the County finance system and the County finance system and the County
fixed asset system are audited.
As a result of these audits, certain adjustments to the accounts may be
needed to fairly present the financial position of the Airport enterprise and
the results of its operations in conformity with generally, accepted
accounting principles. The proposed adjustments are discussed with
Accounting Division personnel. The adjustments affectingithe Airport
enterprise's equity accounts have been entered in the County finance system;
however,. certain proposed account reclassifications have not been entered.
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While not considered a serious problem, to avoid confusion it is preferable
for the County finance system to agree in all respects to ;the audited
financial statements. Reconciliation of the two reports will be coordinated
in the future.
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Regarding the matter of the timing of the audits, the preliminary account
balances are usually not available until late July or early August which
makes it difficult to complete the audit prior to September; however, last
year the audit field work and draft reports were completedl' by August 31, and
the review process was completed on September 7.
V. Retirement System
The retirement system has been transferring custodianship 'of their stock and
bond. investments from First Interstate Bank to Banker's Trust. A residual
amount still remains with First Interstate Bank. The County's (Retirement
System) records indicate an amount approximately $300,000in excess of the
amount confirmed by the bank. Both the treasurer and Retirement Office are
aware of and are actively involved in resolving the discrepancy.
We recommend this discrepancy be resolved as quickly as possible and by no
later than June 30, 1990.
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Response ,
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The reconciliation of the discrepancy between the Treasurer's Office and the
Retirement Association is being processed at the current time. The Treasurer
and the Retirement Office have been working together on this issue and are
expending every effort to have this resolved by June 30, 1990.
VI. Bank Reconciliations
The amount confirmed by Bankers Trust for the Revenue Bond account held by
the County for the Sanitation District was approximately $128,000 greater
than the amount recorded in the County general ledger.
We recommend the Revenue Bond account be reconciled on a regular and timely
basis to the bank balance by the District. Discrepancies or reconciling
items could then be timely communicated to Treasury for resolution or so that
any necessary corrections can be made to the County's accounting records.
Response
This recommendation is directed toward the Delta Diablo Sanitation District
(formerly Sanitation District 7A), an autonomous district: The District
should respond.
VII. Redevelopment Agency
There currently exists no mandatory approval date for thejRedevelopment
Agency (RDA) budget. Three quarters of the 1989 fiscal year had elapsed
prior to the approval of the RDA budget for the year ended June 30, 1989.
The budgetary process is a key internal control for the. County. In order for
this control process to be effective, we recommend that the RDA prepare and
the County legally adopt the RDA budget on a more timely basis, preferably on
or before August 30 of each fiscal year.
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Response
The Redevelopment Agency will endeavor to do this beginning in Fiscal Year
1990-1991. However, the Redevelopment Agency does not receive an indication
of its annual tax. increment for a fiscal year until November , or 60-90 days
after the desired budget adoption date. In some project areas this delay in
receipt of information as to the tax increment results in having to "guess
at" available revenues. This is particularly true in the more recent
Redevelopment Project Areas of North Richmond, West Pittsburg, Oakley and, in
the future, Rodeo. Unlike Pleasant Hill BART those areas have numerous
activities that result in reassessments of which the Agency has absolutely no
knowledge. Not until there is larger historical record toilestimate from, or
when the Agency is more actively involved in specific development projects,
will the Agency be in a positionto do something other than guess at revenues
prior to November.
VIII.Schedule of Federal Financial Assistance
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Federal regulations require the County to prepare a schedule of federal
financial assistance program expenditures (Schedule) as part of the Single
Audit. The information in the Schedule should be reconcilable to the
County's accounting records. Because administration of th1e federal programs
is decentralized among the county departments, the Countydoes not presently
have a procedure in place to perform this reconciliation. '! It is important
that the information included in the Schedule accurately reflect the activity
for each of the Federal programs to ensure that the major federal financial
assistance programs are appropriately identified and subjected to auditing
procedures.
We recommend a reconciliation be performed annually from the Schedule to the
County's internal accounting records. This procedure can1be performed at the
time the Schedule is being prepared. Implementing this procedure will ensure
all applicable grant and financial activity are presentedj.in the CAFR and
Single Audit Report.
Response
In order to prepare the Schedule of Federal Financial Assistance, the
Auditor's Office has traditionally requested each administering department to
submit summary financial data for their particular programs. This year, when
preparing the 1989-1990 Schedule, the Auditor will also request each
administering department to submit a reconciliation of the summary financial
data to the County's accounting records.
DATA PROCESSING OPERATIONS
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IX. General .Controls
A. Use of Internal Audit
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We recommend that the County's Internal Audit Department determine the
level of audit involvement required to adequately review new systems,
existing systems, and to audit the data processing technical
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environment. The County should consider enhancing the Internal Audit
function to include an EDP auditor. We understand that the Internal
Audit Department is currently training one of their auditors in EDP
auditing. We encourage the County to ensure that this training process
is effectively carried out and that the role is supported so that EDP
audits are appropriately prioritized and carried out.
Response
The Auditor's Office has requested that the class of EDP Auditor be
established. The person expected to assume the new position is
receiving EDP Audit training, and necessary new computer equipment is
being obtained.
B. Accounts Payable System
The County will begin the process of installing a new accounts payable
system during 1990 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 the Internal Audit department review thellnew system prior
to and soon after the implementation date. Performink this review will
ensure adequate controls are being incorporated into ";the system and that
such controls will be monitored in the future.
Response
The implementation of a new purchasing/accounts payable system package
from Management Science America is underway. Auditor-Controller Data
Processing Services and General Services has formed an implementation
team to review this system and establish recommendedcontrols.
C. Physical Access
During our review, we found that physical security at the data
processing center has not been fully implemented in the new location
because of the recent move. Until physical access to data processing
equipment and facilities is secured, the County is exposed to risk of
theft or that valuable equipment and programs are tampered with.
We recommend that the County give high priority to implementing physical
security at the new location.
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Response
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Preventive measures have been taken to reduce risks of loss of service
due to fire, water damage, and power outage. The facility is protected
by Halon, an uninterruptible power system and generator, an online
monitor to an alarm company 24 hours a day and a fully implemented
access control system. The entire building is under automated card
control system with supervised general access between 8 .am. and 5 p.m.
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The computer room remains under controlled automated access at all
times.
X. Disaster Recovery
We discussed the current status of the County's disaster recovery plan with
the County data processing staff. We discovered that the 'lplan continues to
be in a development stage. The plan does not reflect allithe updates and
changes resulting from the relocation to new facilities.
We recommend that the County data processing staff update and test the
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disaster recovery plan. We understand that the County has initiated this
process. We encourage them to ensure that the process of documenting and
testing the plan is completed.
Response
A committee meets bi-weekly to update the disaster recovery plan. A contract
with COMDISCO will provide a facility for equipment installation in the event
of a disaster which disables the data center for two weeks or longer.
Because equipping such a "cold site" takes several days, we are planning with
three other counties for mutual benefit arrangements to provide backup for
critical processes in the event of a shorter term disaster or until the
COMDISCO site is ready. Since testing at a "cold site" is impossible, the
testing of the plan is inhouse simulation and limited testing' at other
Counties' facilities. Planning is underway to test County Payroll at Santa
Clara, Alameda or Sacramento County. An inhouse simulated disaster test has
already been performed for a Welfare Payroll run. These tests will be
repeated annually. j
XI> Payroll and Accounts Payable Applications
We understand that the County is installing a new security, software product
which will enhance' the County's ability to control file and data access.
Effective implementation and utilization of this new software will require
design of effective policies and procedures.
We recommend that this new software be implemented as soon as possible and
that Internal Audit be involved.
Response
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The software is installed and implemented to a limited extent in order to
protect certain data., Data Processing Services and the Auditor-Controller
are determining the best method to achieve full implementation.
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XII. Payroll Application Input Processing
We understand-that the County is evaluating the installation of some new
payroll applications to provide better management and processing procedures.
An evaluation committee is addressing the requirements for a new payroll
application but due to staffing constraints, the selection process has been
delayed. Since the current payroll application uses obsolete unit record
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devices with punched cards, operating efficiency is reduced and control
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problems could result.
We recommend that the County identify its needs and requirements for the
payroll application. Once those needs are identified, the County can
effectively evaluate, select and install a payroll system 'Ithat meets its
requirements.
Response
A multi-department committee has been established to assess the County's
requirements for a complete Human Services System, which will also include
the payroll process. A staff member is assigned to analyze an online
timekeeping frontend to the current payroll system. This ,linput system would
eliminate dependency on aging card processing equipment, streamline the input
process and provide additional functions to County departments. When
implemented, this timekeeping component would most likelyfbe an appropriate
front end to the Human Resource System the County would install in the
future.
HOSPITAL OPERATIONS
XIII.Medicare Logs
Our review of Medicare logs identified differences between the remittance
advices (RA's) and the logs. Several patients listed on the remittance
advices could not be traced to the logs.
We recommend .that the Medicare logs be reviewed on a monthly basis to
determine that the log information is reconciled with the;RA. Additionally,
all patient information should be reviewed for accuracy.
Response
The recommended review process has been implemented.
XIV. Case Mix Index
We noted that the Medicare logs were not fully designed to allow management
to determine the case mix index for use in calculating the contractual
allowance.
We recommend that management modify the data captured on the Medicare log to
include an application for calculating the case mix indexi. A case-mix
monitoring system can be an effective means of integrating clinical and
financial data to assess the Hospital's profitability in providing services.
Response
The Medicare log output report has been expanded to routinely calculate the
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Medicare case mix rather than calculate the case mix on ademand only basis.
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XV. Medi-Cal Receivables
Currently, the Hospital does not distinguish between Medi-I Cal pending and
Medi-Cal eligible patients in the estimation of the contractual allowance,
although an aggregate denial factor was used. Additionally; no analysis of
the number of patients denied Medi-Cal eligibility is performed.
Because the reimbursement varies depending on the eligibility status of the
patient, we recommend that the Hospital distinguish between regular and
pending Medi-Cal patients in estimating the contractual allowance. A study
of the denial rates for Medi-Cal claims is needed to ensure that an
appropriate rate is used in calculating the contractual allowances.
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Response
The Department will calculate its estimate of contractual'jadjustmients
consistent with the auditor's revised methodology. i
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�. Peat Marwick
Certified Public Accountants
Peat Marwick Main&Co.
2121 No.California Blvd.,Suite 840 .
Walnut Creek,CA 94596-3572
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January 8, 1990
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 audit of
the general purpose financial statements of the County of Contra Costa(County) as of and
for the year ended June 30, 1989. 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 audit, 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 audit.
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COMMENTS AND RECOMMENDATIONS
Presented below are comments and recommendations organized in three sections: General
Comments,Data Processing Operations and Hospital Operations.
GENERAL COMMENTS
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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. In our prior letter to management dated February 27, 1989, we noted the
following conditions which have not yet been corrected:
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• The County General Ledger and the ORC Accounts Receivable System are not in
agreement and have not been reconciled since the function was transferred in 1988.
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• An analysis of the reserve for bad debt account was not performed at fiscal year
end.
Reconciliation of significant accounts to related subsidiary (detail) ledgers is a crucial
internal accounting control. We again recommend that reconciliations between ORC
reports and the general ledger be performed monthly. 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 and allowing appropriate action on a timely basis to correct any discrepancies.
�i.
Implementation of this recommendation would be facilitated by the County assigning
responsibility for reconciliation and analysis of the account to an appropriate individual at
ORC.
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Reserves for Self Insured Claims and Judgements
The County is entirely self insured for claims relating to public liability,automobile
accidents,medical malpractice workers'compensation,and certain other liabilities. Internal
Service Funds are used to account for the County's self insured activities. Prior to 1989,it
was the County's policy to record the case reserves established for known claims as a
liability in the financial statements. This liability did not include an estimate!for incurred
but not reported(IBNR)losses or adverse development on known claims. Under generally
accepted accounting principles,the County is required to estimate all costs of ultimately
settling self insured claims,including IBNR and adverse development. The County has an
actuarial study performed annually to estimate its ultimate exposure for self insured claims
in an effort to determine its funding requirements and to facilitate the budgetary process.
This report,however,is not used effectively by the County for reporting the financial
statement liability required under generally accepted accounting principles. lAt our
recommendation and based upon the study performed by the County's independent
actuary,the County increased the liability for self insured claims in the June 30, 1989
financial statements by$11 million to account for an estimate of IBNR and adverse
development.
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We recommend that the Auditor-Controller's office receive a draft of the actuarial study and
participate in the evaluation of its contents. The Auditor-Controller should ascertain the
reasonableness of the assumptions and of the methodology used by the actuary and
evaluate the County's loss exposure. This process should be performed incoordination
with the County's Risk Management Department,which provides information to the
actuary and reviews and evaluates the results. Upon gaining an understanding of the
process used by the actuary and the assumptions used,the Auditor-Controller should use
the report to determine the liability which should be recorded for financialreporting
purposes.
Public Facilities Corporation
The County maintains a public facilities corporation (PFC) which is used to raise funds for
the acquisition and development of certain real estate and equipment, which in turn are
typically leased to the County. In accordance with generally accepted governmental
accounting principles, the financial information of the public facilities corporation is
included in the overall combined financial statements of the County.
Currently, the financial operations of the public facilities corporation (PFC)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 PFC
are not reviewed periodically by individuals of the Auditor-Controller's office even though
the financial position and results of operations of the PFC are included as a component unit
of the County.
We recommend that the Auditor-Controller's office increase its reviews and oversight of
this operation. This should include,at a minimum:
• An evaluation of the controls over cash receipts and expenditures.
• A review of cash management procedures.
Airoort Enterprise Fund
The airport enterprise fund is audited annually by the Internal.Audit department. Our
review of Internal Audit's work indicated that the financial statements audited and reported
on by internal audit did not agree with the County's general ledger. We noted specific
discrepancies in that General Accounting's detail of fixed asset additions to the airport fund
was not in agreement with Internal Audit's fixed asset additions schedule and in the
revenue recognition policies for Federal grants.
We recommend meetings between Internal Audit and General Accounting be held prior to
and subsequent to the internal audit of the Airport to ensure the beginning numbers audited
are appropriate and the final balances obtained as a result of the audit are incorporated into
the CAFR. The airport audit should be completed prior to September each year to avoid
delays in producing the CAFR.. I
Retirement ,System
The retirement system has been transferring custodianship of their stock and bond
investments from First Interstate Bank to Banker's Trust. A residual amount still remains
with First Interstate Bank. The County's (Retirement System)records indicate an amount
approximately $300,000 in excess of the amount confirmed by the bank. Both the
treasurer and the Retirement Office are aware of and are actively involvedin resolving the
discrepancy:
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We recommend this discrepancy be resolved as quickly as possible and by no later than
June 30, 1990, 1
Bank Reconciliations
The amount confirmed by Bankers Trust for the Revenue Bond account held by the County
for the Sanitation District was approximately$128,000 greater than the amount recorded in
the County general ledger.
We recommend the Revenue Bond account be reconciled on a regular and timely basis to
the bank balance by the District. Discrepancies or reconciling items could then be timely
communicated to Treasury for resolution or so that any necessary corrections can be made
to the County's accounting records.
Redevelopment Agency
There currently exists no mandatory approval date for the Redevelopment Agency(RDA)
budget. Three quarters of the 1989 fiscal year had elapsed prior to the approval of the RDA
budget for the year ended June 30, 1989.
The budgetary process is a key internal control for the County. In orderifor this control
process to be effective,we recommend that the RDA prepare and the County legally adopt
the RDA budget on a more timely basis,preferably on or before August 30 of each fiscal
year.
Schedule—Vf Federal Financial Assistance
Federal regulations require the County to prepare a schedule of federal financial assistance
program expenditures (Schedule) as part of the Single Audit. The information in the
Schedule should be reconcilable to the County's accounting records. Because
administration of the federal programs is decentralized among the county departments,the
County does not presently have a procedure in place to perform this reconciliation. It is
important that the information included in the Schedule accurately refleci the activity for
each of the Federal programs to ensure that the major federal financial assistance programs
are appropriately identified and subjected to auditing procedures.
We recommend a reconciliation be performed annually from the Schedule;to the County's
internal accounting records. This procedure can be performed at the time;the Schedule is
being prepared. Implementing this procedure will ensure all applicable grant and financial
activity are presented in the CAFR and Single Audit Report.
i
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DATA PROCESSING OPERATIONS
Background
In connection with our audit, we performed a general controls review of the data
processing environment at the County for the limited purpose of gaining an understanding
of that environment. Our general controls review focused on two key application systems,
Payroll and County Financial System (Accounts Payable). We performed a preliminary
review of the access controls,production job controls and system development and change
controls used by the County. Following is a discussion of our; findings and
recommendations over 1)general data processing controls,2)disaster recovery, 3)payroll
and accounts payable applications,and 4)payroll application input processing.
General Controls
.M
Our review included the following general data processing controls: General facilities,
overall organization, physical security, data processing direction, and data processing
funding.
With the exception of some minor problems resulting from the recent relocation of the
department, the controls and work environment at the new EDP facilities are an
improvement over the County's former location. The overall organization of the County's
Data Processing Department.promotes a control conscious environment and facilities
processing.
Use of Internal Audit
We understand that the Internal Audit function does not have a designated EDP Auditor.
We further understand that Internal Audit has not been involved with the implementation
and installation of the new system security software package the County is currently
installing. I
Additionally,certain of the County's data processing activities are decentralized since many
County departments fund and operate their own systems. These stand alone departmental
systems should be subject to the same general and specific EDP controls and procedures.
Internal Audit does not appear to be actively involved with control reviews or with
implementation of new systems.
We recommend that the County's Internal Audit Department determine the level of audit
involvement required to adequately review new systems,existing systems, and to audit the
data processing technical environment. The County should consider enhancing the Internal
Audit function to include an EDP auditor. We understand that the Internal Audit
Department is currently training one of their auditors in EDP auditing. We encourage the
County to ensure that this training process is effectively carried out and that the role is
supported so that EDP audits are appropriately prioritized and carried out.
Accounts Payable System
The County will begin the process of installing a new accounts payable system during 1990
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.
N
We recommend the Internal Audit department review the new system prior to and soon
after the implementation date. Performing this review will ensure adequate controls are
being incorporated into the system and that such controls will be monitored in the future.
"I
Physical Access
During our review, we found that physical security at the data processing center has not
been fully implemented in the new location because of the recent move.'I Until physical
access to data processing equipment and facilities is secured,the County is exposed to risk
of theft or that valuable equipment and programs are tampered with.
We recommend that the County give high priority to implementing physical security at the
new location.
i
Disaster Recovery
We discussed the current status of the County's disaster recovery plan with the County data
processing staff. We discovered that the plan continues to be in a development stage. The
plan does not reflect all the updates and changes resulting from the relocation to new
facilities. j
We recommend that the County data processing staff update and test the disaster recovery
plan. We understand that the County has initiated this process. We encourage them to
ensure that the process of documenting and testing the plan is completed
Payroll and Accounts Payable Applications
Our inquiry of the payroll and accounts payable application covered the following control
elements: Access controls, production job controls, system development controls and
program change controls. The results of our inquiry indicated that the access controls at the
County need to be strengthened. Many users access files, which are stored on disk
devices. This requires a complex storage, access and updating control.ipackage. We
understand that the County is installing a new security software product which will enhance
the County's ability to control file and data access. Effective implementation and utilization
of this new software will require design of effective policies and procedures:,
We recommend that this new software be implemented as soon as possible and that Internal
Audit be involved
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Payroll U1218cation Input Processing
f
We discussed with County EDP personnel control problems relating to the data input
process at the County. Specifically, the County's payroll system uses old unit record
devices and punched cards to input data. We believe this creates a control problem in
providing quality and accurate information. We understand that up to five edits may be
required for a single payroll run to create accurate data input.
We understand that the County is evaluating the installation of some new payroll
applications to provide better management and processing procedures.! An evaluation
committee is addressing the requirements for a new payroll application but due to staffing
constraints, the selection process has been delayed. Since the current payroll application
uses obsolete unit record devices with punched cards,operating efficiency is reduced and
control problems could result.
We recommend that the County identify its needs and requirements) for the payroll
application. Once those needs are identified,the County can effectively evaluate, select and
install a payroll system that meets the its requirements.
I
HOSPITAL OPERATIONS
We noted certain items involving operational matters relating to Merrithew Hospital's
methodology for estimating the provision for contractual allowances. The detetnunation of
accurate data to be used in the contractual allowance calculation is of primary importance as
it represents the difference between gross charges and the anticipated payment from
Medicare,Medi-Cal and other third-party payors. Inaccurate data may give rise to an
understatement of revenue,resulting in a contingent receivable,or an overstatement of
revenue which can result in a potential liability for denial of claims.
These comments and recommendations,all of which have been discussed with the
appropriate members of Hospital management,are intended to result in improved operating
efficiencies and are summarized as follows:
i
Medicare Logs i
i
Our review of Medicare logs identified differences between the remittance"advices(RA's)
and the logs. Several patients listed on the remittance advices could not be'traced to the
logs.
We recommend that the Medicare logs be reviewed on a monthly basis to determine that the
log information is reconciled with the RA. Additionally,all patient information should be
reviewed for accuracy.
Case Mix Index
We noted that the Medicare logs were not fully designed to allow management to determine
the case mix index for use in calculating the contractual allowance.
We recommend that management modify the data captured on the Medicarel log to include
an application for calculating the case mix index. A case-mix monitoring system can be an
effective means of integrating clinical and financial data to assess the Hospital's profitability
in providing services.
Medi-Cal Receivables
We noted that Medi-Cal receivables had increased significantly from the prior year. In
particular,the portion of Medi-Cal receivables pending authorization from the State had
increased from fifteen percent at June 30, 1988 to thirty percent at June 30;11989.
Currently,the Hospital does not distinguish between Medi-Cal pending and Medi-Cal
eligible patients in the estimation of the contractual allowance,although an aggregate denial
factor was used Additionally,no analysis of the number of patients denied:Medi-Cal
eligibility is performed .
Because the reimbursement varies depending on the eligibility status of the.'patient,we
recommend that the Hospital distinguish between regular and pending Medi',Cal patients in
estimating the contractual allowance. A study of the denial rates for Medi-Cal claims is
needed to ensure that an appropriate rate is used in calculating the contractual allowances.
'I
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Appendix A
INTERNAL. ACCOUNTING CONTROL
As part of our audit of the 1989 combined financial statements of the County of Contra
Costa (County), we made a study and evaluation of the County's system ofJinternal
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 judgements 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;i 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 commended upon in this letter and appendix have not been reviewed
subsequent to December 1, 1989,the date of our auditors'report and therefore,we are not
aware of any changes subsequent to that date.
CONTRA COSTA COUNTY
HEALTH SERVICES DEPARTMENT
DATE: May 4, 1990
TO: Scott Tandy, Chief
Assistant Administrator
FROM: Patrick Godley Chief Financial Officer
SUBJECT: FY 1988/89 Management Letter
I
Below are the Department responses to recommendations' contained in
the FY 1988/89 Grand Jury Auditors' Management Letter that related
to the Health Services Department.
1. RECOMMENDATIONS: We recommend that the Medicare logs be
reviewed on a monthly basis to determine that the log
information is reconciled with the remittance advices.
I
RESPONSE: The recommended review process has been
implemented.
2. RECOMMENDATION: We recommend that management modify the
data captured on the Medicare log to include an application
for calculating the case mix index.
RESPONSE: The Medicare log output report has ;been expanded
to routinely calculate the Medicare case mix; rather than
calculate the case mix on a demand only basis. :
3. RECOMMENDATION: We recommend that the Hospital distinguish
between regular and pending Medi-Cal patients in estimating
the contractual allowance,
RESPONSE: The Department will calculate its, estimate of
contractual adjustments consistent with the auditor's revised
methodology.
If I can provide you with any further information, please feel free
to contact me.
PG:GW:dc
A l
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OFFICE OF COUNTY ADMINISTRATOR
CONTRA COSTA COUNTY
Administration Building
Martinez, California
Scott Tandy, Chief
To: Assistant Administrator Date: April lb, 1990
From: D. Bell, Deputy CAO Subject: Management Letter;
Public Facilities Corporation
The 1988-1989 Management Letter prepared by Peat Marwick Main &
Company for the Grand Jury recommends that the Auditor-Controller
increase the review and oversight of the Public Facilities
Corporation specifically in areas of controls over cash receipts
and expenditures and cash management procedures.
The Office of the County Administrator manages the records and
daily activity of the Public Facilities Corporation with the
assistance of the General Services Department. All cash, payment
to vendors and preparation of monthly reports is accomplished by
the Trustee. The County staff, including the Treasurer-Tax
Collector' s staff, provide some direction to the Trustee on
investment of funds within the various accounts managed by the
Trustee.
The recommendations regarding cash management are not clear as to
exactly what should be accomplished by the Auditor-Controller
since the Trustee has control of the funds and must follow the
requirements contained within the extensive legal documents
prepared by Bond Counsel for each issue of securities for the
Corporation. The staff involved with the PFC will cooperate in
whatever way necessary to assist the Auditor-Controller and will
direct the Trustee to make available any informationlrequired.
We will be pleased toimplement any recommendations for
improvements.
DB: lmj
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CONTRA COSTA COUNTY REDEVELOPMENT AGENCY
DATE: April 30!, 1990
TO: Scott Tandy, Chief,
Assistant Admi nisi;ra or Contra Costa County
f1cCE1VED
FROM: Jim Kennedy
Deputy;Di rector- a el opment PA AY 0 11990.
% � 1
SUBJECT: FY 88-89 Man ment Letter Office of
County Ad^ni�istrator
d
The Grand Jury Auditor's report and recommendations regarding internal
accounting controls included a reference to the Redevelopment Agency. They
recommend that the Redevelopment Agency prepare and legally adopt a budget on a
more timely basis preferably on or before August 30, 1990 of each fiscal year.
Reponse
The Redevelopment Agency will endeavor to do this beginning; in Fiscal Year
90-91. With that stated let me further indicate that the Redevelopment Agency
does not receive an indication of its annual tax increment for a fiscal year
until November, or 60-90 days after the desired budget adoption date. In some
of our. project areas this delay in receipt of information as !to what our tax
increment will be results in us having to "guesstimate" available revenues.
This is particularly true in the more recent Redevelopment Project Areas of
North Richmond, West Pittsburg, Oakley and in the future Rodeo. ; Unlike Pleasant
Hill BART those areas have numerous activities occurring Ithat result in
reassessments of which the Agency has absolutely no knowledge. !, Until we have a
larger historical record to estimate from or when the Agency ;.is more actively
involved in specific development projects will the Agency be in'a position to do
something other than guesstimate revenues prior to November.
I trust this responds to the concern and recommendation of`i the Grand Jury
Auditor. Please call me if you have any questions at 4076.
JK:krc
sra4:A:tandy.mem
cc: Ron deVincenzi
Kerry Harms-Taylor
File: B 3.1(e)
•,a
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OFFICE OF COUNTY ADMINISTRATOR
CONTRA COSTA COUNTY
Administration Building
Martinez, California
H. Bragdon, Director
To: Community Development Date: April 10, 1990
From: Scott Tandy, Chief Subject: FY 1988-1989
Assistant Administr Ati Management Letter
The Peat Marwick Main & Company report of comments and
recommendations regarding the internal accounting controls and
other matters resulting from their examination of the combined
financial statements of the County for Fiscal Year 1988-1989 was
referred to this office by the Board of Supervisors oni April 10,
1990. A copy is attached for your reference.
Please review the portions of this report that pertain to your
department and provide me with a response by close of business,
Friday, May 4, 1990. Upon review and further discussion with you,
if necessary, we will compile a report for improving our system of
internal controls and efficiency of operations for the Board of
Supervisors.
I appreciate your thorough and timely consideration of these
recommendations.
ST:lmj
Attachment
cc: Supervisor N. C. Fanden, Chair
Supervisor T. Powers
Supervisor R. I. Schroder
Supervisor S. W. McPeak
Supervisor T. Torlakson
Don Haydock, Grand Jury Foreperson
Kerry Taylor-Harms
1
Office of Contra Costa Count
COUNTY AUDITOR-CONTROLLER F3cCElVED
Contra Costa County
Martinez, California ARR ^ Q
April 26, 1990
Office of
County Administrator
TO:. Scott Tandy, Chief Assistant County Administrator
FROM: Donald L. Bouchet, Auditor-Controller
By: Jim Weber, Accounting Services 0 _
SUBJECT: FY 1988-1989 Management Letter
This is in response to your memo dated April 10, 1990, same subject. I
address those items affecting the Auditor's Office in the same sequence as in the
Management Letter:
° ACCOUNTS RECEIVABLE SYSTEM
Although this item was directed to the Office of Revenue Collection, the
Auditor's Office assisted ORC in resolving the problem. The accounts in
question were converted to a cash basis, so that now all ORC accounts are
on a cash basis. This conversion eliminated the need for a reconciliation
between ORC and the County's general ledger. There will be an' opportunity
at the end of each fiscal year for the .County departments to review their
open accounts, evaluate their collectibility, and make a revenue accrual
entry. ORC must still reconcile their cash clearing accounts.! Our Internal
Audit staff has been assisting ORC in setting up the procedure's and training
staff to perform these reconciliations.
RESERVES FOR SELF INSURED CLAIMS AND JUDGEMENTS
Please refer to the separate memo from Risk Management and this office on this
subject. We will comply with the recommendation; but are concerned about
receiving the actuarial study in a timely manner.
° 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 arethen incorporated
into the County's financial statements. The Auditor's Office has no part in
this operation. The activities being recommended are normally performed by
Internal Audit. While we concur in the recommendation, Internal Audit, as we
have frequently pointed out, has not been able to expand in order to keep
pace with decentralization and neva programs. Budgetary constraints continue
to make it unlikely that additional Internal Audit resources will be. available.
-2-
Scott Tandy, Chief Assistant County Administrator April 26, 1990
FY 1988-1989 Management Letter
° AIRPORT ENTERPRISE FUND
We believe this item has been taken care of. Please see attached letter from
our Internal Audit Chief.
° SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
As noted, administration of the myriad federal funded programs is decentralized
among various County departments. In order to prepare the Schedule of
Federal Financial Assistance, the Auditor's Office has traditionally requested
each administering department to submit summary financial data-! for their
particular programs. This year, when preparing the 1989-90 Schedule, we will
also request each administering department to submit a reconciliation of the
summary financial data to the County's accounting records.
° DATA PROCESSING OPERATIONS
A. Use of Internal Audit
The Auditor's Office has requested the class of EDP Auditor be established.
In the meantime the expected incumbent of the new class is'. receiving EDP
Audit training, and necessary new computer equipment is being obtained.
B. Accounts Payable and Payroll Systems
We agree that Internal Audit should review these new systems and will do
so, time permitting.
C. Payroll Application
We agree the County needs to identify its needs and requirements for the
payroll application. The Auditor's Office has two members of the Systems
Accounting staff on this project, in addition to a larger multi-department
evaluation committee.
For your information, because it was not made clear in the Management
Letter, the item "Bank Reconciliation" is directed toward the Delta Diablo
Sanitation District (formerly Sanitation District 7A) , an autonomous district.
The district's accounting staff should respond.
Please call me, X-2184, if you have any questions.
JW:mp
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Of f ice of
COUNTY AUDITOR-CONTROLLER
Contra Costa County
Martinez, California
April 3, 1990
T0: Bernard Schrader
Grand Jury Audit Committee
FROM: John A. Aylard, Chief, Auditing Division
SUBJECT: Comments of KPMG Peat Marwick re: Airport Enterprise Fund
This is to follow up my meeting with you and Jack Horton this date on the above
subject..
To give you some background on our audit of the Airport Enterprise Fund, I will
describe the auditing process. Each year we audit the preliminary Airport Enterprise
Fund account balances produced by the County finance system and :!'the County fixed
asset system.
As a result of our audits. of these accounts, we may find that certain
adjustments to the accounts are needed to fairly present the financial position of
the Airport enterprise and the results of its operations in conformity with generally
accepted accounting principles. The proposed adjustments are discussed with
Accounting Division personnel. The adjustments affecting the Airport enterprise's
equity accounts have been entered in the County finance system; ,however, certain
proposed account reclassifications have not been entered.
I do not consider this to be a serious problem, but to avoid confusion, it would
be preferable for the County finance system to agree in all respects to the audited
financial statements we prepare. I have discussed this matter with Don Bouchet,
Auditor-Controller and Jim Weber, Accounting Services Officer acid they have agreed to
coordinate reconciliation of the two reports in the future.
Regarding the matter of the timing of the audits, the preliminary account
balances are usually not available to us until late ,July or early August which makes
It difficult to complete our audit prior to September; however, , last year the audit
field work and draft reports were completed by August 31j. and the review process was
completed on September 7.
JAA/pm
a
CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION
THE WILLOWS OFFICE PARK
1 355 WILLOW WAY.SUITE 221
CONCORD,CALIFORNIA 94520
(415)646.5741
FAX:(41 5)646-5747 Contra Costa County
RECEIVED
APR 2 61990
'1'0: Scott 'Pandy, (thief Assistant Administrator � Office of
or
FROM:
FROM: Patricia F. Wiegert, Retirement Administrator n '�
By: Rick Koehler, Retirement Accounting Manage /rp'
SUBJECT: Response to FY 1988-89 Management Letter
DA'VE: April 25, 1990
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
The reconciliation of the discrepancy between the 't'reasurer's office and
the Retirement Association is being processed at the current time. Both
the treasurer and the Retirement office have been working together on this
issue and we are expending every effort to have this resolved by;June 30,
1990.
I
i
Retirement System
The retirement system has been transferring custodianship of their stock and bond
investments from First Interstate Bank to Banker's Trust. A residual amount still remains
with First Interstate Bank. The County's (Retirement System)records indicate an amount
approximately $300,000 in excess of the amount confirmed by the bank. Both the
treasurer and the Retirement Office are aware of and are actively involved in resolving the
discrepancy.
We recommend this discrepancy be resolved as quickly as possible and by no later than
June 30, 1990.
Bank Reconciliations
The amount confirmed by Bankers Trust for the Revenue Bond account held by the County
for the Sanitation District was approximately$128,000 greater than the amount recorded in
the County general ledger.
We recommend the Revenue Bond account be reconciled on a regular and timely basis to
the bank balance by the District. Discrepancies or reconciling items could then be timely
communicated to Treasury for resolution or so that any necessary corrections,can be made
to the County's accounting records.
Redevelopment Agency
i
There currently exists no mandatory approval date for the Redevelopment Agency(RDA)
budget. Three quarters of the 1989 fiscal year had elapsed prior to the approval of the RDA
budget for the year ended June 30, 1989.
The budgetary process is a key internal control for the County. In order for this control
process to be effective,we recommend that the RDA prepare and the County legally adopt
the RDA budget on a more timely basis,preferably on or before August 30 of each fiscal
year.
Schedule of Federal Financial Assistance
Federal regulations require the County to prepare a schedule of federal financial assistance
program expenditures (Schedule) as part of the Single Audit. The information in the
Schedule should be reconcilable to the County's accounting records. Because
administration of the federal programs is decentralized among the county departments,the
County does not presently have a procedure in place to perform this reconciliation. It is
important that the information included in the Schedule accurately reflect the activity for
each of the Federal programs to ensure that the major federal financial assistance programs
are appropriately identified and subjected to auditing procedures.
We recommend a reconciliation be performed annually from the Schedule to the County's
internal accounting records. This procedure can be performed at the time the Schedule is
being prepared. Implementing this procedure will ensure all applicable grant and financial
activity are presented in the CAFR and Single Audit Report.
OFFICE OF THE COUNTY ADMINISTRATOR
CONTRA COSTA COUNTY
DATA PROCESSING SERVICES
April 30, 1990
TO: Scott Tandy
Chief Assistant Administrator
FROM: Marinelle G. Thompson
Director of Data Processing Services
SUBJECT: Response to the Peat Marwick Main and Company
Recommendations for Data Processing Services .;
We are pleased that the review of Data Processing Services was
generally very positive with regard to facilities, overall organiza-
tion, physical security, data processing direction andldata processing
funding. Several specific areas of concern were mentioned to which we
can respond as follows:
Use of Internal Audit:
We have always worked closely with the systems'. accountants and
the Accounting Services Officer in defining controls, for financial
systems. We also have cooperated with Internal Audit in EDP reviews
of existing systems. Recently, there has not been a trained EDP Audi-
tor in Internal Audit but we understand that function is being staffed
and we will be pleased to work. with them in re-establishing an EDP Au-
dit capability.
Accounts Payable System:
The implementation of a new purchasing/accounts , payable system
package from Management Science America is underway now. Data Proc-
essing Services is part of an implementation team along with staff
from the General Services and Auditor-Controller Departments. We will
cooperate fully with Internal Audit in the review of this system and
establishment of recommended controls.
Payroll System:
Data Processing Services is participating on a multi-department
committee to assess the County's requirements fora complete Human
Services System, which will also include the payroll piocess. We also
have a staff member assigned to analyze an online timekeeping front-
end to the current payroll system. This input system1would eliminate
dependency on aging card processing equipment, streamline the input
process and provide additional functions to County departments. If
implemented, this timekeeping component would likely be an appropriate
-1-
'I
front end to the Human Resource System the County would install in the
future as well.
Disaster Recovery and Physical Access:
A committee in DPS is meeting bi-weekly to update the disaster
recovery plan for the division. We have a contract with COMDISCO to
provide a physical facility ready for equipment installation in the
event of a disaster which disables the data center for two weeks or
longer. Because equipping such a "cold site" takes several days, we
are planning with three other counties for mutual benefit arrangements
to provide backup for critical processes in the event of a shorter
term disaster or until the COMDISCO site is ready. A contract for a
fully equipped "hot site" at COMDISCO or with other recovery vendors
was deemed too costly at the present time, given the County's finan-
cial situation. Since testing at a cold site is impossible, the only
possible testing of the plan is inhouse simulation andjlimited testing
at other Counties' facilities. Planning is underway to test County
Payroll at Santa Clara, Alameda or Sacramento County. An inhouse sim-
ulated disaster test has already been performed for a' Welfare Payroll
run. These tests will be repeated annually.
Many preventive measures have been taken. to reduce risks of loss
of service due to fire, water damage, and power outage. The facility
is protected by Halon, an uninterruptible power system and generator,
an online monitor to an alarm company 24 .hours a day: and a fully im-
plemented access control system. Entry to the building was controlled
by lock and key initially with the computer room underfull automated
card control. The entire building is now under automated card control
system with supervised general access between 8 a.m. and 5 p.m. The
computer room remains under controlled automated access at all times
and the entire building is under this access control -at all times ex-
cept during the hours noted above.
MGT:jr
cc: Kerry Harms-Taylor
Dean Lucas
-2-
OFFICE OF COUNTY ADMINISTRATOR
CONTRA COSTA COUNTY
Administration Building
Martinez, California
Scott Tandy, Chief Assistant
To: County Administrator Date: May 2, 1990
Jose h J. Tonda Risk n)ager
From: Jim We a &ittor-Controller
. Services Subject: 1988-89 Management Letter
Officer
agree with Peat Marwick Main & Company's recommendation
that the actuarial reserve estimate at expected .value be used
in estimating the County's reserves for self-insured claims and
judgments.
Each year the County has an actuarial study; conducted to
determine liabilities against its self-insurance i .trust funds.
In the past, the County's liabilities on the annual reports
were shown as actual total reserves on claims. We believe the
actuarial reserve estimate, which includes 'unanticipated
adverse loss development, more accurately reflects the County's
true liabilities.
A concern we have with using the actuarial reserve
estimate is the timely availability of that report. Loss data,
payroll figures, and trust fund balances are submitted to the
actuary approximately two .months after the end of each fiscal
year. The actuary performs the study, submits a; draft to the
Risk Manager for review, and then prepares a final report.
That report might be received after the auditors have completed
their examination. In those instances, an alternative is to
use reserve estimates from the prior year's actuarial report
modified with an inflation factor. However, - those reserve
estimates are not as accurate as the reserve estimates from the
most recent actuarial report.
JJT:py
cc: Kerry Harms-Taylor
i
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J.
Officseo-f Revenue Collection Contra
2020 North Broadway Costa Comtra CoGta'iCount f
Suite 100 Ft�C �VE� (415) 646-6140
Walnut Creek, CA 94596 County
MAY 0 21990
Office of
To: Scott Tandy, Chief Asst. April 30, 1990
County Administrator
From: Nancy Bischoff, Director
Office of Revenue Collection,
Subject: Response to Management Letter FY 1988-89
Pursuant to your memo of April 10, 1990, regarding .�the Peat
Marwick Main and Company report of comments and recommendations.
The following is our response to this report:
ACCOUNTS RECEIVABLE SYSTEM
The Office of Revenue Collection and the Auditor' s ;Internal
Audit and Accounting Divisions, have been working to resolve the
conditions related to the accounts receivable system, since they
were brought to our attention in February, 1989.
To resolve the reconciliation process and analysis ,of the reserve
for bad debt accounts, the Auditor' s Office recommended that ORC
convert accounts that were on an "accrual method of accounting"
to a "cash basis" . This conversion was accomplished in March,
1990, (see attached memo) . The conversion to a cash basis is
expected to simplify the reconciliation process. We are now
reconciling the accounts receivable systems and the general
ledger on a monthly basis.
The analysis of the reserve for bad debt will be done by the
individual departments at fiscal year end. ORC and the Auditor' s
Office will assist the departments as needed in this process.
We are confident that the recent changes have accomplished the
recommendations as suggested by Peat Marwick Main and Company.
CC: Kerry E. Harms-Taylor,
Asst. County Admin.-Finance
I
OFFICE OF THE COUNTY ADMINISTRATOR
C O N T R A C O S T A C O U N T Y
Administration Building
651 Pine Street, 11th Floor
Martinez, California
DATE: April 5, 1990
TO:
FROM: Nancy Bischoff, Director, Office of Revenue Collect_
SUBJECT: CHANGES TN ACCOUNTING FOR BILLINGS THROUGH, ORC
The Grand Jury auditors have pointed out certain deficiencies in
the way the ORC system handles accounts that are on the accrual
method of accounting. By "accrual" , we mean your department
receives revenue at the time the invoice is issued to the debtor,
as opposed to when the money is actually received by the County.
With the concurrence of the Grand Jury auditors, it has been
decided to make the following changes:
1. Beginning March 1, 1990, you will receive revenue at the
time cash is received, instead of the time .: invoices are
issued.
2. Each month you receive a Client Inventory which lists your
department' s accounts and the balances still ' due. At the
end of each fiscal year, you should review the June 30
Client Inventory and determine the amount you"believe to be
collectible. This amount should then be communicated to the
Auditor' s Office to be accrued as revenue for your
department.
3. You have already received revenue for the open balances on
your invoices. Therefore, in order to convert to a cash
basis, a journal entry will be made to reverse the revenue
you received on open balances. This journal will appear in
the County' s financial reports you will receive around April
15, 1990. See the attached journal for the reversed amount.
Cash received on these accounts between Marchjl and June 30
will be credited to you as revenue. At June 30, you will
have an opportunity to make a revenue accrual for the open
accounts, you consider to be collectible.
Accounts transferred to ORC will be moved into the regular
collection process, so a more intensive collection_ effort
will be placed on your accounts.
i
;I
-2-
If you have any questions, please call Jim Weber (ext. 2184) cf
the Auditor' s Office who is assisting us in this conversion, or
me (ext. 6140) . We feel this change is a positive] one for the
County and will give your department more accurate information
about budgeted revenues.
.JW:NB:amb
Attachment