HomeMy WebLinkAboutMINUTES - 06272000 - C132 ?`
TO: E'7ARD OF SUPERVISORS O a
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FROM: INTERNAL OPERATIONS COMMITTEE County J
DATE: June 27, 2000 County
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SUBJECT: EVALUATION OF COUNTY PROGRAMS AND SERVICES lI
FOR EFFICACY AND EFFICIENCY
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1. FIND that the County has an audit program comprising financial, management and
operational audits of various County programs.
2. RECOGNIZE that Federal programs are audited annually.
3. ACKNOWLEDGE that the Board of Supervisors may at any time direct the County
Administrator to conduct special studies or audits of programs that the Board believes could
be improved or warrant special attention.
4. RECOGNIZE that, on occasion, the Board may wish to supplement the County's audit
program by independently contracting additional resources to conduct studies of particular
interest to the Board.
5. RECOGNIZE that some departments/agencies have not been audited since 1991, 1992 and
1993.
6. RECOGNIZE that the preferred audit schedule reflects the desirability of more frequent audits
to fulfill the management and fiduciary responsibilities of the County Administrator's Office
and the Board of Supervisors.
7. DIRECT the County Administrator and the Auditor-Controller to report to the Internal
Operations Committee each December on the proposed schedule of internal financial and
management audits for the following year at an accelerated rate that is more in keeping with
the preferred audit schedule, including those studies requested by the Board of Supervisors.
CONTINUED ON ATTACHMENT. X YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR X RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
LE B. U IL K E,M< K4XRke'SA LNIE
ACTION OF BOARD ON J u n e 2 7,_2000- APPROVE AS RECOMMENDED XX OTHER
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
XXUNANIMOUS(ABSENT - - ) AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AYES: NOES: SHOWN.
ABSENT: .ABSTAIN:
ATTESTED June 27, 2000
CONTACT: JULIE ENEA (925)335-1077 PHIL BATCHELOR,CLERK OF THE BOARD
cc: INTERNAL OPERATIONS COMMITTEE STAFF OF SUPERVISORS AND COUNTY
COUNTY ADMINISTRATOR ADMINISTRATOR
AUDITOR-CONTROLLER
FINANCE COMMITTEE STAFF
B �EPUTY
EVALUATION OF COUNTY PROGRAMS JUNE 27, 2000
FOR EFFICACY AND EFFICIENCY PAGE 2
6. DIRECT the County Administrator and REQUEST the Auditor-Controller, upon request of the
Board of Supervisors for a special study or audit, to return to the Board within two weeks with
an estimate as to when such a study may be undertaken and completed, and to identify the
additional resources necessary to perform such a study or audit.
9. DIRECT the County Administrator to consider the preferred audit schedule and to annually
propose to the Board of Supervisors during Budget Hearings the additional resources
necessary by the Auditor-Controller to improve the audit frequencies of the
departments/agencies on Exhibit 1.
10. DIRECT the County Administrator to work with the Auditor-Controller and return at the 2000-
2001 Budget Hearings with recommendations regarding the immediate staffing requirements
for the internal Audit Division.
11. REFER this procedure for review and evaluation to the 2001 Internal Operations Committee.
FISCAL IMPACT:
Additional costs may be proposed for consideration during Budget Hearings for Board of
Supervisors evaluation and possible inclusion in the 2000-2001 Adopted Budget.
BACKGROUND:
In December 1999, the Board of Supervisors referred to the 2000 Internal Operations
Committee the issue of how the County evaluates its programs and services to insure their
cost-effective and efficient operation. The Board had some specific questions as to how the
annual schedule of audits is determined and asked that some mechanism be established for
the Board of Supervisors to request studies of departments, programs or procedures or have
input into the annual schedule of audits.
The Internal Operations Committee is recommending a procedure that provides the Board
both a regularly-scheduled opportunity to review and have input into the annual audit
schedule and, additionally, the flexibility to commission special studies at any time, as
resources permit. Following is an overview of the County's comprehensive audit program
upon which the Committee relied in its deliberations.
County Audit Program. The County's audit program consists of three areas: the Auditor-
Controller's internal financial audit program; the County Administrator's management audit
program; and the Countywide independent audit program, currently conducted under
contract with Macias, Gini & Co. This three-pronged program is supplemented by internal
reviews of department programs and services initiated by a department and sometimes
conducted with the assistance of other resources such as the Policy & Innovation Institute.
Auditor's Internal Audit Program. Until 1994, the focus of the work by the Auditor-
Controller's Internal Audit Division was primarily on collections and the fiduciary activities
of County departments. However, in 1994, when routine monitoring efforts by federal and
state agencies of at-risk disbursements were significantly reduced, the Internal Audit Division
specifically included the examination of these disbursement activities in its scope of work.
Major projects in this area included the Community Services Department in 1994, the Social
Service Department in 1996 and the District Attorney (including Family Support) currently
nearing completion. Many other examinations were completed during this time including
quarterly reviews of the Treasurer's accountability and annual reviews of the Treasurer's
financial controls and investment activities. The Internal Audit Division is also responsible
for the production of the County's Comprehensive Annual Financial Report (CAFR) and acting
as a liaison to the County's independent auditor.
The Auditor--Controller selects projects based on several criteria. Some audits are legally
mandated or are financed by outside agencies such as autonomous special districts. Some are
EVALUATION OF COUNTY PROGRAMS JUNE 27, 2000
FOR EFFICACY AND EFFICIENCY PAGE 3
done in response to a special request. Generally, however, the annual schedule of financial
audits is based upon an analysis of financial risk and exposure. For this reason, some
programs are audited more frequently than others.
Attached as Exhibit 1 is an inventory of established financial audit projects, an estimate of the
number of hours required for each audit, the last completion date for each audit, and an
indication of the Auditor's preferred audit cycle. The Internal Audit Division has a team of
six auditors assigned to conduct financial audits. Due to staff vacancies and its CAFR
responsibilities, the Internal Audit Division has been unable to meet its preferred audit cycle
for many projects. The Division has recently hired two auditors to fill the existing vacancies.
Attached, as Exhibit 2, is a comparison of Contra Costa's internal audit resources dedicated
to financial audits to 10 other counties. Out of 11 counties, Contra Costa ranks 8" in the ratio
of financial auditors per $100 million expenditures and 9" in the ratio of financial auditors
per 100,000 residents.
In recognition of limited staff resources, care is taken in establishing priorities for the annual
audit schedule. Agencies that are deemed to have a smaller material impact on the County's
fiscal health will receive a lower priority than higher dollar-value or higher risk agencies or
programs.
County Administrator's Management Audit Program. The County Administrator convenes
audit teams on a regular basis to conduct management audits regarding operations and
organization of county departments and programs to determine what services and processes
are working well and what might be improved. These teams are assembled with staff from
the County Administrator and operating departments covering various areas of expertise such
as finance, human resources, technology and organizational analysis. These teams are
sometimes supplemented with outside consultants when special knowledge or technical
expertise is required.
Like the financial audits, a decision to audit a department or program is predicated upon an
analysis of risk or potential liability to the County. For example, the departments/programs
that have been reviewed by the County Administrator have included the Fire Districts, Mental
Health Program, Environmental Health, Library, Office of Revenue Collection, Elections,
Public Works Engineering and Maintenance Units, General Services, Human Resources, and
Community Services.
The County Administrator also conducts studies as directed by the Board of Supervisors on
specific services and issues. For example, four separate studies were requested by the Board
during the 1999-2000 budget hearings have either been completed or are currently
underway:
1. General Services Overhead Costs for Architectural and Facility Design Work. Staff from
the County Administrator and General Services Department has researched overhead
costs for this County in comparison with other counties and will present findings and
recommendations to the Board today.
2. Review of County Purchasing Policy for Acquisition of Services, Supplies and
Equipment. The Purchasing Policy Committee has met regularly over the past several
months and has developed recommendations that it will present to the Board today.
3. Evaluation of Policy and Practice of Interdepartmental Charges. The Interdepartmental
Charges Committee was created to evaluate the policy and practice of interdepartmental
charges. The Committee surveyed all departments on their charging practices and is
currently reviewing the survey findings. The Committee is also contacting other
counties about their procedures. The Committee meets twice a month and plans to
present its finding to the Board today.
4. Review of General Services Fleet Replacement Policy. This study was completed,
presented to the Board on April 4, 2000 and was subsequently referred to the Internal
Operations Committee for further review and action.
EVALUATION OF COUNTY PROGRAMS JUNE 27, 2000
FOR EFFICACY AND EFFICIENCY PAGE 4
Annual Independent Audit of County. Pursuant to the Government Code,, the County
conducts an independent audit of the County's general-purpose financial statements each
year. A Single Audit of all federally funded programs is also performed annually. These
audits are made to form an opinion on the financial statements taken as a whole and on
compliance with federal funding requirements, and are conducted in accordance with
generally accepted auditing standards. Currently, the independent audit firm of Macias, Gini
& Co. is conducting these annual audits.
The Auditor-Controller and the County Administrator are in constant communication with the
independent auditor throughout the annual engagement. They consult with the independent
auditor as to how changes in accounting standards will impact the County's financial
reporting requirements and procedures.
Last year, the Internal Operations Committee recommended a policy that was adopted by the
Board of Supervisors that all audit letters from the independent auditor addressed to the Board
of Supervisors be referred to the Finance Committee for review and follow-up, along with the
status of corrective actions that have been taken on the prior year's external audit. For
example, on May 16, 2000, the Board referred the Single Audit Report for the fiscal year
ending June 30, 1999 to the Finance Committee. The Finance Committee is expected to
consider the County Administrator's report on the Single Audit in July 2000.
EX111Brr I' Established Audit Projects Murch 2000
Prefrd.
Department/Agency Estimated Last Done Cycle
Project Description Hours Through ears
County Administrator
Risk Management 250 12/99 2
Office of Revenue Collections 450 06/95 2
Auditor-Controller
Revolving/Cash Diff Fund& Shortage Report 50 06/99 1
Welfare Payments 500 03/96 2
Fund 8109 100 05/96 5
Miscellaneous Trust 50 01/97 3
Health&Dental.Premium Payments 200 03/97 3
Treasurer-Tax Collector
Treasury Cash&Investments 100 In Prog. 1/4
State of California Trust 40 03/93 2
Special Trust(8314) 100 03/93 2
Supplemental Tax Collection 100 10/92 2
Duplicate Pint."Dust(8315) 50 02/95 2
Talc Redemption 150 02/94 3
Secured Tax Collection 150 09/92 2
Unsecured Payment Trust 60 04/96 2
Unsecured Tax Collection 150 02/96 2
Treasury Oversight Committee 100 In Prog. 1
Human Resources
Collections&Timekeeping 120 06/91 5
gwkyees Ret.Association
Statutory Audit 550 12/97 1
General'Services
Sale of Surplus Equipment 24 06/91 5
Fleet Services Inventory 100 06/94 2
Craft Inventories 100 06/94 2
Custodial Supplies Inventory 55 06/94 2
1
t xFil rr i' Established Audit Projects March 2000
Prefrd,
Departhnent/Agency Estimated last Done Cycle
Pro iect Description Hours Throu ears)
Central Services Inventory 1.00 06/94 2
Lower Courts
Mt Diablo Municipal Court 350 06/96 2
Bay Municipal Court .350 06/96 2
'walnut Creek-Danville M.C. 300 06/97 2
Delta Municipal Court 300 06/97 2
Judicial Special Deposits 200 06/92 2
Cho cam-Recorder
Clerk's Office 400 06/94 2
Recorder's Office 200 06/94- . 1
.Digi r�ict Attorney
D.A. General/Including Family Support 175 05/98 2
Public Administrator 100 04/93 2
Sheriff Coroner
Escrow Fund 300 04/95 1
Revolving FundtTimekeeping 100 06/99 2
Seized&Forfeited Property 70 03/93 3
Inmate Welfare Fund 100 06/'98 2
Custody Alternative Programs 150 In Prog. 3
Prisoners'Cash 300 In Prog. 1
Coroner 100 03/91 5
prgbafin
Statutory Audit 100 06/93 2
Building lnwaflon
Collections&Timekeeping 300 03/97 2
2
EXHIBIT } Established Audit Projects March 2000
Prefrd.
Department/Agency Estimated Last Done Cycle
Project Dcription Hours Throu �yearss
Community Development
Collections &Timekeeping 300 03/97 2
Animal Services
Collections&Timekeeping 200 03/95 1
Health Servir
Public Health 250 12/94 2
A/DA/Mental Health 200 12/93 2
Hospital Inventories 200 05/94 2
Hospital Collections/Timekeeping 300 12/93 2
Consrvatorships/Guardianships 200 03/94 2
Patients Trust&Valuables 50 01/98 3
CCHP Vendor Payments 75 In Prog. 2
Em
loyment&Human Services
Collections/Disbursements &Timekeeping 700 03/95 2
C��n_._,yi Libraries
Collections&Timekeeping 200 02/94 2
Public Works
Collections&Timekeeping 300 02/93 2
Inventories 50 06/94 2
County Airports 200 06/99 1
Burman Flying Club Lease 100 12/93 On Req.
Pacific States Aviation Lease 100 12/92 On Req.
Navajo Aviation Lease 100 12/92 On Req.
Golf Course Lease 100 09/96 On Req.
Buchanan Airport Hangar Co. Lease 30 12/92 On Req.
3
I xMII IT i`' Established Audit Projects March 2000
Prefrd.
Department/Agency Estimated Last Done Cycle
ProjWect Descrivtion Hours ThLou (years
Joint Powers Agencies
East Co. Co.Narcotics Enforcement Team 60 09/94 On Req,
West Co. Co.Narcotics Enforcement Team 100 06/96 On Req.
West County Agency 60 06/95 1
Criminal Justice Agency 100 In Prog. 2
Local Special Disstfl-
Crockett Auditorium CSA P-1 200 01/94 On Req.
Contra.Costa RCI) 30 In Prog 1
West CCSD 200 06/92 1.
Stege SD 150 06/99 1
BBK Union CD 75 06/99 1
Green Valley PRD 50 In Frog. 1
Rollingw'ood W'ilart Park PRD 50 06/93 1
Reclamation District 2065 50 In Prog. 1
Reclamation District 799 75 In Prog. 1
Reclamation District 2059 50 06/91 1
Miscellaneous
Housing Authority Special 500 12/93 On Req.
Community Services Grant Programs 400 09/94 On Req.
Blackhawk&Canyon Lakes GhAD&M-23 200 Spcl On Req.
Various assistance to CAO on operational reviews Varies Various On Req.
4
Comparison of County Financial Audit Organizations
Exhibit 2
Governmental Financial Audtors Financial Auditors
Number of Fund Per 100,000 Per $100,000,000
Financial Expenditures Residents Gov. Fund Exp.
County Auditors* Population (thousands) Number Rank Number Rank
Sonoma 10 430,000 $700,000 2.33 2 1.43 2
San Mateo 9 700,000 850,000 1.29 4 1.06 3
Ventura 7 730,000 800,000 0.96 6 0.88 4
San Francisco 20 750,000 4,000,000 2.67 1 0.50 10
Fresno 14 760,000 756,000 1.84 3 1.85 1
Contra Costa 6 920,000 -974,000 0.65 9 0.62 8
Sacramento 9 1,140,000 1,500,000 0.79 7 0.60 9
Alameda 9 1,400,000 1,400,000 0.64 10 0.64 6
Riverside 3 1,480,000 1,290,000 0.20 11 0.23 11
Santa Clara 11 1,640,000 1,800,000 0.67 8 0.61 7
San Bernardino 17 1,640,000 2,000,000 1.04 5 0.85 5
Includes audit director and vacant positions, does not include clerical staff or
operational/management/performance audit staff.
Of the above, only Contra Costa and Sacramento County audit divisions prepare CAFRs.
Sonoma, Sacramento, Fresno and San Bernardino County audit divisions perform financial statement
audits of county special districts to reduce the fee paid to the county's external auditors.
Most of the above county audit divisions send audit reports to the board of supervisors.
Most of the above county audit divisions follow-up on report recommendations only at the next audit.
Audftorspergg 3/9/00