SANTA BARBARA COUNTY MANAGEMENT PERFORMANCE AUDITS
Released April 3, 1996
In assessing major issues affecting the management of Santa Barbara County government, the Grand Jury concluded that one primary area of attention should be accountability for the effectiveness of ongoing programs in every department.
Accepted management practice demands that the determination of accountability must be accomplished by setting performance objectives and measuring results at regular intervals. In this regard, the 1994-1995 Grand Jury identified a need for management audits as a result of their reports on "Management of County Government" and "Personnel Policies and Procedures." With this background, the 1995-96 Grand Jury established the following objectives and approach.
This study aims at three objectives:
In October, 1995 the Grand Jury conducted a survey of 20 departments to determine how broadly the county was using management audits to evaluate operating effectiveness. The Grand Jury asked each department to provide a copy of its last management audit.
All 20 departments responded promptly to the Grand Jury's request. The Grand Jury studied this data, held several interviews with management and examined Minute Orders from Board of Supervisors meetings going back nearly three years.
As a first step, the Grand Jury explored a range of auditing standards to establish definitions of the critical terms used in this study. The definitions are as follows:
Performance Audit: An independent assessment of the performance of a government, organization, program, activity or function in order to provide information to improve public accountability, to facilitate decision-making by parties with responsibility to oversee or initiate corrective action.1
The terms "performance audit," "management audit" and "operating audit" are often used interchangeably because the purpose of each is essentially the same. Therefore, in this report the Grand Jury will refer to an audit of this type as a "performance audit."
Other types of audits include:
The primary observation emerging from the Grand Jury survey was the extremely low use of performance audits by the county to measure the performance and accountability of each department. Using the past five years as a reference (1991 through 1995) only 3 departments out of 20 reported any involvement with a performance audit of their department. (See Exhibit A.)
Many of the 20 departments volunteered a range of other types of audits, but all were "specialty" types for a specific purpose such as financial, compliance, cash handling, internal reorganization or job classification review. None of these audits possesses the depth, breadth or management orientation that characterizes a performance audit.
On January 11, 1994 the Board of Supervisors accepted the Five Year Audit Plan submitted by the Auditor-Controller. (See Exhibit B.) This plan was submitted in conformance with California law (Government Code Section 1236).4 It offered an opportunity for department performance evaluations on a regular basis. In turn, the Board of Supervisors could use these evaluations to make policy decisions and the County Administrator could direct operating improvements to obtain better management results for the county.
The Auditor-Controller included comments with the plan indicating that personnel resources were not sufficient to perform all audits. The situation worsened when the Board of Supervisors decreased the Auditor-Controller Department from 54 to 51 personnel positions in the 1995-1996 budget, while increasing the total county personnel authorization by 58 positions.5
The Grand Jury also learned that audits as outlined in the Five Year Plan were completed only in some cases. A report from the County Auditor-Controller's office was obtained to show audits completed by type.6
The report shows:
The report concludes with the recommendation that the Board of Supervisors requests the Auditor-Controller to conduct a management audit of the Personnel Department and recommend any new procedures deemed appropriate.
On August 22, 1995 the Auditor-Controller reported to the Board of Supervisors with a draft of an audit proposal for the Personnel Department. (See Exhibit C.)
On September 12, 1995 the Deputy Auditor-Controller requested a confirmation from the Board of Supervisors, at their weekly public meeting, to conduct a management audit of the Personnel Department, although he already had been given that authority. Three elected and one appointed department heads spoke against such confirmation. The President of the County Executive Association, appearing on behalf of all department heads who comprise the association's membership, urged that performance audits be conducted in a planned and collaborative way. After discussion, the Board of Supervisors denied the request of the Deputy Auditor-Controller. (See Exhibit D.)
Thereafter, following further discussion, the Board of Supervisors directed the Personnel Department to conduct its own "User Survey" of county employees, the Civil Service Commission, and employee organizations to determine their degree of satisfaction with services from the Personnel Department, and what changes might be appropriate. This action was taken instead of accomplishing the planned management audit of the Personnel Department. The "User Survey" was completed by that department in early 1996.
When the Five Year Audit Plan was submitted by the Auditor-Controller, it was also proposed that an Internal Control Survey be circulated to each department. (See Exhibit B.) In this case the Board directed that action be taken.
The Internal Control Survey was a complete and comprehensive document, ready for distribution to the County Departments. It contained instructions for use by department executives and their managers. It was easy to understand. The survey forms would provide county managers an excellent tool to assess the performance of their departments.
Two years later in early January 1996, the Grand Jury learned that the survey had not been circulated by the Internal Audit Division. The Auditor-Controller was asked about the two year delay. His response was that several unanticipated major projects left no resources available to circulate the survey until late in January 1996.7 It was circulated on January 23, 1996.8
FINDING 1: The Grand Jury found no evidence of any official in county government accepting accountability for implementation of performance audits of the county's departments. Also, only three of the county's departments have had any performance audits in the last five years.
RECOMMENDATION 1b: The Grand Jury recommends that the Board direct the County Administrator to coordinate the initiation of an effective annual self- audit by each department managed by a non-elected department head, and report the results to the Board within 30 days of its completion.
RECOMMENDATION 1c: The Grand Jury recommends that each department headed by an elected official should initiate a self-administered performance audit program, and request an outside review audit every five years by the Auditor-Controller or an outside consultant, and publish the results and recommendations.
FINDING 2: The Board of Supervisors increased the county personnel authorization by 58 positions for fiscal year 1995-1996, while decreasing the Auditor-Controller Staff by three positions, thereby limiting the resources of that operation.
RECOMMENDATION 2: The Grand Jury recommends that the Board of Supervisors restore the three positions to the Auditor-Controller Department in order to assure a better probability that performance audits will be accomplished.
FINDING 3: The Grand Jury finds that the "User Survey" conducted by the Personnel Department in late 1995 is not a sufficient total evaluation of the management performance of that department.
FINDING 4: The Grand Jury finds that the Internal Control Survey distributed to all departments by the Auditor-Controller on January 23, 1996 presents immediate opportunities to begin self-evaluation of each department's performance.
RECOMMENDATION 3: The Grand Jury recommends that a performance audit of the Personnel Department be given a high priority on the schedule for upcoming performance audits.