August 19, 1996

Spencer Boise, Foreman
1995-96 Grand Jury
County Courthouse Santa Barbara, Ca.


Dear Mr. Boise:

Enclosed is my office's response to the Grand Jury's interim final report regarding Performance Audits. In addition to the responses specified in your April 3, 1996 letter, I have the following additional comments.

The Grand Jury's report is in error on page 2 in the discussion regarding the Five Year Audit Plan. Specifically the report assumes that a performance audit of all the departments was to be completed over a five year period and since that is not happening, the County is not adhering to the plan. In fact, the Five Year Audit Plan was the Auditor-Controller's 1994 prioritization of all types of audits including financial audits, compliance audits and performance audits. The term "performance audit" does not even appear in the text of the plan document.

The report also creates an erroneous impression on page 3 in the discussion of the of the Board of Supervisors' 1995-96 budget decisions regarding the staffing level in the Auditor-Controller's department. The reader would conclude from reading the report that the Board of Supervisors deleted three staff positions assigned to work on performance audits. Attached to this letter is a copy of the organization charts for the Auditor Controller's department that reflect the staffing levels approved for 1994-95 and 1995-96. As you will note, the number of positions assigned to the internal audit unit in 1994 was eight; the number in 1995 was seven. Further, the Board's decision was based on an internal reorganization proposal recommended by the Auditor-Controller as his preferred approach to arriving at the funding level our office was recommending. Lastly, the three positions that were deleted were vacant. Therefore there was no real reduction in audit staff resources.

If there are questions regarding the above comments or the enclosed responses, please let me know.


Kent M. Taylor
County Administrator


Enclosure and attachment

cc: Board of Supervisors
Each department head




(Finding 1)

The Grand Jury did not interview me regarding the subject of performance audits. If it had, I would have advised that I, as County Administrator, am ultimately accountable for implementation of performance audits for departments managed by appointed department heads. Those appointed department heads have primary responsibility for implementing the recommendations included in performance audits. Elected department heads are accountable for implementation of performance audits for their departments.

The Grand Jury is in error in stating that only three department heads have had any (my emphasis added) in the last five years. In response the Grand Jury's request to all departments last Fall, our office provided a copy of the management review of the County Administrative Office which was completed in 1991 by an outside consultant. For some reason, this was not referenced in the Grand Jury's report. Also, there is no reference to the 1991 operational audit of the Data Services division of the General Services department or the 1994 operational audit of the Social Services GAIN program. Both of these were completed by the Auditor-Controller's office, as was the recent operational audit of the Vehicle Operations division of General Services.

Contrary to the impression given by the Grand Jury, the County agrees with the idea of a periodic review of the effectiveness of on-going programs. Unfortunately we only have resources for a limited number of such reviews.

(Recommendation 1b)

We believe the Internal Control Survey distributed by the Auditor-Controller this year will result in an effective annual self audit of each department. We are just completing the survey for our own department and have found it to be a very useful tool for examining our internal practices. We will request that the Auditor-Controller provide our office with copies of all the departments' responses to the survey and will provide them to the Board of Supervisors within 30 days of our receiving them.

(Finding 3)

The "User Survey" for the Personnel Department was never intended to be a "total evaluation of the management performance of that department". Instead it's intent was only to determine what a large number of the department's customers thought about the services they were receiving from the Personnel Department. Customer satisfaction surveys are a common management tool for determining what an organization is doing well and what it needs to improve. Since one of the reasons that the survey was conducted was last year's Grand Jury report on the Personnel Department, it is disappointing that this year's Grand Jury didn't examine closely and report on the results of the survey. Lastly it should be noted that the user survey was conducted by Ralph Andersen & Associates, not the Personnel Department, in order to insure the independence of the survey and the integrity of the results.

(Recommendation 3)

The basis of this recommendation is apparently last year's Grand Jury report inasmuch as there is no evidence cited in this report to justify the recommendation. Clearly the evidence isn't the 1994 Five Year Audit Plan which lists over forty departments or units with a higher "risk factor" than the Personnel Department. Nevertheless, it is one of our office's goals for 1996-97 to either complete our own management review of the Personnel Department or to have it accomplished by an objective third party. The results of this effort will be presented to the Board of Supervisors and a copy will be provided to the Grand Jury.