Honorable Judge William L. Gordon
Presiding Judge, Superior Court
1100 Anacapa Street
Santa Barbara, Ca. 93121
Subject: Response of Grand Jury Report
Dear Judge Gordon:
This letter is in response to the Grand Jury Foremen's April 16, 1996 letter requesting that our office respond to Finding 3 and Recommendation 3 in the interim final report on Audit and Finance. The finding and recommendation and our response as an affected agency follow.
FINDING 3: The County needs to take advantage of the outside auditor's recommendations in the Management Letter.
RECOMMENDATION 3: The Board of Supervisors should require periodic updates from the affected agencies in order to monitor the progress of corrective action.
County Administrator's Response
The County does take advantage of the outside auditor's recommendations that are contained in the Management Letter. One of the reasons the County installed a new financial management system was to address some of the concerns raised in prior Management Letters. For example, previous Management Letters have pointed out the difficulty the County was having in tracking federal grants. The County Auditor-Controller's new FIN system (Financial Information System) will eventually resolve this problem.
We think its important to point out that there can be good reasons for taking time in implementing the outside auditor's recommendations, such as the time attendant to bringing up a new computer system. Also, although a recommendation may make sense, it may not always feasible to implement it. For example, the Grand Jury report points out the need for a data processing disaster plan, and notes that this recommendation has appeared in several consecutive Management Letters. Last summer, the Foreman and others along with the undersigned attended an "exit meeting" with the outside auditors. At that meeting I requested that the outside auditor provide me with a copy of a "model" data processing disaster plan prepared by either another public agency or a private firm. I reiterated that request with the outside auditor this Spring at a similar meeting. I have not yet received a sample of such a plan. I believe this points out that while the recommendation is sound, a real world example of such a plan is difficult to locate. This does not mean that the County isn't taking the recommendation seriously. But it does point out that the recommendations are simply recommendations and not directives that must be complied with.
Regarding periodic updates to the Board of Supervisors on the department's progress at implementing recommendations, we believe that the current system is adequate. Currently, once the Management Letter is issued, affected departments prepare a written response which is then submitted to the Board at a public meeting. Currently, we have the ability to provide periodic reports to the Board in addition to the department's responses if it is necessary or appropriate. If a recommendation is not feasible due to financial constraints, it would seem like a valueless exercise to periodically report to the Board that the recommendation is not being implemented due a lack of funds. On the other hand, if the outside auditor pointed out a serious financial control flaw, a periodic reporting to the Board would be quite appropriate.
The outside audit is a project that county management and the Grand Jury work on jointly. I appreciate having the opportunity to share my views on these issues with the Grand Jury.
Kent M. Taylor
cc: Bob Geis, Auditor-Controller
Each member, Board of Supervisors