June 29, 1998

 

Honorable Frank J. Ochoa, Presiding Judge

Santa Barbara County Superior Court

1100 Anacapa Street

PO Box 21107

Santa Barbara, California 93121-1107

 

 

Countyí Administratorís Response to the 1997-98 Grand Jury Interim Final Report on the Audit and Finances of County Government

 

 

Dear Judge Ochoa:

 

The County Administratorís Office would like to thank the Grand Jury for the findings and recommendations included in the subject report.

 

 

FINDING 2: There is no requirement in the ISAC guidelines for [disaster recovery plan] compliance, nor is there a tracking system in place for completion of the plans.

 

RESPONSE: The County Administratorís Office agrees with the finding.

 

RECOMMENDATION 2(a): The county should revise the disaster recovery plan to require that departments comply with the guidelines.

 

RESPONSE: The recommendation has not yet been implemented, but will be implemented in Fiscal Year 1998-99. The Data Services Division of the General Services Department will be directed to coordinate this effort.

 

As pointed out by the Grand Jury, General Services and Auditor-Controller departments currently have disaster recovery plans. These 2 plans cover all countywide critical enterprise systems as well as some non-countywide systems, including the Financial Information Network, Payroll, Accounts Payable, Employee Information System, Warrant Reconciliation, Info Net, Sheriffís Warrants, Sheriffís Jail Management, Sheriffís Record Management, Social Services systems (includes welfare checks system), Property Assessment and Tax System, Probation, Clerk of the Boardís Indexing System, Retirement Information System, and Municipal Courtís comprehensive and integrated system. These plans also cover the countywide Capital Projects budget database, Performance Measurement database, and the Salary Model system. Health Care Servicesí Patient Billing and Scheduling System was covered under General Servicesí Disaster Recovery Plan until June 1998 when the system was moved from the basement of the Administration Building to the Health Care Services building.

 

RECOMMENDATION 2(b): The county should devise a system to track completion of these plans.

 

RESPONSE: The recommendation has not yet been implemented, but will be implemented in Fiscal Year 1998-99 as a part of the countywide project management system.

 

 

FINDING 3: Employment positions created by grant projects have no specific ending date.

 

RESPONSE: The County Administratorís Office agrees with the finding.

 

RECOMMENDATION 3: The county should implement a procedure to have a specific ending date for employment positions created to work on grant projects.

 

RESPONSE: The recommendation has not yet been implemented, but will be implemented pending proposal to, and contingent upon approval by, the Board of Supervisors in fiscal year 1998-99.

 

To effectuate this new procedure, it will require that position control (authorization to fill a vacant position) be established in the County Administratorís Office and an additional paragraph will need to be added to the County Code, Section 2-75, "Employment Policies and Practices" as sub-section (i). This section should state that "no officer, employee, contractor-on-payroll or other compensated help should be appointed onto the county payroll except by execution of a Personnel Requisition Form prescribed by the County Administrator. The Personnel Requisition Form is to be signed by the appointing department head and approved by the County Administrator or his/her designee." The requisition form would have to include data fields to reflect that if a position is grant funded, the specific grant funding information and the termination date of the grant are displayed.

 

While this important control would be new to the County and may provoke some adverse comments, this centralized method is common practice in thousands of local governments nationwide and is used to ensure budgetary and position control.

 

The position control process would work as follows: when a vacancy occurs, the affected department would submit a requisition to the County Administratorís Office where availability of funds, current budget status, and the overall fiscal condition of the County would be ascertained. These criteria and not simply the departmentís authorized budget would be taken into consideration. The form would then be submitted to the Personnel department for processing.

 

Automating the position control form into a user-friendly on-line system would be ideal and has already been explored in one version by the Personnel Department.

 

It should be noted that existing Civil Service Rules and no employee union memorandum of understandings (MOUs) are affected by this recommendation. When a grant terminates, and unless an alternative funding source is programmed the position(s) would be terminated. The employee(s) filling those positions, however, would still be entitled to displacement rights in accordance with the Civil Services Rules and applicable employee union MOUs.

 

 

 

FINDING 4: The budget document does not identify grant revenue.

 

RESPONSE: The County Administratorís Office agrees with the finding.

 

RECOMMENDATION 4: The budget document should clearly identify grant funding from all sources.

 

RESPONSE: The recommendation will not be implemented at this time.

 

The category entitled "Intergovernmental" revenues in the budget document includes one-time grants, recurring grants, on-going intergovernmental revenues and intermittent on-going government revenues. Often the distinction between revenue types are blurry and blended, and changes as the U.S. Congress, the State Legislature and other granting entities evolve their systems. This office will need to consult with the Auditor-Controller to see if there is a cost-effective way to capture this complex data refinement.

 

In addition, the Auditor-Controllerís office plans on conducting a preliminary needs assessment in 1998-99 for a grant accounting and tracking computerized module. It should be noted that the first step would be to create a grant/project management system. That system would then be followed by a corresponding cost [analysis] system.

 

 

 

FINDING 5: There is a need for a grants management system.

 

RESPONSE: The County Administratorís Office agrees with the finding.

 

RECOMMENDATION 5(a): The county should implement a grants management system that would keep track of grant applications, active grants, revenue and expenses involved in grant funded project.

 

RESPONSE: The recommendation has not yet been implemented, but will be implemented pending proposal to, and contingent upon approval by, the Board of Supervisors in fiscal year 1998-99.

 

To accomplish the Grand Juryís recommendation, the County Administratorís Office proposes that (refer to page 6 of Board letter dated December 9, 1997):

 

  1. Create a new specialized countywide position, Cost Analyst I/II. The proposal is to reclassify existing accounting staff located in the various county departments who work on grant management to the Cost Analyst I/II class. The expectation of the reclassification is to help retain these accounting individuals to continue to work in the area of grant management instead of moving on to higher paying administrative positions. The Auditor-Controllerís office is currently pursuing and coordinating this effort countywide.
  2. The budgets of those departments which are largely grant and intergovernmentally funded, and which are now budgeted in the general fund, should be transferred to special grant fund entities. In fact, starting on July 1, 1998 for the 1998-99 fiscal year, the Social Services and Job Training Network departments were transferred from the general fund to special revenue funds. Their 1998-99 budgets total approximately $100 million (which is approximately 20% of the countyís total budget).
  3. All departments which are thinking of applying for new grants or which are offered new grants (recent examples includes the Juvenile Justice Challenge, MISC, and Community Oriented Policing Services grants) should be required to submit a Grant Termination and Close-Out Plan with their proposal to the Board of Supervisors at the time of initial approval of such grants. Those departments that have such grants which are likely to end in the near term (1-5 years) should also submit a Termination Plan.
  4. It should be recognized that the management of grants which have a beginning and end are fixed-term interval undertakings and should be subject to a separate project management system which is different from the Countyís ongoing day-to-day recurring management systems. The Board of Supervisors should require by ordinance that the County Administrator develop a project management system including a project management and tracking system (PMATS) which fixes accountability for completing the necessary tasks within the required time intervals and within in the allocated resources. For example, if the XYZ grant or intergovernmental revenue has an annual claiming cycle which must start on a certain date and finish on a certain date, that particular work would be assigned as a designated project to a designated project team and a designated project manager with a designated schedule. The project manager would be accountable to the cognizant department head. Performance of the department and the team manager would, in part, be evaluated on the successful completion of the project. In this case, the definition of successful completion of the project would be receipt of the appropriate revenue by the date required.

 

Both the County Administrator and the Auditor-Controller believe that these 4 steps would do more to promote accountability, reduce losses, and enhance the Countyís financial position than creating an amorphous grants training program. These 4 steps require approval by the Board of Supervisors.

 

The County Administratorís Office recognizes interest by the Grand Jury, outside auditors, and perhaps others for a countywide grants management system. While the County Administratorís Office prefers the solution outlined above (some of which is under way, particularly the PMATS system), if the CAO were to seriously undertake KPMGís recommendation (as referenced in the Grand Jury report) but the above 4 steps were not approved, it is estimated that the addition of 3 Administrative Analysts and associated equipment would be required in the CAO (at an estimated cost of $240,000). In addition, there is not any physical space available in the CAO nor the Administration Building to house additional staff so rental space would have to be obtained.

 

It should be further noted that as of this writing, this office is aware of 19 reports prepared by the 1997-98 Grand Jury. Many of the recommendations would not only require additional staffing within the subject agencies, but would significantly impact the workload of the County Administratorís Office.

 

RECOMMENDATION 5(b): The county should explore ways to make its grants management services available to small cities and districts at a nominal administrative fee. This should include locating and applying for grant funds.

 

RESPONSE: The recommendation will not be implemented, as the County does not have the staff resources to subsidize municipal operations in this area.

 

 

 

FINDING 6: The present functions of the Auditor-Controllerís office are being carried out in an efficient and effective manner.

 

RESPONSE: The County Administratorís Office agrees with this finding.

 

RECOMMENDATION 6: No reorganization of the auditor-controller function should be considered at this time.

 

RESPONSE: While the County Administratorís Office is not aware of any reorganization under consideration, we are aware that the Auditor-Controller continuously makes improvements to deal with additional work demands.

 

Sincerely,

 

 

 

 

Michael F. Brown

County Administrator

 

 

cc: Tim Putz, l997-98 Grand Jury Foreman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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