Chaffey Community College District

State of California John Chiang, State Controller M e m o r a n d u m To : Mike Havey, Chief Date: July 17, 2009 Division of Accounting and Reporting State Controller’s Office From: Jeffrey V. Brownfield, Chief Division of Audits State Controller’s Office Subject: CHAFFEY COMMUNITY COLLEGE DISTRICT HEALTH FEE ELIMINATION PROGRAM MANDATED COST CLAIMS FOR THE PERIOD OF JULY 1, 2003, THROUGH JUNE 30, 2006 We reviewed the costs claimed by Chaffey Community College District for the legislatively mandated Health Fee Elimination Program (Chapter 1, Statutes of 1984, 2nd Extraordinary Session, and Chapter 1118, Statutes of 1987) for the period July 1, 2003, through June 30, 2006. Our review was limited to validating the authorized health service fees that the district reported. The district claimed $303,340 for the mandated program. Our review disclosed that $38,580 is allowable and $264,760 is unallowable. The costs are unallowable because the district understated authorized health service fees, as described in the attached Summary of Program Costs and Finding and Recommendation. For the fiscal year (FY) 2003-04 through FY 2005-06 claims, the State made no payment to the district. Our review disclosed that $38,580 is allowable. The State should pay that amount, contingent upon available appropriations. We recommend that the Division of Accounting and Reporting notify the district of the results of this review. If you have any questions, please contact either Jim L. Spano, Chief, Mandated Cost Audits Bureau, at (916) 323-5849 (jspano@sco.ca.gov), or Steve Van Zee, Audit Manager, at (916) 323-2368 (svanzee@sco.ca.gov). JVB:sk Attachments Re: S09-MCC-910 cc: Jill Kanemasu, Bureau Chief SCO-Division of Accounting and Reporting Ginny Brummels, Manager SCO-Division of Accounting and Reporting Chaffey Community College District Health Fee Elimination Program Attachment 1— Summary of Program Costs July 1, 2003, through June 30, 2006 Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment 1 July 1, 2003, through June 30, 2004 Direct costs $ 352,712 $ 352,712 $ — Indirect costs 69,449 69,449 — Total direct and indirect costs 422,161 422,161 — Less authorized health service fees (303,072) (437,244) (134,172) Less offsetting savings/reimbursements (28,028) (28,028) — Subtotal 91,061 (43,111) (134,172) Review adjustments that exceed costs claimed — 43,111 43,111 Total program costs $ 91,061 — $ (91,061) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ — July 1, 2004, through June 30, 2005 Direct costs $ 419,428 $ 419,428 $ — Indirect costs 82,211 82,211 — Total direct and indirect costs 501,639 501,639 — Less authorized health service fees (299,449) (426,778) (127,329) Less offsetting savings/reimbursements (36,281) (36,281) — Total program costs $ 165,909 38,580 $ (127,329) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ 38,580 July 1, 2005, through June 30, 2006 Direct costs $ 380,030 $ 380,030 $ — Indirect costs 74,198 74,198 — Total direct and indirect costs 454,228 454,228 — Less authorized health service fees (378,907) (517,313) (138,406) Less offsetting savings/reimbursements (28,951) (28,951) — Subtotal 46,370 (92,036) (138,406) Review adjustments that exceed costs claimed — 92,036 92,036 Total program costs $ 46,370 — $ (46,370) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ — Attachment 1–Page 1 of 2 Chaffey Community College District Health Fee Elimination Program Attachment 1 (continued) Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment 1 Summary: July 1, 2003, through June 30, 2006 Direct costs $ 1,152,170 $ 1,152,170 $ — Indirect costs 225,858 225,858 — Total direct and indirect costs 1,378,028 1,378,028 — Less authorized health service fees (981,428) (1,381,335) (399,907) Less offsetting savings/reimbursements (93,260) (93,260) — Subtotal 303,340 (96,567) (399,907) Review adjustments that exceed costs claimed — 135,147 135,147 Total program costs $ 303,340 38,580 $ (264,760) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ 38,580 _________________________ 1 See Attachment 2, Finding and Recommendation. Attachment 1–Page 2 of 2 Chaffey Community College District Health Fee Elimination Program Attachment 2— Finding and Recommendation July 1, 2003, through June 30, 2006 FINDING— The district understated authorized health service fees by $399,907. Understated authorized Mandated costs do not include costs that are reimbursable from health service fees authorized fees. Government Code section 17514 states that “costs mandated by the state” means any increased costs that a school district is required to incur. To the extent community college districts can charge a fee, they are not required to incur a cost. In addition, Government Code section 17556 states that the Commission on State Mandates shall not find costs mandated by the State if the school district has the authority to levy fees to pay for the mandated program or increased level of service. For the period of July 1, 2003, through December 31, 2005, Education Code section 76355, subdivision (c), states that health fees are authorized for all students except those who: (1) depend exclusively on prayer for healing; (2) are attending a community college under an approved apprenticeship training program; or (3) demonstrate financial need. Effective January 1, 2006, only subdivisions (c)(1) and (c)(2) are applicable. The California Community Colleges Chancellor’s Office (CCCCO) identified the fees authorized by Education Code section 76355, subdivision (a). The following table summarizes the authorized fee per student: Authorized Health Fee Rate Fiscal Year Semester Summer 2003-04 $ 12 $ 9 2004-05 13 10 2005-06 14 11 We obtained student enrollment, apprenticeship program enrollment, and Board of Governors Grant (BOGG) recipient data from the CCCCO. The CCCCO identified enrollment and BOGG recipient data from its management information system (MIS) based on student data that the district reported. CCCCO identified the district’s enrollment based on its MIS data element STD7, codes A through G. Within the student enrollment, CCCCO identified the number of apprenticeship program enrollees based on its Data Element SB23, Code 1. CCCCO eliminated any duplicate students based on their social security numbers. From the district enrollment, CCCCO identified the number of BOGG recipients based on MIS data element SF21, all codes with first letter of B or F. Attachment 2–Page 1 of 2 Chaffey Community College District Health Fee Elimination Program The following table shows the authorized health service fee calculation and review adjustment: Period Summer Fall Spring Session Semester Semester Total Fiscal Year 2003-04: Number of enrolled students 7,538 20,878 19,770 Less number of BOGG recipients (1,046) (4,309) (4,771) Subtotal 6,492 16,569 14,999 Authorized health fee rate × $(9) × $(12) × $(12) Authorized health service fees $ (58,428) $ (198,828) $ (179,988) $ (437,244) Less authorized health service fees claimed 303,072 Review adjustment, FY 2003-04 (134,172) Fiscal Year 2004-05: Number of enrolled students 9,151 19,393 18,312 Less number of BOGG recipients (1,763) (5,280) (5,279) Subtotal 7,388 14,113 13,033 Authorized health fee rate × $(10) × $(13) × $(13) Authorized health service fees $ (73,880) $ (183,469) $ (169,429) (426,778) Less authorized health service fees claimed 299,449 Review adjustment, FY 2004-05 (127,329) Fiscal Year 2005-06: Number of enrolled students 8,803 18,445 18,470 Less number of BOGG recipients (1,980) (5,325) — Subtotal 6,823 13,120 18,470 Authorized health fee rate × $(11) × $(14) × $(14) Authorized health service fees $ (75,053) $ (183,680) $ (258,580) (517,313) Less authorized health service fees claimed 378,907 Review adjustment, FY 2005-06 (138,406) Total review adjustment $ (399,907) Recommendation We recommend that the district deduct authorized health service fees from mandate-related costs claimed. To properly calculate authorized health service fees, we recommend that the district identify the number of enrolled students based on CCCCO data element STD7, codes A through G. We also recommend that the district identify the number of apprenticeship program enrollees based on data elements SB 23, code 1, and STD7, codes A through G. The district should eliminate duplicate entries for students who attend more than one of the district’s colleges. In addition, we recommend that the district maintain documentation that identifies any students the district excludes from the health service fee based on Education Code section 76355, subdivision (c)(1). If the district denies health services to any portion of its student population, it should maintain contemporaneous documentation of a district policy that excludes those students and documentation identifying the number of students excluded. Attachment 2–Page 2 of 2