Santa Barbara 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 27, 2009 Division of Accounting and Reporting State Controller’s Office From: Jeffrey V. Brownfield, Chief Division of Audits State Controller’s Office Subject: SANTA BARBARA COMMUNITY COLLEGE DISTRICT HEALTH FEE ELIMINATION PROGRAM MANDATED COST CLAIMS FOR THE PERIOD OF JULY 1, 2002, THROUGH JUNE 30, 2006 We reviewed the costs claimed by Santa Barbara 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 of July 1, 2002, through June 30, 2006. Our review was limited to validating the authorized health service fees that the district reported. The district claimed $593,383 for the mandated program. Our review disclosed that $476,998 is allowable and $116,385 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) 2002-03 claim, the State paid the district $211,434. Our review disclosed that $205,560 is allowable. The State should offset $5,874 from other mandated program payments due the district. Alternatively, the district may remit this amount to the State. For the FY 2003-04 through FY 2005-06 claims, the State made no payment to the district. Our review disclosed that $271,438 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-914 Mike Havey -2- July 27, 2009 cc: Jill Kanemasu, Bureau Chief SCO-Division of Accounting and Reporting Ginny Brummels, Manager SCO-Division of Accounting and Reporting Santa Barbara Community College District Health Fee Elimination Program Attachment 1— Summary of Program Costs July 1, 2002, through June 30, 2006 Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment 1 July 1, 2002, through June 30, 2003 Direct costs $ 402,637 $ 402,637 $ — Indirect costs 137,684 137,684 — Total direct and indirect costs 540,321 540,321 — Less authorized health service fees (328,887) (334,761) (5,874) Total program costs $ 211,434 205,560 $ (5,874) Less amount paid by the State (211,434) Allowable costs claimed in excess of (less than) amount paid $ (5,874) July 1, 2003, through June 30, 2004 Direct costs $ 388,685 $ 388,685 $ — Indirect costs 135,639 135,639 — Total direct and indirect costs 524,324 524,324 — Less authorized health service fees (326,646) (341,265) (14,619) Total program costs $ 197,678 183,059 $ (14,619) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ 183,059 July 1, 2004, through June 30, 2005 Direct costs $ 344,578 $ 344,578 $ — Indirect costs 102,865 102,865 — Total direct and indirect costs 447,443 447,443 — Less authorized health service fees (345,582) (358,350) (12,768) Less offsetting savings/reimbursements (27,283) (27,283) — Total program costs $ 74,578 61,810 $ (12,768) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ 61,810 July 1, 2005, through June 30, 2006 Direct costs $ 430,971 $ 430,971 $ — Indirect costs 109,692 109,692 — Total direct and indirect costs 540,663 540,663 — Less authorized health service fees (392,559) (475,683) (83,124) Less offsetting savings/reimbursements (38,411) (38,411) — Total program costs $ 109,693 26,569 $ (83,124) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ 26,569 Attachment 1–Page 1 of 2 Santa Barbara Community College District Health Fee Elimination Program Attachment 1 (continued) Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment 1 Summary: July 1, 2002, through June 30, 2006 Direct costs $ 1,566,871 $ 1,566,871 $ — Indirect costs 485,880 485,880 — Total direct and indirect costs 2,052,751 2,052,751 — Less authorized health service fees (1,393,674) (1,510,059) (116,385) Less offsetting savings/reimbursements (65,694) (65,694) — Total program costs $ 593,383 476,998 $ (116,385) Less amount paid by the State (211,434) Allowable costs claimed in excess of (less than) amount paid $ 265,564 _________________________ 1 See Attachment 2, Finding and Recommendation. Attachment 1–Page 2 of 2 Santa Barbara Community College District Health Fee Elimination Program Attachment 2— Finding and Recommendation July 1, 2002, through June 30, 2006 FINDING— The district understated authorized health service fees by $116,385. 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, 2002, 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 2002-03 $ 12 $ 9 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 3 Santa Barbara 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 2002-03: Number of enrolled students 6,185 15,747 16,682 Less number of BOGG recipients (1,356) (3,835) (4,319) Subtotal 4,829 11,912 12,363 Authorized health fee rate × $ (9) × $(12) × $(12) Authorized health service fees $ (43,461) $ (142,944) (148,356) $ (334,761) Less authorized health service fees claimed 328,887 Review adjustment, FY 2002-03 (5,874) Fiscal Year 2003-04: Number of enrolled students 6,817 16,482 17,104 Less number of BOGG recipients (1,512) (4,544) (4,582) Subtotal 5,305 11,938 12,522 Authorized health fee rate × $ (9) × $(12) × $(12) Authorized health service fees $ (47,745) $ (143,256) $ (150,264) (341,265) Less authorized health service fees claimed 326,646 Review adjustment, FY 2003-04 (14,619) Fiscal Year 2004-05: Number of enrolled students 6,510 16,769 17,373 Less number of BOGG recipients (1,771) (4,903) (5,319) Subtotal 4,739 11,866 12,054 Authorized health fee rate × $(10) × $(13) × $(13) Authorized health service fees $ (47,390) $ (154,258) $ (156,702) (358,350) Less authorized health service fees claimed 345,582 Review adjustment, FY 2004-05 (12,768) Fiscal Year 2005-06: Number of enrolled students 6,578 17,022 18,085 Less number of BOGG recipients (1,773) (4,905) — Subtotal 4,805 12,117 18,085 Authorized health fee rate × $(11) × $(14) × $(14) Authorized health service fees $ (52,855) $ (169,638) $ (253,190) (475,683) Less authorized health service fees claimed 392,559 Review adjustment, FY 2005-06 (83,124) Total review adjustment $ (116,385) 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 Attachment 2–Page 2 of 3 Santa Barbara Community College District Health Fee Elimination Program 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. 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