San Jose/Evergreen Community College District

January 4, 2012 Rita Cepeda, Chancellor San José/Evergreen Community College District 4750 San Felipe Road San José, CA 95135 Dear Ms. Cepeda: The State Controller’s Office (SCO) reviewed the costs claimed by San José/Evergreen 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, 2008, through June 30, 2009. Our review was limited to validating the authorized health service fees that the district reported. The district claimed and was paid $201,417 for the mandated program. Our review disclosed that $173,305 is allowable and $28,112 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. The State will offset $28,112 from other mandated program payments due to the district. Alternatively, the district may remit this amount to the State. If you disagree with the review finding, you may file an Incorrect Reduction Claim (IRC) with the Commission on State Mandates (CSM). The IRC must be filed within three years following the date that we notify you of a claim reduction. You may obtain IRC information at the CSM’s Web site at www.csm.ca.gov/docs/IRCForm.pdf. If you have any questions, please contact Jim L. Spano, Chief, Mandated Cost Audits Bureau, at (916) 323-5849. Sincerely, Original signed by JEFFREY V. BROWNFIELD Chief, Division of Audits JVB/bf Rita Cepeda, Chancellor -2- January 4, 2012 Attachments RE: S12-MCC-902 cc: Peter Fitzsimmons, Director, Fiscal Services San José/Evergreen Community College District Ed Hanson, Principal Program Budget Analyst Education Systems Unit, Department of Finance Christine Atalig, Auditor, Fiscal Services Unit California Community Colleges Chancellor’s Office Jay Lal, Manager Division of Accounting and Reporting State Controller’s Office San José/Evergreen Community College District Health Fee Elimination Program Attachment 1— Summary of Program Costs July 1, 2008, through June 30, 2009 Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment 1 July 1, 2008, through June 30, 2009 Direct costs $ 805,478 $ 805,478 $ — Indirect costs 268,948 268,948 — Total direct and indirect costs 1,074,426 1,074,426 — Less authorized health service fees (696,496) (724,608) (28,112) Less offsetting savings/reimbursements (176,513) (176,513) — Total program costs $ 201,417 173,305 $ (28,112) Less amount paid by the State (201,417) Allowable costs claimed in excess of (less than) amount paid $ (28,112) _________________________ 1 See Attachment 2, Finding and Recommendation. Page 1 of 1 San José/Evergreen Community College District Health Fee Elimination Program Attachment 2— Finding and Recommendation July 1, 2008, through June 30, 2009 FINDING— The district understated authorized health service fees by $28,112. The district understated the authorized fees because it calculated the fees Understated authorized using incorrect enrollment data and an incorrect authorized health fee health service fees rate. Mandated costs do not include costs that are reimbursable from 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. 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, or (2) are attending a community college under an approved apprenticeship training program. The California Community Colleges Chancellor’s Office (CCCCO) identified the fees authorized by Education Code section 76355, subdivision (a). For the Fall 2008 and Spring 2009 semesters, the authorized health fee rate was $17. The district calculated fees by using an incorrect rate of $16. We obtained student enrollment and apprenticeship program enrollment data from the CCCCO. The CCCCO identified enrollment 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. The district used incorrect enrollment date to calculate authorized fees. The district included only those students reported in MIS data element STD7, codes A, B, C, and F. Page 1 of 2 San José/Evergreen Community College District Health Fee Elimination Program The following table shows the authorized health service fee calculation and review adjustment: Period Fall Spring Semester Semester Total Fiscal Year 2008-09: Number of enrolled students $ 22,061 $ 20,593 Less number of apprenticeship program enrollees (30) — Subtotal 22,031 20,593 Authorized health fee rate × $(17) × $(17) Authorized health service fees $ (374,527) $ (350,081) $ (724,608) Less authorized health service fees claimed 696,496 Review adjustment, FY 2008-09 $ (28,112) 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). Page 2 of 2