Orange County

BETTY T. YEE California State Controller March 4, 2016 The Honorable Eric H. Woolery, CPA Auditor-Controller Orange County 12 Civic Center Plaza, Room #200 Santa Ana, CA 92701 Dear Mr. Woolery: The State Controller’s Office performed a desk review of costs claimed by Orange County for the legislatively mandated Peace Officers Procedural Bill of Rights Program (Chapter 465, Statutes of 1976; Chapters 775, 1173, 1174, and 1178, Statutes of 1978; Chapter 405, Statutes of 1979; Chapter 1367, Statutes of 1980; Chapter 994, Statutes of 1982; Chapter 964, Statutes of 1983; Chapter 1165, Statutes of 1989; and Chapter 675, Statutes of 1990) for the period of July 1, 2007, through June 30, 2014. We conducted our review under the authority of Government Code sections 12410, 17558.5, and 17561. Our review was limited to ensuring that the county properly reported the number of full-time sworn peace officers. The county claimed $872,995 for the mandated program. Our review found that $553,476 is allowable and $319,519 is unallowable. The costs are unallowable because the county overstated the number of full-time sworn peace officers reported to the Department of Justice, as described in the attached Summary of Program Costs and the Review Results. The State made no payments to the county. The State will pay $553,476, contingent upon available appropriations. We informed Yani Painter, Manager of Financial Reporting and Mandated Costs, of the review finding via email on January 14, 2016. On February 11, 2016, we discussed the review results with Ms. Painter during a telephone conference call. At the conclusion of the meeting Ms. Painter stated that she understood the methodology the SCO used to calculate the adjustment. If you have any questions, please contact Jim L. Spano, Chief, Mandated Cost Audits Bureau, by telephone at (916) 323-5849. Sincerely, Original signed by JEFFREY V. BROWNFIELD, CPA Chief, Division of Audits The Honorable Eric H. Woolery, CPA -2- March 4, 2016 JVB/as Attachments RE: S15-MCC-9017 cc: Yani Painter, Manager of Financial Reporting and Mandated Costs Auditor-Controller’s Office, Orange County Joanna Kim, Senior Accountant Auditor Auditor-Controller’s Office, Orange County Evelyn Suess, Principal Program Budget Analyst Mandates Unit, California Department of Finance Jay Lal, Manager Division of Accounting and Reporting State Controller’s Office Orange County Peace Officers Procedural Bill of Rights Program Attachment 1— Summary of Program Costs July 1, 2007, through June 30, 2014 Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment 1 July 1, 2007, through June 30, 2008 Unit cost per full-time sworn peace officer $ 39.31 $ 3 9.31 $ 39.31 Number of full-time sworn peace officers × 3,010 × 1,753 × (1,257) Total program costs $ 118,323 68,910 $ (49,413) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 68,910 July 1, 2008, through June 30, 2009 Unit cost per full-time sworn peace officer $ 40.50 $ 4 0.50 $ 40.50 Number of full-time sworn peace officers × 3,065 × 1,854 × (1,211) Total program costs $ 124,133 75,087 $ (49,046) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 75,087 July 1, 2009, through June 30, 2010 Unit cost per full-time sworn peace officer $ 40.69 $ 4 0.69 $ 40.69 Number of full-time sworn peace officers × 2,889 × 1,807 × (1,082) Total program costs $ 117,553 73,527 $ (44,026) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 73,527 July 1, 2010, through June 30, 2011 Unit cost per full-time sworn peace officer $ 41.64 $ 4 1.64 $ 41.64 Number of full-time sworn peace officers × 3,114 × 2,074 × (1,040) Total program costs $ 129,667 86,361 $ (43,306) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 86,361 1 of 2 Orange County Peace Officers Procedural Bill of Rights Program Attachment 1 (continued) Actual Costs Allowable Review Cost Elements Claimed per Review Adjustment 1 July 1, 2011, through June 30, 2012 Unit cost per full-time sworn peace officer $ 43.04 $ 4 3.04 $ 43.04 Number of full-time sworn peace officers × 2,986 × 1,948 × (1,038) Total program costs $ 128,518 83,842 $ (44,676) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 83,842 July 1, 2012, through June 30, 2013 Unit cost per full-time sworn peace officer $ 43.92 $ 4 3.92 $ 43.92 Number of full-time sworn peace officers × 2,913 × 1,885 × (1,028) Total program costs $ 127,938 82,789 $ (45,149) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 82,789 July 1, 2013, through June 30, 2014 Unit cost per full-time sworn peace officer $ 43.64 $ 4 3.64 $ 43.64 Number of full-time sworn peace officers × 2,907 × 1,901 × (1,006) Total program costs $ 126,863 82,960 $ (43,903) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 82,960 Summary: July 1, 2007, through June 30, 2014 Total program costs $ 872,995 $ 553,476 $ (319,519) Less amount paid by the State - Allowable costs claimed in excess of (less than) amount paid $ 553,476 _________________________ 1 See Attachment 2, Review Results. 2 of 2 Orange County Peace Officers Procedural Bill of Rights Program Attachment 2— Review Results July 1, 2007, through June 30, 2014 BACKGROUND— Chapter 465, Statutes of 1976; Chapters 775, 1173, 1174, and 1178, Statutes of 1978; Chapter 405, Statutes of 1979; Chapter 1367, Statutes of 1980; Chapter 994, Statutes of 1982; Chapter 964, Statutes of 1983; Chapter 1165, Statutes of 1989; and Chapter 675, Statutes of 1990 added and amended Government Code sections 3300 through 3310. This legislation, known as the Peace Officers Procedural Bill of Rights (POBOR) was enacted to ensure stable employer-employee relations and effective law enforcement services. This legislation provides procedural protections to peace officers employed by local agencies when a peace officer is subject to an interrogation by the employer, is facing punitive action, or receives an adverse comment in his or her personnel file. The protections required apply to peace officers classified as permanent employees, peace officers who serve at the pleasure of the agency and are terminable without cause (“at will” employees), and peace officers on probation who have not reached permanent status. On November 30, 1999, the Commission on State Mandates (Commission) determined that this legislation imposed a State mandate reimbursable under Government Code section 17561 and adopted the Statement of Decision. The Commission determined that the Peace Officers Procedural Bill of Rights law constitutes a partially reimbursable state-mandated program within the meaning of the California Constitution, Article XII B, section 6, and Government Code section 17514. The Commission further defined that activities covered by due process are not reimbursable. The program’s parameters and guidelines establish the state mandate and define the reimbursement criteria. The Commission adopted the parameters and guidelines on July 27, 2000, and corrected them on August 17, 2000. The parameters and guidelines categorize reimbursable activities into the following four components: Administrative Activities, Administrative Appeal, Interrogations, and Adverse Comments. In compliance with Government Code section 17558, the State Controller’s Office (SCO) issues claiming instructions to assist local agencies, school districts, and community college districts in claiming mandated program reimbursable costs. On March 28, 2008, the parameters and guidelines were amended to provide claimants an opportunity to claim reimbursement for the activities by using either the reasonable reimbursement methodology (RRM) or by filing an actual cost claim. The RRM allows each eligible claimant to be reimbursed at a rate of $37.25 per full-time sworn peace officer employed by the agency and reported to the Department of Justice (DOJ) for all direct and indirect costs of performing the activities. The rate per full-time sworn peace officer is adjusted each year by the Implicit Price Deflator referenced in Government Code section 17523. 1 of 2 Orange County Peace Officers Procedural Bill of Rights Program FINDING— The county overstated the number of full-time sworn peace officers on its mandated cost claims for fiscal year (FY) 2007-08 through FY 2013-14. Overstated number of For the fiscal years in the review period, the county claimed $872,995. We full-time sworn peace found that $553,476 is allowable and $319,519 is unallowable. officers For FY 2007-08 through FY 2013-14, Orange County claimed reimbursement using the Commission-adopted RRM. In reviewing the POBOR mandated cost claims, we found that the number of full-time sworn peace officers claimed by the county for each fiscal year was overstated. The parameters and guidelines (section V. Claim Preparation and Submission, subsection A. 2. Formula) state: Reimbursement is determined by multiplying the rate per full time sworn peace officer for the appropriate fiscal year by the number of full time sworn peace officers employed by the agency and reported to the Department of Justice. Each October 31, the county reports to the DOJ the number of full-time law enforcement employees, both officers and civilians. Law enforcement officers are defined as individuals who ordinarily carry a firearm and a badge, have full arrest powers, and are paid from governmental funds set aside specifically to pay sworn law enforcement officers. Reimbursement for POBOR activities is limited to sworn peace officers and does not include civilians. Civilian employees are not trained as peace officers. They do not carry guns, nor do they have arrest powers. The following table summarizes the adjustment calculations for the review period: Fiscal Year 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Total No. of full-time sworn officers claimed 3,010 3,065 2,889 3,114 2,986 2 ,913 2 ,907 No. of full-time sworn officers reported to the DOJ 1,753 1,854 1,807 2,074 1,948 1 ,885 1 ,901 Difference ( 1,257) ( 1,211) ( 1,082) ( 1,040) ( 1,038) (1,028) (1,006) Unit cost per full-time sworn officer $ 39.31 $ 40.50 $ 40.69 $ 41.64 $ 43.04 $ 4 3.92 $ 4 3.64 Review adjustment $ ( 49,413) $ ( 49,046) $ ( 44,026) $ ( 43,306) $ ( 44,676) $ (45,149) $ (43,903) $ (319,519) Recommendation We recommend that if the county continues to claim reimbursement using the RRM, it ensure that the number of full-time sworn peace officers reported on its mandated cost claim is the same number as reported to the DOJ. 2 of 2