Los Angeles County

LOS ANGELES COUNTY Audit Report CRIME STATISTICS REPORTS FOR THE DEPARTMENT OF JUSTICE PROGRAM Chapter 1172, Statutes of 1989; Chapter 1338, Statutes of 1992; Chapter 1230, Statutes of 1993; Chapter 933, Statutes of 1998; Chapter 571, Statutes of 1999; Chapter 626, Statutes of 2000; and Chapter 700, Statutes of 2004 July 1, 2001, through June 30, 2012 BETTY T. YEE California State Controller September 2019 BETTY T. YEE California State Controller September 11, 2019 CERTIFIED MAIL—RETURN RECEIPT REQUESTED Arlene Barrera, Acting Auditor-Controller Los Angeles County Kenneth Hahn Hall of Administration 500 West Temple Street, Room 525 Los Angeles, CA 90012 Dear Ms. Barrera: The State Controller’s Office (SCO) audited the costs claimed by Los Angeles County for the legislatively mandated Crime Statistics Reports for the Department of Justice Program for the period of July 1, 2001, through June 30, 2012. The county claimed $6,551,653 for the mandated program. Our audit found that $1,837,738 is allowable ($1,995,931 less a $158,193 penalty for filing late claims), and $4,713,915 is unallowable because the county overstated salary and benefit costs, and offsetting reimbursements. The State made no payments to the county. The State will pay $1,837,738, contingent upon available appropriations. Following issuance of this audit report, the SCO’s Local Government Programs and Services Division will notify the county of the adjustment to its claims via a system-generated letter for each fiscal year in the audit period. This final audit report contains an adjustment to costs claimed by the county. If you disagree with the audit findings, you may file an Incorrect Reduction Claim (IRC) with the Commission on State Mandates (Commission). Pursuant to the Commission’s regulations, outlined in Title 2, California Code of Regulations, section 1185.1, subdivision (c), an IRC challenging this adjustment must be filed with the Commission no later than three years following the date of this report, regardless of whether this report is subsequently supplemented, superseded, or otherwise amended. IRC information is available on the Commission’s website at www.csm.ca.gov/forms/IRCForm.pdf. Arlene Barrera, Acting Auditor-Controller -2- September 11, 2019 If you have any questions, please contact Lisa Kurokawa, Chief, Compliance Audits Bureau, by telephone at (916) 327-3138. Sincerely, Original signed by JIM L. SPANO, CPA Chief, Division of Audits JLS/hf cc: The Honorable Janice Hahn, Chair Los Angeles County Board of Supervisors Alex Villanueva, Sheriff Los Angeles County Michael Hanks, Administration Services Manager II Los Angeles County Sheriff’s Department Hasmik Yaghobyan, SB90 Administrator Los Angeles County Auditor-Controller’s Office Chris Hill, Principal Program Budget Analyst Local Government Unit California Department of Finance Steven Pavlov, Finance Budget Analyst Local Government Unit California Department of Finance Debra Morton, Manager Local Government Programs and Services Division State Controller’s Office Los Angeles County Crime Statistics Reports for the Department of Justice Program Contents Audit Report Summary ............................................................................................................................ 1 Background ........................................................................................................................ 1 Objective, Scope, and Methodology ................................................................................. 2 Conclusion .......................................................................................................................... 4 Follow-up on Prior Audit Findings .................................................................................. 4 Views of Responsible Officials .......................................................................................... 4 Restricted Use .................................................................................................................... 4 Schedule—Summary of Program Costs .............................................................................. 5 Findings and Recommendations ........................................................................................... 11 Los Angeles County Crime Statistics Reports for the Department of Justice Program Audit Report Summary The State Controller’s Office (SCO) audited the costs claimed by Los Angeles County for the legislatively mandated Crime Statistics Reports for the Department of Justice Program for the period of July 1, 2001, through June 30, 2012. The county claimed $6,551,653 for the mandated program. Our audit found that $1,837,738 is allowable ($1,995,931 less a $158,193 penalty for filing late claims), and $4,713,915 is unallowable because the county overstated salary and benefit costs, and offsetting reimbursements. The State made no payments to the county. The State will pay $1,837,738, contingent upon available appropriations. Background Penal Code (PC) sections 12025, subdivisions (h)(1) and (h)(3), 12031, subdivisions (m)(1) and (m)(3); 13014; 13023; and 13730, subdivision (a), require local agencies to report information related to certain specified criminal acts to the California Department of Justice (DOJ). These sections were added and/or amended by Chapter 1172, Statutes of 1989; Chapter 1338, Statutes of 1992; Chapter 1230, Statutes of 1993; Chapter 933, Statutes of 1998; Chapter 571, Statutes of 1999; Chapter 626, Statutes of 2000; and Chapter 700, Statutes of 2004. On June 26, 2008, the Commission on State Mandates (Commission) adopted a statement of decision for the Crime Statistics Reports for the Department of Justice Program. The Commission found that the test claim legislation constitutes a new program or higher level of service and imposes a reimbursable state-mandated program on city and county claimants beginning on July 1, 2001, within the meaning of Article XII B, section 6 of the California Constitution and Government Code (GC) section 17514. On July 31, 2009, the Commission heard an amended test claim on PC section 13023 (added by Chapter 700, Statutes of 2004), which imposed additional crime-reporting requirements. The Commission also found that this test claim legislation constitutes a new program or higher level of service, and imposes a reimbursable state-mandated program for city and county claimants beginning on January 1, 2004. On April 10, 2010, the Commission issued a corrected statement of decision to correctly identify the operative and effective date of the reimbursable state-mandated program as January 1, 2005. The Commission found that the following activities are reimbursable:  A local government entity responsible for the investigation and prosecution of a homicide case to provide the California Department of Justice with demographic information about the victim and the person or persons charged with the crime, including the victim’s and person’s age, gender, race, and ethnic background (PC section 13014);  Local law enforcement agencies to report, in a manner to be prescribed by the Attorney General, any information that may be required relative to any criminal acts or attempted criminal acts to cause physical injury, -1- Los Angeles County Crime Statistics Reports for the Department of Justice Program emotional suffering, or property damage where there is a reasonable cause to believe that the crime was motivated, in whole or in part, by the victim’s race, ethnicity, religion, sexual orientation, or physical or mental disability, or gender or national origin (PC section 13023);  For district attorneys to report annually on or before June 30, to the Attorney General, on profiles by race, age, gender, and ethnicity any person charged with a felony or misdemeanor under PC section 12025 (carrying a concealed firearm) or section 12031 (carrying a loaded firearm in a public place), and any other offense charged in the same complaint, indictment, or information. The Commission found that this activity is a reimbursable mandate from July 1, 2001, through January 1, 2005. (PC sections 12025, subdivisions (h)(1) and (h)(3), and 12031, subdivisions (m)(1) and (m)(3));  For local law enforcement agencies to support all domestic-violence related calls for assistance with a written incident report (PC section 13730, subdivision (a), Chapter 1230, Statutes of 1993);  For local law enforcement agencies to report the following in a manner to be prescribed by the Attorney General: o Any information that may be required relative to hate crimes, as defined in PC section 422.55 as criminal acts committed, in whole or in part, because of one or more of the following perceived characteristics of the victim: (1) disability, (2) gender, (3) nationality, (4) race or ethnicity, (5) religion, (6) sexual orientation; and o Any information that may be required relative to hate crimes, defined in PC section 422.55 as criminal acts committed, in whole or in part, because of association with a person or group with one or more of the following actual or perceived characteristics: (1) disability, (2) gender, (3) nationality, (4) race or ethnicity, (5) religion, (6) sexual orientation. The program’s parameters and guidelines establish the state mandate and define reimbursement criteria. The Commission adopted the parameters and guidelines on September 30, 2010, and amended them on January 24, 2014 to clarify reimbursable costs related to domestic violence related calls for assistance. In compliance with GC section 17558, the SCO issues claiming instructions to assist local agencies in claiming mandated program reimbursable costs. Objective, Scope, The objective of our audit was to determine whether costs claimed represent increased costs resulting from the legislatively mandated Crime and Methodology Statistics Reports for the Department of Justice Program. Specifically, we conducted this audit to determine whether costs claimed were supported by appropriate source documents, were not funded by another source, and were not unreasonable and/or excessive. The audit period was July 1, 2001, through June 30, 2012. -2- Los Angeles County Crime Statistics Reports for the Department of Justice Program To achieve our objective, we:  Reviewed the annual mandated cost claims filed by the county for the audit period and identified the significant cost components of each claim as Homicide Reports, Domestic Violence Related Calls for Assistance, and Hate Crime Reports. Determined whether there were any errors or unusual or unexpected variances from year to year. Reviewed the activities claimed to determine whether they adhered to the SCO’s claiming instructions and the program’s parameters and guidelines;  Completed an internal control questionnaire by interviewing key county staff. Discussed the claim preparation process with county staff to determine what information was obtained, who obtained it, and how it was used;  Interviewed county staff to determine what employee classifications were involved in performing the reimbursable activities;  Traced productive hourly rate (PHR) and benefit rate calculations for all employee classifications performing the mandated activities to supporting information in the county’s payroll system;  Assessed whether the average time increments claimed for each fiscal year in the audit period to perform the reimbursable activities were reasonable per the requirements of the program and supported by source documentation (see Finding 1);  Reviewed and analyzed the claimed report counts for domestic violence related calls for assistance, homicides, and hate crimes for consistency and possible exclusions, and verified that counts were supported by the reports that the county submitted to the Department of Justice (DOJ) (see Finding 1);  Traced a judgmentally selected non-statistical sample of 106 out of 16,727 domestic violence related calls for assistance to written incident reports for FY 2006-07 through FY 2011-12. Errors found were not projected to the intended population;  Determined whether indirect costs claimed for each fiscal year in the audit period were for common or joint purposes and whether indirect cost rates were properly supported and applied; and  Reviewed potential sources of offsetting revenues and reimbursements for the audit period. We inquired with district staff, reviewed single audit reports (with accompanying financial statements), and reviewed revenue reports for the audit period for other sources of funding (see Finding 2). GC sections 12410, 17558.5, and 17561 provide the legal authority to conduct this audit. We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective. -3- Los Angeles County Crime Statistics Reports for the Department of Justice Program We limited our review of the county’s internal controls to gaining an understanding of the transaction flow and claim preparation process as necessary to develop appropriate auditing procedures. Our audit scope did not assess the efficiency or effectiveness of program operations. We did not audit the county’s financial statements. Conclusion As a result of performing the audit procedures, we found instances of noncompliance with the requirements described in our audit objective. We found that the county claimed ineligible costs and overstated costs that were funded by another source, as quantified in the Schedule and described in the Findings and Recommendations section of this audit report. For the audit period, Los Angeles County claimed $6,551,653 for costs of the legislatively mandated Crime Statistics Reports for the Department of Justice Program. Our audit found that $1,837,738 is allowable ($1,995,931 less a $158,193 penalty for filing late claims) and $4,713,915 is unallowable. The State made no payments to the county. The State will pay $1,837,738, contingent upon available appropriations. Following issuance of this audit report, the SCO’s Local Government Programs and Services Division will notify the county of the adjustment to its claims via a system-generated letter for each fiscal year in the audit period. Follow-up on We have not previously conducted an audit of the county’s legislatively Prior Audit mandated Crime Statistics Reports for the Department of Justice Program. Findings Views of We discussed our audit results with the county’s representatives during an Responsible exit conference conducted on August 14, 2019. Cynthia Evans, Assistant Director, Administrative Services Division, Los Angeles County Sheriff’s Officials Department; Michael Hanks, Administrative Services Manager II, Los Angeles County Sheriff’s Department; and other county employees agreed with the audit results. The county’s representatives declined a draft audit report and agreed that we could issue the audit report as final. Restricted Use This audit report is solely for the information and use of Los Angeles County, the California Department of Finance, and the SCO; it is not intended to be and should not be used by anyone other than these specified parties. This restriction is not intended to limit distribution of this report, which is a matter of public record and is available on the SCO website at www.sco.ca.gov. Original signed by JIM L. SPANO, CPA Chief, Division of Audits September 11, 2019 -4- Los Angeles County Crime Statistics Reports for the Department of Justice Program Schedule— Summary of Program Costs July 1, 2001, through June 30, 2012 Cost Actual Costs Allowable Audit Elements Claimed per Audit Adjustment Reference1 July 1, 2001, through June 30, 2002 Direct costs: Homicide reports $ 29,743 $ 1,918 $ (27,825) Domestic violence related calls for assistance 501,558 148,350 (353,208) Total direct costs 531,301 150,268 (381,033) Indirect costs 39,314 11,118 (28,196) Total direct and indirect costs 570,615 161,386 (409,229) Finding 1 Less late filing penalty2 - (16,139) (16,139) Total program costs $ 5 70,615 145,247 $ ( 425,368) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 45,247 July 1, 2002, through June 30, 2003 Direct costs: Homicide reports $ 31,408 $ 3,340 $ (28,068) Domestic violence related calls for assistance 502,765 142,326 (360,439) Total direct costs 534,173 145,666 (388,507) Indirect costs 38,774 10,572 (28,202) Total direct and indirect costs 572,947 156,238 (416,709) Finding 1 Less late filing penalty2 - (15,624) (15,624) Total program costs $ 5 72,947 140,614 $ ( 432,333) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 40,614 -5- Los Angeles County Crime Statistics Reports for the Department of Justice Program Schedule (continued) Cost Actual Costs Allowable Audit Elements Claimed per Audit Adjustment Reference1 July 1, 2003, through June 30, 2004 Direct costs: Homicide reports $ 33,247 $ 2,759 $ (30,488) Domestic violence related calls for assistance 480,671 137,803 (342,868) Total direct costs 513,918 140,562 (373,356) Indirect costs 35,656 9,751 (25,905) Total direct and indirect costs 549,574 150,313 (399,261) Finding 1 Less late filing penalty2 - (15,031) (15,031) Total program costs $ 5 49,574 135,282 $ ( 414,292) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 35,282 July 1, 2004, through June 30, 2005 Direct costs: Homicide reports $ 35,020 $ 3,594 $ (31,426) Hate crime reports 9,466 426 (9,040) Domestic violence related calls for assistance 500,490 144,447 (356,043) Total direct costs 544,976 148,467 (396,509) Indirect costs 36,780 10,020 (26,760) Total direct and indirect costs 581,756 158,487 (423,269) Finding 1 Less late filing penalty2 - (15,849) (15,849) Total program costs $ 5 81,756 142,638 $ ( 439,118) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 42,638 -6- Los Angeles County Crime Statistics Reports for the Department of Justice Program Schedule (continued) Cost Actual Costs Allowable Audit Elements Claimed per Audit Adjustment Reference1 July 1, 2005, through June 30, 2006 Direct costs: Homicide reports $ 37,044 $ 3,801 $ (33,243) Hate crime reports 20,033 801 (19,232) Domestic violence related calls for assistance 541,884 155,160 (386,724) Total direct costs 598,961 159,762 (439,199) Indirect costs 39,553 10,550 (29,003) Total direct and indirect costs 638,514 170,312 (468,202) Finding 1 Less late filing penalty2 - (17,031) (17,031) Total program costs $ 6 38,514 153,281 $ ( 485,233) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 53,281 July 1, 2006, through June 30, 2007 Direct costs: Homicide reports $ 37,866 $ 3,327 $ (34,539) Hate crime reports 20,489 978 (19,511) Domestic violence related calls for assistance 605,386 170,654 (434,732) Total direct costs 663,741 174,959 (488,782) Indirect costs 44,736 11,792 (32,944) Total direct and indirect costs 708,477 186,751 (521,726) Finding 1 Less late filing penalty2 - (18,675) (18,675) Total program costs $ 7 08,477 168,076 $ ( 540,401) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 68,076 -7- Los Angeles County Crime Statistics Reports for the Department of Justice Program Schedule (continued) Cost Actual Costs Allowable Audit Elements Claimed per Audit Adjustment Reference1 July 1, 2007, through June 30, 2008 Direct costs: Homicide reports $ 38,169 $ 2,955 $ (35,214) Hate crime reports 20,647 1,003 (19,644) Domestic violence related calls for assistance 657,673 181,920 (475,753) Total direct costs 716,489 185,878 (530,611) Indirect costs 49,787 12,916 (36,871) Total direct and indirect costs 766,276 198,794 (567,482) Finding 1 Less late filing penalty2 - (19,879) (19,879) Total program costs $ 7 66,276 178,915 $ ( 587,361) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 78,915 July 1, 2008, through June 30, 2009 Direct costs: Homicide reports $ 39,854 $ 2,792 $ (37,062) Hate crime reports 21,568 862 (20,706) Domestic violence related calls for assistance 666,532 185,929 (480,603) Total direct costs 727,954 189,583 (538,371) Indirect costs 50,660 13,194 (37,466) Total direct and indirect costs 778,614 202,777 (575,837) Finding 1 Less late filing penalty2 - (20,278) (20,278) Total program costs $ 7 78,614 182,499 $ ( 596,115) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 82,499 -8- Los Angeles County Crime Statistics Reports for the Department of Justice Program Schedule (continued) Cost Actual Costs Allowable Audit Elements Claimed per Audit Adjustment Reference1 July 1, 2009, through June 30, 2010 Direct costs: Homicide reports $ 40,538 $ 2,266 $ (38,272) Hate crime reports 21,930 610 (21,320) Domestic violence related calls for assistance 637,138 181,231 (455,907) Total direct costs 699,606 184,107 (515,499) Indirect costs 48,496 12,762 (35,734) Total direct and indirect costs 748,102 196,869 (551,233) Finding 1 Less late filing penalty2 - (19,687) (19,687) Total program costs $ 7 48,102 177,182 $ ( 570,920) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 77,182 July 1, 2010, through June 30, 2011 Direct costs: Homicide reports $ 33,700 $ 2,564 $ (31,136) Hate crime reports 29,392 897 (28,495) Domestic violence related calls for assistance 668,329 185,074 (483,255) Total direct costs 731,421 188,535 (542,886) Indirect costs 124,986 32,218 (92,768) Total direct and indirect costs 856,407 220,753 (635,654) Finding 1 Less other reimbursements (539,536) - 5 39,536 Finding 2 Total program costs $ 3 16,871 $ 2 20,753 $ (96,118) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 2 20,753 -9- Los Angeles County Crime Statistics Reports for the Department of Justice Program Schedule (continued) Cost Actual Costs Allowable Audit Elements Claimed per Audit Adjustment Reference1 July 1, 2011, through June 30, 2012 Direct costs: Homicide reports $ 33,237 $ 2,266 $ (30,971) Hate crime reports 28,983 604 (28,379) Domestic violence related calls for assistance 588,530 164,458 (424,072) Total direct costs 650,750 167,328 (483,422) Indirect costs 100,812 25,923 (74,889) Total direct and indirect costs 751,562 193,251 (558,311) Finding 1 Less other reimbursements (431,655) - 4 31,655 Finding 2 Total program costs $ 3 19,907 $ 1 93,251 $ ( 126,656) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1 93,251 Summary: July 1, 2001, through June 30, 2012 Direct costs: Homicide reports $ 3 89,826 $ 31,582 $ ( 358,244) Hate crime reports 172,508 6,181 (166,327) Domestic violence related calls for assistance 6,350,956 1,797,352 (4,553,604) Total direct costs 6,913,290 1,835,115 (5,078,175) Indirect costs 609,554 160,816 (448,738) Total direct and indirect costs 7,522,844 1,995,931 (5,526,913) Finding 1 Less other reimbursements (971,191) - 9 71,191 Finding 2 Less late filing penalty2 - (158,193) (158,193) Total program costs $ 6,551,653 $ 1,837,738 $ (4,713,915) Less amount paid by the State3 - Allowable costs claimed in excess of amount paid $ 1,837,738 _________________________ 1 See the Findings and Recommendations section. 2 The county filed its initial reimbursement claims for FY 2001-02 through FY 2009-10 after the due date specified in GC section 17560. Pursuant to GC section 17561, subdivision (d)(3), the State assessed a late filing penalty equal to 10% of allowable costs, with no maximum penalty amount (for claims filed on or after September 30, 2002). 3 Payment amount current as of August 2, 2019. -10- Los Angeles County Crime Statistics Reports for the Department of Justice Program Findings and Recommendations FINDING 1— The county reported $6,913,290 in salary and benefit costs. We found that $1,835,115 is allowable and $5,078,175 is unallowable. The related Overstated salary indirect costs are $448,738, for a total finding of $5,526,913. The audit and benefit costs adjustments are related to the following cost components: Homicide Reports, Hate Crime Reports, and Domestic Violence Related Calls for Assistance. Costs are unallowable because the county misinterpreted the program’s parameters and guidelines when preparing the mandated cost claims. As a result, the county overstated the number of domestic violence related calls for assistance that were used to calculate the costs to write, review, and edit reports on domestic violence related calls for assistance; and overstated employees’ hours claimed to complete the mandated activities for both the Homicide Reports and Hate Crime Reports cost components. The overstatement occurred because the county claimed costs for services provided to its contract cities as well as to the unincorporated areas of the county. The following table summarizes the claimed, allowable and overstated salaries, benefits, and related indirect costs for the audit period: Salaries and Benefits Fiscal Amount Amount Audit Unallowable Total Audit Year Reported Allowable Adjustment Indirect Costs Adjustment 2001-02 $ 5 31,301 $ 1 50,268 $ (381,033) $ (28,196) $ (409,229) 2002-03 5 34,173 1 45,666 (388,507) (28,202) (416,709) 2003-04 5 13,918 1 40,562 (373,356) (25,905) (399,261) 2004-05 5 44,976 1 48,467 (396,509) (26,760) (423,269) 2005-06 5 98,961 1 59,762 (439,199) (29,003) (468,202) 2006-07 6 63,741 1 74,959 (488,782) (32,944) (521,726) 2007-08 7 16,489 1 85,878 (530,611) (36,871) (567,482) 2008-09 7 27,954 1 89,583 (538,371) (37,466) (575,837) 2009-10 6 99,606 1 84,107 (515,499) (35,734) (551,233) 2010-11 7 31,421 1 88,535 (542,886) (92,768) (635,654) 2011-12 6 50,750 1 67,328 (483,422) (74,889) (558,311) Total $ 6 ,913,290 $ 1 ,835,115 $ (5,078,175) $ (448,738) $ (5,526,913) Background The Los Angeles County Sheriff’s Department (LASD) is responsible for providing law enforcement services to the unincorporated areas of the county. LASD also contracts with 44 cities within the county’s boundaries that do not have a police force, to provide general law enforcement services for a fee. The county identifies these cities as “contract cities.” We reviewed a sample contract and found that the contract fee includes all costs for law enforcement officers and administrative functions. The administrative functions are included in the contract fee in order to recover overhead costs. During the course of the audit, we found that the county included costs for providing services to contract cities as part of its mandated cost claims for -11- Los Angeles County Crime Statistics Reports for the Department of Justice Program all activities. The parameters and guidelines state that any county, city, or city and county is eligible to submit a mandate reimbursement claim. Therefore, as all cities are eligible to submit reimbursement claims, and as the county received fees for law enforcement services from its contract cities, we determined that the county should claim only costs associated with the unincorporated areas of the county. As a result, we requested that the county provide support for the unincorporated areas of the county for all reimbursable activities. We determined that costs incurred by contract cities were unallowable because the county had already been compensated by contract fees. Homicide Reports Costs The county claimed $389,826 in salaries and benefits for the Homicide Reports cost component. We found that $31,582 is allowable and $358,244 is unallowable. The costs are unallowable because the county overstated the total number of hours LASD staff spent performing the mandated activities. Unallowable related indirect costs total $30,653, for a total finding of $388,897. Reimbursable activities for this component consist of extracting demographic information from local records, reporting the information to the Department of Justice (DOJ) monthly, verifying information contained in the report, and provide additional explanation when specifically requested by the DOJ. For FY 2001-02 through FY 2009-10, the county claimed a total of 936 hours per fiscal year (78 hours the mandated activities of extracting the required information and submitting the information to DOJ. However, for FY 2010-11 and FY 2011-12, the county claimed a total of 720 hours per fiscal year (60 hours a month) to complete the mandated activities of reviewing the data and submitting to DOJ. The county also claimed a total of 24 hours per fiscal year (two hours per month) for an Operations Assistant to complete the mandated activity of extracting data. County staff provided an email received from its Crime Analysis Unit indicating that it took 80 hours a month to complete the mandated activity. The county was unable to provide source documentation to support the number of hours claimed. During testing, we found that the claimed number of hours was both for contract cities and for unincorporated areas of the county. In addition, based on interviews with LASD’s staff, we found that the county’s process to determine the number of homicide reports included non-reimbursable activities such as reviewing all homicide reports and updating files; and documenting and sending all cases to detectives for review. The parameters and guidelines state that reimbursement is not required for reviewing and editing every homicide report. Therefore, the county claimed costs for the non-reimbursable activity of reviewing and editing every homicide report. We conducted interviews with LASD staff to determine the time it takes employees in the Operations Assistant II and Statistical Analyst classifications to perform the mandated activities per case. Based on our interviews and observations of the LASD processes, the county was able -12- Los Angeles County Crime Statistics Reports for the Department of Justice Program to support that it takes five minutes for an Operations Assistant II and 30 minutes for a Statistical Analyst to perform the mandated activities per case. The county provided us with monthly reports that were submitted to the DOJ, identifying the number of homicides that were reported for the unincorporated areas of the county for each calendar year. We then calculated the number of reported homicides for each fiscal year. The following table summarizes the allowable number of homicide reports for unincorporated areas of the county and were reported to DOJ: Homicide Reports Fiscal Identified in the Year County’s System 2001-02 105 2002-03 173 2003-04 135 2004-05 167 2005-06 167 2006-07 1 43 2007-08 1 26 2008-09 1 14 2009-10 9 1 2010-11 9 6 2011-12 8 6 Total 1 ,403 We calculated the allowable hours by multiplying the number of homicide reports for the unincorporated areas of the county by the allowable time increments. As a result, we found that the county overstated the total number of hours claimed for the Homicide Reports cost component. The following table summarizes the claimed, allowable, and overstated costs for the Homicide Reports cost component by fiscal year: Salaries and Benefits Fiscal Amount Amount Audit Unallowable Total Audit Year Claimed Allowable Adjustment Indirect Costs Adjustment 2001-02 $ 2 9,743 $ 1 ,918 $ (27,825) $ (2,059) $ (29,884) 2002-03 3 1,408 3 ,340 (28,068) (2,038) (30,106) 2003-04 3 3,247 2 ,759 (30,488) (2,116) (32,604) 2004-05 3 5,020 3 ,594 (31,426) (2,121) (33,547) 2005-06 3 7,044 3 ,801 (33,243) (2,195) (35,438) 2006-07 3 7,866 3 ,327 (34,539) (2,328) (36,867) 2007-08 3 8,169 2 ,955 (35,214) (2,447) (37,661) 2008-09 3 9,854 2 ,792 (37,062) (2,579) (39,641) 2009-10 4 0,538 2 ,266 (38,272) (2,653) (40,925) 2010-11 3 3,700 2 ,564 (31,136) (5,320) (36,456) 2011-12 3 3,237 2 ,266 (30,971) (4,797) (35,768) Total $ 3 89,826 $ 3 1,582 $ (358,244) $ (30,653) $ (388,897) -13- Los Angeles County Crime Statistics Reports for the Department of Justice Program Hate Crime Report Costs The county claimed $172,508 in salaries and benefits for the Hate Crime Reports cost component. We found that $6,181 is allowable and $166,327 is unallowable. The costs are unallowable because the county overstated the total number of hours that Sheriff’s Department staff spent performing the mandated activities. Unallowable related indirect costs total $16,744, for a total finding of $183,071. Reimbursable activities for this cost component consist of extracting required information about hate crimes from existing law enforcement records in order to report to the DOJ on an annual and monthly basis in a manner prescribed by the Attorney General; and to verify information contained in the report, or to provide additional explanation about the report when specifically requested by the DOJ. The operable period for this component began January 1, 2005. The county claimed a total of 240 hours for FY 2004-05 (40 hours a month for six months); for FY 2005-06 through FY 2009-10, the county claimed a total of 480 hours per fiscal year (40 hours per month) for a Senior Statistical Analyst to compile, update, and send Hate Crime reports to DOJ. For FY 2010-11 and FY 2011-12 the county claimed a total of 600 hours per fiscal year (50 hours a month) increasing the total number of hours to perform the same activities. The county was unable to provide source documentation to support the number of hours claimed. During testing, we found that the total number of hours the county claimed was for extracting information both for contract cities and for unincorporated areas of the county. We requested that the county provide the number of hate crimes that occurred in the unincorporated areas, as well as the unit time that it takes a Senior Statistical Analyst to gather hate crime information and submit the information to DOJ. The county used its case management system, the Los Angeles Regional Crime Information System (LARCIS) to provide the number of hate crimes that were reported in the unincorporated areas of the county. We interviewed Sheriff’s Department staff and observed the county’s process. Based on our interviews and observations, the county was able to support 25 minutes per case to complete the information in DOJ’s Uniform Crime Reporting system (UCR). As a result, we found that the county overstated the total number of hours claimed for the Hate Crime Reports cost component. We calculated allowable hours by multiplying the time increment by the number of hate crimes identified in the unincorporated areas. -14- Los Angeles County Crime Statistics Reports for the Department of Justice Program The following table summarizes the allowable number of Hate Crime Reports for unincorporated areas of the county that were reported to DOJ: Hate Crime Reports Identified Fiscal in the County’s Year System 2004-05 26 2005-06 46 2006-07 55 2007-08 56 2008-09 46 2009-10 32 2010-11 44 2011-12 30 Total 335 The following table summarizes the claimed, allowable, and overstated costs for the Hate Crime Reports cost component by fiscal year: Salaries and Benefits Fiscal Amount Amount Audit Unallowable Total Audit Year Claimed Allowable Adjustment Indirect Costs Adjustment 2004-05 $ 9 ,466 $ 4 26 $ (9,040) $ (610) $ (9,650) 2005-06 2 0,033 8 01 (19,232) (1,270) (20,502) 2006-07 2 0,489 9 78 (19,511) (1,315) (20,826) 2007-08 2 0,647 1 ,003 (19,644) (1,365) (21,009) 2008-09 2 1,568 8 62 (20,706) (1,441) (22,147) 2009-10 2 1,930 6 10 (21,320) (1,478) (22,798) 2010-11 2 9,392 8 97 (28,495) (4,869) (33,364) 2011-12 2 8,983 6 04 (28,379) (4,396) (32,775) Total $ 1 72,508 $ 6 ,181 $ (166,327) $ (16,744) $ (183,071) Domestic Violence Related calls for Assistance The county claimed $6,350,956 in salaries and benefits for the Domestic Violence Related Calls for Assistance cost component. We found that $1,797,352 is allowable and $4,553,604 is unallowable. The costs are unallowable because the county overstated the number of domestic violence related calls for assistance. Unallowable related indirect costs total $401,341, for a total finding of $4,954,945. Reimbursable activities for this cost component consist of writing, reviewing, and editing incident reports. The parameters and guidelines also require that a written report support each domestic violence related call for assistance. -15- Los Angeles County Crime Statistics Reports for the Department of Justice Program To calculate the claimed salaries and benefits, the county multiplied the time increments to prepare each domestic violence related call for assistance incident report by the number of domestic violence related calls for assistance, and then multiplied the total by the average PHR and related benefit costs for the Deputy Sheriff and Sergeant classifications. As previously stated, during testing, we found that the county claimed the total number of domestic violence related calls for assistance both for the unincorporated areas of the county and for contract cities. The county provided a summary report generated from LARCIS to support the number of domestic violence related calls for assistance for the unincorporated areas of the county. Based on our review of the summary reports, we determined that the county overstated the number of domestic violence related calls for assistance as a result of claiming written incident reports both for contract cities and for unincorporated areas of the county. As a result, the county overstated salaries and benefit costs for this activity. The following table summarizes the claimed, allowable, and overstated number of domestic violence related calls for assistance written incident reports by fiscal year: Fiscal Amount Amount Audit Year Claimed Allowable Adjustment 2001-02 10,814 3,198 (7,616) 2002-03 10,649 3,015 (7,634) 2003-04 9,745 2,795 (6,950) 2004-05 9,687 2,796 (6,891) 2005-06 9,631 2,758 (6,873) 2006-07 1 0,065 2 ,837 (7,228) 2007-08 1 0,526 2 ,911 (7,615) 2008-09 1 0,528 2 ,938 (7,590) 2009-10 1 0,017 2 ,849 (7,168) 2010-11 9 ,790 2 ,711 (7,079) 2011-12 8 ,992 2 ,481 (6,511) Total 1 10,444 3 1,289 ( 79,155) -16- Los Angeles County Crime Statistics Reports for the Department of Justice Program The following table summarizes the claimed, allowable, and overstated costs for the Domestic Violence Related Calls for Assistance cost component by fiscal year: Salaries and Benefits Fiscal Amount Amount Audit Unallowable Total Audit Year Claimed Allowable Adjustment Indirect Costs Adjustment 2001-02 $ 5 01,558 $ 1 48,350 $ (353,208) $ (26,137) $ (379,345) 2002-03 5 02,765 1 42,326 (360,439) (26,164) (386,603) 2003-04 4 80,671 1 37,803 (342,868) (23,789) (366,657) 2004-05 5 00,490 1 44,447 (356,043) (24,029) (380,072) 2005-06 5 41,884 1 55,160 (386,724) (25,538) (412,262) 2006-07 6 05,386 1 70,654 (434,732) (29,301) (464,033) 2007-08 6 57,673 1 81,920 (475,753) (33,059) (508,812) 2008-09 6 66,532 1 85,929 (480,603) (33,446) (514,049) 2009-10 6 37,138 1 81,231 (455,907) (31,603) (487,510) 2010-11 6 68,329 1 85,074 (483,255) (82,579) (565,834) 2011-12 5 88,530 1 64,458 (424,072) (65,696) (489,768) Total $ 6 ,350,956 $ 1 ,797,352 $ (4,553,604) $ (401,341) $ (4,954,945) Criteria Section IV of the parameters and guidelines states, in part: To be eligible for mandated cost reimbursement for any fiscal year, only actual costs may be claimed. Actual costs are those costs actually incurred to implement the mandated activities. Actual costs must be traceable and supported by source documents that show the validity of such costs, when they were incurred, and their relationship to the reimbursable activities. Section IV of the parameters and guidelines also states: The claimant is only allowed to claim and be reimbursed for increased costs for reimbursable activities. Increased cost is limited to the cost of an activity that the claimant is required to incur as a result of the mandate. This section continues to state that claimants may use time studies to support salary and benefit costs when an activity is task repetitive. Section IV (D) of the parameters and guidelines allows ongoing activities related to costs associated with supporting domestic violence related calls for assistance with a written incident report, and reviewing and editing the report. Section V of the parameters and guidelines states that cost elements must be identified for the reimbursable activities identified in section IV of the parameters and guidelines. Each reimbursable cost must be supported by source documentation. For salaries and benefit costs, claimants are to report each employee implementing the reimbursable activities by name, job classification and productive hourly rate. -17- Los Angeles County Crime Statistics Reports for the Department of Justice Program Recommendation The Crime Statistics Reports for the Department of Justice Program was suspended in the FY 2012-13 through FY 2018-19 Budget Acts. If the program becomes active again, we recommend that the county:  Follow the mandated program claiming instructions and parameters and guidelines when claiming reimbursement for mandated costs;  Claim costs based on the number of domestic violence related calls for assistance that are supported with a written report for the unincorporated areas of the county; and  Calculate time increments used to claim mandated costs based on either actual time or based on a documented time study. FINDING 2— The county overstated offsetting reimbursements by $971,191 for the audit period. The allowable costs for the mandated activities are applicable to Overstated offsetting the unincorporated areas of the county; therefore, the offsetting reimbursements reimbursements reported for contract cities are not applicable. The audit disclosed that the offsetting reimbursements were not based on actual revenues received from contract cities. Interviews with county staff members disclosed that county staff was not aware that contract cities were eligible to claim reimbursement for the mandate. Therefore, the county determined that it should be able to claim all associated costs for the mandate, as it provided services both to unincorporated areas of the county and to contract cities. However, after the initial claims were submitted, the county learned that contract cities were eligible to file reimbursement claims for the mandate. At that time, officials in the LASD and the Auditor-Controller’s Office determined that the county should calculate an offset to compensate for the costs applicable to contract cities. For FY 2010-11 and FY 2011-12, the county provided worksheets to show that 63% of the activities performed were for contract cities. The documentation disclosed that the percentage was derived by identifying the number of officers that provided services to the contract cities divided by the total number of officers that provided general law enforcement services. Based on our review, we concluded that the offsetting reimbursements applied to the mandated cost claims were based on an estimated percentage applied only to the calculated mandated costs, and not based on actual revenues received. -18- Los Angeles County Crime Statistics Reports for the Department of Justice Program The following table summarizes the claimed, allowable, and overstated offsetting reimbursements for the audit period: Reported Actual Fiscal Offsetting Offsetting Audit Year Reimbursements Reimbursements Adjustment 2010-11 $ (539,536) $ - $ 5 39,536 2011-12 (431,655) - 4 31,655 Total $ (971,191) $ - $ 9 71,191 Criteria Section VII of the parameters and guidelines states that any offsets the claimant experiences in the same program as a result of the same statutes or executive orders found to contain the mandate must be deducted from the costs claimed. In addition, reimbursement for this mandate received from any federal, state, or non-local source must be identified and deducted from such claims. Recommendation The Crime Statistics Reports for the Department of Justice Program was suspended in the FY 2012-13 through FY 2018-19 Budget Acts. If the program becomes active again, we recommend that the county:  Follow the mandated program claiming instructions and parameters and guidelines when claiming reimbursement for mandated costs; and  Ensure that reported offsetting reimbursements are based on actual revenues and are offset against mandated costs. -19- State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250 http://www.sco.ca.gov S19-MCC-0002