Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grant

REGENTS OF THE UNIVERSITY OF CALIFORNIA, SAN FRANCISCO TRAUMA RECOVERY CENTER Audit Report PROPOSITION 47 SAFE NEIGHBORHOODS AND SCHOOLS FUND GRANT EXPENDITURES July 1, 2018, through June 30, 2020 BETTY T. YEE California State Controller January 2022 BETTY T. YEE California State Controller January 31, 2022 Ellyn McCaffrey, Interim Assistant Controller Contracts and Grants Accounting University of California, San Francisco 1855 Folsom Street, Suite 425 San Francisco, CA 94143 Dear Ms. McCaffrey: Attached is the final report for our audit of the Regents of the University of California, San Francisco Trauma Recovery Center’s Proposition 47 Safe Neighborhoods and Schools Fund grant expenditures for the period of July 1, 2018, through June 30, 2020. If you have any questions, please contact Andrew Finlayson, Chief, State Agency Audits Bureau, by telephone at (916) 324-6310. Sincerely, Original signed by KIMBERLY TARVIN, CPA Chief, Division of Audits KT/as Ellyn McCaffrey, Interim Assistant Controller -2- January 31, 2022 cc: Sarah B. Metz, Interim Director Division of Trauma Recovery Services University of California, San Francisco Jon Dean Green, Administrator Division of Trauma Recovery Services University of California, San Francisco Avice Yee, Finance Director Department of Psychiatry and Behavioral Sciences University of California, San Francisco Courtney Crosson, Compliance Lead Contracts and Grants Accounting University of California, San Francisco Lynda Gledhill, Executive Officer California Victim Compensation Board Andrew LaMar, Deputy Executive Officer California Victim Compensation Board Anita Ahuja, Staff Services Manager II California Victim Compensation Board Ava Jordan, Staff Services Manager I California Victim Compensation Board Kirk Marsten, Senior Management Auditor California Victim Compensation Board Kim Gauthier, Chief Counsel California Victim Compensation Board Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program Contents Audit Report Summary ............................................................................................................................ 1 Background ........................................................................................................................ 1 Audit Authority.................................................................................................................. 2 Objective, Scope, and Methodology ................................................................................. 2 Conclusion .......................................................................................................................... 4 Follow-up on Prior Audit Findings .................................................................................. 4 Views of Responsible Officials .......................................................................................... 4 Restricted Use .................................................................................................................... 5 Schedule—Summary of Grant Awards, Amounts Disbursed and Expended, and Audit Adjustments .............................................................................. 6 Findings and Recommendations ........................................................................................... 7 Attachment—Regents of the University of California, San Francisco Response to Draft Report Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program Audit Report Summary The State Controller’s Office (SCO) conducted a performance audit of Regents of the University of California, San Francisco (UCSF) Trauma Recovery Center’s (TRC) Proposition 47 Safe Neighborhoods and Schools Fund (SNSF) grant expenditures for the period of July 1, 2018, through June 30, 2020. The purpose of the audit was to ensure that program funds were disbursed and expended in accordance with program guidelines and grant requirements, as required by Government Code (GC) section 7599.2(c), and applicable laws and regulations. We verified that during the period of July 1, 2018, through June 30, 2020, the California Victim Compensation Board (CalVCB) awarded the UCSF TRC with $1,465,949 in Proposition 47 SNSF grant funds, of which $1,440,989 was disbursed and expended ($803,161 in fiscal year [FY] 2018-19, and $637,828 in FY 2019-20). Our audit found that UCSF TRC did not prepare and maintain sufficient documentation to substantiate labor costs of $1,205,324 billed during the audit period; and did not adequately account for labor costs of $15,868 charged in FY 2018-19. Except as noted above, UCSF TRC grant expenditures claimed were in compliance with applicable laws, regulations, program guidelines and grant agreement. Proposition 47 – Safe Neighborhoods and Schools Fund Background On November 4, 2014, California voters approved Proposition 47, which reduces penalties for certain offenders convicted of non-serious and nonviolent property and drug crimes. It also allows some offenders to apply for reduced sentences. Proposition 47 established the Safe Neighborhoods and Schools Fund, which is funded by savings that accrue to the State from implementation of the measure. This mandate is expected to save significant state corrections dollars annually. Savings resulting from Proposition 47 are transferred to the Safe Neighborhoods and Schools Fund to support truancy reduction and drop- out prevention programs for public school pupils in grades K–12; increase victim services grants; and support substance abuse and mental health treatment and diversion programs for people in the criminal justice system. Regents of the University of California, San Francisco On July 1, 2018, CalVCB signed Grant Agreement Number VC-G8006 with the Regents of the University of California San Francisco to provide services to crime victims pursuant to GC section 13963.1, and program requirements as stipulated in the Notice of Funds Available for the California Trauma Recovery Center Grant. The program services are provided by the UCSF TRC. CalVCB awarded the UCSF TRC with $1,947,868 in funding, of which $1,465,949 was from the Proposition 47 -1- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program SNSF and $481,919 was from the Restitution Fund. The agreement term was from July 1, 2018, through June 30, 2020. Established in 2001, the UCSF TRC provides specialized trauma- informed mental health services, clinical case management, and support services to underserved crime victims in the community. In 2017, California Assembly Bill 1384 named UCSF’s TRC the “State Pilot Model” for California, and added GC section 13963.2 to require that CalVCB use the evidence-informed Integrated Trauma Recovery Services model developed by the State Pilot TRC when it selects, establishes, and implements trauma recovery centers pursuant to GC section 13963.1. Audit Authority The legal authority to conduct this audit is provided by GC section 7599.2(c), which requires the Controller, every two years, to conduct an audit of the Proposition 47 SNSF Grants Program operated by CalVCB “to ensure the funds are disbursed and expended solely according to this chapter” and to “report his or her findings to the Legislature and the Public.” In addition, GC section 12410 states, in part: The Controller shall superintend the fiscal concerns of the state. The Controller shall audit all claims against the state, and may audit the disbursement of any state money, for correctness, legality, and for sufficient provisions of law for payment. Objective, Scope, The objective of our audit was to ensure that UCSF TRC adequately accounted for Proposition 47 SNSF grant funds expenditures, and that its and Methodology program funds were disbursed and expended in accordance with program guidelines and grant requirements and as required by GC section 7599.2(c) for the period of July 1, 2018, through June 30, 2020. To achieve our objective, we:  Identified the Proposition 47 SNSF Grants Program background, criteria, purpose, and requirements by reviewing the FY 2016-17 Governor’s Budget, GC sections 7599 through 7599.2, and the California Department of Finance fund classification and basis for the Safe Neighborhoods and Schools Fund;  Reviewed UCSF TRC’s Proposition 47 SNSF grant files, grant agreements, program guidelines, program requirements, and claimed invoices;  Reviewed UCSF TRC’s claimed grant expenditures and performed analytical procedures and budgetary analysis to identify material cost components of each claim, any errors, and any unusual or unexpected variances;  Interviewed UCSF TRC key personnel, completed internal control questionnaires, reviewed written internal policies and procedures, and identified controls related to audit objective, performed a limited walk-through of critical controls in order to gain a general understanding of UCSF TRC’s internal controls related to the -2- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program Proposition 47 SNSF Grants Program, such as accounting, timekeeping, procurement and procedures performed by staff when preparing, reviewing and approving grant expenditures, monitoring the grants Program, and recording disbursements and expenditures in the UCSF TRC financial management system;  Assessed UCSF TRC’s internal controls related to the Proposition 47 SNSF Grants Program by reviewing policies and procedures, guidelines, grant agreements, contracts, expenditure reports and supporting documents; and conducted limited tests of those controls related to the audit objective in order to determine whether the controls were functioning as intended; and whether UCSF TRC was in compliance with written internal policies and procedures, applicable provisions of laws, regulations, and established criteria;  Verified that, during the audit period, CalVCB awarded UCSF TRC with $1,465,949 in Proposition 47 SNSF grant funds. In addition, verified that UCSF TRC expended $1,440,989 in Proposition 47 SNSF grant funds ($803,161 in FY 2018-19, and $637,828 in FY 2019-20);  Conducted a risk assessment and reviewed internal controls for Proposition 47 SNSF grants expenditures to determine the nature, timing, and extent of substantive testing;  Tested sample transactions, traced those transactions to supporting documentation, and performed analytical procedures and budgetary analysis. Specifically, we: o Used a judgmental (non-statistical) sampling approach to select samples that supported our audit conclusions, and to ensure that the samples selected were representative of the population and provided sufficient, appropriate evidence; o Tested compliance with applicable laws, regulations, internal policies and procedures, and program requirements. Our audit procedures included interviewing appropriate personnel and inspecting documents, records, and grant agreements; and o Tested $303,046 of $1,440,989 in total claimed program costs as follows:  Salaries and Wages—We tested $240,383 (or 28%) of $872,783.  Rent Costs—We tested $57,587 (or 29%) of $199,167.  Utilities Costs—We tested $2,861 (or 22%) of $13,063.  HR Expenses—We tested $755 (or 43%) of $1,757.  Communication Costs—We tested $1,460 (or 29%) of $5,102. Errors found, if any, were not projected to the intended (total) population We did not examine the information-system controls or the economy, efficiency, or effectiveness of the program. Our audit of the program was related solely to program expenditures as required by GC section 7599.2(c). -3- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program We did not audit UCSF TRC’s financial statements. We limited our audit scope to planning and performing audit procedures necessary to achieve our audit objective. In addition, our review of internal control was limited to gaining an understanding of the transaction flows and financial- management accounting system, and performing limited tests of controls regarding UCSF TRC’s ability to accumulate and segregate reasonable and allowable program costs. 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 we obtained provides a reasonable basis for our findings and conclusions based on our audit objective. Conclusion We verified that during the period of July 1, 2018, through June 30, 2020, CalVCB awarded UCSF TRC with $1,465,949 in Proposition 47 SNSF grant funds. In addition, we verified that UCSF TRC expended its Proposition 47 SNSF grant funds as required by GC section 7599.2(c). However, our audit found that UCSF TRC did not:  Prepare and maintain sufficient documentation to substantiate labor costs; and  Adequately account for labor costs. These findings are quantified in the Schedule and described in the Findings and Recommendations section of this report. Except as noted above, UCSF TRC grant expenditures claimed were in compliance with applicable laws, regulations, program guidelines and the grant agreement. Follow-up on There have been no prior audits of UCSF TRC’s Proposition 47 SNSF Grants Program; therefore, we did not perform any follow-up activity. Prior Audit Findings Views of We issued a draft report on October 12, 2021. Ellyn McCaffrey, Interim Assistant Controller, Executive Director, responded by letter dated Responsible October 21, 2021, disagreeing with Finding 1 and agreeing with Finding 2. Officials This final audit report includes UCSF’s complete response as an attachment. -4- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program Restricted Use This report is intended for the information and use of UCSF TRC, CalVCB, 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 audit report, which is a matter of public record and is available on the SCO website at www.sco.ca.gov. Original signed by KIMBERLY TARVIN, CPA Chief, Division of Audits January 31, 2022 -5- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program Schedule— Summary of Grant Awards, Amounts Disbursed and Expended, and Audit Adjustments July 1, 2018, through June 30, 2020 Program SNSF Grant SNSF Grant SNSF Grant Allowable Audit Cost Element1 Awarded2 Disbursed3 Expended3 per Audit Adjustments Reference4 FY 2018-19 University of California, San Francisco Trauma Recovery Center $ 1 ,465,949 N/A N/A N/A N/A Total for FY 2018-19 $ 1 ,465,949 N/A N/A N/A N/A FY 2018-19 Salaries and Wages N/A $ 4 79,411 $ 4 79,411 N/A $ 4 79,411 Finding 1 & 2 Fringe Benefits N/A 158,876 158,876 N/A 158,876 Finding 1 & 2 Patient Fund N/A N/A N/A N/A N/A Rent N/A 1 10,573 1 10,573 1 10,573 N/A Utilities N/A 7 ,203 7 ,203 7 ,203 N/A Maintenance/Building/ Repair N/A 4 ,987 4 ,987 4 ,987 N/A Supplies N/A 24 24 24 N/A Staff Travel N/A N/A N/A N/A N/A HR Expenses N/A 916 916 916 N/A Communication N/A 2,926 2,926 2,926 N/A Indirect Costs N/A 38,246 38,246 6331 31,914 Finding 1 & 2 Total for FY 2018-19 N/A $ 8 03,161 $ 803,161 $ 132,961 $ 6 70,201 FY 2019-20 Salaries and Wages N/A $ 3 93,372 $ 393,372 N/A $ 393,372 Finding 1 & 2 Fringe Benefits N/A 116,270 116,270 N/A 116,270 Finding 1 & 2 Patient Fund N/A N/A N/A N/A N/A Rent N/A 88,593 88,593 88,593 N/A Utilities N/A 5,860 5,860 5,860 N/A Maintenance/Building/ Repair N/A 274 274 274 N/A Supplies N/A N/A N/A N/A N/A Staff Travel N/A N/A N/A N/A N/A HR Expenses N/A 841 841 841 N/A Communication N/A 2,176 2,176 2,176 N/A Indirect Costs N/A 30,442 30,442 4,960 25,482 Finding 1 & 2 Total for FY 2019-20 N/A $ 6 37,828 $ 6 37,828 $ 1 02,704 $ 5 35,124 Grand Total $ 1 ,465,949 $1 ,440,989 $ 1,440,989 $ 235,665 $ 1,205,324 . __________________________ 1Amounts rounded to the nearest whole dollar. 2For the period of July 1, 2018, through June 30, 2020, CalVCB awarded UCSF TRC with $1,465,949 in Proposition 47 SNSF grant funds, of which $803,161 was disbursed in FY 2018-19 and $637,828 was disbursed in FY 2019-20. 3We verified the accuracy of Proposition 47 SNSF grants disbursed and expended by reconciling Proposition 47 SNSF grant records to UCSF TRC’s financial and accounting reports. 4See the Findings and Recommendations section. -6- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program Findings and Recommendations FINDING 1— UCSF claimed labor costs based on the percentage of time that individual employees worked on Proposition 47 grant activities. The percentage of Insufficient time claimed was based on budgeted estimates. Due to a lack of time supporting accounting records or equivalent data, we were unable to determine documentation for whether the percentage of time claimed for each employee was accurate, labor costs and whether estimates of time spent on Proposition 47 grant activites were reasonable. UCSF provided employee timesheets to support labor costs; however, the timesheets did not support hours worked specifically on Proposition 47 activities. Employee time sheets record total hours worked and leave time used by employees; they do not differentiate between hours spent on Proposition 47 grant activites and hours spent on non-reimbursable activities. UCSF provided patient log data to CalVCB as part of program reporting, but not for invoicing purposes. The clinical logs detail the number of clients served and training sessions provided to law enforcement and community agencies, and are documented in the quarterly progress reports submitted and approved by CalVCB. The clinical logs include hours worked, but do not detail which UCSF staff members worked on grant activities. Althought the clinical logs indicate that UCSF staff members were enganged in grant activities, we were unable to use these logs to verify the actual percentage of time that employees were engaged in grant activities. Because we were unable to determine whether the percentage of time claimed for each employee was accurate, and whether estimates of time spent on Proposition 47 activites were reasonable, we question the labor costs claimed by UCSF. The total questioned labor costs are as follows: Amount Cost Element Claimed Salaries $ 8 72,783 Fringe benefits 275,145 Associated indirect costs (5%) 57,396 Total $ 1,205,324 We also identified instances in which timesheets were submitted but not approved, or no timesheets were available to support the claimed costs. We reviewed 408 timesheets (100% of the billed employees’ timesheets) for the audit period, and found that 73 timesheets had exceptions. We found 29 exceptions in the 133 monthly timesheets, including:  Submitted, but not approved;  Not submitted or approved; and -7- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program  Not submitted, but approved. We found 44 exceptions in the 275 biweekly timesheets, including:  Not approved, but processed and completed; and  Approved and processed, but not completed. The University of California Accounting Manual (Chapter A-000-7, “Official Documentation Required in Support of University Financial Transactions,” section II, Part A, subparagraph 2) states, in part: c) For absences with full salary or absences without salary; an approved copy of the document authorizing such leave d) For employees whose time or effort is charged in whole or in part to U.S. government funds: the Personnel Activity Report (PAR), certified in accordance with campus instructions…. Grant Agreement Number VC-G8006, section IV: Invoicing and Payment, states, in part: Funds will be released retrospectively on a quarterly basis upon receipt and approval of invoices and supporting documentation detailing program expenditures and the required database data as set forth in the Reporting Requirements of this NOFA (Section 8)….Invoices shall include the following: o Signed timesheets or attendance records, including the employee name, position/classification, time base, rate of pay, hours worked (see Attachment 4, TRC Invoice Instructions), and a breakdown of fringe benefits, if applicable. Grant Agreement Number VC-G8006, Attachment 4 – TRC Invoice Instructions, states, in part: Grant funds will be released retrospectively on a quarterly basis upon receipt of the required invoice....Invoice batches received shall include the following....Supporting documentation for all direct costs including receipts and explanations of a typical expenses. Recommendation We recommend that UCSF TRC:  Prepare and maintain sufficient documentation to substantiate labor costs, in accordance with the University of California Accounting Manual;  Ensure that all labor costs charged to the Proposition 47 SNSF Grants Program are program-related, eligible, allowable, supported, reasonable, and in accordance with the grant agreement and program requirements; and  Provide supporting documentation for all labor costs billed to CalVCB. -8- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program UCSF’s Response UCSF’s payroll system and procedures ensure a reasonable representation of time spent as an indication of work completed for all employees. The program requires a complete and detailed review of submitted invoices which includes detailed justification and documentation for all charges prior to making payment. Therefore, the payment of all invoices during this period can be used as support that the [CalVCB] program office believed sufficient supporting documentation for labor charges was provided at the time each invoice payment was made and that the charges align with the work completed during the invoice period. SCO Comment Our finding and recommendation remains unchanged. As stated in the finding, UCSF lacked accounting records or equivalent data. Therefore, we were unable to determine whether the percentage of time claimed for each employee was accurate, and whether estimates of time spent on Proposition 47 grant activities were reasonable. FINDING 2— Our test of salaries disclosed that UCSF TRC did not adequately account for labor costs of $15,868. In FY 2018-19, UCSF TRC incorrectly charged Inadequate the TRC Director’s and the Clinical Coordinator’s time to the program. accounting for Human Resources records indicated that both employees were on labor costs extended leave of absence during the period. UCSF TRC explained that during the emergent medical leave of these personnel, the acting clinicians worked considerable additional hours to fulfill both their primary and acting duties in clinical oversight and supervision of the program. CalVCB was fully aware of the staffing challenges and approved the contract billings. Although we acknowledge the extra efforts of the acting officers to ensure minimal impact to trauma recovery services, we determined that charging the TRC Director’s and the Clinical Coordinator’s labor costs in lieu of work performed by the acting officers was unallowable, and not supported. Only actual costs incurred as a direct charge to the program are allowable. The unallowable labor costs are as follows: Amount Cost Element Claimed TRC Director–Salaries and wages $ 3,924 Clinical Coordinator–Salaries and wages 7,247 Clinical Coordinator–Fringe benefits 3,940 Associated indirect costs (5%) 756 Total $ 15,868 -9- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program Grant Agreement Number VC-G8006, section IV: Invoicing and Payment, states, in part: For services satisfactorily rendered, and upon receipt and approval of the invoices, the Board agrees to compensate the Awardee for actual expenditures permitted by the terms of this contract in accordance with the approved budget….Eligible costs include: Direct Costs: o Salaries and benefits for personnel providing direct treatment, including:  Activities such as mental health treatment, clinical supervision, social work, victim advocacy, and case management  Administrative salaries related to the support of direct treatment and other eligible activities. Grant Agreement Number VC-G8006, Attachment 4 – TRC Invoice Instructions, states, in part: Grant funds will be released retrospectively on a quarterly basis upon receipt of the required invoice....Invoice batches received shall include the following....Supporting documentation for all direct costs including receipts and explanations of a typical expenses. Recommendation We recommend that UCSF TRC:  Ensure that all labor costs charged to the Proposition 47 SNSF Grants Program are program-related, eligible, allowable, supported, reasonable, and in accordance with grant agreement and program requirements;  Make necessary accounting corrections for the labor costs totaling $15,868 (salaries and associated benefits of $15,112, and indirect costs of $756) over-charged to the Proposition 47 SNSF Grants Program; and  Reimburse $15,868 to CalVCB for the unallowable costs claimed, or request that CalVCB offset UCSF TRC’s future claims by $15,868. UCSF’s Response UCSF agrees that charges for extended leave should not have been charged to the program. UCSF reviewed salary transactions for extended leaves for faculty that were posted. UCSF has confirmed that all other payroll during the extended leaves was accurately accounted for and is currently monitoring for such instances to prevent future charges from being incorporated into an invoice. New policies and practices allow for easier capturing of these leaves. Any coverage provided by other employees will be included in the payroll charged and timesheets recorded accordingly. UCSF will work with CalVCB to remediate the $15,068 in charges that were posted during the award period for this purpose. -10- Regents of the University of California, San Francisco Trauma Recovery Center Proposition 47 Safe Neighborhoods and Schools Fund Grants Program Attachment— Regents of the University of California, San Francisco Response to Draft Report State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250 http://www.sco.ca.gov S21-P47-0001