SCO
City of Pasadena
Identity Theft
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CITY OF PASADENA
Audit Report
IDENTITY THEFT PROGRAM
Chapter 956, Statutes of 2000
July 1, 2002, through June 30, 2013
BETTY T. YEE
California State Controller
February 2022
BETTY T. YEE
California State Controller
February 15, 2022
CERTIFIED MAIL—RETURN RECEIPT REQUESTED
Matthew Hawkesworth, Finance Director
City of Pasadena
100 North Garfield Avenue, Room S353
Pasadena, CA 91101
Dear Mr. Hawkesworth:
The State Controller’s Office audited the costs claimed by the City of Pasadena for the
legislatively mandated Identity Theft Program for the period of July 1, 2002, through
June 30, 2013.
The city claimed $912,573 for costs of the mandated program. Our audit found that $598,519 is
allowable and $314,054 is unallowable. The costs are unallowable primarily because the city
overstated the number of identity theft reports and misstated the job classifications that
performed the reimbursable activities. The State made no payments to the city. The State will
pay $598,519, contingent upon available appropriations.
Following issuance of this audit report, the Local Government Programs and Services Division
of the State Controller’s Office will notify the city of the adjustment to its claims via a system-
generated letter for each fiscal year in the audit period.
If you have any questions, please contact Lisa Kurokawa, Chief, Compliance Audits Bureau, by
telephone at (916) 327-3138.
Sincerely,
Original signed by
KIMBERLY TARVIN, CPA
Chief, Division of Audits
KT/as
Matthew Hawkesworth, Finance Director -2- February 15, 2022
cc: Kimberly Siemen, Management Analyst
Pasadena Police Department
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
Darryl Mar, Manager
Local Government Programs and Services Division
State Controller’s Office
Everett Luc, Supervisor
Local Government Programs and Services Division
State Controller’s Office
City of Pasadena Identity Theft Program
Contents
Audit Report
Summary ............................................................................................................................ 1
Background ........................................................................................................................ 1
Audit Authority.................................................................................................................. 2
Objective, Scope, and Methodology ................................................................................. 2
Conclusion .......................................................................................................................... 3
Follow-up on Prior Audit Findings .................................................................................. 4
Views of Responsible Officials .......................................................................................... 4
Restricted Use .................................................................................................................... 4
Schedule—Summary of Program Costs .............................................................................. 5
Finding and Recommendation .............................................................................................. 9
City of Pasadena Identity Theft Program
Audit Report
Summary The State Controller’s Office (SCO) audited the costs claimed by the City
of Pasadena for the legislatively mandated Identity Theft Program for the
period of July 1, 2002, through June 30, 2013.
The city claimed $912,573 for costs of the mandated program. Our audit
found that $598,519 is allowable and $314,054 is unallowable, primarily
because the city overstated the number of identity theft reports and
misstated the job classifications that performed the reimbursable activities.
The State made no payments to the city. The State will pay $598,519,
contingent upon available appropriations.
Background Penal Code (PC) section 530.6(a), as added by the Statutes of 2000,
Chapter 956, requires local law enforcement agencies to take a police
report and begin an investigation when a complainant residing within their
jurisdiction reports suspected identity theft.
On March 27, 2009, the Commission of State Mandates (Commission)
found that this legislation mandates a new program or higher level of
service for local law enforcement agencies within the meaning of
Article XIII B, section 6 of the California Constitution, and imposes costs
mandated by the State pursuant to Government Code (GC) section 17514.
The Commission determined that each claimant is allowed to claim and be
reimbursed for the following ongoing activities identified in the
parameters and guidelines (Section IV., Reimbursable Activities):
1. Either a) or b) below:
a) Take a police report supporting a violation of Penal Code
section 530.5 which includes information regarding the
personal identifying information involved and any uses of that
personal identifying information that were non-consensual and
for an unlawful purpose, including, if available, information
surrounding the suspected identity theft, places where the
crime(s) occurred, and how and where the suspect obtained and
used the personal identifying information. This activity
includes drafting, reviewing, and editing the identity theft
police report; or
b) Reviewing the identity theft report completed on-line by the
identity theft victim.
2. Begin an investigation of the facts, including the gathering of facts
sufficient to determine where the crime(s) occurred and what pieces
of personal identifying information were used for an unlawful
purpose. The purpose of the investigation is to assist the victims in
clearing their names. Reimbursement is not required to complete the
investigation for purposes of criminal prosecution.
The Commission also determined that providing a copy of the report to the
complainant and referring the matter to the law enforcement agency in the
jurisdiction where the suspected crime was committed for further
investigation of the facts are not reimbursable activities.
-1-
City of Pasadena Identity Theft Program
The program’s parameters and guidelines establish the state mandate and
define the reimbursement criteria. In compliance with GC section 17558,
the SCO issues claiming instructions to assist local agencies in claiming
mandated program reimbursable costs.
We conducted this performance audit in accordance with
Audit Authority
GC sections 17558.5 and 17561, which authorize the SCO to audit the
city’s records to verify the actual amount of the mandated costs. In
addition, GC section 12410 provides the SCO with general authority to
audit the disbursement of state money for correctness, legality, and
sufficient provisions of law.
Objective, Scope, The objective of our audit was to determine whether costs claimed
represent increased costs resulting from the legislatively mandated
and Methodology
Identity Theft 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.1
The audit period was July 1, 2002, through June 30, 2013.
To achieve our objective, we performed the following procedures.
We analyzed the annual mandated cost claims filed by the city for the
audit period and identified the significant cost components of each
claim as salaries, benefits, and indirect costs. We determined whether
there were any errors or unusual or unexpected variances from year to
year. We reviewed the activities claimed to determine whether they
adhered to the SCO’s claiming instructions and the program’s
parameters and guidelines.
We completed an internal control questionnaire by interviewing key
city staff members. We discussed the claim preparation process with
city staff members to determine what information was obtained, who
obtained it, and how it was used.
We obtained system-generated lists of identity theft cases from the
city’s Records Management System to verify the existence,
completeness, and accuracy of unduplicated case counts for each fiscal
year in the audit period.
We designed a statistical sampling plan to test approximately 15-25%
of claimed salary costs, based on a moderate level of detection (audit)
risk. We judgmentally selected two of the city’s filed claims during
the audit period (fiscal year [FY] 2009-10 and FY 2012-13), which
comprised costs totaling $240,722 of the $912,575 claimed (26.4%).
The sampling plan is described in the Finding and Recommendation
section.
1 Unreasonable and/or excessive costs include ineligible costs that are not identified in the programs parameters and
guidelines as reimbursable costs.
-2-
City of Pasadena Identity Theft Program
We used a random number table to select 254 identity theft cases out
of 8,177 reported cases. We tested the identity theft cases as follows:
o We determined whether a contemporaneously prepared and
approved police report supported that a violation of PC
section 530.5 occurred.
o We obtained the employee numbers, names, and employee
classifications from the sampled officer-reported cases
documenting who performed the reimbursable activities.
o We compared the employee classifications obtained from the
police reports to those claimed by the city.
We projected the audit results of the two fiscal years tested by
multiplying the audited case counts by the audited average time
increments to perform the activities.
We traced the city’s claimed benefit and indirect cost rates to
supporting documentation for each fiscal year in the audit period and
verified that the rates claimed were not unreasonable or excessive.
We reviewed the city’s Single Audit Reports to identify any offsetting
savings or reimbursements from federal or pass-through programs
applicable to the Identity Theft Program. The city also certified in its
claims that it did not receive any offsetting revenues applicable to this
mandated program.
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.
We did not audit the city’s financial statements.
As a result of performing the audit procedures, we found instances of
Conclusion
noncompliance with the requirements described in our audit objective. We
did not find that the city claimed costs that were funded by other sources;
however, we did find that it claimed unsupported and ineligible costs, as
quantified in the Schedule and described in the Finding and
Recommendation section of this audit report.
For the audit period, the City of Pasadena claimed $912,573 for costs of
the legislatively mandated Identity Theft Program. Our audit found that
$598,519 is allowable and $314,054 is unallowable. The State made no
payments to the city. The State will pay $598,519, contingent upon
available appropriations.
Following issuance of this audit report, the SCO’s Local Government
Programs and Services Division will notify the city of the adjustment to
its claims via a system-generated letter for each fiscal year in the audit
period.
-3-
City of Pasadena Identity Theft Program
Follow-up on We have not previously conducted an audit of the legislatively mandated
Identity Theft Program.
Prior Audit
Findings
We discussed our audit results with the city’s representatives during an
Views of
exit conference conducted on November 29, 2021. Robert Ridley, City
Responsible
Controller; and Kimberly Siemen, Management Analyst, Pasadena Police
Officials Department (PPD), agreed with the audit results. Mr. Ridley 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 the City of
Pasadena, 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 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
February 15, 2022
-4-
City of Pasadena Identity Theft Program
Schedule—
Summary of Program Costs
July 1, 2002, through June 30, 2013
Actual Costs Allowable Audit
Cost Elements Claimed per Audit Adjustments1
July 1, 2002, through June 30, 2003
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 8,964 $ 4,007 $ (4,957)
Beginning an investigation of the facts 13,983 8,725 (5,258)
Total salaries 22,947 12,732 (10,215)
Benefits 13,838 7,677 (6,161)
Total direct costs 36,785 20,409 (16,376)
Indirect costs 15,834 8,785 (7,049)
Total program costs $ 52,619 29,194 $ (23,425)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 29,194
July 1, 2003, through June 30, 2004
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 11,811 $ 5,427 $ (6,384)
Beginning an investigation of the facts 18,428 11,709 (6,719)
Total salaries 30,239 17,136 (13,103)
Benefits 19,806 9,681 (10,125)
Total direct costs 50,045 26,817 (23,228)
Indirect costs 21,167 11,995 (9,172)
Total program costs $ 71,212 38,812 $ (32,400)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 38,812
July 1, 2004, through June 30, 2005
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 12,153 $ 6,135 $ (6,018)
Beginning an investigation of the facts 18,968 13,129 (5,839)
Total salaries 31,121 19,264 (11,857)
Benefits 18,143 9,987 (8,156)
Total direct costs 49,264 29,251 (20,013)
Indirect costs 17,895 11,077 (6,818)
Total program costs $ 67,159 40,328 $ (26,831)
Less amount paid by the State -
Allowable costs claimed in excess of (less than) amount paid $ 40,328
-5-
City of Pasadena Identity Theft Program
Schedule (continued)
Actual Costs Allowable Audit
Cost Elements Claimed per Audit Adjustments1
July 1, 2005, through June 30, 2006
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 12,130 $ 6,291 $ (5,839)
Beginning an investigation of the facts 18,932 13,306 (5,626)
Total salaries 31,062 19,597 (11,465)
Benefits 27,273 14,910 (12,363)
Total direct costs 58,335 34,507 (23,828)
Indirect costs 18,451 11,641 (6,810)
Total program costs $ 76,786 46,148 $ (30,638)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 46,148
July 1, 2006, through June 30, 2007
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 16,244 $ 7,802 $ (8,442)
Beginning an investigation of the facts 25,539 17,165 (8,374)
Total salaries 41,783 24,967 (16,816)
Benefits 24,364 1 3 , 4 5 6- (10,908)
Total direct costs 66,147 38,423 (27,724)
Indirect costs 17,215 10,286 (6,929)
Total program costs $ 83,362 48,709 $ (34,653)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 48,709
July 1, 2007, through June 30, 2008
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 19,083 $ 9,179 $ (9,904)
Beginning an investigation of the facts 30,072 20,427 (9,645)
Total salaries 49,155 29,606 (19,549)
Benefits 27,398 14,973 (12,425)
Total direct costs 76,553 44,579 (31,974)
Indirect costs 20,498 12,671 (7,827)
Total program costs $ 97,051 57,250 $ (39,801)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 57,250
-6-
City of Pasadena Identity Theft Program
Schedule (continued)
Actual Costs Allowable Audit
Cost Elements Claimed per Audit Adjustments1
July 1, 2008, through June 30, 2009
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 14,583 $ 10,465 $ (4,118)
Beginning an investigation of the facts 22,972 22,571 (401)
Total salaries 37,555 33,036 (4,519)
Benefits 21,403 17,212 (4,191)
Total direct costs 58,958 50,248 (8,710)
Indirect costs 15,660 13,776 (1,884)
Total program costs $ 74,618 64,024 $ (10,594)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 64,024
July 1, 2009, through June 30, 2010
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 22,635 $ 10,465 $ (12,170)
Beginning an investigation of the facts 35,698 22,571 (13,127)
Total salaries 58,333 33,036 (25,297)
Benefits 37,302 19,992 (17,310)
Total direct costs 95,635 53,028 (42,607)
Indirect costs 19,950 11,298 (8,652)
Total program costs $ 115,585 64,326 $ (51,259)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 64,326
July 1, 2010, through June 30, 2011
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 14,014 $ 8,136 $ (5,878)
Beginning an investigation of the facts 22,103 17,547 (4,556)
Total salaries 36,117 25,683 (10,434)
Benefits 24,216 16,520 (7,696)
Total direct costs 60,333 42,203 (18,130)
Indirect costs 14,591 10,376 (4,215)
Total program costs $ 74,924 52,579 $ (22,345)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 52,579
-7-
City of Pasadena Identity Theft Program
Schedule (continued)
Actual Costs Allowable Audit
Cost Elements Claimed per Audit Adjustments1
July 1, 2011, through June 30, 2012
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 8,219 $ 9,503 $ 1,284
Beginning an investigation of the facts 21,436 20,494 (942)
Total salaries 29,655 29,997 342
Benefits 18,961 19,294 333
Total direct costs 48,616 49,291 675
Indirect costs 25,503 25,797 294
Total direct and indirect costs 74,119 75,088 969
Less allowable costs that exceed costs claimed3 - (969) (969)
Total program costs $ 74,119 74,119 $ -
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 74,119
July 1, 2012, through June 30, 2013
Direct costs:
Salaries
Taking a police report on a violation of PC § 530.5 $ 11,141 $ 10,050 $ (1,091)
Beginning an investigation of the facts 36,880 21,851 (15,029)
Total salaries 48,021 31,901 (16,120)
Benefits 31,929 21,110 (10,819)
Total direct costs 79,950 53,011 (26,939)
Indirect costs 45,188 30,019 (15,169)
Total program costs $ 125,138 83,030 $ (42,108)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 83,030
Summary: July 1, 2002, through June 30, 2013
Salaries $ 415,988 $ 276,955 $ (139,033)
Benefits 264,633 164,812 (99,821)
Indirect costs 231,952 157,721 (74,231)
Total direct and indirect costs 912,573 599,488 (313,085)
Less allowable costs that exceed costs claimed3 - (969) (969)
Total program costs $ 912,573 598,519 $ (314,054)
Less amount paid by the State2 -
Allowable costs claimed in excess of amount paid $ 598,519
_______________________
1 See the Finding and Recommendation section.
2 Payment amount current as of December 3, 2021.
3 GC section 17568 stipulates that the State will not reimburse any claim more than one year after the filing deadline
specified in the SCO’s claiming instructions. That deadline has expired for FY 2011-12.
-8-
City of Pasadena Identity Theft Program
Finding and Recommendation
FINDING — The city claimed $912,573 ($415,988 in salaries, $264,633 in related
benefits, and $231,952 in related indirect costs) for the Identity Theft
Overstated Identity
Program. We found that $599,488 in direct and indirect costs is allowable
Theft Program costs
and $313,085 is unallowable.1
Salary costs are determined by multiplying the number of identity theft
police reports by the time required to perform the reimbursable activities,
then multiplying the product by the weighted average productive hourly
rates (PHRs) for the city’s employee classifications that performed the
reimbursable activities.
The costs are unallowable because the city misinterpreted the program’s
parameters and guidelines and made claim preparation errors. These errors
resulted in an overstated number of identity theft reports, causing an
overstatement in claimed salaries, employee benefits, and related indirect
costs. We also found differences in the employee classifications that
performed the reimbursable activities based on discussions with city
representatives.
The following table summarizes the claimed and allowable amounts, and
the audit adjustments by fiscal year:
Salaries
Related Related Related
Fiscal Amount Amount Audit Benefit Indirect Cost Audit
Year Claimed1 Allowable Adjustment Adjustment Adjustment Adjustment
2002-03 $ 52,619 $ 12,732 $ (10,215) $ ( 6,161) $ (7,049) $ ( 23,425)
2003-04 7 1,212 1 7,136 (13,103) ( 10,125) (9,172) (32,400)
2004-05 6 7,159 1 9,264 (11,857) (8,156) (6,818) (26,831)
2005-06 7 6,786 1 9,597 (11,465) ( 12,363) (6,810) (30,638)
2006-07 8 3,362 2 4,967 (16,816) ( 10,908) (6,929) (34,653)
2007-08 9 7,051 2 9,606 (19,549) ( 12,425) (7,827) (39,801)
2008-09 7 4,618 3 3,036 ( 4,519) (4,191) (1,884) (10,594)
2009-10 115,585 3 3,036 (25,297) ( 17,310) (8,652) (51,259)
2010-11 7 4,924 2 5,683 (10,434) (7,696) (4,215) (22,345)
2011-12 7 4,119 2 9,997 342 3 33 294 969
2012-13 125,138 3 1,901 (16,120) ( 10,819) (15,169) (42,108)
Total $ 912,573 $ 276,955 $ (139,033) $ (99,821) $ ( 74,231) $ (313,085)
1 The Amount Claimed includes salaries, benefits, and related indirect costs
1 For FY 2011-12, our audit found that $75,088 is allowable, which is $969 in excess of claimed costs. GC
section 17568 stipulates that the State will not reimburse any claim more than one year after the filing deadline
specified in the SCO’s claiming instructions; and that deadline has expired for FY 2011-12.
As such, total allowable costs for the audit period is $598,519 ($599,488 less $969 in excess of claimed costs for
FY 2011-12).
-9-
City of Pasadena Identity Theft Program
Overstated counts of identity theft police reports
The city claimed costs incurred for taking police reports related to
8,177 identity theft cases during the audit period. The city provided us
with system-generated unduplicated lists from its Records Management
System supporting 7,575 identity theft police reports filed for violations
of PC section 530.5.
We determined the accuracy of the unduplicated counts of initial police
reports by determining whether:
Each identity theft case was supported by a contemporaneously
prepared and approved police report; and
The police report supported a violation of PC section 530.5.
We developed a statistical sampling plan to test at least 25% of claimed
costs based on a low level of detection risk. We generated statistical
samples of identity theft cases for these two procedures so that we could
project our sample results to the population of identity theft cases. We
selected our statistical samples of identity theft cases originating from the
city based on a 95% confidence level, a sampling error of ±8%, and an
expected (true) error rate of 50%. We judgmentally selected FY 2009-10
and FY 2012-13 for testing because the city claimed costs totaling
$240,722—which constitutes 26.4% of the total claimed during the audit
period—for these two fiscal years.
Our testing disclosed the following:
For FY 2009-10, we selected 128 cases from the population of
868 reported cases for testing. We found that 32 cases were
unallowable (10 police reports were not found and 22 were courtesy
reports originating from another police department), which represents
a 25% error rate.
For FY 2012-13, we selected 126 cases from the population of
805 reported cases for testing. We found that 25 cases were
unallowable (two police reports were not found and 23 were courtesy
reports), which represents a 19.8% error rate.
Based on these results, we calculated a 22.4% average error rate for the
two fiscal years that we tested. We extrapolated this average error rate to
the other nine fiscal years of the audit period (FY 2002-03 through
FY 2008-09 and FY 2010-11 through FY 2011-12) to determine the
number of allowable and unallowable identity theft incident reports for the
entire eleven-year audit period.
-10-
City of Pasadena Identity Theft Program
The following table summarizes the counts of claimed, supported, and
allowable identity theft cases and the difference by fiscal year:
Fiscal Year Claimed Supported Allowable Difference
2002-03 505 406 315 (190)
2003-04 650 532 413 (237)
2004-05 653 583 452 (201)
2005-06 636 576 447 (189)
2006-07 793 687 533 (260)
2007-08 898 786 610 (288)
2008-09 686 868 674 (12)
2009-10 1,066 868 674 (392)
2010-11 660 675 524 (136)
2011-12 789 789 612 (177)
2012-13 841 805 646 (195)
Total 8,177 7,575 5,900 (2,277)
Unsupported time increments
Claimed Time Increments
The city claimed time increments spent by PPD sworn officers who
performed the following reimbursable activities during the audit period:
Drafting, reviewing, and editing the identity theft police reports for
violations of PC section 530.5 (Activity 1a – Taking a police report);
and
Determining where the crime occurred and what pieces of personal
identifying information was used for unlawful purposes (Activity 2 –
Beginning an investigation of the facts).
We determined the claimed time increments for FY 2002-03 through
FY 2010-11 by dividing the number of hours claimed per employee
classification by the number of police reports claimed. However, for
FY 2011-12 and FY 2012-13, the city’s claims did not indicate the number
of police reports filed for identity theft. In addition, the city did not provide
documentation supporting the time increments claimed. The parameters
and guidelines for the mandated program state that “costs must be
traceable to and supported by source documents that show the validity of
such costs, when they were incurred, and their relationship to the mandated
activities.” As the city did not provide support that complies with this
requirement, we determined that the time increments claimed are
estimated and unsupported.
Allowable Time Increments
In order to determine a reasonable average amount of time spent by PPD
staff on the reimbursable activities, we held discussions with PPD
representatives to determine the average amount of time needed to perform
the reimbursable activities. Based on the discussions, the average time to
complete Activity 1a totaled 25.93 minutes for Police Record Technicians
to take the reports and 4.07 minutes for Police Officers to review and edit
the reports (30 minutes total).
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City of Pasadena Identity Theft Program
The city claimed 45 minutes to complete Activity 2 – Beginning an
investigation of the facts. Based on our discussions with PPD
representatives, we found that the claimed time increment appears
reasonable and that Police Officers performed the activity for all years of
the audit period.
The following table summarizes the total time increments claimed and
allowable for the reimbursable activities by fiscal year:
Claimed Minutes Allowable Minutes
1a 1a 2 1a 1a 2
Taking a Reviewing Beginning T a k i ng a Reviewing Beginning
Fiscal Police a Police an Police a Police an
Year Report Report Investigation Report Report Investigation
2002-03 2 6.32 3 .69 4 5 2 5.93 4 .07 4 5
2003-04 2 6.31 3 .69 4 5 2 5.93 4 .07 4 5
2004-05 2 6.28 3 .72 4 5 2 5.93 4 .07 4 5
2005-06 2 6.27 3 .73 4 5 2 5.93 4 .07 4 5
2006-07 2 5.73 4 .27 4 5 2 5.93 4 .07 4 5
2007-08 2 5.86 4 .14 4 5 2 5.93 4 .07 4 5
2008-09 2 5.58 4 .42 4 5 2 5.93 4 .07 4 5
2009-10 2 5.50 4 .50 4 5 2 5.93 4 .07 4 5
2010-11 2 5.50 4 .50 4 5 2 5.93 4 .07 4 5
2011-12 * unknown unknown unknown 2 5.93 4 .07 4 5
2012-13 * unknown unknown unknown 2 5.93 4 .07 4 5
*Claims for FY 2011-12 and FY 2012-13 did not indicate the number of police reports filed.
Allowable productive hourly rates
The city claimed that Police Officers performed the reimbursable activity
of taking police reports for all fiscal years of the audit period and that
Police Cadets assisted during FY 2011-12 and FY 2012-13. The city
claimed that the Police Specialist III and IV classifications performed the
activity of reviewing police reports for all fiscal years of the audit period.
The city also claimed that Police Officers performed the reimbursable
activity of beginning an investigation for FY 2002-03 through
FY 2010-11, and that Sergeants performed this activity during
FY 2011-12 and FY 2012-13.
Based on our discussions with PPD representatives during the audit, we
found that Police Records Technicians took police reports at the front
counter of the police station and that Police Officers reviewed and edited
the reports. Police Officers also began investigations.
The city provided the requested salary information for all employee
classifications within PPD by fiscal year. We used this information to
determine allowable PHRs for all fiscal years of the audit period.
-12-
City of Pasadena Identity Theft Program
The following table summarizes the PHRs claimed and allowable for the
audit period:
PHRs Claimed PHRs Allowable
Police
Fiscal Police Police Police Police Records Police
Year Officer Specialist III Specialist IV Cadet Sergeant Technician Officer
2002-03 $ 3 6.92 $ 24.51 $ 26.84 $ - $ - $ 23.64 $ 36.92
2003-04 37.80 25.09 27.48 - - 2 4.47 37.80
2004-05 38.73 25.70 28.15 - - 2 5.33 38.73
2005-06 39.69 26.34 28.85 - - 2 6.34 39.69
2006-07 42.94 27.81 30.46 - - 2 7.13 42.94
2007-08 44.65 27.81 30.46 - - 2 7.81 44.65
2008-09 44.65 28.92 31.68 - - 2 8.92 44.65
2009-10 44.65 28.92 31.68 - - 2 8.92 44.65
2010-11 44.65 28.92 31.68 - - 2 8.92 44.65
2011-12 43.01 28.85 31.68 16.08 58.89 2 8.92 44.65
2012-13 43.39 30.96 - 18.69 58.47 2 8.92 45.10
Using this salary rate information, the corrected number of case counts,
the corrected time increments, and the classifications of the employees
who performed the reimbursable activities during the audit period, we
determined allowable salaries for each fiscal year. For example, the
following table shows the calculation of allowable salary costs for
FY 2009-10:
[1] [2] [3] [4]
Allowable
Time Time Increment C o s t s
Activity Employee Number Increment (Hours) PHR ( $ )
Number Reimbursale Activity Classification of Cases (Minutes) (cols. ([1]*[2])/60 ($) (cols.[3] × [4])
1a Take a police report Police Records
Technician 674 25.93 2 91.28 $28.92 $ 8,424
1b Review a police report Police Officer 674 4 .07 4 5.72 $44.65 2,041
2 Begin an investigation Police Officer 674 45.00 5 05.50 $44.65 22,571
Total $ 33,036
Allowable related employee benefits
The city claimed employee benefit costs totaling $264,633 during the audit
period. We determined that $164,812 is allowable and $99,821 is
unallowable. The costs are primarily unallowable due to the unallowable
salaries found during each fiscal year of the audit period. The city also
misstated the claimed benefit rates for all fiscal years of the audit period
for sworn officers.
Benefit costs are determined by multiplying each fiscal year’s allowable
salary costs by each fiscal year’s benefit rate. Employee benefits related
to the allowable salaries previously discussed are also allowable. The city
provided benefit rate information from its payroll system for sworn and
non-sworn personnel for each fiscal year in the audit period. We used this
information to recalculate allowable employee benefit costs.
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City of Pasadena Identity Theft Program
The following table summarizes the claimed, allowable and audit
adjustment amounts for related employee benefit costs by fiscal year:
Claimed Claimed Allowable
Fiscal Allowable Salaries Benefit Allowable Benefit Rates Benefit Benefit
Year Civilian Sworn Rate Civilian Sworn Costs Costs
2002-03 $ 3,218 $ 9,514 69.00% 60.30% 60.30% $ 13,838 $ 7,677
2003-04 4,368 12,768 70.00% 30.18% 65.50% 1 9,806 9 ,681
2004-05 4,948 14,316 57.50% 33.17% 58.30% 1 8,143 9 ,987
2005-06 5,088 14,509 59.40% 42.68% 87.80% 2 7,273 14,910
2006-07 6,249 18,718 41.20% 39.02% 58.86% 2 4,364 13,456
2007-08 7,331 22,275 41.70% 33.60% 56.16% 2 7,398 14,973
2008-09 8,424 24,612 41.70% 36.33% 57.50% 2 1,403 17,212
2009-10 8,424 24,612 34.20% 48.55% 64.61% 3 7,302 19,992
2010-11 6,549 19,134 40.40% 54.80% 67.58% 2 4,216 16,520
2011-12 7,649 22,348 86.00% 54.80% 67.58% 1 8,961 19,294
2012-13 8,074 23,827 94.10% 61.84% 67.64% 3 1,929 21,110
Total $ 7 0,322 $ 206,633 $ 264,633 $ 164,812
Allowable related indirect costs
Indirect costs are determined by multiplying each fiscal year’s indirect
cost base by each fiscal year’s indirect cost rate. The city claimed indirect
costs totaling $231,952 during the audit period based on direct salaries.
We found that $157,721 is allowable and $74,231 is unallowable. The
costs are unallowable primarily due to the unallowable salaries found
during the audit. We did not have any findings regarding the claimed
indirect cost rates.
The following table summarizes the claimed, allowable and audit
adjustments related to indirect costs for PPD employees by fiscal year:
Fiscal Claimed Allowable Allowable Related Indirect Costs
Year Rate Rate Salaries Claimed Allowable Adjustment
2002-03 69.00% 69.00% $ 1 2,732 $ 15,834 $ 8,785 $ ( 7,049)
2003-04 70.00% 70.00% 17,136 21,167 11,995 (9,172)
2004-05 57.50% 57.50% 19,264 17,895 11,077 (6,818)
2005-06 59.40% 59.40% 19,597 18,451 11,641 (6,810)
2006-07 41.20% 41.20% 24,967 17,215 10,286 (6,929)
2007-08 42.80% 42.80% 29,606 20,498 12,671 (7,827)
2008-09 41.70% 41.70% 33,036 15,660 13,776 (1,884)
2009-10 34.20% 34.20% 33,036 19,950 11,298 (8,652)
2010-11 40.40% 40.40% 25,683 14,591 10,376 (4,215)
2011-12 86.00% 86.00% 29,997 25,503 25,797 294
2012-13 94.10% 94.10% 31,901 45,188 30,019 ( 15,169)
Total $ 276,955 $ 231,952 $ 1 57,721 $ (74,231)
Criteria
Section III. (Period of Reimbursement) of the parameters and guidelines
states, in part, “Actual costs for one fiscal year shall be included in each
claim.”
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City of Pasadena Identity Theft Program
Section IV. (Reimbursable Activities) of the parameters and guidelines
begins:
To be eligible for mandated cost reimbursement for any given 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 to and supported by source documents that show the validity
of such costs, when they were incurred, and their relationship to the
reimbursable activities. A source document is a document created at or
near the same time the actual cost was incurred for the event or activity
in question. Source documents may include, but are not limited to,
employee time records or time logs, sign-in sheets, invoices, and
receipts.
Section IV. (Reimbursable Activities) of the parameters and guidelines
also states:
For each eligible claimant, the following ongoing activities are eligible
for reimbursement:
1. Either a) or b) below:
a) Take a police report supporting a violation of Penal Code
section 530.5 which includes information regarding the
personal identifying information involved and any uses of that
personal identifying information that were non-consensual and
for an unlawful purpose, including, if available, information
surrounding the suspected identity theft, places where the
crime(s) occurred, and how and where the suspect obtained and
used the personal identifying information. This activity
includes drafting, reviewing, and editing the identity theft
police report; or
b) Reviewing the identity theft report completed on-line by the
identity theft victim.
2. Begin an investigation of the facts, including the gathering of facts
sufficient to determine where the crime(s) occurred and what pieces
of personal identifying information were used for an unlawful
purpose. The purpose of the investigation is to assist the victims in
clearing their names. Reimbursement is not required to complete the
investigation for purposes of criminal prosecution.
Providing a copy of the report to the complainant is not reimbursable
under this program.
Section V. A. 1, “Salaries and Benefits,” of the parameters and guidelines
states:
Report each employee implementing the reimbursable activities by
name, job classification, and productive hourly rate (total wages and
related benefits divided by productive hours). Describe the specific
reimbursable activities performed and the hours devoted to each
reimbursable activity performed.
Section V. B, “Indirect Cost Rates,” of the parameters and guidelines
begins:
Indirect costs are costs that are incurred for a common or joint purpose,
benefiting more than one program, and are not directly assignable to a
particular department or program without efforts disproportionate to the
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City of Pasadena Identity Theft Program
result achieved. Indirect costs may include: (1) the overhead costs of the
unit performing the mandate; and (2) the costs of the central government
services distributed to the other departments based on a systematic and
rational basis through a cost allocation plan.
Recommendation
The California State Legislature suspended the Identity Theft Program in
the FY 2013-14 through FY 2021-22 Budget Acts. If the program becomes
active again, we recommend that the city:
Adhere to the program’s parameters and guidelines and claiming
instructions when claiming reimbursement for mandated costs; and
Ensure that claimed costs include only eligible costs, are based on
actual costs, and are properly supported.
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State Controller’s Office
Division of Audits
Post Office Box 942850
Sacramento, CA 94250
http://www.sco.ca.gov
S21-MCC-0006