California State University, Long Beach Research Foundation

CALIFORNIA STATE UNIVERSITY, LONG BEACH RESEARCH FOUNDATION Audit Report PROPOSITION 47 SAFE NEIGHBORHOODS AND SCHOOLS FUND GRANT EXPENDITURES July 1, 2018, through June 30, 2020 M M. C ALIA OHEN California State Controller May 2023 M M. C ALIA OHEN California State Controller May 19, 2023 Jane Close Conoley, Ph.D., President California State University, Long Beach 1250 Bellflower Boulevard Long Beach, CA 90840 Dear Dr. Conoley: Attached is the final report on our audit of the California State University, Long Beach Research Foundation’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 Roochel Espilla, Chief, State Agency Audits Bureau by telephone at (916) 323-5744, or by email at respilla@sco.ca.gov. Sincerely, Original signed by KIMBERLY TARVIN, CPA Chief, Division of Audits KT/ac Jane Close Conoley, Ph.D., President -2- May 19, 2023 cc: Scott Apel, Vice President for Administration and Finance California State University, Long Beach Kara Perkins, Ed.D, Associate Vice President California State University, Long Beach Karyn Scissum Gunn, Ph.D., Provost California State University, Long Beach Simon Kim, Ph.D., Associate Vice President California State University, Long Beach Maria Reyes, Ph.D., Senior Director of Sponsored Programs California State University, Long Beach Brian M. Nowlin, Ed.D., Chief Operating Officer California State University, Long Beach Research Foundation Bita Ghafoori, Ph.D., Director Long Beach Trauma Recovery Center Lynda Gledhill, Executive Officer California Victim Compensation Board Natalie Mack, Chief Deputy Executive Officer California Victim Compensation Board Andrew LaMar, Deputy Executive Officer California Victim Compensation Board Kim Gauthier, Chief Counsel California Victim Compensation Board Tyrone Gilliam, Staff Services Manager II California Victim Compensation Board Jaqueline Hom, Staff Services Manager II California Victim Compensation Board Anita Ahuja, Staff Services Manager II California Victim Compensation Board Ava Jordan, Staff Services Manager I California Victim Compensation Board California State University, Long Beach Research Foundation Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures 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 1—Summary of Grant Awards, Amounts Disbursed and Expended, and Audit Adjustments .............................................................................. 6 Schedule 2—Summary of Program Costs............................................................................ 7 California State University, Long Beach Research Foundation Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Audit Report Summary The State Controller’s Office (SCO) conducted a performance audit of California State University, Long Beach Research Foundation’s (Research Foundation) 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 Research Foundation with $2,079,800 in grant funds, comprising $1,565,240 from the Safe Neighborhoods and Schools Fund and $514,560 from the Restitution Fund. For the same period, the Research Foundation’s grant expenditures were $1,919,035. All costs were allowable (see Schedules 1 and 2). The Research Foundation adequately accounted for Proposition 47 SNSF grant expenditures, and ensured that its program funds were disbursed and expended in accordance with program guidelines and grant requirements, and as required by GC section 7599.2(c). Our audit did not disclose any findings. 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 be used in support of truancy reduction and drop-out prevention programs for public school pupils in grades K through 12, increase victim services grants, and support substance abuse and mental health treatment and diversion programs for people in the criminal justice system. California State University, Long Beach Research Foundation The Research Foundation is a non-profit organization established in 1956 to “enhance and advance” the university’s educational mission. The Research Foundation provides administrative services including, but not limited to, financial, purchasing, legal and risk management, human resources, and payroll and employee benefit services. -1- California State University, Long Beach Research Foundation Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures In fiscal year (FY) 2018-19, CalVCB awarded the Research Foundation with $2,079,800 in grant funds, comprising $1,565,240 from the Safe Neighborhoods and Schools Fund and $514,560 from the Restitution Fund. The grants were awarded through a Notice of Funds Available bid process. Grant Agreement Number VC-G8003 was effective on July 1, 2018, to provide services to crime victims pursuant to GC sections 13963.1 and 13963.2, and program requirements stipulated in the Notice of Funds Available for the California Trauma Recovery Center Grant. The Research Foundation used the grant funds to support the Long Beach Trauma Recovery Center’s comprehensive care and outreach program, providing direct trauma treatment, mental health services, clinical case management, and support services to underserved crime survivors in the community. Individuals treated included homeless, chronically mentally ill, disabled, LGBTQ, and juvenile crime victims. Audit Authority We conducted this audit in accordance with GC section 7599.2(c), which requires the SCO, every two years, to conduct an audit of the Proposition 47 SNSF Grants Program operated by CalVCB to ensure that “the funds are disbursed and expended solely according to this chapter,” and to report its findings to the Legislature. 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 for payment. Objective, Scope, Our audit objective was to ensure that the Research Foundation adequately accounted for Proposition 47 SNSF grant expenditures; and that their 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). The audit period was July 1, 2018, through June 30, 2020. To achieve our objective, we performed the following procedures:  We identified the Proposition 47 SNSF Grants Program background, criteria, purpose, and requirements by reviewing GC sections 7599 through 7599.2 and the California Department of Finance fund classification and basis for the Safe Neighborhoods and Schools Fund.  We reviewed the Research Foundation’s Proposition 47 SNSF grant files, grant agreements, program guidelines, program requirements, and claimed invoices.  We reviewed the Research Foundation’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.  We interviewed Research Foundation key personnel, completed internal control questionnaires, reviewed written internal policies and procedures, identified internal controls significant to the audit -2- California State University, Long Beach Research Foundation Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures objective, and performed a limited walk-through of significant controls in order to gain a general understanding of the Research Foundation’s internal controls related to the 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 Research Foundation’s financial management system.  We assessed the Research Foundation’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 the Research Foundation was in compliance with written internal policies and procedures, applicable provisions of laws, regulations, and established criteria.  We verified that, during the audit period, CalVCB awarded the Research Foundation with $2,079,800 in grant funds, comprising $1,565,240 from the Safe Neighborhoods and Schools Fund and $514,560 from the Restitution Fund. In addition, we verified that the Research Foundation expended $1,919,035 in grant funds ($824,386 in FY 2018-19 and $1,094,649 in FY 2019-20).  We conducted a risk assessment and reviewed internal controls for Proposition 47 SNSF grant expenditures to determine the nature, timing, and extent of substantive testing.  To reduce audit risk, we tested sample transactions, traced those transactions to supporting documentation, and performed analytical procedures and budgetary analysis, as follows: o We 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 We also 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.  We tested $404,548 of $1,919,035 claimed by the Research Foundation during the audit period, as follows: o Salaries and wages – We tested $278,896 (or 24%) of $1,154,560. o Rent and utilities – We tested $34,269 (or 26%) of $130,717. o Indirect costs – We tested $91,383 (or 100%). 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- California State University, Long Beach Research Foundation Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures We did not audit the Research Foundation’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 the Research Foundation’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 the Research Foundation with $2,079,800 grant funds, comprising $1,565,240 from the Safe Neighborhoods and Schools Fund and $514,560 from the Restitution Fund. Our audit found that the Research Foundation adequately accounted for Proposition 47 SNSF grant fund expenditures; and ensured that its program funds were disbursed and expended in accordance with program guidelines and grant requirements, and as required by GC section 7599.2(c). Our audit did not disclose any findings. Follow-up on We have not previously conducted an audit of the Research Foundation’s Prior Audit Proposition 47 SNSF grant expenditures. Findings Views of We discussed our audit results with a Research Foundation representative via email dated January 23, 2023. The Research Foundation’s Responsible representative responded via email dated January 23, 2023, agreeing with Officials the audit results. -4- California State University, Long Beach Research Foundation Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Restricted Use This audit report is intended solely for the information and use of the Research Foundation, the 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 May 19, 2023 -5- California State University, Long Beach Research Foundation Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Schedule 1— Summary of Grant Awards, Amounts Disbursed and Expended, and Audit Adjustments July 1, 2018, through June 30, 2020 The following table summarizes the grant award, the amounts disbursed and expended during the audit period, and the audit adjustment. All monetary amounts are rounded to the nearest whole dollar. Amount Fiscal Grant Amount Grant Amount Grant Amount Allowable Audit Year Awarded Disbursed Expended per Audit Adjustment 2018-19 $2,079,800 $824,386 $824,386 $824,386 $ - 2019-20 - 1 ,094,649 1 ,094,649 1 ,094,649 - Grand total $2,079,800 $1,919,035 $1,919,035 $1,919,035 $ - -6- California State University, Long Beach Research Foundation Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Schedule 2— Summary of Program Costs July 1, 2018, through June 30, 2020 Grant Amount Amount Allowable Audit Cost Element Expended per Audit Adjustment July 1, 2018, through June 30, 2019 Direct costs: Salaries and wages $476,265 $476,265 $ - Fringe benefits 218,300 218,300 - Rent and utilities 68,072 68,072 - Software 1,485 1,485 - Internet services 1,794 1,794 - Stipend payments 5,755 5,755 - Postage 265 265 - Educational services and staff training 1,500 1,500 - Office supplies 6,425 6,425 - Outreach costs 1,549 1,549 - Travel 832 832 - Subcontractor cost – Psychiatrist 2,887 2,887 - Total direct costs 785,129 785,129 - Total indirect costs 39,257 39,257 - Total program costs $ 824,386 $ 824,386 $ - July 1, 2019, through June 30, 2020 Direct costs: Salaries and wages $678,295 $678,295 $ - Fringe benefits 274,716 274,716 - Rent and utilities 62,645 62,645 - Software 252 252 - Internet services 1,001 1,001 - Client fund 2,000 2,000 - Stipend payments 7,685 7,685 - Postage 110 110 - Educational services and staff training 3,229 3,229 - Office supplies 8,123 8,123 - Outreach costs 351 351 - Travel 197 197 - Subcontractor cost – Psychiatrist 3,919 3,919 - Total direct costs 1,042,523 1,042,523 - Total indirect costs 52,126 52,126 - Total program costs $1,094,649 $1,094,649 $ - *All monetary amounts rounded to the nearest whole dollar. -7- California State University, Long Beach Research Foundation Proposition 47 Safe Neighborhoods and Schools Fund Grant Expenditures Schedule 2 (continued) Grant Amount Amount Allowable Audit Cost Element Expended per Audit Adjustment July 1, 2018, through June 30, 2020 Direct costs: Salaries and wages $1,154,560 $1,154,560 $ - Fringe benefits 493,016 493,016 - Rent and utilities 130,717 130,717 - Software 1,737 1,737 - Internet services 2,795 2,795 - Client fund 2,000 2,000 - Stipend payments 13,440 13,440 - Postage 375 375 - Educational services and staff training 4,729 4,729 - Office supplies 14,548 14,548 - Outreach costs 1,900 1,900 - Travel 1,029 1,029 - Subcontractor cost – Psychiatrist 6,806 6,806 - Total direct costs 1,827,652 1,827,652 - Total indirect costs 91,383 91,383 - Total program costs $1,919,035 $1,919,035 $ - *All monetary amounts rounded to the nearest whole dollar. -8- State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250 www.sco.ca.gov S22-P47-0001