San Diego County

SAN DIEGO COUNTY Audit Report CUSTODY OF MINORS – CHILD ABDUCTION AND RECOVERY PROGRAM Chapter 1399, Statutes of 1976; Chapter 162, Statutes of 1992; and Chapter 988, Statutes of 1996 July 1, 2017, through June 30, 2021 M M. C ALIA OHEN California State Controller July 2023 M M. C ALIA OHEN California State Controller July 14, 2023 CERTIFIED MAIL—RETURN RECEIPT REQUESTED Tracy Drager, Auditor and Controller San Diego County 5530 Overland Avenue, Suite 410 San Diego, CA 92123 Dear Ms. Drager: The State Controller’s Office audited the costs claimed by San Diego County for the legislatively mandated Custody of Minors – Child Abduction and Recovery Program for the period of July 1, 2017, through June 30, 2021. The county claimed and was paid $3,433,637 for the costs of the mandated program. Our audit found that $43,026 is allowable and $3,390,611 is unallowable. The costs are unallowable primarily because the county did not provide contemporaneous supporting documentation and did not claim actual costs. Following issuance of this audit report, the Local Government Programs and Services Division of the State Controller’s Office will notify the county of the adjustment to its claim 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than three years following the date of this report, regardless of whether this report is subsequently supplemented, superseded, or otherwise amended.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. 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 MAILING ADDRESS P.O. Box 942850, Sacramento, CA 94250 SACRAMENTO 3301 C Street, Suite 700, Sacramento, CA 95816 (916) 324-8907 LOS ANGELES 901 Corporate Center Drive, Suite 200, Monterey Park, CA 91754 (323) 981-6802 Tracy Drager, Auditor and Controller -2- July 14, 2023 KT/ac cc: Luis Mallett, Chief Administrative Officer San Diego County District Attorney’s Office Julie Sexauer, Financial Policy and Planning Officer San Diego County District Attorney’s Office Jacob Breillatt, Administrative Analyst San Diego County District Attorney’s Office Chris Hill, Principal Program Budget Analyst Local Government Unit California Department of Finance Ted Doan, Finance Budget Analyst Local Government Unit California Department of Finance Daryl Mar, Manager Local Reimbursement Section State Controller’s Office Everett Luc, Supervisor Local Reimbursement Section State Controller’s Office San Diego County Custody of Minors – Child Abduction and Recovery Program Contents Audit Report Summary ............................................................................................................................ 1 Background ........................................................................................................................ 1 Audit Authority .................................................................................................................. 2 Objective, Scope, and Methodology ................................................................................. 2 Conclusion .......................................................................................................................... 3 Follow-up on Prior Audit Findings .................................................................................. 3 Views of Responsible Officials .......................................................................................... 3 Restricted Use .................................................................................................................... 4 Schedule—Summary of Program Costs .............................................................................. 5 Findings and Recommendations ........................................................................................... 7 Attachment—County’s Response to Draft Audit Report San Diego County Custody of Minors – Child Abduction and Recovery Program Audit Report Summary The State Controller’s Office (SCO) audited the costs claimed by San Diego County for the legislatively mandated Custody of Minors – Child Abduction and Recovery (CAR) Program for the period of July 1, 2017, through June 30, 2021. The county claimed and was paid $3,433,637 for costs of the mandated program. Our audit found that $43,026 is allowable and $3,390,611 is unallowable. The costs are unallowable primarily because the county did not provide contemporaneous supporting documentation and did not claim actual costs. Background Chapter 1399, Statutes of 1976, established the CAR Program, based on the following laws:  Civil Code section 4600.1 (repealed and added as Family Code sections 3060 through 3064 by Chapter 162, Statutes of 1992);  Penal Code (PC) sections 278 and 278.5 (repealed and added as PC sections 277, 278, and 278.5 by Chapter 988, Statutes of 1996); and  Welfare and Institutions Code section 11478.5 (repealed and added as Family Code Section 17506 by Chapter 478, Statutes of 1999; last amended by Chapter 759, Statutes of 2002). These laws require the District Attorney’s (DA’s) Office to assist persons having legal custody of a child in:  Locating their children when they are unlawfully taken away;  Gaining enforcement of custody decrees, visitation decrees, and orders to appear;  Defraying expenses related to the return of an illegally detained, abducted, or concealed child;  Civil court action proceedings; and  Guaranteeing the appearance of offenders and minors in court actions. On September 19, 1979, the State Board of Control (now the Commission on State Mandates) determined that this legislation imposed a state mandate reimbursable under Government Code (GC) Section 17561. The parameters and guidelines establish the state mandate and define reimbursement criteria. The Commission on State Mandates adopted the parameters and guidelines on January 21, 1981; they were last amended on October 30, 2009. In compliance with GC section 17558, the SCO issues the Mandated Cost Manual for Local Agencies (Mandated Cost Manual) for mandated programs to assist local agencies in claiming reimbursable costs. -1- San Diego County Custody of Minors – Child Abduction and Recovery Program Audit Authority We conducted this performance audit in accordance with GC sections 17558.5 and 17561, which authorize the SCO to audit the county’s records to verify the actual amount of the mandated costs. In addition, GC section 12410 provides the SCO with general audit authority to audit the disbursement of state money for correctness, legality, and sufficient provisions of law for payment. Objective, Scope, The objective of our audit was to determine whether claimed costs represent increased costs resulting from the legislatively mandated and Methodology CAR Program. Specifically, we conducted this audit to determine whether claimed costs were supported by appropriate source documents, were not funded by another source, and were not unreasonable and/or excessive. Unreasonable and/or excessive costs include ineligible costs that are not identified in the program’s parameters and guidelines as reimbursable costs. The audit period was July 1, 2017, through June 30, 2021. To achieve our objective, we completed the following tasks:  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 salaries and benefits, materials and supplies, travel and training, and indirect costs. We determined whether there were any errors or unusual or unexpected variances from year to year. We reviewed the claimed activities to determine whether they adhered to the SCO’s Mandated Cost Manual and the program’s parameters and guidelines.  We completed an internal control questionnaire by interviewing key county staff. We discussed the claim preparation process with county staff to determine what information was obtained, who obtained it, and how it was used.  We reviewed time records, which the county called time studies, provided by the county for the audit period. We also reviewed payroll records for claimed employees. We noted various issues with the time studies that we reviewed. The records provided as support for the claimed costs did not meet the requirements of the program’s parameters and guidelines (see Finding 1).  We reviewed claimed materials and supplies costs, and found that the county claimed costs that were not supported by source documentation. We were unable to verify that costs claimed under materials and supplies were for mandated activities. We also found that the county claimed allocated costs as direct costs. Per the program’s parameters and guidelines, only actual costs are allowable (see Finding 2).  We reviewed the county’s Single Audit and revenue reports to identify potential sources of offsetting revenues and reimbursements from federal or pass-through programs applicable to this mandated program. The county did not claim offsetting revenues for the audit period, and we found no instances of unreported offsetting revenue. We noted no exceptions. -2- San Diego County Custody of Minors – Child Abduction and Recovery Program We did not audit the county’s financial statements. 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. Conclusion As a result of performing the audit procedures, we found instances of noncompliance with the requirements described in our audit objective. We did not find that the county 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 Findings and Recommendations section. For the audit period, San Diego County claimed and was paid $3,433,637 for costs of the legislatively mandated CAR Program. Our audit found that $43,026 is allowable and $3,390,611 is unallowable. 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 The county has satisfactorily resolved the findings noted in our prior audit report for the period of July 1, 1999, through June 30, 2002, issued on Prior Audit January 10, 2005. The prior audit report was conducted under the Findings program’s previous parameters and guidelines, adopted on August 26, 1999. Views of We issued a draft audit report on April 17, 2023. The county’s Responsible representative responded by letter dated May 3, 2023. The county disagreed with the audit results, except for Finding 2. This final audit Officials report includes the county’s response. -3- San Diego County Custody of Minors – Child Abduction and Recovery Program Restricted Use This audit report is solely for the information and use of San Diego 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 KIMBERLY TARVIN, CPA Chief, Division of Audits July 14, 2023 -4- San Diego County Custody of Minors – Child Abduction and Recovery Program Schedule— Summary of Program Costs July 1, 2017, through June 30, 2021 Amount Allowable Audit Cost Elements Claimed per Audit Adjustment Reference 1 July 1, 2017, through June 30, 2018 Direct costs: Salaries and benefits 2 $ 762,864 $ - $ (762,864) Finding 1 Materials and supplies 33,386 972 (32,414) Finding 2 Travel and training 11,843 11,843 - Total direct costs 808,093 12,815 (795,278) Indirect costs 44,559 - (44,559) Finding 1 Total direct and indirect costs 852,652 12,815 (839,837) Less: offsetting revenue - - - Total program costs $ 852,652 12,815 $ (839,837) Less amount paid by the State 3 ( 852,652) Amount paid in excess of allowable costs claimed $ ( 839,837) July 1, 2018, through June 30, 2019 Direct costs: Salaries and benefits $ 924,121 $ - $ (924,121) Finding 1 Materials and supplies 47,607 1,481 (46,126) Finding 2 Travel and training 9,904 9,904 - Total direct costs 981,632 11,385 (970,247) Indirect costs 55,694 - (55,694) Finding 1 Total direct and indirect costs 1,037,326 11,385 (1,025,941) Less: offsetting revenue - - - Total program costs $ 1,037,326 11,385 $ (1,025,941) Less amount paid by the State 3 ( 1,037,326) Amount paid in excess of allowable costs claimed $ ( 1,025,941) July 1, 2019, through June 30, 2020 Direct costs: Salaries and benefits $ 651,605 - $ (651,605) Finding 1 Materials and supplies 2 34,584 200 (34,384) Finding 2 Travel and training 16,118 16,118 - Total direct costs 702,307 16,318 (685,989) Indirect costs 38,462 - (38,462) Finding 1 Total direct and indirect costs 740,769 16,318 (724,451) Less: offsetting revenue - - - Total program costs $ 740,769 16,318 $ (724,451) Less amount paid by the State 3 ( 740,769) Amount paid in excess of allowable costs claimed $ ( 724,451) -5- San Diego County Custody of Minors – Child Abduction and Recovery Program Schedule (continued) Amount Allowable Audit Cost Elements Claimed per Audit Adjustment Reference 1 July 1, 2020, through June 30, 2021 Direct costs: Salaries and benefits $ 717,549 - $ (717,549) Finding 1 Materials and supplies 41,520 283 (41,237) Finding 2 Travel and training 2,225 2,225 - Total direct costs 761,294 2,508 (758,786) Indirect costs 41,596 - (41,596) Finding 1 Total program costs $ 802,890 2,508 $ (800,382) Total direct and indirect costs 802,890 2,508 (800,382) Less: offsetting revenue - - - Total program costs $ 802,890 2,508 $ (800,382) Less amount paid by the State 3 ( 802,890) Amount paid in excess of allowable costs claimed $ ( 800,382) Summary: July 1, 2017, through June 30, 2021 Direct costs: Salaries and benefits $ 3,056,139 - $ (3,056,139) Materials and supplies 157,097 2,936 (154,161) Travel and training 40,090 40,090 - Total direct costs 3,253,326 43,026 (3,210,300) Indirect costs 180,311 - (180,311) Total direct and indirect costs 3,433,637 43,026 (3,390,611) Less: offsetting revenue - - - Total program costs $ 3,433,637 43,026 $ (3,390,611) Less amount paid by the State 3 ( 3,433,637) Amount paid in excess of allowable costs claimed $ ( 3,390,611) _________________________ 1 See the Findings and Recommendations section. 2 Immaterial differences due to rounding. 3 Payment amount current as of June 1, 2023. -6- San Diego County Custody of Minors – Child Abduction and Recovery Program Findings and Recommendations FINDING 1— The county claimed $3,056,139 in salaries and benefits for the audit period. We determined that the entire amount is unallowable. The related Unsupported salaries, unallowable indirect costs total $180,311, for total unallowable costs of benefits, and related $3,236,450. The costs are unallowable because the county did not provide indirect costs contemporaneous source documentation to support the mandated functions performed or the actual number of hours devoted to each function. The following is a summary of the audit adjustment: Cost Elements 2017-18 2018-19 2019-20 2020-21 Total Unallowable salaries1 A $ ( 445,587) $ ( 556,941) $ ( 384,620) $ ( 415,959) $ (1,803,107) Unallowable benefits B ( 317,277) ( 367,180) ( 266,985) ( 301,590) (1,253,032) Sub-total: Unallowable salaries and benefits C ( 762,864) ( 924,121) ( 651,605) ( 717,549) (3,056,139) Claimed indirect cost rate D 10.00% 10.00% 10.00% 10.00% Related indirect costs [A x D] E ( 44,559) ( 55,694) ( 38,462) ( 41,596) (180,311) Audit adjustment [C + E] $ ( 807,423) $ ( 612,635) $ ( 423,082) $ ( 457,555) $ (3,236,450) 1 Immaterial differences due to rounding The county provided bi-weekly time studies that record “Allocable Regular Hours” charged to the following activity titles:  Compliance with Court Orders (CA/Other Duties)  Court Costs for Out-of-State Jurisdiction Cases (Out-of-State/Hague)  Securing Appearance of Offender  Return of Children to Custodian The bi-weekly time studies also record “Nonallocable Hours,” which include time associated with vacation, sick leave, compensatory time, and hours spent on non-child abduction unit activities. No further description of activities was provided. Without a description of the mandated functions performed, we were unable to verify that the hours claimed under the description of “Allocable Regular Hours” or “Nonallocable Hours” were for reimbursable activities. We noted that many time studies were signed months after the last day of the pay period. The county acknowledged that staff members often submit their time studies late, and stated “The San Diego District Attorney’s Office is implementing a process where staff submit their time studies each pay period.” We also noted that several employees’ time studies claimed both “Compliance with Court Orders” and “Court Costs for Out-of-State Jurisdiction Cases”; however, none of the claims submitted to the SCO included “Court Costs for Out-of-State Jurisdiction Cases.” Based on the documentation provided, we were unable to determine the mandated functions performed, the actual number of hours devoted to each function, or the validity of the claimed costs. Without a description of the -7- San Diego County Custody of Minors – Child Abduction and Recovery Program mandated functions performed, we were unable to determine whether the county claimed unallowable costs associated with criminal prosecution, commencing with the defendant’s first appearance in a California court; or claimed costs associated with activities that are non-mandate related. Criteria Section V., “Reimbursable Costs,” of the parameters and guidelines begins: 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. 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 VII.A.I., “Salary and Employees’ Benefits,” of the parameters and guidelines states, in part: Identify the employee(s), show the classification of the employee(s) involved, describe the mandated functions performed and specify the actual number of hours devoted to each function, the productive hourly rate, and the related benefits. The average number of hours devoted to each function may be claimed if supported by a documented time study. . . . Recommendation We recommend that the county:  Follow the SCO’s Mandated Cost Manual and the mandated program’s parameters and guidelines when preparing its reimbursement claims; and  Ensure that claimed costs are supported by source documentation. County Response The County respectfully disagrees with this finding and disallowance of costs. The San Diego County District Attorney’s Office (DAO) supported the salaries and benefits costs with reports from the County’s timekeeping software – Kronos, time studies, and PeopleSoft Budget Unit Labor Cost reports (BULC). Kronos entries are made by DAO Custody of Minors – Child Abduction and Recovery Program (CARP) funded employees and approved by their supervisors each bi-weekly pay period, contemporaneous to the time worked. To corroborate the Kronos reports, DAO provided bi-weekly time studies to reflect the reimbursable/non-reimbursable activities and BULC reports to reflect employees, classifications, and other salary/benefit information. DAO staff members additionally provided case notes and redacted records. -8- San Diego County Custody of Minors – Child Abduction and Recovery Program As the audit noted, the corroborating time studies were not always submitted on time. DAO plans to implement changes to further substantiate costs using available County systems and resources. SCO Comment The Kronos entries for employees’ actual hours worked consist of hours charged to a code for “Child Abduction – General Fund” or “General Prosecution – General Fund”. Hours charged to a code do not show the hours worked on reimbursable mandated activities. The Kronos and BULC reports are payroll documentation that do not show the actual number of hours the employees worked on mandated activities, as required by the parameters and guidelines. The county states, “To corroborate the Kronos reports, DAO provided bi-weekly time studies to reflect the reimbursable/non-reimbursable activities. . . .” The activity titles used in the time studies are generally vague; they do not describe the mandated functions performed or specify the actual number of hours devoted to each function. Furthermore, the county acknowledges that “the corroborating time studies were also not always submitted on time.” Section VII.A.1., “Salaries and Employees’ Benefits” of the parameters and guidelines states, in part: Identify the employee(s), show the classification of the employee(s) involved, describe the mandated functions performed and specify the actual number of hours devoted to each function, the productive hourly rate, and the related benefits. FINDING 2— The county claimed a total of $157,097 in materials and supplies costs for the audit period. We determined that $2,936 is allowable and $154,161 is Overstated materials unallowable. These costs are unallowable because the county did not and supplies costs provide supporting documentation; and it claimed costs that were allocated to the CAR Program, rather than actual costs supported by source documentation as required by the program’s parameters and guidelines. -9- San Diego County Custody of Minors – Child Abduction and Recovery Program The following table shows the materials and supplies costs claimed by the DA’s Office, the allowable costs, and the audit adjustment: Materials and Supplies Total Amount Audit Account Description Claimed Allowable Adjustment Cell phone expenses 52068 Cellular Phone Use $ 1 0,351 - $ (10,351) Total cell phone expenses 1 0,351 - (10,351) Vehicle-related expenses 52178 Auto Maintenance – Vehicle Charge 3 3,217 - (33,217) 52182 Automotive Fuel 2 1,906 - (21,906) 52616 Transportation & Travel (Parking) 1 4,939 - (14,939) 52758 Vehicle Lease – ISF [Internal Service Fund] 1 1,116 - (11,116) Total vehicle-related expenses 8 1,178 - (81,178) Allocated expenses 52670 Utility Charges – ISF 1 6,525 - (16,525) 52708 Fac Management – ISF 4 6,107 - (46,107) Total allocated expenses 6 2,632 - (62,632) Other Expenses 52156 Interpreters 2 15 2 15 - 52270 Memberships 1 15 1 15 - 52332 Postage 2 85 2 85 - 52550 Misc. Dept. Expense 2 ,321 2 ,321 - Total other expenses 2 ,936 2 ,936 Total materials and supplies costs $ 1 57,097 $ 2 ,936 $ (154,161) Cell phone expenses The county claimed a total of $10,351 for “Cellular Phone Use” for the audit period. These costs include the monthly cell phone charges for the DA’s Office investigators. The following table shows cell phone expenses claimed by the DA’s Office, the allowable costs, and the audit adjustment by fiscal year: Cell phone expenses Fiscal Year Total Total Account Description 2017-18 2018-19 2019-20 2020-21 Claimed Allowable 52068 Cellular Phone Use $ 3,641 $ 4,287 $ 984 $ 1,439 $ 1 0,351 $ - Total cell phone expenses $ 3,641 $ 4,287 $ 984 $ 1,439 $ 10,351 $ - -10- San Diego County Custody of Minors – Child Abduction and Recovery Program We reviewed cell phone bills for DA’s Office investigators for the audit period. The investigators’ timesheets included time charged to “General Prosecution” activities, which are not mandate-related. Based on the documentation provided, we were unable to determine how much of the claimed cell phone expenses were related to the reimbursable activities. The county did not support the claimed cell phone expenses with source documents that show the validity of such costs and their relationship to the reimbursable activities. Therefore, we determined that $10,351 in cell phone expenses is unallowable. Vehicle-related expenses The county claimed a total of $81,178 in vehicle-related expenses for the audit period. Costs included maintenance, fuel, parking, and lease expenses for vehicles assigned to DA’s Office investigators. The following table shows the vehicle-related expenses claimed by the DA’s Office, the allowable costs, and the audit adjustment by fiscal year: Vehicle-related expenses Fiscal Year Total Total Audit Account Description 2017-18 2018-19 2019-20 2020-21 Claimed Allowable Adjustment 52178 Auto Maintenance – Vehicle Charge $ 6 ,655 $ 8 ,845 $ 11,505 $ 6 ,212 $ 3 3,217 - $ ( 33,217) 52182 Automotive Fuel 4 ,304 7 ,216 6,647 3 ,739 2 1,906 - ( 21,906) 52616 Transportation & Travel (Parking) 2 ,807 6 ,631 2,213 3 ,288 1 4,939 - ( 14,939) 52758 Vehicle Lease – ISF - - - 1 1,116 1 1,116 - ( 11,116) Total vehicle-related expenses $ 1 3,766 $ 2 2,692 $ 20,365 $ 2 4,355 $ 8 1,178 - $ ( 81,178) We requested a vehicle use log to determine the reimbursable activities for the audit period; however, the county does not keep this type of record. We were informed that investigators are assigned vehicles, but daily vehicle usage is not tracked. Investigators can use vehicles for business- related purposes and for transportation from their personal homes to the DA’s Office location. The county was not able to provide source documents showing that “Automotive Fuel” and “Transportation & Travel (Parking)” charges were direct costs of the mandate. Based on the documentation provided, we were unable to determine how much of the claimed vehicle-related expenses was related to the reimbursable activities. The county did not support the claimed vehicle- related expenses with source documents that show the validity of such costs and their relationship to the reimbursable activities. Therefore, we determined that a total of $81,178 in vehicle-related expenses is unallowable. Allocated expenses The county claimed a total of $62,632 for costs allocated to the CAR Program. Costs included utility costs and facility management costs charged to the Internal Service Fund. The county developed a methodology to allocate a percentage of utility costs and facility management costs (i.e., fire safety, custodial, and building upkeep costs) as direct costs applicable to the mandated program. For each quarter, the county calculated the percentage of the CAR Program full-time equivalents to the total full-time equivalents at the DA’s Office Hall of Justice location. To determine program-related utility and facility management costs, the county applied the percentage to the total costs incurred by the DA’s Office Hall of Justice location. -11- San Diego County Custody of Minors – Child Abduction and Recovery Program The following table shows the allocated expenses claimed by the DA’s Office, the allowable costs, and the audit adjustment by fiscal year: Allocated expenses Fiscal Year Total Total Audit Account Description 2017-18 2018-19 2019-20 2020-21 Claimed Allowable Adjustment 52670 Utility Charges – ISF $ 4,016 $ 5,798 $ 3,283 $ 3,428 $ 16,525 - $ (16,525) 52708 Fac Management – ISF 10,991 13,349 9,754 12,013 46,107 - (46,107) Total allocated expenses $ 15,007 $ 19,147 $ 13,037 $ 15,441 $ 62,632 - $ (62,632) Based on the documentation provided, we determined that a total of $62,632 in allocated expenses is unallowable. The costs are unallowable because the county did not claim actual costs that were supported by source documentation. Criteria Section V., “Reimbursable Costs,” of the parameters and begins: 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. 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. Recommendation We recommend that the county:  Follow the SCO’s Mandated Cost Manual and the mandated program’s parameters and guidelines when preparing its reimbursement claims; and  Ensure that claimed costs include only eligible costs, are based on actual costs, and are properly supported. County Response The County concurs with this finding and disallowance of costs. The mandated program’s parameters and guidelines provide: “The claimant is only allowed to claim and be reimbursed for increased costs for reimbursable activities identified below. Increased cost is limited to the cost of an activity that the claimant is required to incur as a result of the mandate” (Amendment to Parameters and Guidelines 05-PGA-26 (CSM 4237), page 3). The DAO interpreted this to apply the commonly accepted practice among cost sharing programs that the proportional share of usage is applied to the appropriate program. The DAO will implement changes to ensure that only expenditures which can be identified as a direct cost of the mandate and are supported by source documentation are claimed. -12- San Diego County Custody of Minors – Child Abduction and Recovery Program Attachment— County’s Response to Draft Audit Report State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250 www.sco.ca.gov S22-MCC-0016