City of Stockton

CITY OF STOCKTON Final Audit Report DOMESTIC VIOLENCE ARREST POLICIES AND STANDARDS PROGRAM Chapter 246, Statutes of 1995 July 1, 2019, through June 30, 2023 M ALIA M. C OHEN C S C ALIFORNIA TATE ONTROLLER March 2026 S25-MCC-0002 STATE CONTROLLER’S OFFICE | DIVISION OF AUDITS Post Office Box 942850 | Sacramento, CA 94250 Sacramento Office: 3301 C Street, Suite 700 | Sacramento, CA 95816 | 916-324-8907 Monterey Park Office: 901 Corporate Center Drive, Suite 200 | Monterey Park, CA 91754 | 323-981-6802 www.sco.ca.gov MALIA M. COHEN CALIFORNIA STATE CONTROLLER March 12, 2026 CERTIFIED MAIL—RETURN RECEIPT REQUESTED Mr. Gilbert Garcia, Chief Financial Officer City of Stockton 501 West Weber Avenue Stockton, CA 95203 Dear Mr. Garcia: The State Controller’s Office audited the costs claimed by the City of Stockton (the city) for the legislatively mandated Domestic Violence Arrest Policies and Standards Program for the period of July 1, 2019, through June 30, 2023. The city claimed and was paid $670,318 for costs of the Domestic Violence Arrest Policies and Standards Program. Our audit found that $484,989 is allowable and $185,329 is unallowable. The costs are unallowable because the city overstated salary and benefit costs, and related indirect costs. 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. 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 Mr. Gilbert Garcia March 12, 2026 Page 2 of 2 If you have any questions regarding this report, please contact Lisa Kurokawa, Chief, Compliance Audits Bureau, by telephone at 916-327-3138. Thank you. Sincerely, Original signed by Kimberly A. Tarvin, CPA Chief, Division of Audits Copy: The Honorable Christina Fugazi, Mayor City of Stockton Johnny Ford, City Manager City of Stockton Stanley McFadden, Chief City of Stockton Police Department Jeanetta McDonald, Police Services Administrator City of Stockton Police Department Chris Hill, Principal Program Budget Analyst Local Government Unit California Department of Finance Kaily Yap, Finance Budget Analyst Local Government Unit California Department of Finance Darryl Mar, Manager Local Reimbursements Section State Controller’s Office Everett Luc, Supervisor Local Reimbursements Section State Controller’s Office 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 Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 CONTENTS SUMMARY 1 BACKGROUND 1 AUDIT AUTHORITY 2 OBJECTIVE, SCOPE, AND METHODOLOGY 2 CONCLUSION 5 FOLLOW-UP ON PRIOR AUDIT FINDINGS 5 VIEWS OF RESPONSIBLE OFFICIALS 5 RESTRICTED USE 6 SCHEDULE—SUMMARY OF PROGRAM COSTS 7 FINDINGS AND RECOMMENDATIONS 10 Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 SUMMARY The State Controller’s Office (SCO) audited the costs claimed by the City of Stockton (the city) for the legislatively mandated Domestic Violence Arrest Policies and Standards Program (DVAPS Program) for the period of July 1, 2019, through June 30, 2023. The city claimed and was paid $670,318 for costs of the mandated program. Our audit found that $484,989 is allowable and $185,329 is unallowable. The costs are unallowable because the city overstated salary and benefit costs, and related indirect costs. BACKGROUND Penal Code (PC) section 13701, subdivision (b) (added by Chapter 246, Statutes of 1995), required local law enforcement agencies to develop, adopt, and implement written arrest policies for domestic violence offenders by July 1, 1996. The legislation also required local law enforcement agencies to obtain input from local domestic violence agencies in developing the arrest policies. Under previous law, local law enforcement agencies were required to develop, adopt, and implement written policies for response to domestic violence calls and were encouraged, but not obligated, to consult with domestic violence experts. On September 25, 1997, the Commission on State Mandates determined that Chapter 246, Statutes of 1995, imposed a state mandated program reimbursable under Government Code (GC) section 17561. The program’s parameters and guidelines establish the state mandate and define the reimbursement criteria. The Commission on State Mandates adopted the parameters and guidelines on August 20, 1998, and amended them on October 30, 2009. In compliance with GC section 17758, the SCO issues the Mandated Cost Manual for Local Agencies (Mandated Cost Manual) to assist local agencies in claiming mandated program reimbursable costs. -1- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 AUDIT AUTHORITY We conducted this performance audit in accordance with 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 for payment. OBJECTIVE, SCOPE, AND METHODOLOGY Our audit objective was to determine whether claimed costs represent increased costs resulting from the legislatively mandated DVAPS Program during the period of July 1, 2019, through June 30, 2023. Specifically, we conducted this audit to determine whether claimed costs were supported by appropriate source documents, not funded by another source, and 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. To achieve our objective, we performed the following procedures: • We reviewed the annual mandated cost claims filed by the city for the audit period and identified the significant cost components of each claim as salaries and benefits, and related indirect costs. We then determined whether there were any errors or unusual, 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 the city’s key staff members. We discussed the claim preparation process with the city’s staff members to determine what information was obtained, who obtained it, and how it was used. We determined which controls were significant to the audit objective, and the effect of the identified internal control weaknesses on the audit objective. -2- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 • We assessed the reliability of the data (payroll and expenditure records) generated by the city’s information management system and the city’s record management system (RMS), by interviewing the city’s staff members and examining supporting documentation. We determined that the data was sufficiently reliable to address the audit objective. • We verified that the city used the uniform time allowance and applied it properly. • We reviewed and analyzed the claimed domestic violence incident report counts and verified that these counts were supported by the city’s RMS. We found that the city misstated salaries and benefits; see Finding 1. • We used simple random sampling to select the following statistical samples from the audited population of incident reports: o We sampled 142 of 2,672 incident reports for fiscal year (FY) 2019-20. o We sampled 142 of 2,552 incident reports for FY 2020-21. o We sampled 142 of 2,736 incident reports for FY 2021-22. o We sampled 143 of 3,056 incident reports for FY 2022-23. • We determined whether the sampled incident reports included interviews with both parties involved in the domestic violence incident, and whether the officer considered the 17 factors listed in the parameters and guidelines to identify the primary aggressor. Errors found were projected to the intended (total) population; see Finding 2. We identified the following errors: o Of the 142 sampled incident reports for FY 2019-20, 48 were partially reimbursable and five were non-mandate-related. o Of the 142 sampled incident reports for FY 2020-21, 60 were partially reimbursable and six were non-mandate-related. -3- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 o Of the 142 sampled incident reports for FY 2021-22, 52 were partially reimbursable and 32 were non-mandate-related. o Of the 143 sampled incident reports for FY 2022-23, 48 were partially reimbursable and 48 were non-mandate-related. • We recalculated the allowable costs using the audited incident report counts. • We interviewed the city’s staff members to determine what employee classifications were involved in performing the mandated activities during the audit period. • We traced the average productive hourly rate (PHR) calculations for the claimed employee classification to supporting information in the city’s payroll system. No errors were found. • We verified that the indirect costs claimed by the city for each fiscal year of the audit period were for common or joint purposes, and that the indirect cost rates were properly supported and applied. We found that the city had overstated the indirect cost rate claimed for FY 2021-22; see Finding 3. • We traced the benefit rate calculations for the claimed employee classification to supporting information in the city’s payroll system. No errors were found. • We reviewed whether the training hours used to calculate the claimed costs were reasonable per the requirements of the program and supported by the source documentation. We found that the city claimed unsupported training costs for FY 2019-20; see Finding 4. • We verified that the city’s claimed costs were not funded by any other sources. 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. -4- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 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 city claimed costs that were funded by other sources; however, we found that it claimed unsupported and ineligible costs as quantified in the Schedule and described in the Findings and Recommendations section. For the audit period, the city claimed and was paid $670,318 for costs of the legislatively mandated DVAPS Program. Our audit found that $484,989 is allowable and $185,329 is unallowable. 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. FOLLOW-UP ON PRIOR AUDIT FINDINGS We have not previously conducted an audit on the city’s legislatively mandated DVAPS Program. VIEWS OF RESPONSIBLE OFFICIALS We issued a draft audit report on January 23, 2026. The city did not provide comments on the draft audit report. -5- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 RESTRICTED USE This report is solely for the information and use of the city, the California Department of Finance, and 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 A. Tarvin, CPA Chief, Division of Audits March 12, 2026 -6- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 SCHEDULE—SUMMARY OF PROGRAM COSTS July 1, 2019, through June 30, 2023 Payment amounts shown below are current as of February 9, 2026. Actual Costs Allowable Audit Cost Elements Claimed per Audit Adjustment Reference July 1, 2019, through June 30, 2020 Direct costs – salaries and benefits Implementation of the New Domestic Violence Arrest Policies to Identify the Primary Aggressor $112,945 $98,459 -$14,486 Intentionally left blank Training Officers About New Written Domestic Violence Arrest Policies 7,901 0 -7,901 Intentionally left blank Total direct costs 120,846 98,459 -22,387 Findings 1, 2, 4 Indirect costs 37,384 30,459 -6,925 Findings 1, 2, 4 Total direct and indirect costs 158,230 128,918 -29,312 Intentionally left blank Less: offsetting revenues and other reimbursements 0 0 0 Intentionally left blank Total program costs $158,230 128,918 -$29,312 Intentionally left blank Less: amount paid by the State -158,230 Intentionally left blank Intentionally left blank Intentionally left blank Amount paid in excess of allowable costs claimed -$29,312 Intentionally left blank Intentionally left blank Intentionally left blank -7- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 Actual Costs Allowable Audit Cost Elements Claimed per Audit Adjustment Reference July 1, 2020, through June 30, 2021 Direct costs – salaries and benefits Implementation of the New Domestic Violence Arrest Policies to Identify the Primary Aggressor $119,002 $96,659 -$22,343 Intentionally left blank Total direct costs 119,002 96,659 -22,343 Finding 2 Indirect costs 36,078 29,306 -6,772 Finding 2 Total direct and indirect costs 155,080 125,965 -29,115 Intentionally left blank Less: offsetting revenues and other reimbursements 0 0 0 Intentionally left blank Total program costs $155,080 125,965 -$29,115 Intentionally left blank Less: amount paid by the State -155,080 Intentionally left blank Intentionally left blank Intentionally left blank Amount paid in excess of allowable costs claimed -$29,115 Intentionally left blank Intentionally left blank Intentionally left blank July 1, 2021, through June 30, 2022 Direct costs – salaries and benefits Implementation of the New Domestic Violence Arrest Policies to Identify the Primary Aggressor $127,468 $85,053 -$42,415 Intentionally left blank Total direct costs 127,468 85,053 -42,415 Finding 2 Indirect costs 43,048 23,345 -19,703 Findings 2 and 3 Total direct and indirect costs 170,516 108,398 -62,118 Intentionally left blank Less: offsetting revenues and other reimbursements 0 0 0 Intentionally left blank Total program costs $170,516 108,398 -$62,118 Intentionally left blank Less: amount paid by the State -170,516 Intentionally left blank Intentionally left blank Intentionally left blank Amount paid in excess of allowable costs claimed -$62,118 Intentionally left blank Intentionally left blank Intentionally left blank -8- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 Actual Costs Allowable Audit Cost Elements Claimed per Audit Adjustment Reference July 1, 2022, through June 30, 2023 Direct costs – salaries and benefits Implementation of the New Domestic Violence Arrest Policies to Identify the Primary Aggressor $145,421 $94,907 -$50,514 Intentionally left blank Total direct costs 145,421 94,907 -50,514 Findings 1 and 2 Indirect costs 41,071 26,801 -14,270 Findings 1 and 2 Total direct and indirect costs 186,492 121,708 -64,784 Intentionally left blank Less: offsetting revenues and other reimbursements 0 0 0 Intentionally left blank Total program costs $186,492 121,708 -$64,784 Intentionally left blank Less: amount paid by the State -186,492 Intentionally left blank Intentionally left blank Intentionally left blank Amount paid in excess of allowable costs claimed -$64,784 Intentionally left blank Intentionally left blank Intentionally left blank Summary: July 1, 2019, through June 30, 2023 Direct costs – salaries and benefits Implementation of the New Domestic Violence Arrest Policies to Identify the Primary Aggressor $504,836 $375,078 -$129,758 Intentionally left blank Training Officers About New Written Domestic Violence Arrest Policies 7,901 0 -7,901 Intentionally left blank Total direct costs 512,737 375,078 -137,659 Findings 1 through 4 Indirect costs 157,581 109,911 -47,670 Findings 1 through 4 Total direct and indirect costs 670,318 484,989 -185,329 Intentionally left blank Less: offsetting revenues and other reimbursements 0 0 0 Intentionally left blank Total program costs $670,318 484,989 -$185,329 Intentionally left blank Less: amount paid by the State -670,318 Intentionally left blank Intentionally left blank Intentionally left blank Amount paid in excess of allowable costs claimed -$185,329 Intentionally left blank Intentionally left blank Intentionally left blank -9- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 FINDINGS AND RECOMMENDATIONS Finding 1—Misstated Costs The city claimed $504,836 in salaries and benefits for the Implementation of the New Domestic Violence Arrest Policies to Identify the Primary Aggressor cost component during the audit period. We found that the city misstated salaries and benefits by $23,007. The related indirect costs total $6,490, for a total finding of $29,497. For the audit period, the city’s claims identified a total of 10,601 domestic violence incidents (2,680 for FY 2019-20; 2,552 for FY 2020-21; 2,736 for FY 2021-22; and 2,633 for FY 2022-23). The city used its RMS to provide the summary incident report listings to support the number of domestic violence incident reports claimed for the audit period. We compared the RMS information to the number of domestic violence incident reports that the city claimed. Based on our review, we found that for FY 2019-20 and FY 2022-23, the city misstated the number of domestic violence incident reports claimed. The city misstated the number of domestic violence incident reports because it did not claim costs in accordance with the program’s parameters and guidelines or the SCO’s Mandated Cost Manual. The following table summarizes the audit adjustment for the misstated number of incident reports: Description FY 2019-20 FY 2022-23 Total Number of incident reports, per RMS 2,672 3,056 Intentionally left blank Less: Number of incident reports claimed -2,680 -2,633 Intentionally left blank Misstated number of incident reports -8 423 Intentionally left blank Multiply by: Standard time allowance (hours) 0.48 0.48 Intentionally left blank Misstated number of hours -4 203 Intentionally left blank Multiply by: Claimed average PHR (salaries only) $49.28 $60.02 Intentionally left blank Misstated salaries ([A]) -197 12,184 Intentionally left blank Multiply by: Claimed benefit rate 78.16% 91.71% Intentionally left blank Misstated benefits ([B]) -154 11,174 Intentionally left blank -10- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 Description FY 2019-20 FY 2022-23 Total Misstated salaries and benefits ([C] = [A] + [B]) -351 23,358 $23,007 Multiply by: Claimed indirect cost rate ([D]) 30.93% 28.25% Intentionally left blank Related indirect costs ([E] = [C] × [D]) -109 6,599 6,490 Audit adjustment ([F] = [C] + [E]) -$460 $29,957 $29,497 Criteria Section IV, “Reimbursable Activities,” 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 IV, “Reimbursable Activities,” of the parameters and guidelines continues: The claimant is only allowed to claim and be reimbursed for increased costs for reimbursable activities. . . . Increased cost is limited to the cost of an activity that the claimant is required to incur as a result of the mandate. Section IV, E, “Uniform Cost Allowance,” of the parameters and guidelines states: Pursuant to Government Code section 17557, the Commission on State Mandates has adopted a uniform cost allowance for reimbursement in lieu of payment of total actual costs incurred. The uniform cost allowance is applied only to Section IV, Reimbursable Activities, Component D (Implementation of the New Domestic Violence Arrest Policies to Identify the Primary Aggressor) and covers all costs (direct and indirect) of performing -11- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 activities described under Component D. The uniform cost allowance provides the following: A standard time of twenty-nine (29) minutes may be claimed to identify the primary aggressor in any domestic violence incident. The standard time of twenty-nine (29) minutes is broken down as follows: • Seventeen (17) Minutes – Interview of both parties. • Twelve (12) Minutes – Consideration of the factors listed [under Component D]. The total cost will be determined by multiplying the number of reported responses × the average [PHR], including applicable indirect costs as specified in section V., paragraph B, herein, × .48 (29 minutes divided by 60 minutes). Recommendation We recommend that the city: • Follow the program’s parameters and guidelines and the SCO’s Mandated Cost Manual when preparing its reimbursement claims; and • Claim costs based on the number of domestic violence incident reports that its RMS supports. Finding 2—Non-reimbursable Costs The city claimed non-reimbursable salaries and benefits totaling $152,765. The related indirect costs total $46,337, for a total finding of $199,102. -12- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 As noted in Finding 1, the city misstated the claimed number of domestic violence incident reports for FY 2019-20 and FY 2022-23. The following table summarizes the audited population of incident reports and the claimed hours attributable to the audited population: Description FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Documented number of incident reports (audited population) [A] 2,672 2,552 2,736 3,056 Multiply by: Standard time allowance (hours) [B] 0.48 0.48 0.48 0.48 Total hours attributable to documented number of incident reports ([C] = [A] × [B]) 1,283 1,225 1,313 1,467 The reimbursable activities for this cost component consist of interviewing both parties involved in the domestic violence incident and considering the 17 factors identified in the program’s parameters and guidelines to identify the primary aggressor. To calculate the claimed costs, the city multiplied the number of reported responses to incidents by the average PHR, including the applicable indirect costs, then multiplied the resulting amount by the standard time of 29 minutes (0.48 of an hour). For each fiscal year, we selected a statistical sample from the documented number of domestic violence incident reports (the audited population) based on a 95 percent confidence level, a precision rate of ±8 percent, and an expected error rate of 50 percent. We used statistical samples so that the results could be projected to the population for each fiscal year. For testing purposes, we selected a random sample of 569 incident reports (142 for FY 2019-20, 142 for FY 2020-21, 142 for FY 2021-22, and 143 for FY 2022-23). We reviewed the sample incident reports to determine whether the city had performed the required mandated program activities. The results of our review are as follows: • Allowable – 270 incident reports were fully reimbursable under the mandated program. These reports are reimbursable at 29 minutes (0.48 hours) per report. -13- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 • Partially reimbursable – 208 incident reports were partially reimbursable because the officers did not interview both parties involved in the domestic violence incident. These reports are reimbursable at 20.5 minutes (0.34 hours) per report, based on 8.5 minutes to interview one party and 12 minutes to consider the various factors identified in the parameters and guidelines. • Unallowable – 91 incident reports were non-mandated related. Non-mandate related incidents were those that did not meet the definition of domestic violence as provided in PC section 13700. During testing, we found that the city had claimed the entire standard time of 29 minutes for incident reports that were only partially reimbursable and claimed reimbursement for ineligible incident reports. The city overstated these costs because it did not claim costs in accordance with the program’s parameters and guidelines or the SCO’s Mandated Cost Manual. The following table summarizes the results of the statistical samples: Description FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Total Allowable incident reports 89 76 58 47 270 Partially reimbursable incident reports (only one party interviewed) 48 60 52 48 208 Non-mandate-related incident reports 5 6 32 48 91 Total reports sampled 142 142 142 143 569 The following table summarizes the unallowable hours based on the results of the statistical samples by fiscal year: Description FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Total Number of allowable incident reports 89 76 58 47 270 Multiply by: Standard time allowance (hours) 0.48 0.48 0.48 0.48 Intentionally left blank Subtotal [A] 43 36 28 23 Intentionally left blank -14- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 Description FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Total Number of partially reimbursable incident reports (only one party interviewed) 48 60 52 48 208 Multiply by: Allowable standard time allowance (hours) 0.34 0.34 0.34 0.34 Intentionally left blank Subtotal [B] 16 20 18 16 Intentionally left blank Total reimbursable hours for sampled reports ([C]= [A] + [B]) 59 56 46 39 Intentionally left blank Divide by: Statistical sample size 142 142 142 143 Intentionally left blank Reimbursable hours per report 0.42 0.39 0.32 0.27 Intentionally left blank Multiply by: Documented number of incident reports (audited population) 2,672 2,552 2,736 3,056 Intentionally left blank Total reimbursable hours 1,122 995 876 825 Intentionally left blank Add: Total hours attributable to documented incident reports -1,283 -1,225 -1,313 -1,467 Intentionally left blank Total unallowable hours -161 -230 -437 -642 -1,470 The following table summarizes the unallowable costs based on the unallowable hours identified in the statistical samples by the fiscal year: Description FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Total Unallowable hours -161 -230 -437 -642 Intentionally left blank Multiply by: Claimed average PHR (salary only) $49.28 $53.94 $53.66 $60.02 Intentionally left blank Unallowable salaries [A] -7,934 -12,406 -23,449 -38,533 Intentionally left blank Multiply by: Claimed benefit rate [B] 78.16% 80.10% 80.88% 91.71% Intentionally left blank -15- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 Description FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Total Related unallowable benefit costs ([C] = [A] × [B]) -6,201 -9,937 -18,966 -35,339 Intentionally left blank Total unallowable salaries and benefits ([D] = [A] + [C]) -14,135 -22,343 -42,415 -73,872 -$152,765 Multiply by: Claimed indirect cost rate [E] 30.93% 30.31% 33.77% 28.25% Intentionally left blank Related indirect costs ([F] = [D] × [E]) -4,372 -6,772 -14,324 -20,869 -46,337 Audit adjustment ([G] = [D] + [F]) -$18,507 -$29,115 -$56,739 -$94,741 -$199,102 Criteria Section IV, “Reimbursable Activities,” 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 IV, “Reimbursable Activities,” of the parameters and guidelines continues: The claimant is only allowed to claim and be reimbursed for increased costs for reimbursable activities. . . . Increased cost is limited to the cost of an activity that the claimant is required to incur as a result of the mandate. -16- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 Section IV, E, “Uniform Cost Allowance,” of the parameters and guidelines states: Pursuant to Government Code section 17557, the Commission on State Mandates has adopted a uniform cost allowance for reimbursement in lieu of payment of total actual costs incurred. The uniform cost allowance is applied only to Section IV, Reimbursable Activities, Component D (Implementation of the New Domestic Violence Arrest Policies to Identify the Primary Aggressor) and covers all costs (direct and indirect) of performing activities described under Component D. The uniform cost allowance provides the following: A standard time of twenty-nine (29) minutes may be claimed to identify the primary aggressor in any domestic violence incident. The standard time of twenty-nine (29) minutes is broken down as follows: • Seventeen (17) Minutes – Interview of both parties. • Twelve (12) Minutes – Consideration of the factors listed [under Component D]. The total cost will be determined by multiplying the number of reported responses × the average [PHR], including applicable indirect costs as specified in section V., paragraph B, herein, × .48 (29 minutes divided by 60 minutes). Recommendation We recommend that the city: • Follow the program’s parameters and guidelines and the SCO’s Mandated Cost Manual when preparing its reimbursement claims; • Claim costs based on the number of domestic violence incidents that its RMS supports; -17- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 • Claim costs for only those reports that document incidents meeting the definition of domestic violence provided by PC section 13700; and • Claim only the portion of the standard time allowance that is attributable to the mandated activities performed. Finding 3—Overstated Indirect Cost Rate For the audit period, the city claimed indirect costs based on indirect cost rate proposals (ICRP) prepared by the city’s police department. We found that the city had overstated its indirect costs for FY 2021-22 by $5,375. During testing, we found that the city had used cost allocation plan (CAP) costs from FY 2018-19 to calculate indirect costs for FY 2020-21 and FY 2021-22. Based on our discussions with city officials, we found that the city’s CAPs are prepared on a two-year roll-forward basis. The CAP prepared from FY 2018-19 actual costs is allowable for use in the city’s FY 2020-21 ICRP. The city did not provide a FY 2021-22 CAP prepared from FY 2019-20 actual costs. Therefore, the allocation costs included in the city’s claimed costs for FY 2021-22 are unallowable. We applied the error rate to allowable salaries and benefits to calculate the overstated indirect costs for FY 2021-22, and found that the city overstated indirect costs by $5,375. The city overstated these costs because it did not claim costs in accordance with the program’s parameters and guidelines or the SCO’s Mandated Cost Manual. The following table summarizes the claimed, allowable, and adjusted indirect cost rates: Fiscal Claimed Indirect Allowable Indirect Audit Year Cost Rate Cost Rate Adjustment 2021-22 33.77% 27.45% -6.32% -18- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 The following table summarizes the adjustment to the indirect costs: Description FY 2021-22 Allowable indirect cost rate 27.45% Less: Claimed indirect cost rate -33.77% Error rate -6.32% Multiply by: Allowable salaries and benefits $85,053 Audit adjustment -$5,375 Criteria Section IV, “Reimbursable Activities,” 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 IV, “Reimbursable Activities,” of the parameters and guidelines continues: The claimant is only allowed to claim and be reimbursed for increased costs for reimbursable activities. . . . Increased cost is limited to the cost of an activity that the claimant is required to incur as a result of the mandate. Section V.B., “Indirect Costs,” of the parameters and guidelines states: Indirect costs are defined as costs which are incurred for common or joint purpose, benefiting more than one program and are not directly assignable to a particular department of program without efforts disproportionate to the result achieved. -19- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 Indirect costs may include both (1) overhead costs of the unit performing the mandate; and (2) the costs of central government services distributed to other departments based on a systematic and rational basis through a cost allocation plan. Compensation for indirect costs is reimbursable utilizing the procedure provided in the OMB A-87 [Title 2, Code of Federal Regulations, Part 225]. Claimants have the option of using 10 [percent] of direct labor, excluding fringe benefits, or preparing a departmental [ICRP] for the department if an indirect cost in excess of 10 [percent] is claimed. If more than one department is claiming indirect costs for the mandated program, each department must have its own ICRP prepared in accordance with OMB A-87. An ICRP must be submitted with the claim when the indirect cost rate is in excess of 10 [percent]. Recommendation We recommend that the city: • Follow the program’s parameters and guidelines and the SCO’s Mandated Cost Manual when preparing its reimbursement claims; and • Ensure that it uses the correct CAP to identify indirect cost rates applicable to the corresponding fiscal year. Finding 4—Unsupported One-time Costs For FY 2019-20, the city claimed $7,901 for one-time activities related to the Training of Officers on New Domestic Violence Arrest Policies cost component. We found that the entire amount is unallowable. The related indirect costs total $2,444, for a total finding of $10,345. For FY 2019-20, the city claimed a total of 45 police officers who attended a two-hour training related to New Domestic Violence Arrest Policies. We requested and the city provided instructional training material dated October 2019 and training rosters. The instructional training material provided support for the content of the training. Based on our review of the -20- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 rosters, we found that the number of officers attending the training did not reconcile with the number claimed; the rosters included dates outside of the audit period; the location was not specified; and training was included for other law enforcement agencies (Lathrop and Santa Clara city police departments). The training of other law enforcement agencies is not reimbursable. Additionally, we found that the rosters did not reconcile with the training material dated October 2019. The city did not maintain appropriate source documentation to support the training costs of local law enforcement officers who normally respond to incidents of domestic violence on New Domestic Violence Arrest Policies for FY 2019-20. Therefore, we were unable to trace the claimed hours and activities to determine that the costs were related to actual hours. We found that the entire amount is unallowable because the city did not claim costs in accordance with the program’s parameters and guidelines or the SCO’s Mandated Cost Manual. The following table summarizes the audit adjustment: Description FY 2019-20 Police Officer PHR $49.28 Multiply by: Number of training hours claimed -90.00 Total salaries [A] -4,435 Multiply by: Claimed benefit rate 78.16% Related benefit costs [B] -3,466 Total salaries and benefits ([C] = [A] + [B]) -7,901 Multiply by: Claimed indirect cost rates 30.93% Related indirect costs [D] -2,444 Audit adjustment ([E] = [C] + [D]) -$10,345 Criteria The parameters and guidelines require that all claimed costs be traceable to source documents that show evidence of the validity of such costs and their relationship to the mandate. -21- Office of the State Controller | City of Stockton Domestic Violence Arrest Policies and Standards Program Final Audit Report March 2026 Section IV, “Reimbursable Activities,” 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 IV, “Reimbursable Activities,” of the parameters and guidelines continues: The claimant is only allowed to claim and be reimbursed for increased costs for reimbursable activities. . . . Increased cost is limited to the cost of an activity that the claimant is required to incur as a result of the mandate. Section V.A.6., “Training,” of the parameters and guidelines states: The cost of training specified in Section IV, Reimbursable Activities, is eligible for reimbursement. Identify the employee(s) by name and job classification. Provide the title of the training session, the dates attended and the location. Reimbursable costs include salaries and benefits, registration fees, transportation, lodging and per diem. Recommendation We recommend that the city: • Follow the program’s parameters and guidelines and the SCO’s Mandated Cost Manual when preparing its reimbursement claims; and • Ensure that claimed costs are supported by source documentation. End of report -22-