Ventura County

VENTURA COUNTY Audit Report DOMESTIC VIOLENCE TREATMENT SERVICES–AUTHORIZATION AND CASE MANAGEMENT PROGRAM Chapters 183 and 184, Statutes of 1992; Chapter 28, Statutes of 1994; and Chapter 641, Statutes of 1995 July 1, 1999, through June 30, 2002 S W TEVE ESTLY California State Controller June 2005 S W TEVE ESTLY California State Controller June 24, 2005 The Honorable Christine L. Cohen Auditor-Controller Ventura County 800 South Victoria Avenue Ventura, CA 93009 Dear Ms. Cohen: The State Controller’s Office audited the claims filed by Ventura County for costs of the legislatively mandated Domestic Violence Treatment Services–Authorization and Case Management Program (Chapters 183 and 184, Statutes of 1992; Chapter 28, Statutes of 1994; and Chapter 641, Statutes of 1995) for the period of July 1, 1999, through June 30, 2002. The county claimed $441,720 for the mandated program. Our audit disclosed that $195,894 is allowable and $245,826 is unallowable. The unallowable costs occurred primarily because the county claimed unsupported costs. The State paid the county $314,847. The amount paid exceeds allowable costs claimed by $118,953. If you have any questions, please contact Jim L. Spano, Chief, Compliance Audits Bureau, at (916) 323-5849. Sincerely, Original Signed By: VINCENT P. BROWN Chief Operating Officer VPB:JVB/ams cc: Mercy Grieco Chief Deputy Auditor-Controller Ventura County Calvin Remington Chief Probation Officer Ventura County James Tilton, Program Budget Manager Corrections and General Government Department of Finance Ventura County Domestic Violence Treatment Services–Authorization and Case Management Program Contents Audit Report Summary............................................................................................................................ 1 Background........................................................................................................................ 1 Objective, Scope, and Methodology................................................................................. 2 Conclusion.......................................................................................................................... 2 Views of Responsible Official........................................................................................... 2 Restricted Use.................................................................................................................... 3 Schedule 1—Summary of Program Costs............................................................................ 4 Findings and Recommendations........................................................................................... 5 Attachment—County’s Response to Draft Audit Report Steve Westly • California State Controller Ventura County Domestic Violence Treatment Services–Authorization and Case Management Program Audit Report Summary The State Controller’s Office (SCO) audited the claims filed by Ventura County for costs of the legislatively mandated Domestic Violence Treatment Services–Authorization and Case Management Program (Chapters 183 and 184, Statutes of 1992; Chapter 28, Statutes of 1994; and Chapter 641, Statutes of 1995) for the period of July 1, 1999, through June 30, 2002. The last day of fieldwork was February 25, 2005. The county claimed $441,720 for the mandated program. Our audit disclosed that $195,894 is allowable and $245,826 is unallowable. The unallowable costs occurred primarily because the county claimed unsupported costs. The State paid the county $314,847. The amount paid exceeds allowable costs claimed by $118,953. Background Penal Code Sections 273.5, 1000.93 through 1000.95, and 1203.097 (repealed, added, or amended by Chapters 183 and 184, Statutes of 1992; Chapter 28, Statutes of 1994; and Chapter 641, Statutes of 1995) provide that, if an accused is convicted of a domestic violence crime and granted probation as part of sentencing, the defendant is required to successfully complete a batterer’s treatment program as a condition of probation. The Commission on State Mandates (COSM) determined that probation is a penalty for conviction of a crime. The successful completion of probation is required before the unconditional release of the defendant. If the defendant fails to successfully complete a batterer’s treatment program, the legislation subjects the defendant to further sentencing and incarceration. Since the Legislature changed the penalty for domestic violence crimes by changing the requirements for probation, COSM determined that the “crimes and infractions” disclaimer in Government Code Section 17556, subdivision (g), applies. COSM concluded that subdivision (g) applies to those activities required by the legislation that are directly related to enforcement of the statute, which changed the penalty for a crime. On April 23, 1998, COSM determined that Chapters 183 and 184, Statutes of 1992; Chapter 28, Statutes of 1994; and Chapter 641, Statutes of 1995, imposed a state mandate reimbursable under Government Code Section 17561. Parameters and Guidelines establishes the state mandate and defines reimbursement criteria. COSM adopted Parameters and Guidelines on November 30, 1998. In compliance with Government Code Section 17558, the SCO issues claiming instructions for mandated programs, to assist local agencies in claiming reimbursable costs. Steve Westly • California State Controller 1 Ventura County Domestic Violence Treatment Services–Authorization and Case Management Program Objective, We conducted the audit to determine whether costs claimed represent increased costs resulting from the Domestic Violence Treatment Scope, and Services–Authorization and Case Management Program for the period of Methodology July 1, 1999, through June 30, 2002. Our audit scope included, but was not limited to, determining whether costs claimed were supported by appropriate source documents, not funded by another source, and not unreasonable and/or excessive. We conducted the audit according to Government Auditing Standards, issued by the Comptroller General of the United States, and under the authority of Government Code Section 17558.5. We did not audit the county’s financial statements. We limited our audit scope to planning and performing audit procedures necessary to obtain reasonable assurance that costs claimed were allowable for reimbursement. Accordingly, we examined transactions, on a test basis, to determine whether the costs claimed were supported. We limited our review of the county’s internal controls to gaining an understanding of the transaction flow and claim preparation process as necessary to develop appropriate auditing procedures. Conclusion Our audit disclosed instances of noncompliance with the requirements outlined above. These instances are described in the accompanying Summary of Program Costs (Schedule 1) and in the Findings and Recommendations section of this report. For the audit period, Ventura County claimed $441,720 for costs of the Domestic Violence Treatment Services–Authorization and Case Management Program. Our audit disclosed that $195,894 is allowable and $245,826 is unallowable. For fiscal year (FY) 1999-2000, the State paid the county $79,944. Our audit disclosed that $44,990 is allowable. The county should return $34,954 to the State. For FY 2000-01, the State paid the county $173,341. Our audit disclosed that $81,839 is allowable. The county should return $91,502 to the State. For FY 2001-02, the State paid the county $61,562. Our audit disclosed that $69,065 is allowable. The State will pay allowable costs claimed that exceed the amount paid, totaling $7,503, contingent upon available appropriations. Views of We issued a draft audit report on May 6, 2005. Christine L. Cohen, Auditor-Controller, responded by letter dated May 26, 2005 (attached), Responsible agreeing with the audit results. This final audit report includes the Official county’s response. Steve Westly • California State Controller 2 Ventura County Domestic Violence Treatment Services–Authorization and Case Management Program Restricted Use This report is solely for the information and use of Ventura 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. Original Signed By: JEFFREY V. BROWNFIELD Chief, Division of Audits Steve Westly • California State Controller 3 Ventura County Domestic Violence Treatment Services–Authorization and Case Management Program Schedule 1— Summary of Program Costs July 1, 1999, through June 30, 2002 Actual Costs Allowable Audit Cost Elements Claimed per Audit Adjustment Reference 1 July 1, 1999, through June 30, 2000 Salaries and benefits $ 59,306 $ 33,376 $ (25,930) Finding 1 Indirect costs 20,638 11,614 (9,024) Finding 1 Total claimed costs $ 79,944 44,990 $ (34,954) Less amount paid by the State (79,944) Allowable costs claimed in excess of (less than) amount paid $ (34,954) July 1, 2000, through June 30, 2001 Salaries and benefits $ 111,259 $ 56,691 $ (54,568) Finding 1 Indirect costs 62,082 25,148 (36,934) Findings 1, 2 Total claimed costs $ 173,341 81,839 $ (91,502) Less amount paid by the State (173,341) Allowable costs claimed in excess of (less than) amount paid $ (91,502) July 1, 2001, through June 30, 2002 Salaries and benefits $ 129,065 $ 47,153 $ (81,912) Finding 1 Indirect costs 59,370 21,912 (37,458) Findings 1, 2 Total claimed costs $ 188,435 69,065 $ (119,370) Less amount paid by the State (61,562) Allowable costs claimed in excess of (less than) amount paid $ 7,503 Summary: July 1, 1999, through June 30, 2002 Salaries and benefits $ 299,630 $ 137,220 $ (162,410) Indirect costs 142,090 58,674 (83,416) Total claimed costs $ 441,720 195,894 $ (245,826) Less amount paid by the State (314,847) Allowable costs claimed in excess of (less than) amount paid $ (118,953) _________________________ 1 See the Findings and Recommendations section. Steve Westly • California State Controller 4 Ventura County Domestic Violence Treatment Services–Authorization and Case Management Program Findings and Recommendations FINDING 1— The county overstated salaries and benefits by $162,410 during the audit period. The related indirect costs, based on the claimed indirect cost rates Unsupported salaries, for each fiscal year, totaled $77,153. benefits, and related indirect costs The county claimed salaries and benefits for the following components. • Component 1–Administration and Regulation: The development of an approval and annual renewal process for a batterer’s program and processing of initial and annual renewal approvals for vendors. • Component 2–Victim Notification: The probation department’s attempt to notify victims regarding available resources. • Component 3–Murder Assessment: Assessing the future probability of a defendant committing murder. For Component 1, the county did not support $5,395 in claimed salaries and benefits during the audit period. The county did not provide records to substantiate the entire amount for fiscal year (FY) 1999-2000 and FY 2000-01. For FY 2001-02, the county provided records to substantiate $821 of the $4,430 claimed. The unsupported hours claimed were based on estimates of time spent performing mandate activities. The claimed, allowable, and unallowable costs for Component 1 are as follows. Fiscal Year 1999-2000 2000-01 2001-02 Total Administration and Regulation: Allowable costs $ — $ — $ 821 $ 821 Less claimed costs (620) (1,166) (4,430) (6,216) Audit adjustment $ (620) $ (1,166) $ (3,609) $ (5,395) For Components 2 and 3, the county’s claim was based on estimated time spent by probation officers for victim notification and murder assessment. The county did not maintain source documentation to substantiate time spent for these activities. Because the activities under these components are task-specific and repetitive in nature, the county conducted a time study to establish reasonable amounts of time spent performing reimbursable activities. The time study results revealed that the county spent an average of 37.5 minutes for activities related to victim notification and 1 hour and 39 minutes for activities related to murder assessment. Based on the time study results, the county recomputed salary and benefit costs by multiplying the average time spent for each component by employee productive hourly rates and benefit rates. Steve Westly • California State Controller 5 Ventura County Domestic Violence Treatment Services–Authorization and Case Management Program The claimed, allowable, and adjusted costs for Components 2 and 3 are as follows. Fiscal Year 1999-2000 2000-01 2001-02 Total Victim Notification: Allowable costs $ 9,169 $ 15,574 $ 12,728 $ 37,471 Less claimed costs (7,336) (13,762) (19,685) (40,783) Audit adjustment $ 1,833 $ 1,812 $ (6,957) $ (3,312) Murder Assessment: Allowable costs $ 24,207 $ 41,117 $ 33,604 $ 98,928 Less claimed costs (51,350) (96,331) (104,950) (252,631) Audit adjustment $ (27,143) $ (55,214) $ (71,346) $ (153,703) Total unallowable costs are summarized as follows. Fiscal Year 1999-2000 2000-01 2001-02 Total Component 1 $ (620) $ (1,166) $ (3,609) $ (5,395) Component 2 1,833 1,812 (6,957) (3,312) Component 3 (27,143) (55,214) (71,346) (153,703) Subtotal (25,930) (54,568) (81,912) (162,410) Related indirect costs (9,024) (30,449) (37,680) (77,153) Total audit adjustment $ (34,954) $ (85,017) $ (119,592) $ (239,563) Parameters and Guidelines states that all costs claimed should be traceable to source documents that show evidence of the validity of such costs and their relationship to the state-mandated program. Recommendation We recommend the county establish and implement procedures to ensure that all hours claimed are traceable to source documents. County’s Response The county agrees with the finding and recommendation. SCO’s Comment The finding and recommendation remain unchanged. Steve Westly • California State Controller 6 Ventura County Domestic Violence Treatment Services–Authorization and Case Management Program FINDING 2— The county overstated indirect costs by $6,263 for the audit period. Overstated indirect costs For FY 2000-01, the county claimed an indirect cost rate of 55.8% rather than the supported rate of 44.36%, a difference of 11.44%, because it incorrectly calculated employee benefit costs in its indirect cost rate proposal (ICRP). For FY 2001-02, the county claimed an indirect cost rate of 46% rather than the supported rate of 46.47%, a difference of 0.47%, because the county rounded the indirect cost calculation. The overstated indirect costs are summarized as follows. Fiscal Year 2000-01 2001-02 Total Allowable direct costs $ 56,691 $ 47,153 Overstated indirect cost rate × (11.44)% × 0.47% Audit adjustment $ (6,485) $ 222 $ (6,263) Parameters and Guidelines states that all costs claimed should be traceable to source documents that show evidence of the validity of such costs and their relationship to the state-mandated program. Recommendation We recommend the county ensure that claimed indirect costs are properly supported. County’s Response The county agrees with the finding and recommendation. SCO’s Comment The finding and recommendation remain unchanged. Steve Westly • California State Controller 7 Ventura County Domestic Violence Treatment Services–Authorization and Case Management Program Attachment— County’s Response to Draft Audit Report Steve Westly • California State Controller State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, California 94250-5874 http://www.sco.ca.gov S03-MCC-052