SCO
San Bernardino County
Peace Officers Procedural Bill of Rights
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SAN BERNARDINO COUNTY
Audit Report
PEACE OFFICERS PROCEDURAL
BILL OF RIGHTS PROGRAM
Chapter 465, Statutes of 1976; Chapters 775, 1173, 1174, and 1178,
Statutes of 1978; Chapter 405, Statutes of 1979; Chapter 1367, Statutes of 1980;
Chapter 994, Statutes of 1982; Chapter 964, Statutes of 1983;
Chapter 1165, Statutes of 1989; and Chapter 675, Statutes of 1990
July 1, 2001, through June 30, 2004
J C
OHN HIANG
California State Controller
June 2007
J C
OHN HIANG
California State Controller
June 29, 2007
Larry Walker
Auditor/Controller-Recorder
San Bernardino County
222 West Hospitality Lane, 4th Floor
San Bernardino, CA 92415-0018
Dear Mr. Walker:
The State Controller’s Office audited the costs claimed by San Bernardino County for the
legislatively mandated Peace Officers Procedural Bill of Rights Program (Chapter 465, Statutes
of 1976; Chapters 775, 1173, 1174, and 1178, Statutes of 1978; Chapter 405, Statutes of 1979;
Chapter 1367, Statutes of 1980; Chapter 994, Statutes of 1982; Chapter 964, Statutes of 1983;
Chapter 1165, Statutes of 1989; and Chapter 675, Statutes of 1990) for the period of July 1,
2001, through June 30, 2004.
The county claimed $1,222,606 for the mandated program. Our audit disclosed that $62,857 is
allowable and $1,159,749 is unallowable. The unallowable costs occurred because the county
claimed costs that were ineligible for reimbursement or were unsupported. The State paid the
county $11. The State will pay allowable costs claimed that exceed the amount paid, totaling
$62,846, contingent upon available appropriations.
If you disagree with the audit findings, you may file an Incorrect Reduction Claim (IRC) with
the Commission on State Mandates (CSM). The IRC must be filed within three years following
the date that we notify you of a claim reduction. You may obtain IRC information at CSM’s
Web site, at www.csm.ca.gov (Guidebook link); you may obtain IRC forms by telephone, at
(916) 323-3562, or by e-mail, at csminfo@csm.ca.gov.
If you have any questions, please contact Jim L. Spano, Chief, Compliance Audits Bureau, at
(916) 323-5849.
Sincerely,
Original signed by
JEFFREY V. BROWNFIELD
Chief, Division of Audits
JVB/jj:vb
Larry Walker -2- June 29, 2007
cc: Bonnie Ter Keurst, Special Projects Manager
Auditor/Controller’s Office
San Bernardino County
Todd Jerue, Program Budget Manager
Corrections and General Government
Department of Finance
Carla Castaneda
Principal Program Budget Analyst
Department of Finance
Paula Higashi, Executive Director
Commission on State Mandates
San Bernardino County Peace Officers Procedural Bill of Rights Program
Contents
Audit Report
Summary............................................................................................................................ 1
Background........................................................................................................................ 1
Objective, Scope, and Methodology................................................................................. 2
Conclusion.......................................................................................................................... 2
Views of Responsible Officials.......................................................................................... 2
Restricted Use.................................................................................................................... 3
Schedule 1—Summary of Program Costs............................................................................ 4
Findings and Recommendations........................................................................................... 5
Attachment—County’s Response to Draft Audit Report
San Bernardino County Peace Officers Procedural Bill of Rights Program
Audit Report
Summary The State Controller’s Office (SCO) audited the costs claimed by
San Bernardino County for the legislatively mandated Peace Officers
Procedural Bill of Rights Program (Chapter 465, Statutes of 1976;
Chapters 775, 1173, 1174, and 1178, Statutes of 1978; Chapter 405,
Statutes of 1979; Chapter 1367, Statutes of 1980; Chapter 994, Statutes
of 1982; Chapter 964, Statutes of 1983; Chapter 1165, Statutes of 1989;
and Chapter 675, Statutes of 1990) for the period of July 1, 2001,
through June 30, 2004. The last day of fieldwork was June 1, 2006.
The county claimed $1,222,606 for the mandated program. Our audit
disclosed that $62,857 is allowable and $1,159,749 is unallowable. The
unallowable costs occurred because the county claimed costs that were
ineligible for reimbursement or were unsupported. The State paid the
county $11. The State will pay allowable costs claimed that exceed the
amount paid, totaling $62,846, contingent upon available appropriations.
Background Chapter 465, Statutes of 1976; Chapters 775, 1173, 1174, and 1178,
Statutes of 1978; Chapter 405, Statutes of 1979; Chapter 1367, Statutes
of 1980; Chapter 994, Statutes of 1982; Chapter 964, Statutes of 1983;
Chapter 1165, Statutes of 1989; and Chapter 675, Statutes of 1990, added
and amended Government Code sections 3300 through 3310. This
legislation, known as the Peace Officers Procedural Bill of Rights
(POBOR) was enacted to ensure stable employer-employee relations and
effective law enforcement services.
This legislation provides procedural protections to peace officers employed
by local agencies and school districts when a peace officer is subject to an
interrogation by the employer, is facing punitive action, or receives an
adverse comment in his or her personnel file. The protections apply to
peace officers classified as permanent employees, peace officers who serve
at the pleasure of the agency and are terminable without cause (“at will”
employees), and peace officers on probation who have not reached
permanent status.
On November 30, 1999, the Commission on State Mandates (CSM)
determined that this legislation imposed a state mandate reimbursable
under Government Code section 17561 and adopted the Statement of
Decision. CSM determined that the peace officer rights law constitutes a
partially reimbursable state mandated program within the meaning of the
California Constitution, Article XIII B, Section 6, and Government Code
section 17514. COSM further defined that activities covered by due
process are not reimbursable.
Parameters and Guidelines establishes the state mandate and defines
reimbursement criteria. CSM adopted the Parameters and Guidelines on
July 27, 2000, and corrected it on August 17, 2000. Parameters and
Guidelines categorized reimbursable activities into the four following
components: Administrative Activities, Administrative Appeal,
Interrogation, and Adverse Comment. In compliance with Government
Code section 17558, the SCO issues claiming instructions for mandated
programs, to assist local agencies in claiming reimbursable costs.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
Objective, We conducted the audit to determine whether costs claimed represent
increased costs resulting from the Peace Officers Procedural Bill of
Scope, and
Rights Program for the period of July 1, 2001, through June 30, 2004.
Methodology
Our audit scope included, but was not limited to, determining whether
costs claimed were supported by appropriate source documents, were not
funded by another source, and were 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 sections 12410, 17558.5, and 17561. 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, San Bernardino County claimed $1,222,606 for
costs of the Peace Officers Procedural Bill of Rights Program. Our audit
disclosed that $62,857 is allowable and $1,159,749 is unallowable. The
State paid the county $11. The State will pay allowable costs claimed
that exceed the amount paid, totaling $62,846, contingent upon available
appropriations.
Views of We issued a draft audit report on April 30, 2007. Bonnie Ter Keurst,
Manager, Reimbursable Projects, of the County Auditor-Controller’s
Responsible
Office, responded by letter dated June 4, 2007 (Attachment), disagreeing
Officials
with the Interrogations component of Finding 1, not commenting on
Finding 2, and agreeing with Finding 3. This final audit report includes
the county’s response.
We held a telephone conversation with representatives from the County
Auditor-Controller’s Office on June 27, 2007 regarding Finding 2. The
Auditor-Controller’s Office staff now agrees with the portion of the audit
finding pertaining to the Probation Department and disagrees with the
portion pertaining to the Sheriff’s Department. However, staff also stated
that it would not dispute the Sheriff’s Department portion of the Finding
due to its immateriality.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
Restricted Use This report is solely for the information and use of San Bernardino
County, 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
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San Bernardino County Peace Officers Procedural Bill of Rights Program
Schedule 1—
Summary of Program Costs
July 1, 2001, through June 30, 2004
Actual Costs Allowable Audit
Cost Elements Claimed per Audit Adjustment Reference 1
July 1, 2001, through June 30, 2002
Salaries and benefits $ 157,815 $ 1,573 $ (156,242) Finding 1
Services and supplies 6,656 2,742 (3,914) Finding 3
Total direct costs 164,471 4,315 (160,156)
Indirect costs 106,996 742 (106,254) Findings 1, 2
Total program costs $ 271,467 5,057 $ (266,410)
Less amount paid by the State —
Allowable costs claimed in excess of (less than) amount paid $ 5,057
July 1, 2002, through June 30, 2003
Salaries and benefits $ 206,732 $ 16,443 $ (190,289) Finding 1
Services and supplies 4,585 1,379 (3,206) Finding 3
Total direct costs 211,317 17,822 (193,495)
Indirect costs 163,892 2,920 (160,972) Findings 1, 2
Total program costs $ 375,209 20,742 $ (354,467)
Less amount paid by the State (11)
Allowable costs claimed in excess of (less than) amount paid $ 20,731
July 1, 2003, through June 30, 2004
Salaries and benefits $ 325,212 $ 30,060 $ (295,152) Finding 1
Services and supplies 5,835 2,925 (2,910) Finding 3
Total direct costs 331,047 32,985 (298,062)
Indirect costs 244,883 4,073 (240,810) Findings 1, 2
Total program costs $ 575,930 37,058 $ (538,872)
Less amount paid by the State —
Allowable costs claimed in excess of (less than) amount paid $ 37,058
Summary: July 1, 2001, through June 30, 2004
Salaries and benefits $ 689,759 $ 48,076 $ (641,683) Finding 1
Services and supplies 17,076 7,046 (10,030) Finding 3
Total direct costs 706,835 55,122 (651,713)
Indirect costs 515,771 7,735 (508,036) Findings 1, 2
Total program costs $ 1,222,606 62,857 $ (1,159,749)
Less amount paid by the State (11)
Allowable costs claimed in excess of (less than) amount paid $ 62,846
Recap by Components
Administrative activities $ 334,626 $ 37,185 $ 297,441
Administrative appeals 68,347 1,443 66,904
Interrogation 819,633 24,229 795,404
Total program costs $ 1,222,606 $ 62,857 $ 1,159,749
_________________________
1 See the Findings and Recommendations section.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
Findings and Recommendations
FINDING 1— The county claimed $689,759 in salary and benefit costs, and $515,771
Unallowable salary in related indirect costs for the audit period. Salary and benefit costs,
and benefit costs, and totaling $641,683, were unallowable because the activities claimed were
not identified in the Parameters and Guidelines as reimbursable costs,
related indirect costs
were not adequately documented, or were due to the overstatement of the
countywide productive hourly rates. Indirect costs from the unallowable
costs total $477,763.
Following is a summary of the claimed, allowable, and unallowable costs
for the audit period.
Allowable Audit
Claimed Costs Costs Adjustment
Salaries and benefits:
Administrative activities:
Sheriff’s Department $ 119,085 $ 1,439 $ (117,646)
Probation Department 67,738 29,406 (38,332)
District Attorney — — —
Total administrative activities 186,823 30,845 (155,978)
Administrative appeals:
Sheriff’s Department 33,631 — (33,631)
Probation Department 6,565 — (6,565)
District Attorney 880 853 (27)
Total administrative appeals 41,076 853 (40,223)
Interrogations:
Sheriff’s Department 115,575 6,513 (109,062)
Probation Department 346,285 9,865 (336,420)
District Attorney — — —
Total interrogations 461,860 16,378 (445,482)
Total salary and benefit costs 689,759 48,076 (641,683)
Related indirect costs 515,771 38,008 (477,763)
Total $ 1,205,530 $ 86,084 $ (1,119,446)
Recap by department:
Sheriff’s Department $ 268,291 $ 7,952 $ (260,339)
Probation Department 420,588 39,271 (381,317)
District Attorney 880 853 (27)
Total $ 689,759 $ 48,076 $ (641,683)
Administrative Activities
For Administrative Activities, the county claimed $186,823 in salary and
benefit costs ($119,085 by the Sheriff’s Department and $67,738 by the
Probation Department) for the audit period. We determined that
$155,978 was unallowable ($117,602 due to overstated Sheriff’s
Department costs, $27,630 due to ineligible Probation Department
activities, $9,794 due to unsupported Probation Department costs, and
$952 in overstated productive hourly rates.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
Parameters and Guidelines allows the following ongoing activities:
• Developing or updating internal policies, procedures, manuals, and
other materials pertaining to the conduct of the mandated activities;
• Attendance at specific training for human resources, law enforcement,
and legal counsel regarding the requirements of the mandate; and
• Updating the status of the Peace Officers Procedural Bill of Rights
(POBOR) cases.
However, the county claimed $32,600 for the Sheriff’s Department
activities of transcribing tape recordings of interrogations under the
administrative activities cost component instead of under the
Interrogations cost component, and $86,485 for the costs of tracking and
updating cases. The department’s claim was based entirely upon
estimates and included 490 hours in the claims for each of the three fiscal
years of the audit period for “transcribing POBOR cases” and 980 hours
for “tracking, updating, and transcribing POBOR cases.” However, it
was determined that the county did incur some reimbursable costs under
both of these activities and the county offered to provide additional
documentation in support of claimed costs. The county completed a time
study to support $1,483 of costs incurred for the reimbursable activity of
updating the status of POBOR cases. See the Interrogations section of
this report for a discussion of the review of the additional documentation
provided for the activity of transcribing POBOR cases.
The county also claimed costs totaling $27,630 for the following
Probation Department activities that are not reimbursable:
• Gathering information for interrogations; and
• Preparing interrogation questions.
The Probation Department also claimed $9,794 for costs incurred during
FY 2001-02 that were not supported by any documentation. Department
representatives stated that the accounting staff members who prepared
the FY 2001-02 claim were no longer with the department and that they
did not leave the source documentation behind. Therefore, the Probation
Department was unable to substantiate any reimbursable activities.
For a discussion of unallowable costs for overstated Probation
Department and Sheriff’s Department productive hourly rates, see the
overstated Productive Hourly Rates section.
Administrative Appeals
For Administrative Appeals, the county claimed $41,076 in salary and
benefit costs ($33,631 by the Sheriff’s Department, $6,565 by the
Probation Department, and $880 by the District Attorney’s Office) for
the audit period. We determined that $40,223 was unallowable ($33,631
for ineligible Sheriff’s Department activities, $6,565 for ineligible
Probation Department activities, and $27 for overstated productive
hourly rates).
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San Bernardino County Peace Officers Procedural Bill of Rights Program
Parameters and Guidelines allows reimbursement for providing the
opportunity for, and the conduct of, an administrative appeal for the
following disciplinary actions.
• Dismissal, demotion, suspension, salary reduction, or written
reprimand received by the Chief of Police whose liberty interest is not
affected (i.e.: the charges supporting a dismissal do not harm the
employee’s reputation or ability to find future employment).
• Transfer of permanent employees for purposes of punishment.
• Denial of promotion for permanent employees for reasons other than
merit.
• Other actions against permanent employees or the Chief of Police that
result in disadvantage, harm, loss, or hardship and impact the career
opportunities of the employee.
However, the county claimed $33,631 for the following Sheriff’s
Department activities that are not reimbursable.
• Board of Chiefs Discipline Hearings—This hearing takes place when
a peace officer brings his/her case before a board for a determination
of the discipline that the officer will receive. This activity occurs
before any disciplinary action is taken against a peace officer and,
therefore, is an unallowable activity.
• Mitigation Hearings—This hearing takes place at the request of a
peace officer after the officer has received a notice of proposed
discipline. The mitigation hearing process is an internal procedure
developed by the county to afford additional protection for their peace
officers. According to the procedures in place, an officer has three
days after a disciplinary action has been imposed to request a
mitigation hearing. An assistant sheriff conducts the hearing with the
officer. The assistant sheriff has authority only to reduce the
discipline imposed, but not to reduce the disciplinary action entirely.
Once this final hearing has taken place and a “final” disciplinary
action has been determined, the officer can then file a formal
administrative appeal. A Sheriff’s Department representative also
stated that most of the mitigation hearings that have been held were
requested by permanent peace officers who received a notice of
termination. Accordingly, we determined that mitigation hearings are
an unallowable activity.
• Skelly Hearings—A Skelly hearing is a due process requirement that
predates the test claim legislation that is the basis of this mandated
program and is, therefore, unallowable. A Sheriff’s Department
representative also stated that most of the permanent peace officers
that have requested a Skelly hearing had already been terminated.
The county also claimed $6,565 for the unallowable Probation
Department activity of conducting interviews.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
A Probation Department representative also stated that most of the
permanent peace officers who filed an administrative appeal have
already received notices of termination, which is also an unallowable
activity.
For a discussion of unallowable costs for overstated Probation
Department and Sheriff’s Department productive hourly rates, see the
Overstated Productive Hourly Rates section.
Interrogations
For Interrogations, the county claimed $461,860 in salary and benefit
costs ($115,575 by the Sheriff’s Department and $346,285 by the
Probation Department) for the audit period. We determined that
$445,482 was unallowable ($336,116 due to ineligible Probation
Department costs, $108,859 due to ineligible Sheriff’s Department costs,
and $507 for overstated productive hourly rates).
Parameters and Guidelines states that specific identified interrogation
activities are reimbursable when a peace officer is under investigation or
becomes a witness to an incident under investigation and is subjected to
an interrogation by the commanding officer or any other member of the
employing public safety department during off-duty time if the
interrogation could lead to dismissal, demotion, suspension, reduction in
salary, written reprimand, or transfer for purposes of punishment.
Section IV(C) identifies reimbursable activities under compensation and
timing of an interrogation, interrogation notice, tape recording of an
interrogation, and documents provided to the employee.
Parameters and Guidelines, Section IV(C), states that claimants are not
eligible for interrogation activities when an interrogation of a peace
officer is in the normal course of duty. It further states:
When required by the seriousness of the investigation, compensating
the peace officer for interrogations occurring during off-duty time in
accordance with regular department procedures.
In reference to compensation and timing of the interrogation pursuant to
Government Code section 3303, subdivision (a), the Commission on
State Mandates Final Staff Analysis to the adopted Parameters and
Guidelines states:
It does not require local agencies to investigate an allegation, prepare for
the interrogation, conduct the interrogation, and review the responses
given by the officers and/or witnesses, as implied by the claimant’s
proposed language. Certainly, local agencies were performing these
investigative activities before POBOR was enacted.
Parameters and Guidelines, Section IV(C), also states that tape
recording the interrogation, when the peace officer employee records the
interrogation, is reimbursable.
However, the county claimed $336,116 for the unallowable Probation
Department activity of conducting interrogations during regular duty
hours. A department spokesman also noted that its payroll system did not
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San Bernardino County Peace Officers Procedural Bill of Rights Program
have the capability to link any overtime costs paid to a particular
POBOR case, if any overtime costs were incurred. The spokesman
confirmed that the majority of interrogations occurred during regular
duty hours.
The county also originally claimed $115,575 for the unallowable
Sheriff’s Department activity of conducting interrogations during regular
duty hours. A Sheriff’s Department spokesman confirmed that the
majority of interrogations occurred during regular duty hours. However,
it was noted that the department’s payroll system did record a POBOR
case number and had the ability to provide a direct link to overtime
charges incurred. The county offered to provide additional information in
support of claimed costs and performed an analysis of overtime costs
incurred by peace officers per fiscal year for time spent in interrogations.
Allowable costs per this analysis totaled $2,533 for the audit period.
As noted in the section on administrative activities, the county claimed
estimated costs totaling $32,600 for the Sheriff’s Department activities
of transcribing tape recordings of interrogations under the
Administrative Activities cost component instead of the Interrogations
cost component. The costs incurred for transcription of a tape recording
is only reimbursable when the peace officer under interrogation also
records the interrogation. Discussions with a Sheriff’s Department
spokesperson revealed that the only time when this occurred was when
a union representative was present at an interrogation session, because it
is the policy of the San Bernardino County Safety Employees’ Benefit
Association (SEBA) to record all interrogations for represented
members, be they accused peace officers or peace officer witnesses. The
county offered to provide additional information in support of claimed
costs for this activity.
First, the county provided information detailing when a union
representative was present at interrogation sessions and how long the
sessions lasted. Next, the county performed a time study in the current
year to determine the amount of time it took a county clerical employee
to transcribe a page of taped interrogation. The time study was
performed; it was determined that it took 4 minutes and 40 seconds to
transcribe one page of interrogation. We reviewed the supporting data
and determined that the average time appeared reasonable. We then
determined how many minutes of eligible interrogations occurred each
fiscal year (those that included a union representative). This analysis
disclosed that $4,183 was allowable for transcription costs. Therefore,
allowable costs for the interrogations cost component totaled $6,716 and
unallowable costs totaled $108,859 for the audit period.
Adverse Comment
The county did not claim any costs under this cost component during
the audit period.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
Overstated Productive Hourly Rates
The county overstated salary and benefit costs by $1,486 ($1,212 for the
Probation Department, $247 for the Sheriff’s Department, and $27 for
the District Attorney’s Office) because it overstated its productive hourly
rates. The county calculates a countywide productive hourly rate for all
of its employees. In its calculation, the county deducted 52 hours for
estimated administration and meeting time to compute the number of
annual productive hours. However, for FY 2002-03, the county
incorrectly subtracted 47 hours instead of 52 hours for estimated
administration and meeting time. Subsequently, as productive hours were
understated, the productive hourly rates were overstated.
The SCO’s claiming instructions include guidelines for preparing
mandated cost claims. The instructions do not identify time spent on
administration and meetings as deductions (excludable components)
from total hours when productive hours are computed. In addition, the
time excluded by the county for administration and meetings was
estimated and not based on any actual time records associated with this
activity. However, if a county chooses to deduct time for administration
activities and/or meetings in calculating countywide productive hours, its
accounting system must separately identify the actual time associated
with these two components.
Summary
Following is a summary of the audit adjustments for salaries and
benefits.
Fiscal Year
2001-02 2002-03 2003-04 Total
Salaries and benefits:
Sheriff’s Department $ (85,508) $ (83,248) $ (91,583) $ (260,339)
Probation Department (70,734) (107,014) (203,569) (381,317)
District Attorney’s Office — (27) — (27)
Subtotal (156,242) (190,289) (295,152) (641,683)
Related indirect costs (106,065) (150,356) (221,342) (477,763)
Audit adjustment $(262,307) $(340,645) $(516,494) $ (1,119,446)
Parameters and Guidelines for POBOR, adopted by the CSM on July 27,
2000, defines the criteria for procedural protection for the county’s peace
officers.
Parameters and Guidelines, Section IV, Reimbursable Activities,
outlines specific tasks that are deemed above the due process clause. The
Statement of Decision on which Parameters and Guidelines was based
noted that due process activities were not reimbursable.
Parameters and Guidelines, Section VA1, Salaries and Benefits, requires
that the claimants identify the employees and/or show the classification
of the employees involved, describe the reimbursable activities
performed, and specify the actual time devoted to each reimbursable
activity by each employee.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
Parameters and Guidelines, Section VI, Supporting Data, requires that
all costs be traceable to source documents showing evidence of the
validity of such costs and their relationship to the state-mandated
program.
Recommendation
We recommend that the county establish and implement procedures to
ensure that claimed costs include only eligible costs and that claimed
costs are based on actual costs that are properly supported.
County’s Response
We continue to disagree with the State Controller’s interpretation of the
Parameters and Guidelines (P&Gs). Our position is that the P&Gs must
reflect and support the Statement of Decision which included as
reimbursable activities: “Conducting an interrogation of a peace officer
while the peace officer is on duty, or compensating the peace officer for
off-duty time in accordance with regular department procedures.” A
second statement reads “Conducting the investigation when the peace
officer is on duty, and compensating the peace officer for off-duty time
in accordance with regular department procedures are new
requirements not previously imposed on local agencies and school
districts.” We would also note the Pasadena Police Officers
Association v. City of Pasadena Supreme Court Case [(1990) 51 Cal.
3d 564] in finding “To maintain the public’s confidence in its police
force, a law enforcement agency must promptly, thoroughly, and fairly
investigate allegations of officer misconduct.” We would submit that
the cost for conducting interrogations during regular time are
reimbursable, as is preparation/investigation for those interrogations.
SCO’s Comment
The finding and recommendation remain unchanged.
The county responded only to the audit finding related to the cost
component of Interrogations. The county did not respond to the audit
findings related to the cost components of Administrative Activities,
Administrative Appeal, and Adverse Comment.
The State Controller’s interpretation of the Parameters and Guidelines
for the cost component of Interrogations is consistent with that of the
Commission on State Mandates (CSM). At a CSM hearing held on
December 4, 2006, one of the agenda items (item #13) concerned
Requests to Amend Parameters and Guidelines for the Peace Officer
Procedural Bill of Rights Program. During testimony for this item, a
representative from the county testified that a request had been submitted
for an amendment to clarify what was adopted in the original Statement
of Decision. The county representative disagreed with the CSM staff’s
conclusion regarding interrogation because it was inconsistent with the
original Statement of Decision, and she urged the Commission to
reconsider the amendments. The Chief Legal Counsel for the CSM
responded that some statements in the original Statement of Decision
were being taken out of context. She clarified that the test claim
legislation does not mandate local agencies to interrogate an officer and
it does not mandate local agencies to investigate. Rather, these activities
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San Bernardino County Peace Officers Procedural Bill of Rights Program
are based on local policy and regulation. She maintained that the COSM
made those clarifications in the Statement of Decision on reconsideration
and explained that the COSM is bound by those findings.
FINDING 2— The county overstated indirect cost rates by $30,273 during the audit
Unallowable indirect period ($189 in FY 2001-02, $10,616 in FY 2002-03, and $19,468 in
FY 2003-04).
cost rates
The Probation Department overstated its indirect cost rates by 68.42%,
74.87%, and 71.09% during FY 2001-02, FY 2002-03, and FY 2003-04,
respectively. This resulted in overstated indirect costs totaling $28,427
during the audit period ($10,079 in FY 2002-03 and $18,348 in
FY 2003-04). During the course of the audit, it was noted that certain
salary and benefit costs that were claimed as 100% direct within the
county’s mandate claims were also included in the county’s indirect cost
pools. Accordingly, we noted that the indirect cost rates would need to be
re-calculated after eliminating these directly claimed salary and benefit
costs from the department’s indirect cost rate plans (ICRPs).
Probation Department representatives requested that the department be
allowed to claim the standard default indirect cost rate of 10% for all
three years of the audit period. We complied, noting that for FY 2001-02,
all indirect costs claimed were already found to be unallowable within
audit Finding 1 (unallowable salaries and benefits). This resulted in
additional unallowable indirect costs totaling $274 for FY 2002-03 and
$619 for FY 2003-04 because the 10% default rate can only be applied
against direct salaries instead of salaries and benefits.
The Sheriff’s Department overstated its indirect cost rates by 12.04%,
12.31%, and 11.79% during FY 2001-02, FY 2002-03, and FY 2003-04,
respectively. This resulted in overstated indirect costs totaling $952
during the audit period ($189 in FY 2001-02, $262 in FY 2002-03, and
$501 in FY 2003-04). This occurred because the county was unable to
support the manner in which it originally classified services and supplies
costs as direct and indirect. We reviewed the department’s Cost Center
Listing with department representatives to determine whether cost
centers were either direct or indirect. The county then generated reports
showing services and supplies costs by cost center for FY 2002-03 and
FY 2003-04, from which the correct total amount of direct, unallowable,
and indirect costs for services and supplies was determined. We replaced
the original services and supplies amounts within the department’s ICRP
with these amounts and revised the resulting indirect cost rates
accordingly. For FY 2001-02, the county was unable to generate a report
showing services and supplies costs by cost center. For this fiscal year,
we determined “weighted average” amounts of direct, unallowable, and
indirect costs using verified percentages from FY 2002-03 and
FY 2003-04. We recalculated the department’s original ICRP for
FY 2001-02 using the revised allocated services and supplies amounts
and revised the rate accordingly.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
The following is a summary of the misstated indirect costs.
Fiscal Year
2001-02 2002-03 2003-04 Total
Sheriff’s Department
Allowable indirect cost rate 1 47.13% 59.18% 49.65%
Claimed indirect cost rate (59.17)% (71.49)% (61.44)%
Overstated indirect cost rate (12.04)% (12.31)% (11.79)%
Allowable salaries and benefits × $ 1,573 ×$ 2,128 ×$ 4,251
Audit adjustment, Sheriff’s Dept. $ (189) $ (262) $ (501) $ (952)
Probation Department
Allowable indirect cost rate 1 10.00% 10.00% 10.00%
Claimed indirect cost rate (78.42)% (84.87)% (81.09)%
Overstated indirect cost rate (68.42)% (74.87)% (71.09)%
Allowable salaries and benefits $ — $13,462 $25,809
Subtotal — (10,079) (18,348)
Less 10% of allowable benefits — (275) (619)
Audit adjustment, Probation Dept. $ — $ (10,354) $ (18,967) (29,321)
Total audit adjustment $ (189) $ (10,616) $ (19,468) $ (30,273)
_________________
1 The 10% default rate is only applied to direct labor, excluding fringe benefits.
However, the county’s allowable direct salary and benefit costs are computed using a
countywide productive hourly rate that includes both salaries and benefits. An analysis
of Probation Department salaries and benefits for FY 2002-03 and FY 2003-04
determined that allowable benefit costs totaled $2,750 and $6,185, respectively.
Accordingly, in addition to overclaimed costs due to overstatement of the indirect cost
rate, an adjustment is also made for 10% of allowable fringe benefit amounts. A related
adjustment for the Sheriff’s Department was not material.
Parameters and Guidelines states that indirect costs are defined as costs
which are incurred for a common or joint purpose that benefit more than
one program and are not directly assignable to a particular department or
program without efforts disproportionate to the result achieved. The
guidelines also state that compensation for indirect costs is eligible for
reimbursement utilizing the procedure provided in the OMB Circular
A-87, Cost Principles for State, Local, and Indian Tribal Government.
Claimants have the option of using 10% of direct labor, excluding fringe
benefits, or preparing an ICRP for the department if the indirect cost rate
claimed exceeds 10%. 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 Circular A-87.
Recommendation
We recommend that the county ensure that the indirect cost calculations
are consistent with the methodology outlined in OMB Circular A-87,
Cost Principles for State, Local, and Indian Tribal Governments.
County’s Response
Our indirect cost methodology, along with examples, has been
submitted to your offices for review. Our process was submitted in
response to an audit question early on, concerning the development of
individual ICRPs for each department. We have not reached a
resolution on this item. As a result, we do not feel a response is
appropriate at this time.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
SCO’s Comment
The finding and recommendation remain unchanged.
We held a telephone conversation with representatives from the County
Auditor-Controller’s Office on June 27, 2007, concerning any remaining
issues with this finding. The county stated that the only unresolved issue
also related to another SCO audit ongoing in the county that had been
resolved with the audit manager for the other audit.
The Auditor-Controller’s Office staff now agrees with the Probation
Department portion of the finding, but disagrees with the Sheriff’s
Department portion of the finding. However, staff also stated that it
would not dispute the Sheriff’s Department portion of the finding due to
its immateriality. Staff also stated that Sheriff’s Department employees,
who are not well versed on OMB Circular A-87 issues, made the
determination of which services and supplies cost centers were direct and
indirect, without subsequent concurrence from the Auditor-Controller’s
Office.
FINDING 3— The county claimed costs for services and supplies totaling $10,030
Ineligible services and during the audit period ($9,044 under the administrative activities cost
supplies component and $986 under the interrogations cost component) that are
unallowable ($6,152 for costs that were overstated and $3,878 for costs
that are not reimbursable under the mandated program).
Specifically, the Sheriff’s Department overstated by $6,152 the cost of
leasing a computer to track and update POBOR cases ($2,152 in
FY 2001-02, $2,000 in FY 2002-03, and $2,000 in FY 2003-04). This
occurred because the department claimed $2,366 for the computer lease
costs during each year of the audit period, a total of $7,098. However, a
review of the supporting invoices revealed that the county actually paid
$946 for computer lease costs, a difference of $6,152.
The Sheriff’s Department also incorrectly claimed $6,664 for the
purchase of audiocassette tapes under the Administrative Activities cost
component instead of under the Interrogations cost component. These
costs were reclassified under the Interrogations cost component.
However, we determined that $2,892 of these costs were unallowable
because the tapes were used to record interrogations when a peace officer
or peace officer witness did not also record the interrogation. A Sheriff’s
Department spokesperson revealed that the only time that a peace officer
or peace officer witness recorded an interrogation was when a union
representative was present at the interrogation session. A Sheriff’s
Department spokesperson stated that it is the policy of the
San Bernardino County Safety Employees’ Benefit Association (SEBA)
to record all interrogations for represented members, be they accused
peace officers or a peace officer witnesses. The county provided
additional information indicating when a union representative was
present at interrogation sessions. We used this information to determine
reimbursable costs for audiocassette tapes.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
The Probation Department claimed $986 during the audit period for
interrogation supplies, although department representatives stated that
they could not substantiate any of the supply costs. Accordingly, these
costs are unallowable.
Following is a summary of the audit adjustments.
Fiscal Year
2001-02 2002-03 2003-04 Total
Sheriff’s Department:
Computer lease costs $ (2,152) $ (2,000) $ (2,000) $ (6,152)
Audiocassette tapes (1,762) (884) (246) (2,892)
Subtotal (3,914) (2,884) (2,246) (9,044)
Probation Department:
Interrogation supplies — (322) (664) (986)
Audit adjustment $ (3,914) $ (3,206) $ (2,910) $ (10,030)
Parameters and Guidelines, Section VI, Supporting Data, states that all
costs claimed should be traceable to source documentation that show
evidence of validity and their relationship to the state-mandated program.
Parameters and Guidelines, Section IV(C), Interrogations, states that
tape recording the interrogation when the peace officer employee records
the interrogation is reimbursable. Included in the foregoing is the cost of
the tape.
Recommendation
We recommend that the county ensure that claimed costs include only
eligible costs, which are based on actual direct expenditures that
occurred as a result of performing mandated activities.
County’s Response
The county agreed with this finding.
SCO’s Comment
The Finding and Recommendation remain unchanged.
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San Bernardino County Peace Officers Procedural Bill of Rights Program
Attachment—
County’s Response to
Draft Audit Report
State Controller’s Office
Division of Audits
Post Office Box 942850
Sacramento, California 94250-5874
http://www.sco.ca.gov
S06-MCC-023