Santa Barbara County

SANTA BARBARA COUNTY Audit Report PERMANENT ABSENT VOTERS PROGRAM Chapter 1422, Statutes of 1982 July 1, 2002, through June 30, 2005 J C OHN HIANG California State Controller September 2007 J C OHN HIANG California State Controller September 12, 2007 The Honorable Joseph E. Holland Clerk-Recorder-Assessor Santa Barbara County P.O. Box 159 Santa Barbara, CA 93102-0159 Dear Mr. Holland: The State Controller’s Office audited the costs claimed by Santa Barbara County for the legislatively mandated Permanent Absent Voters Program (Chapter 1422, Statutes of 1982) for the period of July 1, 2002, through June 30, 2005. The county claimed $100,709 for the mandated program. Our audit disclosed that $50,726 is allowable and $49,983 is unallowable. The unallowable costs occurred because the county claimed salary and benefit costs that it did not support with actual time records. The State paid the county $45,138. The State will pay allowable costs claimed that exceed the amount paid, totaling $5,591, 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, Mandated Cost Audits Bureau, at (916) 323-5849. Sincerely, Original signed by JEFFREY V. BROWNFIELD Chief, Division of Audits JVB/vb The Honorable Joseph E. Holland -2- September 12, 2007 cc: The Honorable Robert W. Geis Auditor-Controller Santa Barbara County Rose Rodarte, Fiscal Manager Office of the Clerk-Recorder-Assessor Santa Barbara County Todd Jerue, Program Budget Manager Corrections and General Government Department of Finance Santa Barbara County Permanent Absent Voters Program Contents Audit Report Summary............................................................................................................................ 1 Background........................................................................................................................ 1 Objective, Scope, and Methodology................................................................................. 1 Conclusion.......................................................................................................................... 2 Views of Responsible Official........................................................................................... 2 Restricted Use.................................................................................................................... 2 Schedule 1—Summary of Program Costs............................................................................ 3 Findings and Recommendations........................................................................................... 4 Attachment—County’s Response to Draft Audit Report Santa Barbara County Permanent Absent Voters Program Audit Report Summary The State Controller’s Office (SCO) audited the costs claimed by Santa Barbara County for the legislatively mandated Permanent Absent Voters Program (Chapter 1422, Statutes of 1982) for the period of July 1, 2002, through June 30, 2005. The last day of fieldwork was January 10, 2007. The county claimed $100,709 for the mandated program. Our audit disclosed that $50,726 is allowable and $49,983 is unallowable. The unallowable costs occurred because the county claimed salary and benefit costs that it did not support with actual time records. The State paid the county $45,135. The State will pay allowable costs claimed that exceed the amount paid, totaling $5,591, contingent upon available appropriations. Background Chapter 1422, Statutes of 1982, added Election Code sections 1450 through 1456 (subsequently renumbered to Election Code sections 3200 through 3206 by Chapter 920, Statutes of 1994). The law requires counties to establish a permanent absent voters program. This legislation requires county clerks to: • Establish and maintain a list of permanent absent voters who provide evidence of physical disability; • Mail absent voter ballots to such voters for each election in which they are eligible to vote; and • Delete from the permanent absent voter list any person who fails to return an executed absent voter ballot for any statewide district primary or general election. On September 21, 1989, the Commission on State Mandates (CSM) determined that Chapter 1422, Statutes of 1982, imposed a state mandate reimbursable under Government Code section 17561. The program’s parameters and guidelines establish the state mandate and defines reimbursement criteria. CSM adopted the parameters and guidelines on March 27, 1990. In compliance with Government Code section 17558, the SCO issues mandated program claiming instructions to assist local agencies in claiming reimbursable costs. Objective, We conducted the audit to determine whether costs claimed represent increased costs resulting from the Permanent Absent Voters Program for Scope, and the period of July 1, 2002, through June 30, 2005. 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. -1- Santa Barbara County Permanent Absent Voters Program 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, Santa Barbara County claimed $100,709 for costs of the Permanent Absent Voters Program. Our audit disclosed that $50,726 is allowable and $49,983 is unallowable. The State paid the county $45,135. The State will pay allowable costs claimed that exceed the amount paid, totaling $5,591, contingent upon available appropriations. Views of We issued a draft audit report on June 29, 2007. Rose Rodarte, Fiscal Manager, responded by letter dated July 20, 2007 (Attachment), agreeing Responsible with the audit results except for Finding 1. This final audit report Official includes the county’s response. Restricted Use This report is solely for the information and use of Santa Barbara 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 -2- Santa Barbara County Permanent Absent Voters Program Schedule 1— Summary of Program Costs July 1, 2002, through June 30, 2005 Actual Costs Allowable Audit Cost Elements Claimed per Audit Adjustment Reference 1 July 1, 2002, through June 30, 2003 Salaries and benefits $ 27,852 $ — $ (27,852) Findings 1, 2 Indirect costs 22,131 — (22,131) Findings 1, 2 Total program costs $ 49,983 — $ (49,983) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ — July 1, 2003, through June 30, 2004 Salaries and benefits $ 1,029 $ 1,029 $ — Indirect costs 4,562 4,562 — Total program costs $ 5,591 5,591 $ — Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ 5,591 July 1, 2004, through June 30, 2005 Salaries and benefits $ 5,903 $ 5,903 $ — Indirect costs 39,232 39,232 — Total program costs $ 45,135 45,135 $ — Less amount paid by the State (45,135) Allowable costs claimed in excess of (less than) amount paid $ — Summary: July 1, 2002, through June 30, 2005 Salaries and benefits $ 34,784 $ 6,932 $ (27,852) Findings 1, 2 Indirect costs 65,925 43,794 (22,131) Findings 1, 2 Total program costs $ 100,709 50,726 $ (49,983) Less amount paid by the State (45,135) Allowable costs claimed in excess of (less than) amount paid $ 5,591 _________________________ 1 See the Findings and Recommendations section. -3- Santa Barbara County Permanent Absent Voters Program Findings and Recommendations FINDING 1— The county claimed salary and benefit costs totaling $27,852 that it did Unallowable salary not support with actual time records. The related indirect costs total $22,131. and benefit costs, and related indirect costs The county maintained a time reporting system that included a charge code (PAV) for time spent performing Permanent Absent Voters Program mandated activities. However, county employees did not use the PAV charge code during fiscal year (FY) 2002-03. As a result, the county claimed 90% of salary and benefit costs reported under charge code ELE. The county did not provide any documentation to support the 90% allocation. In addition, the county’s Activity Table Report identifies charge code ELE as elections administration. It does not identify any Permanent Absent Voters Program mandated activities associated with this charge code. The parameters and guidelines require the county to report the actual number of hours devoted to each mandated activity. In addition, the parameters and guidelines state, “For auditing purposes, all costs claimed must be traceable to source documents or worksheets that show evidence of and the validity of such costs.” Recommendation We recommend that the county claim only those costs that its actual time records support. The county should ensure that employees use the existing time reporting system to properly account for time they spend performing Permanent Absent Voters Program mandated activities. County’s Response Section VII of the Parameters and Guidelines (P&G’s) state that all costs claimed must be traceable to a source document or worksheets that show evidence of and the validity of such costs. The P&G’s do not state that actual time records are required to determine validity of costs claimed. While the County did not keep actual time records on this task, the County did establish a reasonable methodology to determine the costs involved, including examining other source documents. The County’s source documents included reports that evidence the change in the number of permanent absentee voter registrations from 1,460 to 46,782. From this large change, we reasonably concluded that a certain amount of staff time was involved to update the permanent absent voter file. The methodology used included determining the timeframe in which these registrations took place; generating labor reports to identify staff who worked on these permanent absentee voter registrations; then concluded a percentage of staff time devoted to the task. The County feels this was a reasonable methodology in the absence of actual time records. -4- Santa Barbara County Permanent Absent Voters Program SCO’s Comment Our finding and recommendation are unchanged. Regarding appropriate supporting documentation for salary and benefit costs claimed, the parameters and guidelines require claimants to describe the mandated function performed and specify the actual number of hours devoted to each function. The claimant may claim the average number of hours devoted to each function if the claim is supported by a documented time study. The county maintained a time reporting system that included a charge code (PAV) for time spent performing Permanent Absent Voters Program mandated activities. However, county employees did not use the PAV charge code during fiscal year (FY) 2002-03. Therefore, the county has not provided the referenced “labor reports [that] identify staff who worked on these permanent absentee voter registrations.” In addition, the county provided no documentation to support the percentage of time allocated from its “elections administration” charge code to the Permanent Absent Voters Program. We also noted that the county’s FY 2003-04 Permanent Absent Voters Program claim states that the county claimed labor costs applicable to maintaining the permanent absentee voter file on the county’s Absentee Ballots Program claim. The county could not determine whether it followed a similar procedure for its FY 2002-03 Permanent Absent Voters Program and Absentee Ballots Program claims. FINDING 2— The county claimed duplicate benefit costs totaling $4,749 in FY Duplicate benefit 2002-03. The related indirect costs total $3,773. costs claimed The county’s records show that the salary costs it claimed also included benefit costs. However, the county claimed benefit costs again, as a separate item on its mandated program reimbursement claim forms. As a result, the county claimed duplicate costs. In Finding 1, we concluded that all FY 2002-03 salary and benefit costs claimed are unallowable. Therefore, there are no additional unallowable costs in this finding. The parameters and guidelines state, “For auditing purposes, all costs claimed must be traceable to source documents or worksheets that show evidence of and the validity of such costs.” Recommendation We recommend that the county claim only those costs that its expenditure records support. County’s Response The county agreed with the audit finding. -5- Santa Barbara County Permanent Absent Voters 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-043