San Francisco City and County

CITY AND COUNTY OF SAN FRANCISCO Audit Report SEXUALLY VIOLENT PREDATOR PROGRAM Chapter 762 and 763, Statutes of 1995, and Chapter 4, Statutes of 1996 July 1, 2000, through June 30, 2005 J C OHN HIANG California State Controller November 2007 J C OHN HIANG California State Controller November 15, 2007 Edward M. Harrington, Controller City and County of San Francisco 1 Dr. Carlton B. Goodlett Place, Room 316 San Francisco, CA 94102-4694 Dear Mr. Harrington: The State Controller’s Office audited the costs claimed by the City and County of San Francisco for the legislatively mandated Sexually Violent Predator Program (Chapter 762 and 763, Statutes of 1995, and Chapter 4, Statutes of 1996) for the period of July 1, 2000, through June 30, 2005. The city and county claimed $2,434,929 for the mandated program. Our audit disclosed that $2,340,045 is allowable and $94,884 is unallowable. The unallowable costs occurred primarily because the city and county claimed ineligible, unsupported, or overstated costs. The State paid the city and county $961,389. Allowable costs claimed exceed the amount paid by $1,378,656. 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/sk:wm cc: Todd Rydstrom, Director of Analysis and Budget City and County of San Francisco Linda Yeung, City Projects Director City and County of San Francisco Todd Jerue, Program Budget Manager Corrections and General Government Department of Finance City and County of San Francisco Sexually Violent Predator Program Contents Audit Report Summary............................................................................................................................ 1 Background........................................................................................................................ 1 Objective, Scope, and Methodology................................................................................. 1 Conclusion.......................................................................................................................... 2 Views of Responsible Officials.......................................................................................... 3 Restricted Use.................................................................................................................... 3 Schedule 1—Summary of Program Costs............................................................................ 4 Findings and Recommendations........................................................................................... 7 Attachment—District’s Response to Draft Audit Report City and County of San Francisco Sexually Violent Predator Program Audit Report Summary The State Controller’s Office (SCO) audited the costs claimed by the City and County of San Francisco for the legislatively mandated Sexually Violent Predator Program (Chapter 762 and 763, Statutes of 1995, and Chapter 4, Statues of 1996) for the period of July 1, 2000, through June 30, 2005. The last day of fieldwork was October 11, 2007. The city and county claimed $2,434,929 for the mandated program. Our audit disclosed that $2,340,045 is allowable and $94,884 is unallowable. The unallowable costs occurred primarily because the city and county claimed ineligible, unsupported, or overstated costs. The State paid the city and county $961,389. Allowable costs claimed exceed the amount paid by $1,378,656. Background Chapters 762 and 763, Statutes of 1995, and Chapter 4, Statutes of 1996 added Welfare and Institution Code sections 6250 and 6600 through 6608. The legislation established new civil commitment procedures for the continued detention and treatment of sexually violent offenders following their completion of a prison term for certain sex-related offenses. Before detention and treatment are imposed, the county attorney is required to file a petition for civil commitment. A trial is then conducted to determine if the inmate is a sexually violent predator beyond a reasonable doubt. If the inmate accused of being a sexually violent predator is indigent, the test claim legislation requires counties to provide the indigent with the assistance of counsel and experts necessary to prepare the defense. On June 25, 1998, the Commission on State Mandates (CSM) determined that Chapters 762 and 763, Statutes of 1995, and Chapter 4, Statutes of 1996, imposed a reimbursable state mandate under Government Code section 17561. The program’s parameters and guidelines establish the state mandate and define reimbursement criteria. CSM adopted the parameters and guidelines on September 24, 1998. In compliance with Government Code section 17558, the SCO issues claiming instructions, to assist local agencies in claiming mandated program reimbursable costs. Objective, Scope, We conducted the audit to determine whether costs claimed represent increased costs resulting from the legislatively mandated Sexually and Methodology Violent Predators Program for the period of July 1, 2000, through June 30, 2005. 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- City and County of San Francisco Sexually Violent Predator 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 city and 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 city and 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, the City and County of San Francisco claimed $2,434,929 for costs of the Sexually Violent Predators Program. Our audit disclosed that $2,340,045 is allowable and $94,884 is unallowable. For the fiscal year (FY) 2000-01 claim, the State paid the city and county $338,819. Our audit disclosed that $315,812 is allowable. The State will offset $23,007 from other mandated program payments due the city and county. Alternatively, the city and county may remit this amount to the State. For the FY 2001-02 claim, the State paid the city and county $157,099. Our audit disclosed that $472,676 is allowable. The State will pay allowable costs claimed that exceed the amount paid, totaling $315,577 contingent upon available appropriations. For the FY 2002-03 claim, the State did not pay the city and county. Our audit disclosed that $583,869 is allowable. The State will pay allowable costs claimed, totaling $583,869, contingent upon available appropriations. For the FY 2003-04 claim, the State did not pay the city and county. Our audit disclosed that $517,255 is allowable. The State will pay allowable costs claimed, totaling $517,255, contingent upon available appropriations. For the FY 2004-05 claim, the State paid the city and county $465,471. Our audit disclosed that $450,433 is allowable. The State will offset $15,038 from other mandated program payments due the city and county. Alternatively, the city and county may remit this amount to the State. -2- City and County of San Francisco Sexually Violent Predator Program Views of We issued a draft audit report on October 24, 2007. Edward M. Harrington, Controller, responded by letter dated November 5, 2007 Responsible (Attachment), agreeing with the audit results. This final audit report Officials includes the city and county’s response. Restricted Use This report is solely for the information and use of the City and County of San Francisco, 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 -3- City and County of San Francisco Sexually Violent Predator Program Schedule 1— Summary of Program Costs July 1, 2000, through June 30, 2005 Actual Costs Allowable Audit Cost Elements Claimed per Audit Adjustment Reference 1 July 1, 2000, through June 30, 2001 District Attorney: Salaries and benefits $ 88,800 $ 87,024 $ (1,776) Finding 1 Indirect costs 37,939 28,022 (9,917) Findings 1, 3 Subtotal 126,739 115,046 (11,693) Public Defender: Services and supplies 25,250 25,250 — Sheriff: Salaries and benefits 87 87 — Services and supplies 186,720 175,406 (11,314) Finding 2 Indirect costs 23 23 — Subtotal 186,830 175,516 (11,314) Total program costs $ 338,819 315,812 $ (23,007) Less amount paid by the State (338,819) Allowable costs claimed in excess of (less than) amount paid $ (23,007) July 1, 2001, through June 30, 2002 District Attorney: Salaries and benefits $ 111,939 $ 118,046 $ 6,107 Finding 1 Indirect costs 25,575 26,442 867 Findings 1, 3 Subtotal 137,514 144,488 6,974 Public Defender Services and supplies 116,310 116,310 — Sheriff: Salaries and benefits 185 185 — Services and supplies 225,505 211,643 (13,862) Finding 2 Indirect costs 50 50 — Subtotal 225,740 211,878 (13,862) Total program costs $ 479,564 472,676 $ (6,888) Less amount paid by the State (157,099) Allowable costs claimed in excess of (less than) amount paid $ 315,577 -4- City and County of San Francisco Sexually Violent Predator Program Schedule 1 (continued) Actual Costs Allowable Audit Cost Elements Claimed per Audit Adjustment Reference 1 July 1, 2002, through June 30, 2003 District Attorney: Salaries and benefits $ 117,173 $ 113,235 $ (3,938) Finding 1 Indirect costs 29,962 28,953 (1,009) Finding 1 Subtotal 147,135 142,188 (4,947) Public Defender: Services and supplies 140,806 140,806 — Sheriff: Services and supplies 300,875 300,875 — Total program costs $ 588,816 583,869 $ (4,947) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ 583,869 July 1, 2003, through June 30, 2004 District Attorney: Salaries and benefits $ 43,863 $ 42,328 $ (1,535) Finding 1 Indirect costs 12,628 12,187 (441) Findings 1, 3 Subtotal 56,491 54,515 (1,976) Public Defender: Services and supplies 130,460 120,648 (9,812) Finding 2 Sheriff: Services and supplies 375,308 342,092 (33,216) Finding 2 Total program costs $ 562,259 517,255 $ (45,004) Less amount paid by the State — Allowable costs claimed in excess of (less than) amount paid $ 517,255 July 1, 2004, through June 30, 2005 District Attorney: Salaries and benefits $ 99,099 $ 95,193 $ (3,906) Finding 1 Indirect costs 15,410 14,803 (607) Findings 1, 3 Subtotal 114,509 109,996 (4,513) Public Defender: Services and supplies 129,600 129,600 — -5- City and County of San Francisco Sexually Violent Predator Program Schedule 1 (continued) Actual Costs Allowable Audit Cost Elements Claimed per Audit Adjustment Reference 1 July 1, 2004, through June 30, 2005 (continued) Sheriff: Salaries and benefits 6,484 2,778 (3,706) Finding 1 Services and supplies 211,182 205,391 (5,791) Finding 2 Travel and training 1,896 1,896 — Indirect costs 1,800 772 (1,028) Findings 1, 3 Subtotal 221,362 210,837 (10,525) Total program costs $ 465,471 450,433 $ (15,038) Less amount paid by the State (465,471) Allowable costs claimed in excess of (less than) amount paid $ (15,038) Summary: July 1, 2000, through June 30, 2005 Total direct costs $ 2,311,542 $ 2,228,793 $ (82,749) Indirect costs 123,387 111,252 (12,135) Total program costs $ 2,434,929 $ 2,340,045 $ (94,884) Less amount paid by the State (961,389) Allowable costs claimed in excess of (less than) amount paid $ 1,378,656 _________________________ 1 See the Findings and Recommendations section. -6- City and County of San Francisco Sexually Violent Predator Program Findings and Recommendations FINDING 1— For the audit period, the city and county overstated employee salaries and benefits totaling $8,754. The related indirect cost, based on the Overstated salaries, allowable indirect cost rate for each fiscal year, is $2,290. benefits, and related indirect costs The following table summarizes the audit adjustment. Fiscal Year 2001-02 2001-02 2002-03 2003-04 2004-05 Total Salaries and benefits: Insufficient documentation $ (1,776) $ — $ — $ — $ — $ (1,776) Non-current payroll data — 6,107 (3,938) (794) — 1,375 Mathematical errors — — — (741) (7,612) (8,353) Total salaries and benefits adjustment (1,776) 6,107 (3,938) (1,535) (7,612) (8,754) Related indirect costs (572) 1,367 (1,009) (441) (1,635) (2,290) Audit adjustment $ (2,348) $ 7,474 $ (4,947) $ (1,976) $ (9,247) $ (11,044) Insufficient Supporting Documentation For FY 2000-01, the city and county overstated employee salaries and benefits totaling $1,776, due to its failure to provide adequate supporting documentation—specifically attorney timesheets that would readily support the attorney hours on the claim. As a result, we applied an average error rate of 2%, calculated based on the average unallowable costs, for the other four years, FY 2001-02 through FY 2004-05, to determine the total unallowable costs for FY 2000-01. Use of Non-Current Payroll Data to Prepare the Claims The city and county understated $1,375 in employee salaries and benefits, due to its use of non-current employee payroll information to prepare the claims. The city and county did not use the current employee payroll information to compute the employee salary and benefit rate claimed. This adjustment is attributed mainly to the timing difference of available employee payroll information at the time the claims were filed. Mathematical Errors The city and county overstated $8,353 in employee salaries and benefits due to mathematical errors. The errors occurred because the city and county claimed an incorrect productive hourly rate for an attorney ($741), overstated the number of trips a sheriff made to transport defendants between prison facilities ($3,705), and double-claimed attorney timesheet hours ($3,907). -7- City and County of San Francisco Sexually Violent Predator Program The program’s parameters and guidelines, Section V.A.1, state that claimed costs must: Describe the reimbursable activities performed and specify the actual time devoted to each reimbursable activity by each employee, productive hourly rate and related fringe benefits. The parameters and guidelines, section VI, state: For audit purposes, all costs claimed shall be traceable to source documents (e.g., employee time records . . .) that show evidence of the validity of such costs and their relationship to the state mandated program. Recommendation We recommend that the city and county develop and implement an adequate accounting and reporting system to ensure that all costs claimed are allowable and properly supported. City and County’s Response The city and county agrees with the finding. FINDING 2— The city and county overstated services and supplies costs totaling Overstated services $73,995 for the audit period. and supplies costs The following table summarizes the audit adjustment. Fiscal Year 2000-01 2001-02 2003-04 2004-05 Total Accounting error $ — $ — $ (9,812) $ — $ (9,812) Use of incorrect daily jail rate (11,314) (13,862) (33,216) (5,791) (64,183) Audit adjustment $ (11,314) $ (13,862) $ (43,028) $ (5,791) $ (73,995) Accounting Error The city and county claimed overstated services and supplies costs totaling $9,812, due to its failure to update/reflect on the claim a cancelled SVP-related check payment in the city and county’s accounting system. Improper Daily Jail Rates for Prisoner-Housing Costs The city and county overstated prisoner-housing costs totaling $64,183 because it did not consistently apply the proper daily jail rates to the appropriate fiscal years of the claims. -8- City and County of San Francisco Sexually Violent Predator Program The parameters and guidelines, section VI, state: For audit purposes, all costs claimed shall be traceable to source documents (e.g., employee time records . . .) that show evidence of the validity of such costs and their relationship to the state mandated program. Recommendation We recommend that the city and county develop and implement an effective control and reporting system to ensure that all claimed costs are properly accounted for, and adequately supported. City and County’s Response The city and county agrees with the finding. FINDING 3— The city and county overstated indirect costs totaling $9,845, due to a Overstated indirect mathematical error that occurred during the claim preparation process. costs The city and county erroneously transposed overstated direct salary figures on the claim forms and used them to calculate indirect costs. The following table summarizes the unallowable indirect costs. Fiscal Year 2000-01 2001-02 Total Mathematical error $ (9,345) $ (500) $ (9,845) Audit adjustment $ (9345) $ (500) $ (9,845) The parameters and guidelines, section VI, state: For audit purposes, all costs claimed shall be traceable to source documents (e.g., employee time records . . .) that show evidence of the validity of such costs and their relationship to the state mandated program. Recommendation We recommend that the city and county develop an accounting system control that will ensure the accuracy and propriety of the claimed costs. City and County’s Response The city and county agrees with the finding. -9- City and County of San Francisco Sexually Violent Predator Program Attachment— District’s Response to Draft Audit Report State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250-5874 http://www.sco.ca.gov S06-MCC-015