Santee School District

SANTEE SCHOOL DISTRICT Revised Audit Report COLLECTIVE BARGAINING PROGRAM Chapter 961, Statutes of 1975, and Chapter 1213, Statutes of 1991 July 1, 2000, through June 30, 2004 J C OHN HIANG California State Controller November 2011 November 23, 2011 Barbara Ryan, President Board of Education Santee School District 9625 Cuyamaca Street Santee, CA 92071-2674 Dear Ms. Ryan: The State Controller’s Office (SCO) audited the costs claimed by the Santee School District for the legislatively mandated Collective Bargaining Program (Chapter 961, Statutes of 1975, and Chapter 1213, Statutes of 1991) for the period of July 1, 2000, through June 30, 2004. The district claimed $1,117,902 for the mandated program. Our audit disclosed that the entire amount is allowable. The State paid the district $378,678. The State will pay allowable costs claimed that exceed the amount paid, totaling $739,224, contingent upon available appropriations. This second revised final report supersedes the previous revised report dated January 31, 2007. We reconsidered the $765,967 finding in light of the September 21, 2010 appellate court decision in Clovis Unified School District et al. v. John Chiang, State Controller. In the prior final audit report, we did not allow $763,155 in costs for two employees that were supported only with annual statements estimating the percentage of staff time without contemporaneous documentation validating the hours claimed. However, the court ruled that the SCO contemporaneous source document rule (CSDR) was invalid prior to the Commission on State Mandates’ (CSM) adoption of the rule in the Collective Bargaining Program’s parameters and guidelines. The CSM adopted the CSDR for this mandate effective July 1, 2005. The remaining finding reported in the previous report, totaling $2,812, is immaterial. Therefore, we reinstated the entire finding, totaling $765,967, identified in the previous report. 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 Barbara Ryan, President -2- November 23, 2011 cc: Patrick Shaw, Ed.D, Superintendent Santee School District Karl Christensen, Assistant Superintendant Business Services, Santee School District Randolph E. Ward, Ed.D. San Diego County Superintendent of Schools San Diego County Office of Education Scott Hannan, Director School Fiscal Services Division California Department of Education Carol Bingham, Director Fiscal Policy Division California Department of Education Thomas Todd, Principal Program Budget Analyst Education Systems Unit Department of Finance Jay Lal, Manager Division of Accounting and Reporting State Controller’s Office Santee School District Collective Bargaining Program Contents Revised Audit Report Summary ............................................................................................................................ 1 Background ........................................................................................................................ 1 Objective, Scope, and Methodology ................................................................................. 2 Conclusion .......................................................................................................................... 2 Views of Responsible Official ........................................................................................... 3 Restricted Use .................................................................................................................... 3 Revised Schedule 1—Summary of Program Costs ............................................................. 4 Santee School District Collective Bargaining Program Revised Audit Report Summary The State Controller’s Office (SCO) audited the costs claimed by the Santee School District for the legislatively mandated Collective Bargaining Program (Chapter 961, Statutes of 1975, and Chapter 1213, Statutes of 1991) for the period of July 1, 2000, through June 30, 2004. The district claimed $1,117,902 for the mandated program. Our audit disclosed that the entire amount is allowable. The State paid the district $378,678. The State will pay allowable costs claimed that exceed the amount paid, totaling $739,224, contingent upon available appropriations. Background In 1975, the State enacted the Rodda Act (Chapter 961, Statutes of 1975), requiring the employer and employee to meet and negotiate, thereby creating a collective bargaining atmosphere for public school employers. The legislation created the Public Employment Relations Board to issue formal interpretations and rulings regarding collective bargaining under the Act. In addition, the legislation established organizational rights of employees and representational rights of employee organizations, and recognized exclusive representatives relating to collective bargaining. On July 17, 1978, the Board of Control (now the Commission on State Mandates [CSM]) determined that the Rodda Act imposed a reimbursable state mandate upon school districts reimbursable under Government Code section 17561. Chapter 1213, Statutes of 1991, added Government Code section 3547.5, requiring school districts to publicly disclose major provisions of a collective bargaining effort before the agreement becomes binding. On August 20, 1998, the CSM determined that this legislation also imposed a state mandate upon school districts reimbursable under Government Code section 17561. Costs of publicly disclosing major provisions of collective bargaining agreements that districts incurred after July 1, 1996, are allowable. Claimants are allowed to claim increased costs. For claim components G1 through G3, increased costs represent the difference between the current-year Rodda Act activities and the base-year Winton Act activities (generally, fiscal year [FY] 1974-75), as adjusted by the implicit price deflator. For components G4 through G7, increased costs represent actual costs incurred. -1- Santee School District Collective Bargaining Program The seven components are as follows. G1–Determining bargaining units and exclusive representatives G2–Election of unit representatives G3–Costs of negotiations G4–Impasse proceedings G5–Collective bargaining agreement disclosure G6–Contract administration G7–Unfair labor practice costs The parameters and guidelines, adopted by the CSM on October 22, 1980 (last amended on January 29, 2010), establish the state mandate and defines criteria for reimbursement. In compliance with Government Code section 17558, the SCO issues claiming instructions for each mandate requiring state reimbursement in order to assist local agencies and school districts in claiming reimbursable costs. Objective, Scope, We conducted the audit in order to determine whether costs claimed represent increased costs resulting from the Collective Bargaining and Methodology Program for the period of July 1, 2000, through June 30, 2004. 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 this performance audit under the authority of Government Code sections 12410, 17558.5, and 17561. We did not audit the district’s financial statements. We conducted the 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 objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. We limited our review of the district’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 no material instances of noncompliance with the requirements outlined above. For the audit period, the Santee School District claimed $1,117,902 for the mandated program. Our audit disclosed that the entire amount is allowable. The State paid the district $378,678. The State will pay allowable costs claimed that exceed the amount paid, totaling $739,224, contingent upon available appropriations. -2- Santee School District Collective Bargaining Program Views of We issued a final audit report on September 29, 2006, and revised it on January 31, 2007, to decrease the finding by $36,478. In this second Responsible revised report, we eliminated the remaining finding of $765,967 in light Official of the appellate court decision in Clovis Unified School District et al. v. John Chiang, State Controller. We notified Karl Christensen, Assistant Superintendent, Business Services, of the change on September 27, 2011. Mr. Christensen concurred with the revision to the report. Restricted Use This report is solely for the information and use of the Santee School District, the San Diego County Office of Education, the California Department of Education, 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 November 23, 2011 -3- Santee School District Collective Bargaining Program Revised Schedule 1— Summary of Program Costs July 1, 2000, through June 30, 2004 Actual Costs Allowable Cost Elements Claimed per Audit July 1, 2000, through June 30, 2001 Components G1 through G3: Salaries and benefits $ 110,750 $ 110,750 Materials and supplies 740 740 Travel 931 931 Contracted services 25,515 25,515 Total increased direct costs, G1 through G3 137,936 137,936 Components G4 through G7: Salaries and benefits 127,593 127,593 Materials and supplies 75 75 Travel 478 478 Contracted services 21,040 21,040 Total increased direct costs, G4 through G7 149,186 149,186 Total increased direct costs, G1 through G7 287,122 287,122 Indirect costs 12,389 12,389 Total program costs $ 299,511 299,511 Less amount paid by the State (143,849) Allowable costs claimed in excess of (less than) amount paid $ 155,662 July 1, 2001, through June 30, 2002 Components G1 through G3: Salaries and benefits $ 84,018 $ 84,018 Materials and supplies 1,282 1,282 Travel 4,586 4,586 Contracted services 6,629 6,629 Total increased direct costs, G1 through G3 96,515 96,515 Components G4 through G7: Salaries and benefits 133,018 133,018 Materials and supplies 2,490 2,490 Travel 1,084 1,084 Contracted services 44,718 44,718 Total increased direct costs, G4 through G7 181,310 181,310 Total increased direct costs, G1 through G7 277,825 277,825 Indirect costs 16,148 16,148 Total program costs $ 293,973 293,973 Less amount paid by the State (89,420) Allowable costs claimed in excess of (less than) amount paid $ 204,553 -4- Santee School District Collective Bargaining Program Revised Schedule 1 (continued) Actual Costs Allowable Cost Elements Claimed per Audit July 1, 2002, through June 30, 2003 Components G1 through G3: Salaries and benefits $ 82,355 $ 82,355 Materials and supplies 74 74 Travel 493 493 Contracted services 16,113 16,113 Total increased direct costs, G1 through G3 99,035 99,035 Components G4 through G7: Salaries and benefits 134,749 134,749 Materials and supplies 1,520 1,520 Travel 183 183 Contracted services 44,483 44,483 Total increased direct costs, G4 through G7 180,935 180,935 Total increased direct costs, G1 through G7 279,970 279,970 Indirect costs 17,265 17,265 Total program costs $ 297,235 297,235 Less amount paid by the State (94,872) Allowable costs claimed in excess of (less than) amount paid $ 202,363 July 1, 2003, through June 30, 2004 Components G1 through G3: Salaries and benefits $ 66,637 $ 66,637 Materials and supplies 152 152 Travel 271 271 Contracted services 9,135 9,135 Total Increased direct costs, G1 through G3 76,195 76,195 Components G4 through G7: Salaries and benefits 123,889 123,889 Materials and supplies 566 566 Travel 204 204 Contracted services 17,280 17,280 Total increased direct costs, G4 through G7 141,939 141,939 Total increased direct costs, G1 through G7 218,134 218,134 Indirect costs 9,049 9,049 Total program costs $ 227,183 227,183 Less amount paid by the State (50,537) Allowable costs claimed in excess of (less than) amount paid $ 176,646 Summary: July 1, 2000, through June 30, 2004 Total increased direct costs, G1 through G7 $ 1,063,051 $ 1,063,051 Indirect costs 54,851 54,851 Total program costs $ 1,117,902 1,117,902 Less amount paid by the State (378,678) Allowable costs claimed in excess of (less than) amount paid $ 739,224 -5- State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250-5874 http://www.sco.ca.gov S04-MCC-071