SCO
Montebello Unified School District
Collective Bargaining
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MONTEBELLO UNIFIED
SCHOOL DISTRICT
Audit Report
COLLECTIVE BARGAINING PROGRAM
Chapter 961, Statutes of 1975,
and Chapter 1213 Statutes of 1991
July 1, 2002, through June 30, 2005
J C
OHN HIANG
California State Controller
June 2007
J C
OHN HIANG
California State Controller
June 29, 2007
Edward Velasquez, Superintendent
Montebello Unified School District
123 South Montebello Boulevard
Montebello, CA 90640
Dear Mr. Velasquez:
The State Controller’s Office audited the costs claimed by the Montebello 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, 2002, through June 30, 2005.
The district claimed and was paid $786,757 for the mandated program. Our audit disclosed that
$441,269 is allowable and $345,488 is unallowable. The unallowable costs occurred because the
district claimed ineligible and unsupported costs. The State will offset $345,488 from other
mandated program payments due the district. Alternatively, the district may remit this amount to
the State.
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/jj:vb
Edward Velasquez, Superintendent -2- June 29, 2007
cc: Glenn Sheppard, Assistant Superintendent
Business Services
Montebello Unified School District
Darline Robles, Ph.D., County Superintendent of Schools
Los Angeles County Office of Education
Scott Hannan, Director
School Fiscal Services Division
California Department of Education
Arlene Matsuura, Education Fiscal Services Consultant
School Fiscal Services Division
California Department of Education
Gerry Shelton, Director
Fiscal and Administrative Services Division
California Department of Education
Jeannie Oropeza, Program Budget Manager
Education Systems Unit
Department of Finance
Montebello Unified School District Collective Bargaining Program
Contents
Audit Report
Summary............................................................................................................................ 1
Background........................................................................................................................ 1
Objective, Scope, and Methodology................................................................................. 2
Conclusion.......................................................................................................................... 2
Views of Responsible Official........................................................................................... 3
Restricted Use.................................................................................................................... 3
Schedule 1—Summary of Program Costs............................................................................ 4
Findings and Recommendations........................................................................................... 6
Attachment—District’s Response to Draft Audit Report
Montebello Unified School District Collective Bargaining Program
Audit Report
Summary The State Controller’s Office (SCO) audited the costs claimed by the
Montebello Unified 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, 2002, through
June 30, 2005. The last day of fieldwork was June 21, 2006.
The district claimed and was paid $786,757 for the mandated program.
Our audit disclosed that $441,269 is allowable and $345,488 is
unallowable. The unallowable costs occurred because the district claimed
ineligible and unsupported costs. The State will offset 345,488 from
other mandated program payments due the district. Alternatively, the
district may remit this amount to the State.
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 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, 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 1974-75), as adjusted by the implicit price
deflator. For components G4 through G7, increased costs represent
actual costs incurred.
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Montebello Unified 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
Parameters and Guidelines establishes the state mandate and defines
reimbursement criteria. CSM adopted the Parameters and Guidelines on
October 22, 1980, and last amended it on January 27, 2000. In
compliance with Government Code section 17558, the SCO issues
claiming instructions for mandated programs, to assist local agencies and
school districts in claiming reimbursable costs.
Objective, We conducted the audit to determine whether costs claimed represent
increased costs resulting from the Collective Bargaining Program for the
Scope, and
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.
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 district’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 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 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 Montebello Unified School District claimed
$786,757 for costs of the Collective Bargaining Program. Our audit
disclosed that $441,269 is allowable and $345,488 is unallowable.
For fiscal year (FY) 2002-03 claim, the State paid the district $197,849.
Our audit disclosed that $117,387 is allowable. The State will offset
$80,462 from other mandated program payments due the district.
Alternatively, the district may remit this amount to the State.
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Montebello Unified School District Collective Bargaining Program
For the FY 2003-04 claim, the State paid the district $266,813. Our audit
disclosed that $108,382 is allowable. The State will offset $158,431 from
other mandated program payments due the district. Alternatively, the
district may remit this amount to the State.
For the FY 2004-05 claim, the State paid the district $322,095. Our audit
disclosed that $215,500 is allowable. The State will offset $106,595 from
other mandated program payments due the district. Alternatively, the
district may remit this amount to the State.
Views of We issued a draft audit report on March 16, 2007. Peter Wong,
Controller, responded by letters dated April 2, 2007, and April 27, 2007
Responsible
(Attachments), partially agreeing with Findings 1 and 4, disagreeing with
Official
Finding 2, and agreeing with Finding 3. This final audit report includes
the district’s response. We did not include the district’s attachments
because they contained payroll-related information.
Based on a review of corroborating evidence provided by the district’s
Controller and after obtaining legal input, we revised Findings 2 and 4.
Consequently, the findings reported in the draft report were reduced by
$103,680, from $449,168 to $345,488. We discussed the revisions with
the district’s Controller on May 11, 2007. With the exception of $5,427
claimed for negotiation preparation in Finding 4, the district’s Controller
concurred with the revisions to Findings 2 and 4.
Restricted Use This report is solely for the information and use of the Montebello
Unified School District, the Los Angeles 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
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Montebello Unified School District Collective Bargaining 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
Components activities G1 through G3:
Salaries and benefits $ 85,753 $ 46,190 $ (39,563) Findings 1, 2
Materials and supplies 6,129 6,129 —
Contracted services 87,418 62,280 (25,138) Finding 4
Increased direct costs, G1 through G3 179,300 114,599 (64,701)
Components activities G4 through G7:
Salaries and benefits 240 — (240) Findings 1
Contracted services 13,399 — (13,399) Finding 4
Increased direct costs, G4 through G7 13,639 — (13,639)
Total increased direct costs, G1 through G7 192,939 114,599 (78,340)
Indirect costs 4,910 2,788 (2,122) Findings 1, 2
Total costs $ 197,849 117,387 $ (80,462)
Less amount paid by the State (197,849)
Allowable costs claimed in excess of (less than) amount paid $ (80,462)
July 1, 2003, through June 30, 2004
Components activities G1 through G3:
Salaries and benefits $ 162,472 $ 30,761 $ (131,711) Findings 1, 2
Materials and supplies 25,193 4,800 (20,393) Findings 2, 3
Contracted services 69,428 69,428 — Finding 4
Increased direct costs, G1 through G3 257,093 104,989 (152,104)
Components activities G4 through G7:
Contracted services 1,913 1,913 —
Total increased direct costs, G1 through G7 259,006 106,902 (152,104)
Indirect costs 7,807 1,480 (6,327) Findings 1, 2, 3
Total costs $ 266,813 108,382 $ (158,431)
Less amount paid by the State (266,813)
Allowable costs claimed in excess of (less than) amount paid $ (158,431)
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Montebello Unified School District Collective Bargaining Program
Schedule 1 (continued)
Actual Costs Allowable Audit
Cost Elements Claimed per Audit Adjustment Reference 1
July 1, 2004, through June 30, 2005
Components activities G1 through G3:
Salaries and benefits $ 166,068 $ 80,639 $ (85,429) Findings 1, 2
Materials and supplies 11,447 5,907 (5,540) Finding 3
Contracted services 135,478 124,067 (11,411) Finding 4
Increased direct costs, G1 through G3 312,993 210,613 (102,380)
Components activities G4 through G7:
Salaries and benefits 178 — (178) Finding 1
Contracted services 1,052 1,052 —
Increased direct costs, G4 through G7 1,230 1,052 (178)
Total increased direct costs, G1 through G7 314,223 211,665 (102,558)
Indirect costs 7,872 3,835 (4,037) Findings 1, 2, 3
Total costs $ 322,095 215,500 $ (106,595)
Less amount paid by the State (322,095)
Allowable costs claimed in excess of (less than) amount paid $ (106,595)
Summary: July 1, 2002, through June 30, 2005
Components activities G1 through G3:
Salaries and benefits $ 414,293 $ 157,590 $ (256,703) Findings 1, 2
Materials and supplies 42,769 16,836 (25,933) Findings 2, 3
Contracted services 292,324 255,775 (36,549) Finding 4
Increased direct costs, G1 through G3 749,386 430,201 (319,185)
Components activities G4 through G7:
Salaries and benefits 418 — (418) Finding 1
Contracted services 16,364 2,965 (13,399) Finding 4
Increased direct costs, G4 through G7 16,782 2,965 (13,817)
Total increased direct costs, G1 through G7 766,168 433,166 (333,002)
Indirect costs 20,589 8,103 (12,486) Findings 1, 2
Total costs $ 786,757 441,269 $ (345,488)
Less amount paid by the State (786,757)
Allowable costs claimed in excess of (less than) amount paid $ (345,488)
_________________________
1 See the Findings and Recommendations section.
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Montebello Unified School District Collective Bargaining Program
Findings and Recommendations
FINDING 1— The district claimed $250,694 in unallowable salary and benefit costs for
the audit period. The related indirect costs, based on claimed indirect
Unallowable salary
cost rates, totaled $11,071.
and benefit costs, and
related indirect costs
The district claimed $158,042 in unsupported salaries and benefits for
negotiations, agreement disclosure, and contract administrations–$11,982
for fiscal year (FY) 2002-03, $108,418 for FY 2003-04, and $37,642 for
FY 2004-05. The district did not provide any documentation—such as
individual activity log sheets, meeting sign-in sheets, or time records—to
support 189 hours for FY 2002-03, 1,359.5 hours for FY 2003-04, and
639.5 hours for FY 2004-05. Without other corroborating evidence, we
could not ascertain whether the costs claimed reflect actual mandated
activities that the district performed.
The district also claimed $92,652 in ineligible salaries and benefits
related to negotiation preparation: $23,661 for FY 2002-03, $23,293 for
FY 2003-04, and $45,698 for FY 2004-05. The district claimed 397.5
hours for FY 2002-03, 280.5 hours for FY 2003-04, and 680 hours for
FY 2004-05. The district claimed ½ hour of negotiation preparation for
every one hour of actual negotiations. These costs were also
unsupported. The district did not provide any documentation to validate
the costs claimed. The district provided no documentation showing that
the preparation time claimed related to negotiation planning sessions,
which are allowable costs.
Following is a summary of the unallowable salaries and benefits.
Fiscal Year
2002-03 2003-04 2004-05 Total
Salaries and benefits
Component G3:
Cost of negotiation $ (35,403) $ (131,711) $ (83,162) $ (250,276)
Component G5:
Agreement disclosure (240) — — (240)
Component G6:
Contract administration — — (178) (178)
Total salaries and benefits (35,643) (131,711) (83,340) (250,694)
Related indirect cost (1,900) (5,479) (3,692) (11,071)
Audit adjustment $ (37,543) $ (137,190) $ (87,032) $ (261,765)
Parameters and Guidelines states, “Public schools employers will be
reimbursed for the ‘increased costs’ incurred as a result of compliance
with the mandate.”
Parameters and Guidelines requires the district to “show the
classification of the employees involved, amount of time spent, and their
hourly rate.”
Parameters and Guidelines requires the district to “Show the costs of
salaries and benefits for employer representatives participating in
negotiations” and “Show the costs of employer representatives and
employees participating in negotiation planning sessions.”
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Montebello Unified School District Collective Bargaining Program
Recommendation
We recommend that the district ensure that all claimed costs are
supported by appropriate documentation. Documentation should identify
the mandated functions performed and support the actual number of
hours devoted to each function.
District’s Response
The District accepts the audit finding disallowing $11,982, $108,418
and $37,642 for negotiation in 2002-03, 2003-04 and 2004-05
respectively.
However, the District appeals the disallowance of $23,661 in 2002-03,
$23,293 in 2003-04 and $45,698 in 2004-05 for negotiation preparation
as unallowable activity. During the exit audit conference, the
explanation given to the District was that the Controller Office’s
interpretation of negotiation preparation as an activity that members
representing both the management and labor groups should be present.
Since all our preparation activities involved only the management
members and did not meet the aforementioned Controller Office
interpretation, all amount claimed are disallowed.
In the Parameters and Guidelines of Collective Bargaining Mandated
Cost, it states clearly that the costs of salaries and benefits for employer
representatives and employees participating in negotiation planning
sessions are reimbursable. There are no languages suggesting that the
presence of members representing both the labor groups and
management are required for planning purposes.
The District feels strongly the rationale for disallowing these claims
contradicted the Parameters and Guidelines and is therefore appealing
the finding.
SCO’s Comment
The finding remains unchanged.
We agree that reimbursable costs of employees participating in
negotiation planning sessions relate to members representing
management. As explained in the draft audit report, the district claimed
½ hour of negotiation preparation for every one hour of actual
negotiations. This activity is not identified in the Parameters and
Guidelines as reimbursable. The district provided no documentation
showing that the preparation time claimed related to reimbursable
negotiation planning sessions costs.
FINDING 2— The district claimed $24,660 in unallowable costs for substitute teachers.
The related indirect costs totaled $1,080.
Unallowable
substitute teacher
For FY 2002-03, the district claimed $4,160 in unsupported costs for
costs and related
substitute teachers. The district claimed 111.5 days for substitute
indirect costs
teachers, but provided documentation that only 80 days related to
negotiations sessions. Therefore, we allowed only the 80 days.
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Montebello Unified School District Collective Bargaining Program
For FY 2003-04, the district claimed $18,233 in unsupported costs for
substitute teachers, reported under Materials and Supplies. The district
incorrectly computed the costs of substitute teachers by multiplying the
daily pay rate for substitutes by 164 half days worked rather than by 82
full days worked. The district pays substitute teachers a daily rate
regardless of hours worked; one full day worked by a substitute teacher
equates to two half days. Of the 82 full days worked, the district did not
provide any documentation for 75 days showing that the costs claimed
related to substitutes for release time of collective bargaining
representatives to attend negotiation meetings. The district provided no
source documents, such as negotiation sign-in sheets, time records, or
individual activity log sheets.
For FY 2004-05, the district claimed $2,267 in unsupported costs for
substitute teachers. The district incorrectly computed the cost of
substitute teachers by multiplying the daily pay rate by the number of
substitute teachers, including substitutes used so that non-collective
bargaining representatives could attend meetings unrelated to
negotiations. As noted above, the district pays substitute teachers a daily
rate regardless of the hours worked. We computed the allowable costs of
substitute teachers based on the daily pay rate, the number of negotiation
sessions days as supported by sign-in sheets, the number of negotiation-
session days as supported by sign-in sheets, and the number of collective
bargaining representatives who attended the sessions.
Following is a summary of the unallowable substitute teacher costs and
related indirect costs.
Fiscal Year
2002-03 2003-04 2004-05 Total
Component G3:
Cost of negotiation
Salaries and benefits $ (4,160) $ — $ (2,267) $ (6,427)
Materials and supplies — (18,233) — (18,233)
Subtotal (4,160) (18,233) (2,267) (24,660)
Related indirect costs (222) (758) (100) (1,080)
Audit adjustment $ (4,382) $ (18,991) $ (2,367) $ (25,740)
Parameters and Guidelines states, “Public schools employers will be
reimbursed for the ‘increased costs’ incurred as a result of compliance
with the mandate.”
Parameters and Guidelines requires the district to “show the
classification of the employees involved, amount of time spent, and their
hourly rate.”
Parameters and Guidelines requires the district to “Show the costs of
salaries and benefits for employer representatives participating in
negotiations” and “Show the costs of employer representatives and
employees participating in negotiation planning sessions.”
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Montebello Unified School District Collective Bargaining Program
Recommendation
We recommend that the district ensure that all claimed costs are
supported by appropriate documentation. Documentation should identify
the mandated functions performed and support the actual number of
hours devoted to each function.
District’s Response
For fiscal year 2002-03, the District claimed 111.5 days of substitute
teacher costs for negotiation in the amount of $15,205. The audit
disallowed 76.5 days, or $10,280 for the lacking of supporting
documents. Attached please find two separate schedules of the
Montebello Teachers Association (MTA) negotiation. There were 16
negotiation sessions between October 24, 2002 and November 20,
2002. Also attached is the “Absence Report by Site” generated from the
substitute teacher finder system, which listed the dates of absences for
the five MTA negotiation team members (Irving Bartikofsky, Gloria
Estrada, Teresa Salas-Ortiz, Kenneth Seto and Dianne Stevens) and
their substitute teachers. These documents together should substantiate
80 out of the 111.5 days claimed. The District is appealing the
disallowed substitute teacher costs should only be 31.5 days or $4,160
($130/day) plus related indirect costs.
For fiscal year 2003-04, the District claimed 164 days of substitute
costs for negotiation in the amount of $20,053. The audit disallowed all
of it. Attached are the negotiation schedule and the Absence Report by
Site for 2003-04, they substantiate 15 days of substitute teacher costs
for the five members (Dianne Stevens, Gloria Estrada Garza, Irving
Bartikofsky, Elizabeth Gasca and Kenneth Seto) of the MTA
negotiation team, or $1,950. The District is appealing to reduce the
disallowance by this amount.
For fiscal year 2004-05, the District is able to substantiate 7 days of
substitute teacher costs for the MTA negotiation team (Terry Salas
Ortiz, Brian Stevens, Walter Lowery and Dolores Rego), using the
Absence Report by Site and the negotiation schedule (attached), or
$910.00. The District is appealing the audit adjustment be reduced by
this amount.
SCO’s Comment
Upon reviewing other corroborating evidence provided by the district’s
Controller, we concur with his comments. Consequently, based on our
analysis, we reduced the finding by $11,466, from $37,206 to $25,740.
In a May 11, 2007, telephone conversation, the district’s Controller
concurred with the revised finding.
FINDING 3— The district claimed $7,700 in unallowable materials and supplies costs
Unallowable materials for the audit period. The related indirect costs totaled $335.
and supplies costs
For FY 2004-05, the district claimed $5,540 in ineligible travel costs
under “Materials and Supplies.” The district claimed $3,000 for lodging
costs incurred for negotiation training sessions, but was able to support
costs of only $1,440, an overstatement of $1,560. Of the $1,440, $1,320
is ineligible for reimbursement because it was for the lodging costs for
union collective bargaining representatives. Only specified training
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Montebello Unified School District Collective Bargaining Program
sessions held for supervisory and management personnel are
reimbursable.
For FY 2003-04 and FY 2004-05, the district claimed $2,160 in
unsupported printing costs. The district provided calculations showing
how the costs were derived, but did not provide any documentation to
support the figures used. Without source documents, we were unable to
verify the validity of costs claimed.
Following is a summary of the unallowable materials and supplies.
Fiscal Year
2003-04 2004-05 Total
Materials and supplies
Component G3:
Cost of negotiation $ (2,160) $ (5,540) $ (7,700)
Related indirect costs (90) (245) (335)
Audit adjustment $ (2,250) $ (5,785) $ (8,035)
Parameters and Guidelines states, “Public schools employers will be
reimbursed for the ‘increased costs’ incurred as a result of compliance
with the mandate.”
Parameters and Guidelines states, “Only expenditures which can be
identified as a direct cost as a result of the mandate can be claimed.”
Parameters and Guidelines states, “Reasonable costs incurred for a
reasonable number of training sessions held for supervisory and
management personnel on contract administration/interpretation of the
negotiated contract are reimbursable.”
Recommendation
We recommend that the district develop and implement an accounting
system to ensure that all claimed costs are properly supported.
District’s Response
The District accepts the finding and the unallowable amount of $8,035.
SCO’s Comment
The district agrees with the finding.
FINDING 4— The district claimed unsupported contracted services costs of $49,948 for
Unallowable contracted the audit period.
services costs
For FY 2002-03, the district claimed $13,399 in unsupported contracted
services related to contract administration. The district did not provide
any documentation, such as attorney invoices, to support 99.25 hours of
attorneys’ time.
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Montebello Unified School District Collective Bargaining Program
For FY 2004-05, the district claimed $5,539 in unsupported contracted
services costs related to negotiation. The district claimed 18.9 hours of
contracted service costs at $135 per hour instead of the actual cost rate of
$84 per hour, an overcharge of $945. The district also claimed 12.9 hours
of contracted services, totaling $1,742, that were provided free to the
district. In addition, the district claimed a contractor-services cost of
$2,852 twice.
For FY 2004-05, the district claimed $445 in ineligible negotiation costs
related to payments to contractors for lodging at rates exceeding the state
per diem lodging rate of $84 per night.
For FY 2002-03 and FY 2004-05, the district claimed $30,565 in
ineligible contracted services costs for negotiation preparation: 186.21
hours totaling $25,138 for FY 2002-03 and 40.2 hours totaling $5,427 for
FY 2004-05. The district provided no documentation showing that the
preparation time claimed related to negotiation planning sessions, which
are allowable costs.
Following is a summary of the unallowable contracted-services costs.
Fiscal Year
2002-03 2004-05 Total
Contract services
Component G3:
Cost of negotiation $ (25,138) $ (11,411) $ (36,549)
Component G6:
Contract administration (13,399) — (13,399)
Audit adjustment $ (38,537) $ (11,411) $ (49,948)
Parameters and Guidelines states, “Public schools employers will be
reimbursed for the ‘increased costs’ incurred as a result of compliance
with the mandate.”
Parameters and Guidelines requires that the district to “Separately show
the names of professionals or consultants, specify the functions the
consultant performed relative to the mandate, specify the length of
appointment, and provide itemized costs for such service.”
Parameters and Guidelines requires the district to “Show the costs of
salaries and benefits for employer representatives participating in
negotiations. Contracted services will be reimbursed. Costs for maximum
of five public school employer representatives per unit, per negotiation
session will be reimbursed.”
Parameters and Guidelines requires the district to “Show the costs of
employer representatives and employees participating in negotiation
planning sessions.”
Parameters and Guidelines states that “travel expenses for consultants
and experts (including attorneys) hired by the claimant shall not be
reimbursed in an amount higher than that received by State employees,
as established under Title 2, Div. 2, Section 700ff, CAC.”
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Montebello Unified School District Collective Bargaining Program
Recommendation
We recommend that the district ensure that all claimed costs are
supported by appropriate documentation. Documentation should identify
the mandated functions performed and support the actual number of
hours devoted to each function. In addition we recommend that the
district ensure that hourly rates claimed for contracted services are
reimbursable under the mandate.
District’s Response
In its first response, the district indicated the following.
In order for the District to determine the accuracy of the audit findings,
please provide additional information detailing the $25,138
disallowance in 2002-03 and $16,505 ($5,539, $945, $1,742, $2,852
and $5,427) in 2004-05.
The District accepts the finding disallowing the $13,399 of legal
services in 2002-03 for contract administration.
The District does not concur with the disallowance of $92,214, or 50%
of facilitator service costs we incurred for the audit period. We disagree
with the rationale that the costs of the services should be shared evenly
between the bargaining unit and the employer.
The Parameters and Guidelines on Collective Bargaining Mandate
states that school employers will be reimbursed for the increased costs
incurred as a result of compliance with the mandate. There is no
reference that the state only reimburses 50% of the contract-facilitator
costs. We feel strongly that the auditor’s interpretation is contradicting
the published guidelines.
In its subsequent response, the district indicated the following.
The District accepts the disallowance of $25,138 of consultant cost
associated with negotiation in 2002-03.
For 2004-05, the District is appealing the disallowance of $2,700 for
the rationale that the costs should be shared between the labor group
and the employer. The said cost is for consulting services for regular
negotiation sessions. There are no languages in the Parameters and
Guidelines suggesting that the cost shall be share between employer
and labor Group.
The District also appeals the finding disallowing $5,427 for legal
services provided for preparation of negotiation. The finding is again
based on the interpretation that planning for negotiation requires the
presence of representatives from both the employer and the labor
group. Again, the District feels this contradict the Parameters and
Guidelines and the finding is not warranted.
The District accepts the finding of disallowing the remaining $8,378.
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Montebello Unified School District Collective Bargaining Program
SCO’s Comment
Based on further review of the issues and after obtaining legal input, we
concur with the district Controller’s comments, except for the $5,427
amount relating to negotiation preparation. Consequently, we reduced the
finding by $92,214, from $142,162 to $49,948. We discussed the revised
finding with the district’s Controller on May 11, 2007. With the
exception of the $5,427 claimed for negotiation preparation, the district’s
Controller concurred with the revised finding.
We agree that reimbursable costs of employees participating in
negotiation planning sessions relate to members representing
management. As explained in the draft audit report, the district claimed
40.2 hours of contracted negotiation preparation time, totaling $5,427.
This activity is not identified in the Parameters and Guidelines as
reimbursable. The district provided no documentation showing that the
preparation time claimed related to reimbursable negotiation planning
sessions costs.
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Montebello Unified School District Collective Bargaining Program
Attachment—
District’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
C06-MCC-006