County Auditor*

Conclusions 2

• CL1 Page 6
  (Unpredictable timing of inter-departmental fee-for-service assessments): Much of the county's departmental spending is grant-funded. The state requires that these funds be allocated according to strictly prescribed Office of Management and Budget procedures. In this there is no flexibility. So when one department offers support services (such as legal, accounting, clerical or data processing) to another department of county government, those hours have to be aggregated in a time-study and then apportioned according to strict rules. Some of these hours are charged to the General Fund, which are passed through to the end-user department after a lapse of two years. Others are billed to particular funds and passed through after a one-year lapse. As a result, department heads may feel "blind-sided" as they are unsure just when expenses incurred in a given year will impact their budgets. But these accounting procedures are state-mandated and beyond the county's control.
• CL2 Page 6
  Considering the county's budgetary constraints and the resulting down-sizing, the Auditor's Office is doing a creditable job in dealing with a tremendous work load. RESPONSES REQUIRED: Entity Finding Recommendation Respond in Auditor 2-3-4-5-6 2-3-4-5-6 60 days Trinity County Board of Supervisors 2-3-4-5-6 2-3-4-5-6 90 days FINDING #6 (Unpredictable timing of inter-departmental fee-for-service assessments): Much of the county's departmental spending is grant-funded. The state requires that these funds be allocated according to strictly prescribed Office of Management and Budget procedures. In this there is no flexibility. So when one department offers support services (such as legal, accounting, clerical or data processing) to another department of county government, those hours have to be aggregated in a time-study and then apportioned according to strict rules. Some of these hours are charged to the General Fund, which are passed through to the end-user department after a lapse of two years. Others are billed to particular funds and passed through after a one-year lapse. As a result, department heads may feel "blind-sided" as they are unsure just when expenses incurred in a given year will impact their budgets. But these accounting procedures are state-mandated and beyond the county's control. RECOMMENDATION # 6: County Auditor should alert departments to any upcoming inter-departmental billings not posted in the same year as incurred. CONCLUSION: Considering the county's budgetary constraints and the resulting down-sizing, the Auditor's Office is doing a creditable job in dealing with a tremendous work load. RESPONSES REQUIRED: Entity Finding Recommendation Respond in Auditor 2-3-4-5-6 2-3-4-5-6 60 days Trinity County Board of Supervisors 2-3-4-5-6 2-3-4-5-6 90 days TRINITY COUNTY BRIAN E. MUIR, COUNTY AUDITOR-CONTROLLER DAVID NELSON, CHIEF DEPUTY AUDITOR-CONTROLLER P.O. BOX 1230, WEAVERVILLE, CALIFORNIA 96093 PHONE (530) 623-1317 FAX (530) 623-1323 RECEIVED TO: The Honorable Anthony Edwards, JUN 2 1 2006 Presiding Judge of the Superior Court TRINIT: COUNTY FROM: Brian Muir, Auditor / Controller SUPERIOR COURT CC: Kelly Frost, Deputy Clerk to the Board of Supervisors SUBJECT: Response to Recommendations of 2005-06 Trinity County Grand Jury Report re: Finance and Administration Committee — County Auditor DATE: June 20, 2006 The Grand Jury has requested a written response to their final report on Finance and Administration Committee — County Auditor. In my capacity as Auditor/Controller my response is as follows: Finding #2 (Is county expenditure on topical studies worthwhile?): Most such studies are part of grant-funded projects and therefore, in a sense, payf or themselves. Similarly, expenditures on grants writers and administrators are self- funding in that they are typically covered under the terms of each grant. Examples of such studies include our Classification and Compensation Study, comparing Trinity's pay scales with those of other county administrations; the Airport Study; and the General Plan Study, which insures the county against lawsuits and construction delays. Response: I agree in part. The Classification and Compensation Study and much of the work on the General Plan are not grant funded. However, with the exception of those that require a County match, most grants do pay for themselves. Recommendation #2: Use grant funding to engage or internally train more professional grant writers and administrators. Recommendation #2: I agree. Implementation of the recommendation is the responsibility of the County Administrative Officer to whom the Grants Administration Department reports. The Department recently hired another person to write and administer grants. -18- Finding #3: (Volunteer Fire Departments) Under the Romero Bill (SB 1207) of 2002, the state, rather than the county, assumes regulatory responsibility and liability for the training and occupational safety requirements of Volunteer Fire Departments. The county, however, helps local Volunteer Fire Departments to pay Workman's Compensation Insurance. The Auditor's Office also provides accounting support to help volunteer firefighters meet the state's fiscal reporting and audit requirementsf or Special Districts. Response: I agree. Finding #4: Veterans' Services: As per the recommendation of the 2004-2005 Grand Jury, the position of Veterans' Service Representative has been upgraded in the current fiscal year from part time to full time. A new Representative has been hired. Response: I agree. Finding #5: (Budgeting and Cash-flow) : Apart from those departments that generate their own fee-based income, all other county departments are financedf rom the county's General Fund Much of the county's expenditure is financed by the state. When the state is late in passing its own budget, the county has to keep running with a temporary budget that covers only ongoing operational expenses but excludes any major new outlays. Every year around November, the county faces a cash crunch prior to its receipt of bi-annual Property Tax revenues in December. Normally this gap is bridged with a Tax Revenue Anticipatory Note (IRAN), but last year the county was ineligible for this funding pool since its debt rating dropped below investment grade. Instead, the county had to take out a loan from a bank Although the county now meets the "investment grade" criteria, it might take another year for its debt rating to be restored, which could necessitate one more bank loan in the upcoming year. The other bi-annual Property Tax inflow, at the end of April, signals the start of the count3es budget preparation cycle. After the property taxes are in, the Auditor's Office makes its projectionsf or the coming year. These numbers go to the individual departments for refinement and renegotiation until an overall budget can be agreed upon. Some of the departments, such as Behavioral Health, are mandated to balance revenues against expenditures. Others run on countyf unding without generating any revenues of their own. Response: I agree. Finding #6: (Unpredictable timing of inter-departmental fee-for-service assessments): Much of the county's departmental spending is grant-funded The state requires that these funds be allocated according to strictly prescribed Office of Management and Budget procedures. In this there is no flexibility. So when one department offers support services (such as legal, accounting, clerical or data processing) to another department of county government, those hours have to be aggregated in a time-study and then apportioned according to strict rules. Some of these hours are charged to the General Fund, which are passed through to the end-user department after a lapse of two years. Others are billed to particular funds and passed through -19- after a one-year lapse. As a result, department heads may feel "blind-sided" as they are unsure just when expenses incurred in a given year will impact their budgets. But these accounting procedures are state-mandated and beyond the county's control. Response: I agree. Recommendation #6: County Auditor should alert departments to any upcoming inter- departmental billings not posted in the same year as incurred. Recommendation #6: The recommendation will be implemented. Unusual service department billings occur in charges from General Services, County Counsel, and Information Technology. The Auditor's Office will provide all departments with summary time studies for these three service departments, covering the first 10 months of the fiscal year each May. The time studies will reflect any large blocks of time devoted to a single department indicating significant cost plan charges, and departments will be able to reflect the charges in their budgets for the upcoming fiscal year. TRINITY COUNTY BOARD OF SUPERVISORS P.O. BOX 1613, WEAVERVILLE, CA 96093 PHONE (530) 623-1217 FAX (530) 623-8398 WATER AIF 011W7* TO: The Honorable Anthony C. Edwards, Presiding Judge of the Superior Court FROM: Trinity County Board of Supervisors SUBJECT: Response to Recommendations of 2005-2006 Grand Jury Finance and Administration Committee Final Report — County Auditor DATE: July 17, 2006 The Grand Jury Finance and Administration Committee has requested a written response to their final report on the County Auditor. The Trinity County Board of Supervisors respectfully offers their response as follows: Finding #2: Most such studies are part of grant funded projects and therefore, in a sense, pay for themselves. Similarly, expenditures on grants writers and administrators are self-funding in that they are typically covered under the terms of each grant. Examples of such studies include our Classification and Compensation Study, comparing Trinity's pay scales with those of other county administrations; the Airport Study; and the General Plan Study, which insures the county against lawsuits and construction delays. Response #2: The Trinity County Board of Supervisors agrees. Recommendation #2: Use grant funding to engage or internally train more professional grant writers and administrators. Recommendation #2: Has been and will be implemented. The Grants Office has recently hired a new grant writer and potential exists for that department to engage or internally train more professional grant writers and administrators in the future. Finding #3 (Volunteer Fire Departments): Under the Romero Bill (SB 1207) of 2002, the state, rather than the county, assumes regulatory responsibility and liability for the training and occupational safety requirements of Volunteer Fire Departments. The county, however, helps local Volunteer Fire Departments to pay Workman's Compensation Insurance. The Auditor's also provides accounting support to help -21- volunteer firefighters meet the state's reporting and audit requirements for Special Districts. Response #3: The Trinity County Board of Supervisors agrees. Finding #4 (Veterans' Services): As per the recommendation of the 2004-2005 Grand Jury, the position of Veterans' Service Representative has been upgraded in the current fiscal year from part time to full time. A new Representative has been hired Response #4: The Trinity County Board of Supervisors agrees. Finding #5 (Budgeting and Cash-flow): Apart from those departments that generate their own fee-based income, all other county departments are financedf rom the county's General Fund. Much of the county's expenditure is financed by the state. When the state is late in passing its own budget, the county has to keep running with a temporary budget that covers only ongoing operational expenses but excludes any major new outlays. Every year around November, the county faces a cash crunch prior to its receipt of bi- annual Property Tax revenues in December. Normally this gap is bridged with a Tax Revenue Anticipatory Note (IRAN), but last year the county was ineligible for this funding pool since its debt rating dropped below investment grade. Instead, the county had to take out a loan from a bank Although the county now meets the "investment grade" criteria, it might take another year for its debt rating to be restored, which could necessitate one more bank loan in the upcoming year. The other bi-annual Property Tax inflow, at the end of April, signals the start of the county's budget preparation cycle. After the property taxes are in, the Auditor 's Office makes its projections for the coming year. These numbers go to the individual departments for refinement and renegotiation until an overall budget can be agreed upon. Some of the departments, such as Behavioral Health, are mandated to balance revenues against expenditures. Others run on county funding without generating any revenues of their own. Response #5: The Trinity County Board of Supervisors agrees. Finding #6 (Unpredictable timing of inter-departmental fee-for-service assessments):: Much of the county's departmental spending is grant-funded. The state requires that these funds be allocated according to strictly prescribed Office of Management and Budget procedures. In this there is no flexibility. So when one department offers support services (such as legal, accounting, clerical or data processing) to another department of county government, those hours have to be aggregated in a time-study and then apportioned according to strict rules. Some of these hours are charged to the General Fund, which are passed through to the end-user department after a lapse of two years. Others are billed to particular funds and passed through after a one-year lapse. As a result, department heads may feel "blind-sided" as they are unsure just when expenses incurred in a given year will impact their budgets. But these accounting procedures are state-mandated and beyond the county's control. —22 Response #6: The Trinity County Board of Supervisors agrees. Recommendation #6: County Auditor should alert departments to any upcoming inter-departmental billings not posted in the same year as incurred. Recommendation #6: Will be implemented. The County Auditor's Office will provide all departments with summary time studies from the three service departments (General Services, County Counsel and Information and Technology) covering the first 10 months of the fiscal year each May and departments will be able to reflect the charges in their budgets for the upcoming fiscal year.

No Responses Found 2

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