No Strings Attached

The Board’s role is primarily policymaking, oversight, and providing legislative authority. The Board does not have day-to-day operational responsibilities. As such, the Board is ill-equipped to administer and monitor the inventory item grant program. Response to Finding 1 The County agrees with this finding. The Charter and state law do not provide for the Board of Supervisors to administer programs or have day-to-day operational responsibility. Accordingly, the Office of the Clerk of the Board of Supervisors administers the budget for inventory items, including payments, and processes all post-approval paperwork associated with inventory items, including initiating contact with the grantee, requesting proper signatory, requesting certification of good standing with the California Secretary of State, issuing and receiving the grant agreement, obtaining an acknowledgment of receipt of funds, and monitoring whether and when funds are expended. Further, the Office of the Clerk of the Board follows up with the grantee and receives any impact reports/compliance letters in cases where a Board office had included conditions of approval. The Office of the Clerk of the Board tracks the status of each of these milestones and follows up when necessary. As noted in the Civil Grand Jury report, consistent with its role, the Board has periodically established policies and guidelines for inventory items. The report further notes that the current Board of Supervisors has approved a cap on inventory items and a cover sheet to gather information used as part of the approval process. Additionally, at the June 18, 2024, Board of Supervisors meeting, the Board approved the Management Auditor’s workplan for Fiscal Year 2024-2025 (Item No. 59), with additional direction by Supervisor Simitian to the Management Auditor to include random audits of budget inventory items in the Management Auditor’s workplan. Board of Supervisors: Sylvia Arenas, Cindy Chavez, Otto Lee, Susan Ellenberg, S. Joseph Simitian County Executive: James R. Williams Adopted: 08/27/2024

Although the County has implemented an informational cover sheet, the County’s current inventory item program does not have a consistent solicitation approach, eligibility requirements, or approval criteria, creating great inconsistencies across the Supervisorial Districts in the manner in which County funds are recommended to be awarded. Response to Finding 2 The County agrees with this finding. Other than the eligibility requirement that the non-governmental entity be in good standing with the California Secretary of State, the solicitation approach and approval criteria are determined by individual Board offices.

The existing inventory item program has failed to meet the Board’s stated purpose, which is to give one- time grants to small, start-up CBOs, which would not otherwise have the means or expertise to request grants. Response to Finding 3 The County partially disagrees with this finding. The report itself acknowledges the evident lack of “original parameters, guidelines, or authorization for inventory items (p. 8).” Giving one-time grants to small, start-up community-based organizations is understood to be one purpose of inventory items, but not the sole purpose. The January 23, 2024 (Item No. 14) Board referral made by Supervisors Ellenberg and Arenas indicated “[a]dvantages of the inventory grant process include opportunities for small organizations to secure grants without lengthy or complicated applications for which they may not have the organizational infrastructure to complete,” but also includes other purposes such as Board members becoming aware about a range of needs in their district that may not otherwise have come to light, and allowing Board members to fund issues important to them and their constituents that may not rise to the level of a Board or organizational priority.

The current inventory item program lacks effective recipient accountability to ensure inventory item grant money is used for its approved purposes, making it difficult for the County to judge the program’s effectiveness. Response to Finding 4 The County partially agrees with this finding. The standard grant agreement template used for inventory items includes provisions covering adherence to the approved grant purpose. For those small dollar grantees associated with many inventory items, more extensive tracking of whether grant funds were expended for their approved purpose would be onerous on the recipient entities and could reduce the impact of these grants. The Office of the Clerk of the Board tracks whether grant funds have been expended, and, as a process improvement already under way, has begun tracking receipt of impact reports/compliance letters in cases where conditions of approval were set by a Board office. Additionally, the Fiscal Year 2024-2025 approved workplan for the Board’s management auditor will include random audits of inventory items, which could provide an indication about the extent to which exceptions exist to the use of grant money for approved purposes.

Under the current process, a single elected official has largely unregulated autonomy to award public funds to a particular organization of their choosing using a system that lacks transparency. There is no way to avoid the appearance of favoritism in a grant program that the Board administers itself. Response to Finding 5 The County partially disagrees with this finding. Regardless of an individual Supervisor’s discretion to select entities as proposed recipients of inventory grant items, full Board approval is required to award funding. In terms of transparency, the application process is listed on each Supervisorial District’s public webpage. Inventory items listed on the May 15, 2024 Budget Workshop agenda were made posted on the County website and made public eight calendar days in advance of the meeting. Meetings are open to the public and public comment is taken on inventory items. As the report notes, the current Board of Supervisors has taken concrete steps to better regulate the process.