Score: +4 (4/0/0)
Stanislaus County Grand Jury • 2024-2025

Stanislaus County 2024-2025 Grand Jury Final Report

130 pages Consolidated Report
Ver PDF original

Findings 11 findings

F1
The Oakdale Police Department is found to be in compliance with deadlines recommended in the 2022-2023 SCCGJ Report related to mandatory Peace Officer Training.
F2
Oakdale Police Department officers are current in statewide standards for training required by the California State Commission on Peace Officer Standards and Training or have legitimate waivers related to recent dates of hire and training received in the academy within the training cycle.
F3
The Oakdale Police Department Training Coordinator is in compliance with
F4
The Oakdale Police Department’s Master Training Plan is in order and up to date. COMMENDATION Leadership at the Oakdale Police Department was fully cooperative and transparent in their participation in this implementation review process having responded promptly and thoroughly to all inquiries. Indicators are that measures have been successfully implemented to ensure department compliance with state mandates related to Peace Officer Training and that all officers Oakdale Police Department Mandated Training Implementation Report within the department are currently fully compliant. As a result, Oakdale community members are better served and protected. The ongoing maintenance of these significant improvements remains important. Leadership at the Oakdale Police Department should conscientiously maintain the current improved management and implementation of the training aspect of the department’s operation by regularly reviewing, updating, and implementing changes in state regulations and closely monitoring each officer’s training requirements and completion dates, assuring that the Training Coordinator at least annually attends the Training Manager’s Workshops, and by holding regularly scheduled meetings of the training committee to keep the Master Training Plan up to date. REQUEST FOR RESPONSES IN 90 DAYS REQUIRED RESPONSE: The following response is required pursuant to California Penal Code §933 and 933.05. The SCCGJ compels a response from the following governing body within ninety days: •City of Oakdale City Council: F1, F2, F3, F4. INVITED RESPONSE: SCCGJ invites the following official to respond within sixty days: •The City of Oakdale Chief of Police: F1, F2, F3, F4. Responses are to be submitted to: Honorable Sonny Sandhu, Presiding Judge Superior Court of California, County of Stanislaus P.O. Box 3488 Modesto, CA 95353 Reports issued by the Grand Jury do not identify individuals interviewed. Penal Code section 929 requires that reports of the Grand Jury not contain the name of any person or facts leading to the identity of any person who provides information to the Grand Jury. 2024-2025 Stanislaus County Civil Grand Jury Review of the Annual Financial Audit Report For the Fiscal Year Ended June 30, 2023 Case #25-15GJ Release Date: June 25, 2025 Review of the Annual Financial Audit Report For the Fiscal Year Ended June 30, 2023 Review of the Annual Financial Audit Report for the Fiscal Year Ended June 30, 2023 Case Number #25-15GJ Release Date: June 25, 2025 SUMMARY The Stanislaus County Office of the Auditor-Controller is now in its third year of struggle with implementation of a new software system. As a result, required financial reporting is delayed. While this reporting is substantially adequate, the external auditor found material weaknesses that could lead to real errors over time. GLOSSARY accounting principles. Best practices that assure uniformity, accuracy, and compliance with state and federal laws. An ACFR relies on Generally Accepted Accounting Principles (GAAP) as interpreted by the Government Accounting Standards Board (GASB). ACFR. An abbreviation for Annual Comprehensive Financial Report. Analogous to a corporate “annual report,” it provides a detailed annual summary of local government revenue, spending, and resources. CA PC §. An abbreviation for the California Penal Code section. CFR. An abbreviation for Code of Federal Regulations. These are rules published in the Federal Register for federal agencies. ERP. An abbreviation for Enterprise Resource Planning system: Software used to manage and interpret data gathered from many parts of the organization. This includes financial and accounting data. material weakness. The accounting process lacks important controls and oversight. This lack is severe enough that there is a reasonable possibility of an important error being overlooked. Review of the Annual Financial Audit Report For the Fiscal Year Ended June 30, 2023 present fairly. The term used when an external auditor concludes that an organization’s financial report uses appropriate accounting principles, is reasonably informative, and is acceptably accurate. SEFA. An abbreviation for Schedule of Expenditures of Federal Awards. An internal document used to track the spending of funds given by the federal government. This document is not included in the ACFR but is used to prepare it. significant deficiency. Some portion of the accounting process lacks necessary controls, leading to errors. These errors are less severe than a material weakness. Single Audit: An assessment, by an external auditor, of whether the financial systems used to prepare the ACFR have adequate controls to prevent and detect mistakes. BACKGROUND Accountability in spending tax dollars is a vital component of government. As a result, there are legal requirements for accountability. One is that the Board of Supervisors must annually publish a report summarizing the revenue, spending, and financial condition of the county (CA Govt Code Code § 25253 (2024)). This is the Annual Comprehensive Financial Report. In addition, because Stanislaus County receives more than $1,000,000 in federal funds, it must submit an annual Single Audit performed by an external auditor (2 CFR § 200.500 (2025)). This pair of documents answers two related questions: • ACFR: How did the county use the money available to it? • Single Audit: Does the county have adequate systems for keeping track of where the money goes? The ACFR covers the operations of Stanislaus County government and some closely related entities, such as lighting districts. It does not address the finances of any of the incorporated or unincorporated cities, the school districts, or the Stanislaus County Superior Court. The ACFR provides a comprehensive look at where money comes from and where it goes. One sample is this breakdown of revenue sources. It shows the importance of money from state and federal government (operating grants and contributions). Review of the Annual Financial Audit Report For the Fiscal Year Ended June 30, 2023 Figure 1: Stanislaus County AFCR Fiscal Year Ending 2023 In the Single Audit, the external auditor evaluates the county’s financial systems and reporting methods in order to evaluate two major issues: • Do financial systems have good controls to prevent mistakes? These can be understood as checks and balances. Are policies followed? Is there sufficient oversight? Are there processes for preventing or correcting mistakes? • Are the finances in compliance with specific rules for federal funding programs? The Single Audit is to be submitted to the Federal Audit Clearinghouse within nine months after the end of the fiscal year. At the same time, the ACFR is also submitted to the California Office of the Controller. Since the county’s fiscal year ends on June 1, the 2022-23 package should have been submitted by March 31, 2024. It did not reach the Federal Audit Clearinghouse until January 10, 2025. The prior year’s package had also been late by more than 90 days. The responsibility of a civil grand jury under CA PC §925 is to review the most recent ACFR and Single Audit, which is the 2022-23 package. Review of the Annual Financial Audit Report For the Fiscal Year Ended June 30, 2023 METHODOLOGY Before the pattern of delays began, the review of the ACFR and Single Audit typically started with an entrance meeting with the external auditor. This would take place in autumn, when the audit began. The investigation would end with an exit meeting with the external auditor, in the spring. Significant delays in producing the ACFR, spreading the process across multiple CGJ terms, made this process unavailable to us. When we began our term, in July 2024, the 2022-23 ACFR and Single Audit were 90 days overdue. We instead spoke with key staff at the office of the Stanislaus County Auditor-Controller, as well as members of the Stanislaus County Board of Supervisors. We also consulted the state and federal regulations and guidelines for submitting an ACFR and Single Audit, as well as the Government Finance Officers Association’s best practices. The Office of the Auditor- Controller provided us with the 2022-23 ACFR and Single Audit in November 2024. DISCUSSION In late 2022, the Office of the Auditor-Controller started its move to a new ERP with a steep learning curve. The impact of this move thus started with the 2021-22 reports and continued into the 2022-23 reports. The resulting training needs and workload strain led to six staff members leaving for other local government agencies. In August 2024, shortly after the end of the 2023-24 fiscal year, the elected Stanislaus County Auditor-Controller suddenly retired. This Auditor-Controller had been a champion of the new system, particularly for configuring it to reconcile accounts at a high level of precision. The belated 2021-22 ACFR was awarded a Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association. This award is based on a detailed checklist of what financial data is provided, in what format. It speaks to the comprehensiveness and care in presentation of the ACFR. What an award like this does not cover—and the Single Audit does—is the robustness of the system that produces the detailed and carefully presented numbers. While the external auditor concluded that the 2022-23 ACFR did present fairly the financial situation of Stanislaus County, it also found two material weaknesses. Review of the Annual Financial Audit Report For the Fiscal Year Ended June 30, 2023 One material weakness involves a missing step in preparation of the SEFA document. The county omitted from the SEFA its $10 million standard revenue-replacement allowance. The money is not missing from the general ledger or otherwise imperiled. Both the county’s official response to the auditor’s finding and our interviews confirmed that this was a one-time mistake that will not affect the county’s ability to obtain American Rescue Plan Act (ARPA) funds. The second material weakness was a repeat from the prior 2021-22 Single Audit. The auditor found a pattern of errors in how the county accounted for revenue that is 180 or more days late in arriving. This “unearned revenue” is typically funds due from other government agencies, rather than bad debt. Being late does not mean that it will never arrive. Until it arrives, it belongs on the balance sheet as a liability. Accounting for this money as if it had already arrived is an error that makes a fund look like it has more money in the bank than it does. Errors in unavailable revenue were found in three funds, both in the current year and in the prior year. In both cases, the external auditor attributed the problem to confusion caused by the new ERP system. The Auditor-Controller’s office is working with the departments to get their paperwork in order to receive their funds. Everyone we spoke with assured us that the 2023-24 ACFR and Single Audit would be completed by the March 31, 2025 deadline. We believe that our sources were speaking from their best knowledge at the time and had no intent to mislead us. However, the report was not submitted on time, and we have since been informed that the new target is June 30, 2025. Of California’s 58 counties, 41 submitted their 2023-24 Single Audits to the federal clearinghouse on time. Excluding the six counties that are too small to consistently be required to do the Single Audit, 79% of counties were timely. Stanislaus and Kern counties are the only two among the twenty largest counties to be consistently and significantly late over the past three years. Review of the Annual Financial Audit Report For the Fiscal Year Ended June 30, 2023 FINDINGS AND RECOMMENDATIONS
F5
StanCOG’s absence of a Director of Financial Services resulted in several members of upper management undertaking that role’s responsibilities. The substandard performance of these duties led to delinquent audits with material findings.
F6
The Employee Handbook as stated is a “working guide for Employees and supervisors.” It is out of compliance with the current practices of StanCOG.
F7
The Jury found that the StanCOG Single Audit, dated June 30, 2023, had material weaknesses that caused the report to be issued late.
F8
There are two published Appendix A documents for full-time employee benefits. Appendix A (1/1/25) provided by the director of Administrative Services allows for nine weeks paid vacation at twelve years and Appendix A (11/17/21) provided by the General Counsel allows for only five weeks at twelve years and more.
F9
The Executive Director has used rental cars extensively and excessively rather than her personal vehicle due to vague policies and lack of oversight.
F10
The policy on missing receipts is not being adhered to by the Executive Director due to the lack of appropriate oversight by the Policy Board.
F11
The expenditure category “training and education” is too broad.

Recommendations 36

Conclusions 6

Commendations 7

Agency Responses 1

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.