Calaveras County

"The Grand Jury does not find that County Administration (CAO, ACAO, Auditor/Controller) misled the Board of Supervisors and/or the public concerning the County's finances during the FY 2013-14 nor in the preparation and adoption of the FY 2014-15 Budget. Confusion, however, is common due to sporadic or nonexistent information provided to the public by County administrative personnel regarding the budget process. In preparing the budget, County Administration must use its best estimate of future revenue based on the information at hand. It must allocate spending in line with statutes and Board of Supervisors' guidance and decisions. . . . . "

"The Grand Jury finds that the County Administration (CAO, ACAO, Auditor/Controller) was correct in stating that continued reduction (spending from funds in excess of revenue) of Teeter funds could cause the funds to become insolvent. . . . . "

"Independent audits of the County's financial statements are a safeguard for the citizens of the county. Grand Jury participation provides oversight to ensure that audits conducted are free from internal influences. This participation is currently not mandated by policy or procedure."

"The Board of Supervisors and department heads lack the expertise in the budget process."

"Employee separation costs have not been budgeted. These costs can include unused vacation/sick days plus other contractual obligations." Findings 10/Recommendation "The Grand Jury recommends the CAO add to the budget and Board of Supervisors allocate funds for employee separation costs." Response to Finding 10/Recommendation: The County Administrative Officer agrees with the finding that employee separation costs have not been budgeted. The recommendation to allocate funds for employee separation costs will not be implemented at this time. It is the County's policy to permit employees to accumulate a limited amount of earned but unused vacation and compensatory time off (CTO). Employees may accumulate an unlimited amount of sick leave. Normally, sick leave, vacation and CTO are paid out as used in lieu of hours worked. One hundred percent of unused vacation benefits and CTO are paid to employees upon termination. Up to $1,500 of unused sick benefits may be paid to employees only upon retirement, and the remaining available accumulated sick leave may be applied to retirement service credit. Employees have the option to apply all accumulated sick leave towards service credit for retirement purposes in accordance with CalPERS retirement laws. Unused sick leave benefits do not vest with the employee, and are lost and are not paid to the employee upon termination. Per the Comprehensive Annual Financial Report for fiscal year ending June 30, 2014, the unfunded liability for compensated absences totaled $1,579,245. The County continues to face a structural budget deficit, where current year expenses exceed current vear revenues. Over the past two years, the County Administrative Officer and Auditor/Controller have worked to present a budget that has significantly reduced the reliance on one-time funds (cash carry and Teeter) to balance the budget. Only when the County is able to have a structurally balanced budget will the County be able to annually allocate funds for employee separation costs. At this time it is unknown at what point the County will be able to begin allocating funds for employee separation costs. Shirley Ryan County Administrative Office Board of Supervisors cc: 89