San Diego County Sheriff’s Department Inmate Welfare Fund

The absence of a strategic plan reduces economy, efficiency, and effectiveness. INTERNAL CONTROL WEAKNESSES This is the phrase the auditor uses to characterize some budgetary problems in the administration of the IWF. Interviews with Sheriff’s staff and Committee members made it clear that they are committed to appropriate use of the IWF, but written policies (other than the very general language of Section 4025) do not exist. Instead, the Committee relies on its collective wisdom and experience to decide which expenses legitimately 1 The Assistant Sheriff, three Detention Service Bureau Commanders, the six Facility Managers and the Reentry Manager. 2 belong to the IWF and which should be charged to the Sheriff’s Department general funds. The pitfalls of this informal system are obvious: lack of transparency, accountability, and objective standards. A concrete example of those risks appears in the audit. Of thirty expenditures sampled (out of thousands) the auditor found one unallowable expense--$89,999 of a $449,997 total--for ISO Rec Yard Day Room Toilets at George Bailey Detention Facility. Department Staff informed the auditor that “the project would have been delayed if a request was made to pay for the expenditure out of the General Fund.” The IWF has functioned as a discretionary fund for the Sheriff’s Department, contrary to its purpose. The monies should be replaced if the Committee has not already done so. The Grand Jury identified two other budgetary issues. One, there is no firm, written policy on the minimum expenditure requiring a Committee vote. Interviewees gave conflicting answers, and the IWF Operations manual is silent. Two, despite a Grand Jury request, the Committee was unable to produce a pre-approved annual operating budget detailing proposed expenditures. There appears to be no such document. In one case described by the auditor, the Committee failed to follow its own policies and procedures to purchase a $15,173 electric vehicle. The audit states, “Proper approval of non-budgeted items will ensure that the expenditures are made for the benefit, education, and welfare of the inmates confined within the jail. Insufficient approval could result in potential waste and abuse of the IWF.” The Committee’s “internal control weaknesses” need to be corrected. One useful step would be to institute periodic audits, beginning with a thorough audit of all expenditures for the past three fiscal years. FACTS AND FINDINGS Fact: There are no defined policies and procedures for deciding what expenditures can be charged appropriately to the IWF. Fact: There is no documented minimum expenditure requiring a IWF Committee vote. Fact: The IWF Committee acts without a pre-approved annual operating budget. Fact: There is no periodic audit of the IWF. Fact: The Office of Audits & Administrative Services audit sampled just thirty expenditures, finding two of them questionable.

The IWF Committee has weak internal controls. Fact: The IWF Committee has approved inappropriate expenditures for construction and a vehicle.

The Sheriff’s Department spent IWF funds that should have come from the Department’s General Fund, subverting the IWF’s purpose. IWF RESERVE Penal Code §4025 does not specify the amount or percentage of an IWF reserve. The unwritten policy of the IWF Committee is to retain a 50% reserve (according to the auditor, over $10 million on June 30, 2015). According to Sheriff’s staff, there are two reasons for this policy: one, past experience with unanticipated losses (undocumented in any materials provided by the Sheriff’s Department to the jury) two, an estimated loss of $3,100,000 in telephone services revenue if a pending Federal Communications Commission decision (lowering intrastate jail collect call rates) is approved by the courts. The Grand Jury finds neither of these a compelling justification for a 50% reserve policy, which appears excessive. Regarding this situation, the auditor states: “…while the reserve fund has increased over the year, a formal contingency plan to account for the use of reserve funds has not been developed.” If telephone revenue drops severely, the IWF Committee needs to be prepared. If it does not, some of the reserve could be put to use for inmates’ benefit. In either case, the Committee should make a careful study of the 50% reserve policy and document its findings. FACTS AND FINDINGS Fact: The Sheriff’s Department undocumented policy is to maintain a 50% IWF reserve. Fact: The IWF faces a potential loss of telephone services income. Fact: The IWF Committee has no plan for the use of reserve funds.

The IWF Committee is putting future programs at risk by not setting priorities for the IWF reserve in the face of potential revenue loss. If revenue remains near current levels, the lack of priorities stifles creative application of more of the reserve to inmate welfare. IWF COMMITTEE MEMBERSHIP The Committee has one non-Sheriff’s Department staff member, appointed by the Sheriff, who serves an unspecified term. The result, as the audit states, is “the Sheriff’s Department has complete discretion in regards to programs and expenses funded by IWF monies.” In addition, it is simply unrealistic to ask one person to represent all of San Diego County’s diverse citizens, much less the inmates the IWF serves. The Committee provides only informal training for its civilian member. Given the importance and complexity of the IWF’s purpose, this puts the civilian member at a serious disadvantage. In the auditor’s words, “Due to the structure of the Committee, potential biases for certain programs or expenditures could influence judgment, diminish objectivity, and cause decisions to be made in the best interest of the Sheriff’s Department instead of the inmates.” Other Southern California counties’ IWF committees have more civilian members; in two cases (San Bernardino and Los Angeles), all IWF Committee members are non-staff citizens. The Committee’s responsibility for inmate welfare would benefit from larger public representation, with staggered terms to give continuity and term limits to ensure fresh perspectives. Fact: The IWF Committee has one non-staff, citizen member. Fact: There is no organized, formal training for citizen members. Fact: The IWF Committee citizen member has no set term and no term limit.

The IWF Committee suffers from a lack of public input, expertise, advocacy and transparency. THE IWF OPERATIONS MANUAL The ten-page IWF Operations manual is outdated, for it does not reflect the current organization of the Sheriff’s Department. It is incomplete, as documented throughout this report, for it lacks policies and procedures essential for the Committee to function effectively and appropriately. In its current form, the manual allows the Committee to conduct its business without sufficient planning, guidance, or internal controls. The manual’s deficiencies make it more difficult for new civilian members to learn their duties. And it undermines the purpose of the IWF and the public trust. The manual requires a thorough revision. To increase the Committee’s transparency, it should be easily available to the public, as should the Committee’s roster and minutes (presumably on the Sheriff’s Department website). FACTS AND FINDINGS Fact: The IWF Operations manual is outdated and incomplete.

The IWF Operations manual is not adequate to its purpose. Fact: The IWF Committee’s roster and minutes are not easily available to the public.

The IWF Committee’s work lacks transparency.