2003-2004 Final Report

Conclusions 38

• CL1 Page 1
  State and federal funding for special education is insufficient to cover special education costs in all 18 Alameda County districts. All districts spend substantial general education resources to cover the shortfall in special education funding.
• CL2 Page 1
  Special education encroachment is putting substantial pressure on local resources and is threatening the financial viability of many districts.
• CL3 Page 1
  In many cases, the magnitude of special education encroachment is the difference between financial health and the need for massive budget reductions and for external financial intervention.
• CL4 Page 2
  Shortfalls in special education funding must be covered from a district’s unrestricted general fund. This means reducing spending for non-special education students. When this shortfall is large, general fund resources are insufficient to avoid a conflict between both covering the shortfall and meeting obligations to all students. The point is not that special education funding is excessive to meet the needs of special education students. Even at present levels, special education funds may be seriously inadequate. The point is that where encroachment is substantial, it creates an unfortunate competition between special and general education programs for already scarce funds.
• CL5 Page 2
  Districts are constrained in their ability to limit special education spending. Special education students are entitled to an “appropriate” education. Appropriate has come to mean appropriate regardless of cost. Even when districts prevail, legal costs to determine the limits of “appropriate” can be substantial. Districts must make calculated decisions weighing the cost of providing additional services vs. the costs of challenging the need for such services in legal proceedings. Federal “maintenance of effort” regulations, which generally require states and school districts to maintain special education spending at no less than the prior year level, further limit district efforts to reduce spending.
• CL6 Page 29
  State and federal funding for special education is insufficient to cover special education costs in all 18 Alameda County districts. All districts spend substantial general education resources to cover the shortfall in special education funding.
• CL7 Page 29
  Special education encroachment is putting substantial pressure on local resources and is threatening the financial viability of many districts.
• CL8 Page 29
  In many cases, the magnitude of special education encroachment is the difference between financial health and the need for massive budget reductions and for external financial intervention. 28
• CL9 Page 30
  Shortfalls in special education funding must be covered from a district’s unrestricted general fund. This means reducing spending for non-special education students. When this shortfall is large, general fund resources are insufficient to avoid a conflict between both covering the shortfall and meeting obligations to all students. The point is not that special education funding is excessive to meet the needs of special education students. Even at present levels, special education funds may be seriously inadequate. The point is that where encroachment is substantial, it creates an unfortunate competition between special and general education programs for already scarce funds.
• CL10 Page 30
  Districts are constrained in their ability to limit special education spending. Special education students are entitled to an “appropriate” education. Appropriate has come to mean appropriate regardless of cost. Even when districts prevail, legal costs to determine the limits of “appropriate” can be substantial. Districts must make calculated decisions weighing the cost of providing additional services vs. the costs of challenging the need for such services in legal proceedings. Federal “maintenance of effort” regulations, which generally require states and school districts to maintain special education spending at no less than the prior year level, further limit district efforts to reduce spending.
• CL11 Page 30
  Given inadequate state and federal funding, encroachment cannot be eliminated. Districts should make efforts to make programs more cost effective. 29
• CL12 Page 31
  Where state special education funds are allocated based on ADA (average daily attendance), declining enrollment affects special education, as well as overall funding levels. This does not appear to be well understood by school districts.
• CL13 Page 31
  All students should be entitled to an “appropriate” education. FINAL OBSERVATIONS The importance of special education encroachment is not well understood by legislators or by the general public. Districts must work together to educate state and federal authorities as to the urgent need to adequately fund special education: for special education students, for general education students, and for the fiscal viability of school districts. Policy makers are all too accustomed to un-funded mandates. When such mandates seriously impact the adequate funding of public education, and create unfortunate conflicts in spending priorities between different groups of students, then much greater concern is warranted. An important guarantee of the IDEA, is that special education students are entitled to an “appropriate” education. Ultimately, all students should be entitled to an appropriate education. Unfortunately, most students have no such entitlement. School districts should work with their communities and their legislators to make this a reality. While many school districts complain of the impacts of encroachment, they do not routinely monitor its magnitude or its overall impact. Districts must pay specific attention to special education spending and to the impact of funding shortfalls on general unrestricted spending and on the district’s financial stability. 30
• CL14 Page 40
  Districts throughout Alameda County, and increasingly throughout the state, are in serious financial difficulty with many facing financial disaster. The system for financing public school districts requires overhaul. Absent substantial increases in public education funding, school districts throughout the state will fail in ever increasing numbers.
• CL15 Page 40
  Inadequate funding does not excuse districts from understanding the difficult constraints under which they have to operate and to work within those constraints. Similarly, it does not excuse those responsible for oversight from acting aggressively before financial crises erupt.
• CL16 Page 40
  The HUSD and OUSD cases illustrate limitations of the current system of fiscal oversight, at least as practiced in Alameda County. Once disaster strikes (or is brought to their attention), the ACOE takes decisive action. However, ACOE fiscal oversight does little to prevent disasters from occurring in the first place, even when districts have long histories of financial difficulty.
• CL17 Page 40
  The ACOE is adamant that under AB1200 it has no real authority to act absent financial disaster. Other COEs and oversight experts argue that AB1200 does provide sufficient authority for forestalling serious financial problems. Regardless, the net result is that the ACOE fiscal oversight is of limited utility in helping districts avoid fiscal disaster or even to help them know that disaster is imminent. Until both OUSD and HUSD self-reported their 39
• CL18 Page 41
  That said, the ACOE deserves commendation for quickly intervening in both OUSD and HUSD once alerted to the scope of the financial problems in these districts. Similarly, their actions in LVJU seem measured and appropriate. Both 2002-2003 interim reports resulted in qualified certifications. It was only when LVJU would not make additional required cuts, that their budget was disapproved, the negative certification made, and a fiscal advisor appointed.
• CL19 Page 41
  Proposed legislation, giving COEs the authority to comment on the financial implications of prospective collective bargaining agreements before they occur, rather than the current situation of 45 days after they occur, will allow COEs a voice on an important determinant of school district expenditures.
• CL20 Page 41
  The HUSD fiscal crisis seemingly followed that of OUSD. In fact, the crises were concurrent and shared many similar causes: lack of financial systems; lack of position control; lack of communication between the principal finance and administrative units (e.g., planning, budget, finance, payroll, and Human Resources).
• CL21 Page 41
  There is an interesting line between the rights of a district to act autonomously, and the need for meaningful external financial oversight of that district. Whatever that boundary, it must be stated explicitly that it is the district’s responsibility for operating in a financially sound manner. At best, county financial oversight can act as a check on the responsibility. For the oversight function to be meaningful, it must require detailed and accurate documentation of the financial status of the district. Where the ACOE has any questions concerning the financial viability of a district, it has the requisite authority to require that district to demonstrate its current and prospective viability. 40
• CL22 Page 61
  Better communications between building services division and the HR operations payroll department are required.
• CL23 Page 61
  Building services management does not check the original time card documents for accuracy and consistency.
• CL24 Page 61
  Payroll procedure manuals are needed in each operating unit.
• CL25 Page 61
  Training is lacking in the plan checking unit.
• CL26 Page 22
  It is the opinion of the Grand Jury that the Board of Supervisors made the correct decision when they created an independent authority to operate the Medical Center. Under the leadership of the independent Board of Trustees, the Medical Center has dramatically improved the quality of medical care it provides. However, while focusing on improving medical care, the Board of Trustees and management lost sight of their responsibility to make parallel improvements with the financial and administrative sides of the hospital. The Board of Trustees did not do an adequate job in selecting either the last permanent CEO or the interim CEO. Neither was competent to deal with the financial crisis of the Medical Center. As a result of turnover in the CEO position, the administration is in shambles. Entire departments of employees have not received sufficient training or supervision to be able to adequately perform their duties. The Medical Center stands at a crossroad. The recent passage of Measure A should assure a stable revenue base and financial health for the Medical Center. However, if reform does not take place and if changes are not made in the way in which the Medical Center does business, 21
• CL27 Page 23
  Health & Social Services this new source of revenue will be squandered and conditions will rapidly deteriorate into a far worse crisis. The Grand Jury found that over a long period of time, due to lax executive management and insufficient attention from the Board of Supervisors and later, the Board of Trustees, a culture developed that “the county will always pay.” This meant employees lost sight of the idea that funds should be spent efficiently. This culture manifested itself in small ways and large. For example, should a mechanical pencil run out of lead, a new mechanical pencil would be acquired instead of simply adding a replacement lead. Similarly, should a computer break down, it was never repaired, but replaced with the most up-to-date models while running outdated software. Spending decisions were consistently made by all levels of personnel and in all operations of the Medical Center. As a result, there was great waste of public funds. This spending was not driven by a desire to deliver the best possible medical care or even to improve the quality of medical care. It was a failure of management to designate conscientious employees and instill in them a responsible manner of spending. The Grand Jury found this culture has developed over a long period of time and that responsibility must be shared. The Board of Supervisors and later the Board of Trustees allowed top managers over the years to ignore fiscal efficiency and responsibility. This situation is unacceptable and must be continually monitored so that it will never again exist. In moving forward, both management and employees must work together to improve the quality of the medical care provided and become more efficient in the way they deliver medical services. This may require employees and management to make sacrifices. Both sides should keep in mind the great importance the citizens of the county place on the Medical Center’s ability to provide high quality medical care in the most efficient and cost effective way. The Grand Jury expects the Board of Trustees will move ahead with the reform efforts they have initiated. The Board of Supervisors needs to exercise patience with the current governance 22
• CL28 Page 24
  Health & Social Services structure and support the Board of Trustees as they move forward with their efforts to make the Medical Center an efficient public hospital. In the past, the Board of Trustees has ignored substantial portions of the Medical Center, to its detriment. The Board must exercise fiscal restraint as they move ahead, including closely scrutinizing the on-going recommendations of their consultant, Cambio Healthcare Services. Before implementing Cambio recommendations, the Board of Trustees has to be assured that the proposed changes will serve the dual purpose of improving the quality of care and fiscal efficiency. The Board of Trustees needs to carefully review any Cambio recommendation that involves increased payment to Cambio. The Cambio contract is extremely expensive. At a time when employees may be asked to make sacrifices, it would only increase strife and ill will to enter into further contracts with already highly paid consultants. The Board of Trustees should be allowed to maintain its independent governance over the Medical Center. Without interference, the Board of Trustees needs to be allowed to do the job they were originally designated to do. They should have the authority as an autonomous group to implement the approved recommendations made by Cambio and PriceWaterhouseCoopers. Delay in implementing recommendations will further increase costs.
• CL29 Page 49
  All three facilities – Eden Township Substation, the coroner’s bureau, and the communications center - are in serious need of replacement as soon as possible. 48
• CL30 Page 50
  Law & Justice VIOLENCE IN OAKLAND The Grand Jury, based upon public information, instituted a review of the level of violence and homicides in Oakland. The Grand Jury met with the Oakland City Manager and the Chief of the Oakland Police Department to determine what plans are in place to reduce the violence and homicides plaguing the city. The following plan was presented. PROJECT S.A.F.E. On October 1, 2003, the Oakland police department implemented Phase I of their Violence Reduction Plan, Project S.A.F.E. (Supplemental and Focused Enforcement). This plan was designed to coordinate and focus department resources towards well-defined violence crime objectives. The plan also increases the effectiveness of specialized and undercover operations and holds personnel at all levels accountable for their violence reduction efforts. The S.A.F.E. Plan has five goals: 1) Reduce injuries and deaths, especially from gun-related conflicts; 2) Reduce community fear and violent crime; 3) Reduce incidents that discourage the use of public places such as parks and businesses open to the public; 4) Improve Oakland’s image as a safe place to conduct business and recreational activities; and 5) Create public trust and confidence in the police department. This plan requires that patrol officers, detectives, corrections officers and special crime reduction teams work together to solve problems that arise in the city. There are six police service areas in Oakland. Each of these areas has a commander who will identify problems, decide the type of specific enforcement action to be taken, and then monitor the results. Police seize approximately 90 guns per month in the city of Oakland. There are 17,000 individuals on probation in the city and 4,000 of these are considered “high risk.” There are approximately 3,000 parolees living in Oakland. As of October 14, 2003, 41 of the 96 murder 49
• CL31 Page 51
  Law & Justice victims in 2003 were on probation or parole; and 80% of these victims had at least one felony arrest. The S.A.F.E. plan was instituted on October 1, 2003. Statistics for the period ending April 25, 2004, indicate violent crime and murders have been reduced by 35% over the same period one year earlier. Chief Richard Word and his department are to be commended for this major reduction. The complete text of the City of Oakland’s Violence Prevention Plan can be accessed on the city’s web site at http://www.oaklandnet.com/violence.pdf; or, may be accessed at the public library. 50
• CL32 Page 52
  Government COMMUNITY ACCESS TELEVISION INTRODUCTION Meetings of two of Alameda County’s highest profile governmental agencies are currently not broadcast on local community access television (CATV). The two agencies are the county Board of Supervisors (BOS) and the county Board of Education (BOE). The Grand Jury undertook an examination of the practicality of broadcasting these meetings. HISTORY As part of the consideration for granting cable television broadcast rights, local government is entitled to the use of Community Access Television (CATV). Through negotiated contracts between each local government and the cable company, the cable company becomes obligated to transmit from particular locations to subscribers’ residences. Typically, these locations are the sites of local governmental meetings. The cable company uses a percentage of its revenue to pay for the operating costs of CATV. These payments are generally made to each local government’s general fund, which in turn funds its own CATV. In Alameda County most cities have both a contract with a cable television provider and facilities to broadcast programs which they deem to be of public interest. Generally these include city council meetings, boards of education and other local agency meetings. These meetings are frequently broadcast live with subsequent rebroadcasts to assure the widest possible dissemination. Contracts currently exist between the County of Alameda and cable companies to provide cable services to unincorporated areas of the county. These contracts provide CATV service to unincorporated areas of the county. These contracts generate annual revenues for the county of 51
• CL33 Page 53
  Government approximately $100,000, which currently go into the county’s general fund. The county, in its contract with the cable companies, has not required the installation of equipment at meeting places, or the provision of a studio to facilitate live broadcasts or taped meetings. Unlike local municipalities, the county has not developed its own TV station and has no means for distributing programming countywide.
• CL34 Page 55
  The Alameda County Board of Supervisors and the Alameda County Board of Education have not sufficiently recognized the importance to the community of televising their meetings. While the means to do so have been available for a considerable number of years and other local governing bodies have widely used the access provided by CATV, meetings of these boards remain untelevised. The Grand Jury believes televising these meetings is a high priority and action toward this end should be accelerated. We recognize the county is currently facing financial difficulties, however, the Grand Jury believes there are low cost solutions to broadcasting these meetings.
• CL35 Page 58
  Important issues remain in the use of electronic voting machines: better training is needed for poll workers; only certified equipment should be used; and physical security of electronic voting machines needs to be maintained at the polling places. 57
• CL36 Page 59
  Government PORT OF OAKLAND - OAK to NINTH PROJECT INTRODUCTION The Grand Jury received a complaint alleging impropriety in the award of the contract for development of the Oak-to-Ninth project. In 2003, the Port of Oakland announced plans for the “Oak-to-Ninth” project for the development of 60 acres of port owned property located at the waterfront between Oak Street and Ninth Avenue. The Oak-to-Ninth project involves the conversion of currently underutilized industrial property into a commercial and residential development. The development will include many acres of public access along the shoreline. The Grand Jury investigated whether public bids for this contract were advertised properly; whether the scope and specifications of the bid were correct; and if the construction of the RFP was correct. Representatives of the Port of Oakland and the city of Oakland were also interviewed. The bidding process was public with widespread advertising. A substantial effort was made by the port to obtain multiple bids. The Grand Jury found no indication that any impropriety existed. 58
• CL37 Page 60
  Government CITY OF OAKLAND BUILDING SERVICES DIVISION PAYROLL PROCESSING INTRODUCTION The 2002-2003 Grand Jury examined allegations and made recommendations regarding excessive overtime in the plan checking unit of the city of Oakland’s Community and Economic Development Agency, building services division. The current Grand Jury undertook a follow up investigation. It was determined that progress has been made to correct certain deficiencies noted last year. FACTUAL SUMMARY The Grand Jury reviewed time cards for all plan checkers for the period from January 4, 2003 through October 4, 2003. The Grand Jury also interviewed the unit’s manager and management from the Human Resources (HR) department of the city of Oakland. The time card analysis revealed inconsistencies in the reporting of hours worked, creating the possibility of erroneous payments being made. Reporting inconsistencies complicate and slow down the payroll data input function performed in the unit. Data entry persons must correct errors detected on the time cards before inputting the data. While the HR department performs tests to ascertain the reasonableness of the input submitted, these tests are generally arithmetic and quantitative in nature and not designed to detect coding and other procedural type errors. Thus, any undetected input errors can result in incorrect payroll output (payroll checks, registers, earnings records, etc.). 59
• CL38 Page 61
  Government As an explanation of these errors, the Grand Jury found that standard operating procedures pertaining to payroll were not in place at the building services division and that no training had been received by the plan checkers.

No Responses Found 1

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