Secivre Yrosivd Stidu

Recommendations 6

• R1
  To ensure that IWF monies are spent for the benefit, education, and welfare of the inmates confined within the jail, the Sheriff's Department should ensure that expenditures funded by the IWF are thoroughly reviewed for compliance with all applicable laws and regulations. Expense Funded by the IWF was not Properly Approved Finding II: OAAS identified a non-budgeted purchase of an electric vehicle for Las Colinas Detention and Reentry Facility for $15,173 that was not properly approved through the established process. According to the IWF policies and procedures, to purchase a non- budgeted item or service, it must be brought to the Committee for consideration and approval. The purchasing request shall be accompanied by a "Letter of Justification" to the County Board of Supervisors (BOS). Upon approval by the Committee, the requesting unit will forward the purchasing request with the "Letter of Justification" to the Inmate Service Division for preparation of a Board letter. Once approved by the BOS, the procurement request, "Letter of Justification" and the BOS approval document, is forwarded to the Accounting Unit for further processing. According to the Sheriff's Department, the purchase was not brought to the Committee for approval since this purchase was a replacement of an existing vehicle. The procurement request was sent to the Department of General Services' Fleet Division, directly instead of going through the required process for the purchase of a non-budgeted item. 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.
• R2
  The Sheriff's Department should properly follow and document approval of IWF expenditures according to established procedures. Lack of Written Policies and Procedures for Jail Commissary Profit Finding III: Reconciliation The Sheriff's Department does not have written policies and procedures regarding the need and timing of profit transfer reconciliations to allocate Jail Commissary profit from the Jail Commissary to the IWF. Penal Code, Section 4025 (e) Inmate welfare funds shall not be used to pay required county expenses of confining inmates in a local detention system, such as meals, clothing, housing, or medical services or expenses, except that inmate welfare funds may be used to augment those required county expenses as determined by the sheriff to be in the best interests of inmates. Office of Audits & Advisory Services Report No. A16-006 A strong system of internal controls includes the performance of periodic reconciliations of accounts. The process of reconciliation ensures the accuracy and validity of financial information. Lack of written policies and procedures that outline required reconciliations can result in inconsistent administration of the Jail Commissary Fund concerning profit transfers as noted in prior audits.
• R3
  The Sheriff's Department should establish written policies procedures that clearly describe the jail commissary profit transfer process. The procedures should define responsibility and guidelines over profit transfers; identify how profit transfer amounts are determined and the process when the jail commissary fund sustains a loss instead of a profit. Finding IV: Agreement Regarding Phone Revenue Allocation to the Probation Department is not Documented During audit testing of phone contract revenues, OAAS found that 5% of the Annual Revenue Guaranteed (ARG) amount was being allocated to the Probation Department. While the agreement states that phone revenue will be provided to the Sheriff's Department and Probation Department, the specific allocation of revenue is not documented. Adequate documentation of agreements between parties provides evidence pertaining to transactions that have occurred including the parties who are authorized to perform such transactions. Proper documentation provides evidence of what has transpired as well as information for researching any discrepancies that may arise. A lack of written agreement of the revenue distribution may result in inconsistent administration of phone company revenues that are received.
• R4
  The Sheriff's Department should re-evaluate the distribution of phone contract revenues based on current phone usage at each facility. Also, document the verbal agreement with the Probation Department regarding the administration of the phone revenues received. Finding V: Insufficient Internal Controls over IWF Minor Equipment and Fixed Assets Based on historical cost, there is approximately $146,248 of minor equipment and $ 17,693 of fixed assets pertaining to the IWF that were not sighted during the inventory count conducted in January 2016. Office of Audits & Advisory Services Report No. A16-006 The breakdown of unsighted assets is as follows: Table 1: Fixed Assets Book Value of Asset Type Amount Not Sighted $ 6,459.40 Weight Machine Scanner $11,233.75 Total $17,693.15 Table 2: Minor Equipment Book Value of Asset Type Amount Not Sighted Books $10,082.94 $23,833.13 Furniture Information Technology $14,653.29 Other Minor Equipment $97,678.83 $146,248.19 Total According to the Sheriff's Department, many of these items are older assets and due to the size of the facilities as well as high turnover of corrections staff, the location of these assets might not have been available when the inventory count was counted. Additionally, difficulty locating the items may have come from not properly affixing a numbered tag upon initial receipt of the items. The County Administrative Manual 0050-02-01 - Control of Capital Assets and Minor Equipment, requires the County Officers and Department heads are responsible for all County property (assets) in their charge, including (fixed) capital assets and minor equipment. These responsibilities include the identification and control of these assets, the filing of inventories and submission of reports as specified by the Board of Supervisors. Insufficient controls over the IWF assets increases the risk of assets being misplaced, lost or misappropriated.
• R5
  The Sheriff's Department should: 1. Monitor year-to-date write-offs of missing assets at least quarterly and determine if additional control measures are warranted, 2. Implement procedures to ensure that an asset tag is physically placed on the asset at the time it is received, and 3. Develop and provide training to staff conducting physical inventory counts (e.g., Learning Management System web based training) to ensure obsolete assets are properly disposed and written off. Office of Audits & Advisory Services Report No. A16-006 Finding VI: Increasing the Participation of Private Citizens in the Committee Would Ensure Impartial Decision Making The Committee is composed almost entirely of Sheriff's Department staff and only includes one private citizen appointed by the Sheriff's Department. As such, the Sheriff's Department has complete discretion in regards to programs and expenses funded by IWF monies. According to the Inmate Welfare Special Revenue Fund and Operating Procedures, the Committee shall be comprised of the Detention Services Bureau Assistant Sheriff, Bureau Commanders, Facility Commanders, Inmate Services Division Manager, Reentry Services Manager, and one civilian volunteer public member appointed by the Sheriff. 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. Segregation of duties is critical to an effective internal control system; it reduces the risk of both erroneous and inappropriate actions. Based on OAAS research, it was noted that the San Bernardino and Los Angeles Counties' IWF Committees are comprised solely of private citizens with diverse backgrounds whose views on how the funds are used are more representative of inmate needs.
• R6
  The Sheriff's Department should consider including a diverse group of private citizens as part of the Committee to ensure that operations of the IWF are conducted in the best interest of the inmates and to ensure impartial decisions regarding the use of the IWF. Observation: Adequacy of IWF Reserve Funding Levels OAAS found that, as of June 30, 2015, the balance of the IWF reserve fund totaled $10,505,247. According to the Sheriff's Department, the IWF is managed with great fiscal responsibility which has allowed them to accumulate such balance in the reserve fund. In preparation of unforeseen events, the Sheriff's Department strived to maintain such balance to ensure that the services provided to the inmates would not be impacted. Penal Code Section 4025 does not require a specific amount to be maintained in the IWF reserve funds. This is a decision at the discretion of the Sheriff's Department. As such, the Sheriff Department established a policy that requires a minimum fund balance equal to 50% of its operating budget to be maintained in the IWF reserve fund. Due to the potential downfall in revenue related to the phone usage, the Sheriff Department may have to utilize the reserve fund to sustain program expenses in the near future. Further, the Sheriff Department is currently looking for other revenue sources to possibly fund the salary expense related to the IWF of $3.1 million which correlates to the amount of revenue that would be lost due to the pending FCC ruling. Office of Audits & Advisory Services Report No. A16-006 However, OAAS noted that 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. The Sheriff's Department should consider developing a formal contingency plan that documents the planned use of reserve funds to offset potential downfall in revenues. Office of Audits & Advisory Services Reliability Effectiveness Efficiency Accountability Transparency Compliance VALUE