Submittal to 'the Board of Supervisors County of Riverside, State of California Submittal Date: July 10,2001

R1

Government Code 25250 and Board of Supervisors' Resolution 83-338 mandate that each department be audited every two years. Staffing shortages within the Internal Audit Unit (IAU) have made it impossible to conduct internal audits and to meet these legal requirements. Numerous agencies of Riverside County have not had an internal audit for at least 6 years. RESPONSE: -X Respondent disagrees partially with the finding. The Auditor's office has stated that the provisions of GC 25250 are being ,satisfied by the comprehensive annual financial report (CAFR) audit performed by the outside CPA firms and that the State Controllers Office concurs with this position.

R2

Chronic underfunding by the County of Riverside impacts the Auditor- Controller's Internal Audit Unit staffing needs. Inadequate staffing continues to result in noncompliance with Government Code 25250 and Board of Supervisors' Resolution 83-338. RESPONSE: -X Respondent disagrees partially with the finding. The Internal Audit Unit is currently staffed with 3.5 full time equivalents (F.T.E.) Additional auditing resources have been requested in the 2001102 fiscal year budget and that request is currently being analyzed. As stated above, the provisions of Government Code 25250 are being met by the (CAFR) audit. Response to 2001 Grand Jury Report /- FINDING:

R3

The Auditor-Controller's Office is responsible to the taxpayers for ensuring that' monies are not lost due to theft, fraud, waste and that all legal mandates are upheld. RESPONSE: -X Respondent disagrees partially with the finding. The Auditor Controller's office acknowledges its role in a coordinated effort with others and not an exclusive responsibility of the department. The Auditor- Controller's office, per statute, is the chief accounting officer of the County. In the carrying out of its duties, the Auditor-Controllers office shall exercise general supervision over the accounting forms and the method of keeping the accounts of all offices, departments and institutions under the control of the Board of Supervisors and of all districts whose funds are kept in the County treasury.

R4

Current efforts by the Board of Supervisors to outsource the internal audit functions of the IAU, could impact and limit the objective audit accountability to the public. RESPONSE: -X Respondent disagrees partially with the finding. Further explanation regarding the underlying assumption of this finding is important. Outsourcing the internal audit functions could impact the way that audits are performed but without further analysis of how such a function would be coordinated, the determination that the objective audit accountability is limited or problematic cannot be substantiated. INTER-DEPARTMENTAL LETTER AUDITOR- COUNTY OF RIVERSIDE CONTROLLER OFFICE OF THE AUDITOR-CONTROLLER TO: David Howitt, Foreperson Grand Jury From: Anthony J. Bellanca, Auditor-Controller Date: June 14,2001 Re: Grand Jury Report dated May 9,2001 : Riverside County Auditor- Controllers Internal Audit Unit In response to your 2000-200 1G rand Jury Report on the Riverside County Auditor- Controllers Internal Audit Unit, the following comments are offered. P