The Mis-Fortunes of Humboldt County

Additional Recommendations 5

These recommendations are not explicitly linked to specific findings.

• R17
  Consultant’s Findings: It is important to provide training to ACO staff to guarantee ​ ​​ ​ property tax responsibilities are performed in a timely and accurate manner. CG Recommendation: Tax staff be allowed to attend the quarterly property tax manager’s ​ meetings to stay current on property tax changes and other forms of property tax training also be made available to tax staff, such as the Property Tax Manual, Megabyte training, Megabyte user group meetings (including the annual meeting). However, the best type of property tax training is one-on-one training on the job. So it is important to share the property tax institutional knowledge with at least two staff members and a manager to protect the County from losing such knowledge. In the alternative, hands on training with a similar County using Megabyte would be helpful. Unfortunately, not all counties have made the same elections and therefore, property taxes may calculate differently county to county. CAO Staff Follow-up Response: Auditor-Controller staff have been allowed and will continue to be ​ allowed to attend property tax manager’s meetings, Megabyte meetings and other property tax training. An additional accountant is being trained on property tax duties and there has been some cross training of other Auditor-Controller staff. The Auditor-Controller will continue to train current and additional staff as much as time and workload will allow. Grand Jury Discussion: During our investigation we learned that the Auditor-Controller staff ​ has been receiving ongoing training, has access to the Property Tax Manual, and is fully involved with all property tax manager meetings.
• R18
  Consultant’s Findings: General Training - Adequately trained staff is vital in operating an ​ ​ ​ effective and efficient Auditor-Controller’s Office. Training, in general, is lacking. At the time of the study by the consultant there was no internal training on ONESolution or other software being used by the County. The County should hire trainers, or increase the capacity of Information Technology to provide training classes for all County employees, especially ONESolution. CG Recommendation: The County make a commitment to invest in the Auditor-Controller Staff ​ and County staff through training, both internally and externally. CAO Staff Follow-up Response: The FY 2018-19 Auditor-Controller budget has funding allocated for ​ training. The interim Auditor-Controller and Assistant Auditor-Controller are working with staff to identify and schedule appropriate training. The Auditor’s office will work with the CAO on providing ongoing internal training. Grand Jury Discussion: Training is planned for County staff on ONESolution, the accounting ​ software. A contractor will conduct the training onsite. That training schedule has not yet been established.
• R19
  Consultant’s Findings: Government Code Section 26883 - The Board of Supervisors has ​ ​ ​ the power to require the County Auditor-Controller to audit the accounts and records of any department, office, board of institution under its control and any district funds kept in the County Treasury. CG Recommendation: Upon the completion of the Cooperative Personnel Services Staffing ​ Review that the CAO revisit the Auditor-Controller’s budget to guarantee that sufficient appropriations are provided to the Auditor-Controller to perform the duties of the Controller. CAO Staff Follow-up Response: At this time the Board of Supervisors has not requested or ​ required that the Auditor-Controller audit the accounts and records of any departments. It is anticipated that if a request of this type was made by the Board sufficient funding would be provided. Grand Jury Discussion: The Auditor-Controller’s staff needs to have the necessary resources ​ allocated in order to perform auditing functions. The Civil Grand Jury learned from several interviews that this office is severely understaffed.
• R20
  Consultant’s Findings: Government Code Section 26909 - states the County ​ ​ ​ Auditor-Controller shall make or contract with a certified public accountant (CPA) or public accountant (PA) to make an annual audit of the accounts and records of every special district within the county for which an audit by a CPA or PA is not otherwise provided. CG Recommendation: The Auditor-Controller assign a staff member to establish the process for ​ tracking and enforcing this requirement. CAO Staff Follow-up Response: Auditor staff is currently working on a system to track and ​ enforce this regulation. The Auditor-Controller is also working with special districts on 14 alternative audit options allowed by Government Code such as less frequent audits, financial reviews and financial compilations. Grand Jury Discussion: Government Code Section 26909 is clear that this process must be ​ ​​ followed to account for all funds in the special districts such as fire and water districts. Less frequent audits are not an option until an operative system to track and enforce this regulation is in place.
• R21
  Consultant’s Findings: Government Code Section 26920 — states that the county auditor ​ ​ ​ ​​ shall perform or cause to be performed, at least once each quarter, a review of the treasurer's statement of assets in the county treasury. At least annually, the county auditor, shall perform or cause to be performed an audit of the assets in the county treasury and express an opinion whether the treasurer's statement of assets is presented fairly and in accordance with generally accepted accounting principles. This annual audit replaces one of the earlier mentioned quarterly reviews. I recommend that the Auditor-Controller assign a staff member to establish the process for performing this requirement. CG Recommendation: The Auditor-Controller assign a staff member to establish the process for ​ performing this requirement. CAO Staff Follow-up Response: The interim Auditor-Controller has assigned a staff member ​ this task. Grand Jury Discussion: It is fundamental that the County Treasurer’s statement of assets in the ​ County treasury be audited on a regular basis. According to the Auditor-Controller’s Office assigned this task, the work is not being performed due to a lack of staffing. In contrast, staff in the County Administrative Office claims that staff have been assigned to perform this work. There is an apparent lack of coordination and communication between County offices. This is of concern to the Civil Grand Jury as it has the potential to affect operational capability. Failure to perform this task could result in a lack of accountability, and errors, in the County budget. CLA Audit Report for the Year Ending June 30, 2018 After completing this review of the Consultant Findings and Recommendations as well as the County Administrative Office responses to those, this Civil Grand Jury reviewed the upcoming CLA report for the year ending June 30, 2018. We made note of one of the findings and recommendations that we believe was substantiated by our investigation. CLA Findings – Payroll Controls and Segregation of Duties: Subsequent to the fiscal year, the ​​ County moved the payroll department from the auditor-controller’s office to human resources. Upon discussion with the payroll department, internal controls have not changed, and the payroll department provides prelist reports to all individual departments, including the Auditor-Controller’s Office, for review prior to processing payroll each period. However, the 15 transfer of the payroll department to human resources could present a greater risk of fraud due to the lack of segregation of duties since the human resources department now has the capability to add new employees, determine salary and wage rates, adjust salary and wage rates in the system, and process payroll. CLA Recommendations: The auditor-controller’s office work closely with the payroll department to ​ ensure controls have been established to address any segregation of duties, issues and increased fraud risk. For example, the payroll systems master file change log, showing all changes made to the payroll information, should be reviewed by management outside the payroll department to ensure it reflects accurate and complete information. The auditor-controller’s office should also analyze payroll registers obtained from the payroll department to ensure they have sufficient information for monitoring payroll disbursements each pay period. Grand Jury Discussion: The Human Resources Payroll Department is not working adequately ​ with the Auditor-Controller’s Office to monitor and audit the payroll to ensure controls have been established to address any segregation of duties and increased fraud risk. The Auditor-Controller’s Office lacks the data needed to analyze payroll registers obtained from the Payroll Department and to ensure they have sufficient information for monitoring payroll disbursements each pay period.