A Failure of Oversight - Lompoc Housing and Community Development Corporation

R1a

That the Santa Barbara County Board of Supervisors establish a policy that the Auditor-Controller conduct an annual audit, with time certain deadlines, of all organizations that receive County funds in excess of $100,000. This recommendation will not be implemented as written because it is not reasonable as written. The County incurs significant expenditures associated with grants, cost-reimbursement contracts, cooperative agreements, disbursements to non-profits, other governments, service providers for health and mental health services, loan programs, debt service payments, cash assistance, food subsidies, property purchases, information technology contracts, construction contracts, workers compensation, legal services, etc. The County has a number of mandated audits performed over County departments. Two of the mandated annual audits require an evaluation of the reliability of the County's financial processes and compliance with regulations of Federal programs. Other policies and procedures are also already in place to mitigate weaknesses in disbursement of funds to outside organizations. Due to the number of contracts and costs involved in performing an audit it is not reasonable to audit each contract greater than $100,000 on an annual basis. The Auditor-Controller's department is currently staffed to complete its mandated audits and is limitedly able to complete any additional audits. The Auditor-Controller estimates that, to accomplish this recommendation, as written, an additional equivalent of nine to ten full-time auditors would need to be added to the department. Additionally, the County CEO is developing an internal contract compliance policy committee to improve accountability, efficiency and consistency in contract / grant management businesses processes.