Responsetograndjuryreport ReportTitle; Distrust,Disagreements,Dysfunction:Non-CommunicationMinusCooperationDividedby*

The Board of Supervisors is responsible for the administration and management of the County's business practices; however, the Supervisors did not respond in an effective manner to information provided to them regarding dysfunction on many levels between the County Administrative Officer, Auditor-Controller, other elected officials, and department directors. Response: Partially agree The Auditor-Controller is an independently elected official, and as such the Board of Supervisors has limited tools to direct their actions. The Board, however, in 2018 placed a measure on the ballot for voters to decide whether the position of Auditor-Controller and Treasurer-Tax Collector should become one position, the Director of Finance, and whether that position should be appointed by the Board of Supervisors. Such a position would allow the Board of Supervisors to more effectively and quickly solve finance-related issues while ensuring an experienced, qualified individual serves in that role. By law, elected officials must reside in the jurisdiction they serve. The County of Humboldt has an annual operating budget of more than $500 million, the largest of any organization in the region, 18 departments, more than 2,000 employees, more than 40 community services districts, fire districts and school districts. It can be difficult in a small community like Humboldt to find an individual who not only possesses the qualifications, but also the experience, leadership and interpersonal skills needed to effectively lead such a large and complex agency as its chief accountant, as well as someone who is willing to conduct their affairs as a public official subject to public inspection, review and criticism. However, the Board collectively leads the County of Humboldt and is ultimately responsible for the financial well-being of the organization, and its response did not prevent the dysfunction.

Humboldt County Code, Sec. 241-6(a) requires the County Administrative Officer and the Auditor- Controller to cooperate in the preparation of the County's annual budget. There is a general obligation that the two offices collaborate to ensure fiscal responsibility; however, this is being obstructed by a breakdown of trust and communications between the two offices. Response: Agree The County Administrative Office (CAO), after receiving direction from the Board, during open session and the mid-year budget report, provides departments their fixed cost estimates for the coming year (salary and benefits costs; insurance; Information Technology charges; Purchasing; Motorpool, etc.) as well as the amount of General Fund allocation they will receive. At the mid-year budget report, the Board also provides direction on priorities for any additional General Fund requests that departments may have. Typically, in April, departments come before the Board during two informational meetings to discuss directly with the Board the condition of their budgets and programs. These are also opportunities for departments to express to the Board their need for any additional funding request(s) they have submitted. During this same time (typically in March and April), CAO staff meet individually with each department to discuss their budgets, answer questions, and hear concerns. The CAO then gathers all this information and considers the additional funding requests in light of the Board- approved priorities and discussions and makes a recommendation to the Board in June in the form of the Proposed Budget. From there, the Board holds a public hearing to hear from the public and discuss the Proposed Budget with departments. Again, these are additional opportunities for departments to come before the Board to express their needs. The CAO provides all these public meeting dates to departments at the beginning of the budget development process. The Auditor-Controller did not participate in any of these processes for FY 20-21, 21-22, or 22-23.

The County paid unnecessary credit card interest; lost bank interest; paid for consultants to assist with finances and other professional or personnel services; faced delays in receiving funds; paid fines and late fees; and missed opportunities to secure grants. These losses were the results of payments or required reports not submitted on time by the Auditor-Controller. Response: Agree

The County's financial procedures are decentralized in that different processes for accounting are used by different departments, including the use of spreadsheets and some use of paper timecards. Response: Partially Agree All county departments use the same central financial software for accounting, CentralSquare Technologies, Finance Enterprise. The central agencies responsible for issuing financial procedures are the Auditor-Controller and CAO. Each department then may produce their own department-specific procedures that allow them to streamline application of rules from the central agencies to their individual programs. Some departments, including Department of Health and Human Services (DHHS) and Public Works must adhere to unique financial procedures, timelines and deadlines required by state and federal agencies. In other cases, like in the Sheriff's Office, the central software responsible for payroll, Executime, which feeds into Finance Enterprise, is not currently set up to handle the unique circumstances of, and portions of labor agreements that apply to, 24/7 employees like Sheriff's and Correctional Deputies. These factors have necessitated the use of other timekeeping measures than Executime.

The Board of Supervisors adopted Resolution 21-128 affirming, unless otherwise authorized by law, all interest on monies deposited with the County belongs to and shall be paid quarterly into the General Fund and the Auditor-Controller is authorized and directed to act in compliance with the resolution and Government Code section 53647. Response: Agree

The County Administrative Officer is responsible for supervising County business affairs, as charged by the Board of Supervisors, specifically including, supervising all departments for whom the Board adopts an annual budget. Response: Agree The Chief Administrative Officer is charged with supervising the affairs of the county and those entities for whom the Board adopts an annual budget. It enforces and carries out the Board's policies, coordinates the administration of departments and services under the Chief Administrative Officer's supervision and makes recommendations on transferring personnel services between them. The Chief Administrative Officer, in cooperation with the Auditor-Controller, supervises the budget, and reviews all requests for additional personnel and makes