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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Riverside County Grand Jury • 2003-2004

Riverside County Auditor-Controller Internal Audit Unit

Published: July 06, 2004 4 pages
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Findings 9 findings

F1
Evidence clearly shows that staffing shortages have plagued the Auditor-Controller’s Office since 1990. This matter has been brought to the attention of the Board of Supervisors in six (6) past Riverside County Grand Jury Reports. (1990, 1992, 1993, 1996, 1997 and 2001) In 2001 the Riverside County Grand Jury issued a report on the Riverside County Internal Audit Unit, concluding that the IAU was inadequately staffed. In May 2002, the Board of Supervisors allocated funds to the IAU for three (3) additional senior auditors, bringing the total number of senior auditors to six (6). In February 2004, an eight percent (8%) budget cut was decreed by the Board of Supervisors resulting in the loss of twenty-three (23) positions, eleven (11) staff, and twelve (12) temporary positions in the Auditor-Controller’s Office. In May 2004, one senior auditor resigned, reducing the senior auditing positions to five (5). 1
F2
The Riverside County Board of Supervisors have utilized the county’s comprehensive annual financial report (CAFR), to meet the requirements of Government Code Section 25250 and Board of Supervisors’ Resolution 83-338. The CAFR audit is not an in- depth analysis of county operations. Without an in-depth audit, this deprives the Board of Supervisors, County Executive Officer and Department Directors of information necessary to make sound fiscal evaluations and decisions.
F3
A severe staffing shortage has resulted in: • Non-compliance with laws, regulations, policy and procedure. • Difficulty in performing operational audits or special audits without adversely impacting the two-year auditing cycle. • Inability to perform routine financial functional and operational audits. • Failure to provide the taxpayers with accountability in spending public funds.
F4
Riverside County has the largest average number of county employees and the fourth largest budget with a disproportionate auditing staff as shown in chart below: TOTAL AVERAGE # COUNTY TOTAL # COUNTY FISCAL OF COUNTY OF BUDGET YEAR EMPLOYEES AUDITORS San Bernardino 16 $2,378,800,251 2003-2004 16,000 Orange 17 $5,086,921,444 2003-2004 17,000 San Diego 20 $3,414,398,000 2002-2003 14,000 Ventura 7 $641,215,000 2003-2004 8,000 Riverside 5 $2,211,371,850 2003-2004 19,000 2
F5
Frequent auditing requests from county department directors for internal audits, are causing limited audit resources to be diverted from other needed areas or the requests cannot be met.
F6
There are thirty-eight (38) departments in Riverside County whose budgets are required to be audited by the Auditor- Controller. Approximately twenty-two (22) departments have not had an in-depth audit, within the last five (5) years, as well as the County Board of Supervisors and the County Treasurer’s Office.
F7
A shortage of internal auditors has hampered the process of performing risk based audits, resulting in a selected review of higher risk areas in the departments and use of a system control audit approach with limited testing.
F8
Outside CPA firms, used by county departments to perform the function that the Auditor-Controller is elected to do, results in duplication of costs and waste of taxpayer’s dollars.
F9
The Auditor-Controller is not afforded the option to have any input as to the selection of CPA firms, type of audits performed or fees incurred for the outside audits.

Recommendations 3