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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.

Score: 0 (0/1/0)

Orange County Grand Jury • 2014-2015

Orange County Sheriff Medical Insurance: County Failures in Negotiation, Documentation, Oversight, and Transparency

38 pages

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⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.

⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

Note: Missing finding numbers detected: F2

Findings 8 findings

F1 Page 357

Numerous provisions contained in the Memorandum of Understanding are 12 ambiguous as they relate to medical insurance coverage for Association of Orange County Deputy Sheriffs active and retiree members. REPORT 13 F.2. There are no limitations in the Memorandum of Understanding on how the Association of Orange County Deputy Sheriffs Trust’s reserves are to be used, REPORT what should be done if the reserve is over-funded, or what would happen to the 14 funds in the Blue Cross Stabilization Fund when the agreement between the Association of Orange County Deputy Sheriffs Trust and Blue Cross is terminated. REPORT 15

F3 Page 357

The County has not insisted that the Association of Orange County Deputy Sheriffs Trust have a formal anti-fraud program, accounting policy and procedure REPORT manuals, or disaster recovery plan. 16 2014-2015 Orange County Grand Jury REPORT 1 Orange County Sheriff Medical Insurance: County Failures in Negotiation, Documentation, Oversight, and Transparency REPORT

F4 Page 358

The jointly retained auditor selection process does not guarantee that the three 2 auditor candidates are qualified, willing to do the work if selected, and will actually do the work if selected. REPORT

F5 Page 358

The Association of Orange County Deputy Sheriffs Trust has subsidized retirees’ 3 health benefits. REPORT

F6 Page 358

Contrary to the terms of the Memorandum of Understanding, Association of 4 Orange County Deputy Sheriffs employees are receiving health care coverage from the Association of Orange County Deputy Sheriffs Trust. REPORT

F7 Page 358

Auditors have noted a number of internal control deficiencies related to the 5 Association of Orange County Deputy Sheriffs Trust. REPORT

F8 Page 358

Allowing only one Reserve study and one Administrative fee study during the 6 entire term of the Memorandum of Understanding is inadequate.

F9 Page 358

There is a general lack of transparency in the Memorandum of Understanding REPORT negotiation and approval process. RECOMMENDATIONS REPORT In accordance with California Penal Code sections 933 and 933.05, the 2014- 8 2015 Grand Jury requires (or, as noted, requests) responses from each agency affected by the recommendations presented in this section. The responses are to be submitted REPORT to the Presiding Judge of the Superior Court. Based on its investigation titled “Orange County Sheriff Medical Insurance: Transparency Problems Abound,” the 2014-2015 Orange County Grand Jury makes the REPORT 10 following ten recommendations:

Recommendations 10

R1
Page 358

The County should retain a qualified, experienced, and independent negotiator to REPORT assist in the next negotiations between Orange County and the Association of 11 Orange County Deputy Sheriffs and require that entity to prepare an internally consistent Memorandum of Understanding that, for example, makes it clear REPORT whether the Orange County contributions are to be used only for active 12 employees. (F.1.)
R2
Page 358

The County should retain a qualified, experienced, and independent negotiator to REPORT incorporate clear terms in the Memorandum Of Understanding that define 13 limitations on the use of Orange County contributions that become reserve funds, specify how to deal with over-funding, and resolve what is to become of the funds REPORT in the Premium Stabilization Fund if the Trust’s agreement with Blue Cross is 14 terminated. (F.2.)
R3
Page 358

The County should ensure that an anti-fraud program, accounting policies and REPORT procedures manuals, and a disaster recovery plan are developed, implemented, 15 and maintained by the Association of Orange County Deputy Sheriffs Trust. (F.3.) REPORT 16 2014-2015 Orange County Grand Jury REPORT 1 Orange County Sheriff Medical Insurance: County Failures in Negotiation, Documentation, Oversight, and Transparency REPORT 2
R4
Page 359

The County should require the County and the Association of Orange County Deputy Sheriffs Trust to have each of the three-candidate auditor firms sign a REPORT firm commitment that the nominees meet specified qualifications, want the 3 business, and will do the business, if selected. (F.4.)
R5
Page 359

If the County is convinced that Sheriff retirees should not be benefiting from REPORT monthly County contributions to the Trust, the County should seek 4 reimbursement from the Association of Orange County Deputy Sheriffs Trust for funds that the County believes are inappropriately used, e.g., Trust funds used to REPORT subsidize retirees medical insurance premiums. (F.5) 5
R6
Page 359

The County should seek reimbursement from the Association of Orange County Deputy Sheriffs Trust for funds that the County believes are inappropriately used, REPORT e.g., Trust funds used to pay for Association of Orange County Deputy Sheriffs 6 employees’ medical insurance. (F.6) REPORT
R7
Page 359

The County should seek to include terms in the next Orange County and 7 Association of Orange County Deputy Sheriffs Memorandum of Understanding that require that the Association of Orange County Deputy Sheriffs Trust have REPORT specific additional appropriate and necessary controls in place, and require that 8 the Trust fully implement and maintain the Memorandum of Understanding controls the Trust currently has. (F.7.) REPORT
R8
Page 359

The County should seek to include provisions in the next Orange County and 9 Association of Orange County Deputy Sheriffs Memorandum of Understanding, requiring that Administrative Fees Assessments and Reserve Studies be REPORT performed more often than once a term and contain specifications and 10 guarantees of active, equal control/access/involvement by Orange County. (F.8.)
R9
Page 359

The County should support and take full advantage of Orange County’s Civic REPORT Openness in Negotiations - “COIN” ordinance in future Orange County and 11 Association of Orange County Deputy Sheriff’s Memorandum of Understanding negotiations and approval processes. (F.9.) REPORT 12 R.10. The County, at the conclusion of the term of the current Memorandum of Understanding, should seriously consider discontinuing its agreement with the REPORT Association of Orange County Deputy Sheriffs and instead take back its rightful 13 responsibility for administering the medical insurance program(s) for all qualified County of Orange employees. (F.1. through F.9.) REPORT REQUIRED RESPONSES 14 The California Penal Code section 933 requires the governing body of any public agency which the Grand Jury has reviewed, and about which it has issued a final report, REPORT to comment to the Presiding Judge of the Superior Court on the findings and 15 recommendations pertaining to matters under the control of the governing body. Such comment shall be made no later than 90 days after the Grand Jury publishes its report REPORT (filed with the Clerk of the Court). Additionally, in the case of a report containing findings 16 and recommendations pertaining to a department or agency headed by an elected 2014-2015 Orange County Grand Jury REPORT 1 Orange County Sheriff Medical Insurance: Orange County Sheriff Medical Insurance: County Failures in Negotiation, Documentation, Oversight, and Transparency County Failures in Negotiation, Documentation, Oversight, and Transparency REPORT County official (e.g. District Attorney, Sheriff, etc.), such elected official shall comment 2
R10
Page 360

The County, at the conclusion of the term of the current Memorandum of (c) If a finding or recommendation of the Grand Jury addresses budgetary or personnel 12 Understanding, should seriously consider discontinuing its agreement with the matters of a county agency or department headed by an elected officer, both the Association of Orange County Deputy Sheriffs and instead take back its rightful agency or department head and the Board of Supervisors shall respond if requested by REPORT responsibility for administering the medical insurance program(s) for all qualified the Grand Jury, but the response of the Board of Supervisors shall address only those 13 County of Orange employees. (F.1. through F.9.) budgetary or personnel matters over which it has some decision making authority. The response of the elected agency or department head shall address all aspects of the REPORT REQUIRED RESPONSES findings or recommendations affecting his or her agency or department. The California Penal Code section 933 requires the governing body of any public Comments to the Presiding Judge of the Superior Court in compliance with Penal Code agency which the Grand Jury has reviewed, and about which it has issued a final report, REPORT section 933.05 are required from: to comment to the Presiding Judge of the Superior Court on the findings and 15 recommendations pertaining to matters under the control of the governing body. Such Responses Required: comment shall be made no later than 90 days after the Grand Jury publishes its report REPORT (filed with the Clerk of the Court). Additionally, in the case of a report containing findings 16 and recommendations pertaining to a department or agency headed by an elected 2014-2015 Orange County Grand Jury 2014-2015 Orange County Grand Jury REPORT 1 Orange County Sheriff Medical Insurance: County Failures in Negotiation, Documentation, Oversight, and Transparency REPORT Responses to Findings F.1. through F.9. and to Recommendations R.1. through 2

Agency Responses 1

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.

Orange County Sheriff Medical Insurance: County Failures in Negotiation, Documentation, Oversight, a

June 24, 2015 • 36 pages • 1 response • Score: 0 (+0, 1, 0) View Details ▾

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1 response to findings and recommendations

Strategies Effective?" Detention Facilities" "Annual Inquiry on Current Probation Jails and Juvenile GJ Report before the end of calendar year 2016. Phase II is still planned to take Probation has taken steps to implement the recommendation in the the surveillance equipment and archiving capacity for Juvenile Hall Part A: Juvenile Hall and Youth Leadership Academy Part A: OC Public Works is currently leading a project to upgrade place during the beginning on FY 2016-17. The overall project is co...

Response: Implemented

Due: End of 2016 Scheduled: within 60 days Score: 0

. The County should require the County and the Association of Orange County Deputy Sheriffs Trust to have each of the three-candidate auditor firms sign a firm commitment that the nominees meet specified qualifications, want the business, and will do the business, if selected. (F.4.) R.5. If the County is convinced that Sheriff retirees should not be benefiting from monthly County contributions to the Trust, the County should seek reimbursement from the Association of Orange County Deputy Sheriffs Trust for funds that the County believes are inappropriately used, e.g., Trust funds used to subs...