Yolo County response regarding Yolo County Finance: Tracking Changes

Department staff preparing payroll can pick up and distribute checks in violation of Yolo County internal controls. County Administrator and Human Resources response: The respondents agree with this finding. In theory, it is possible for anyone to violate any rule, policy or law.

The Finance Manager will replace the Auditor-Controller, but it is not yet clear what the job description for the new position will be. Human Resources response: The respondent disagrees partially with this finding. The Auditor-Controller’s term does not end until December 31, 2014. Still, a job description (class specification) for Director of Finance will be developed by October 31, 2013 as part of the countywide fiscal class study. Auditor-Controller response sent under separate cover: We agree that the job description for the new Director of Finance is not yet available. However, this position will not become effective until my term ends on December 31, 2014. A team of finance managers is currently designing the new financial management structure and will make a

Requisite financial reporting is late and bank reconciliations have been from three to six months late because finance operations are understaffed. Human Resources response: The respondent agrees with this finding and has recommended to the Auditor-Controller that an additional position be requested as part of the 2013-14 budget development process. Auditor-Controller response sent under separate cover: We agree that the issuance of the county annual financial report has taken more than six months from the end of the fiscal year and that bank reconciliations were also performed late. It should be noted that all financial reports complied with statutes and that there were other compensating controls that mitigate the late bank reconciliations. We have reorganized resources where possible and requested additional resources to improve timeliness in the future.

The County uses multiple systems to collected “hours worked.” Human Resources response: The respondent agrees with the findings Auditor-Controller Response sent under separate cover: We agree. Of the 20 county departments, 16 use the countywide E-Schedule to track absences and 4 use their own systems. In addition, some departments use time sheets to certify time worked. The County realizes the need for a more uniform and robust timekeeping system and is preparing request for proposals for a payroll/HR system that includes automated timekeeping.

Some finance personnel lack requisite accounting, finance or software backgrounds. Human Resources response: The respondent disagrees wholly with this finding. Every employee in the County is hired into a classification that sets forth the essential functions performed by the incumbent as well as the minimum education, experience, knowledge and abilities required for the job. Before an individual is hired, Human Resources certifies that the person possesses the minimum education and experience required in the class specification. Auditor-Controller Response sent under separate cover: We disagree partially. Most finance and accounting personnel in the County possess the basic skills and abilities required by their respective job classifications. What has gradually happened over time is that the nature of the work has evolved while the skill sets contained in the job classifications have not been updated. The Human Resources Division is presently engaged in the tasks of reviewing fiscal classifications countywide, as well as enhancing the training program for fiscal skills.

Departments in Yolo County tend to function autonomously, which could lead to lack of management accountability. County Administrator response: The respondent disagrees partially with this finding. While departments are provided leadership autonomy to achieve their goals, management accountability is a strong component of the County’s leadership structure. As one example, all appointed department heads participate in an annual 360 evaluation process which provides an opportunity for feedback from both internal and external sources.

The external auditor has found repeated, uncorrected conditions of non-compliance in grant reporting. Human Resources and Board of Supervisors response: The respondents disagree partially for the same reasons expressed below by the Auditor-Controller. Auditor-Controller response sent under separate cover: We disagree partially. The independent auditors found uncorrected conditions related to the untimely verification of eligibility in the In Home Support Services program, not related to grant reporting. It should be noted that although the findings represent a non-compliance issue, they were within the exception rate allowed by the California Department of Social Services.

A Request for Proposal (RFP) for a new external auditor has not been issued in a timely manner. Board of Supervisors response: The respondents disagree wholly for the same reasons expressed below by the Auditor-Controller. Auditor-Controller response sent under separate cover: We disagree. The contract with the current audit firm does not expire until 6/30/13. A request for proposal for audit services was issued on 3/7/13 and an independent audit firm was approved by the Board of Supervisors on 5/7/13. The new audit firm will begin fieldwork on 6/18/13.

Internal audits need to be performed regularly in all departments. The last internal audit was two years ago. Board of Supervisors response: The respondents disagree partially for the same reasons expressed below by the Auditor- Controller. In addition, the Board Audit Committee notes that the County uses a risk-based approach to prioritize internal audits within available resources. This approach schedules departments or programs with higher risk for more intensive internal audits. Auditor-Controller response sent under separate cover: We agree partially. The Internal Audit staff have been conducting small audit projects in various departments (such as cash and equipment audits) while also being pulled away to help out in other understaffed areas in the Auditor-Controller department. The last major audit project was a countywide payroll audit that was completed two years ago. The Internal Audit division does not have a manager who can regularly lead the charge on these large countywide projects. We have requested additional resources to remedy this gap.

Financial off-line adjustments are made without formal supervisory sign-off, as required by good business practice. Auditor-Controller response sent under separate cover: We disagree partially. Although we agree with the nature of the finding it should be noted that this deficiency was corrected in the FY 2011-12 financial audit.

Yolo County management has taken steps to assure fiscal staff competency. Thank you.

The Board Audit Committee does not initiate financial review or internal audits in Yolo County departments as recommended by the AICPA. Board of Supervisors response: The respondent disagree with this finding. The Board Audit Committee does in fact initiate financial reviews and internal audits.

Employees report favoritism and disparate treatment from managers and supervisors, some of whom have made unprofessional remarks regarding staff deficiencies. County Administrator and Human Resources response: The respondents partially agree with this finding. The County takes seriously any reports of favoritism or disparate treatment. Incidents reported to County Administration are investigated. That said, the aforementioned statement does not reference any specific allegation or survey response. Absent specific supporting evidence, the respondents are unable to support this finding.