Distrust, Disagreements, Dysfunction: Non-Communication Minus Cooperation Divided by

The Auditor-Controller did not submit a proposed budget to the County Administrative Office for Fiscal Years 2020/2021, 2021/2022, or 2022/2023 where, per established procedures, staffing requests are to be made. Response: Agree The County Administrative Office (CAO), after receiving direction from the Board of Supervisors during open session and the mid-year budget report, provides departments their fixed cost estimates for the coming year (salary and benefits; insurance; Information Technology; 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. From there, departments estimate any additional funding they expect to receive and their associated expenses, then they categorize those expenses and enter them into the county's financial system, Finance Enterprise. Departments can also submit any additional requests for funding, including staffing requests, and provide their justification. 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 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 The CAO then gathers all of 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 two public hearings 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 of 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.

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 In the short time since Cheryl Dillingham has stepped into the role of Interim Auditor-Controller, there has been an increase in communication and collaboration between the Auditor-Controller and County Administrative Officer, as well as with other department fiscal staff.

The Auditor-Controller did not file financial reports and audits on time as required by the Federal Government and the State of California in 2019, 2020, 2021 and 2022, causing loss of substantial public funds to the County, schools and special districts, and putting past, current, and future funds at risk. Response: Agree Interim Auditor-Controller Cheryl Dillingham has developed a corrective action plan to have the outstanding financial audits and financial transaction reports through fiscal year 2021-22 finalized by June 30, 2023. This plan has been reviewed by the state. The County Administrative Officer is dedicated to supporting this goal through the allocation of supporting resources and staffing.

Departments, other than that of the Auditor-Controller, are not able to utilize Finance Enterprise workflow modules to submit journal entries, invoices and accounts receivable as well as run reports. This requires information to be entered into spreadsheets and transmitted to the Auditor-Controller's office, where staff in that office, in a duplication of effort, enters the same information into Finance Enterprise. Response: Partially agree Departments can submit invoices into Finance Enterprise. However, department staff, other than that of the Auditor-Controller, cannot submit journal entries and accounts receivables. Department staff can run certain reports but have had their permissions limited by the Auditor-Controller to run other reports. Staff, working with a third-party consultant, have developed a plan to automate and streamline a number of processes in the county's financial software. Included in that plan is developing processes so that departments have responsibility for creating and inputting journal entries and accounts receivable entries into the Finance Enterprise system workflow. Interim Auditor-Controller Cheryl Dillingham is providing additional report access to department staff in an effort to add an additional layer of review for accuracy in transactional postings.

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 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 more streamline application of rules from the central agencies to their individual programs.

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 Response: Agree Humboldt County Code (HCC) 241-2, states the County Administrative Officer (CAO): "... is responsible for carrying out the decisions of the Board and seeing that policies and procedures are implemented and executed." HCC 241-6(a) and (b) state: "Subject to the control and direction of the Board of Supervisors, the County Administrative Officer shall ... (a) Administer, enforce and carry out the policies, rules, regulations, orders and Code sections as implemented and directed by the Board of Supervisors relating to the administration of County departments, services, institutions or districts. (b) Supervise the affairs of the County as charged by the Board of Supervisors and supervise all departments, services, institutions and districts of the County for whom or for which the Board of Supervisors is required to adopt an annual budget, except the County Counsel; and to have the right to report on or to discuss with the Board of Supervisors any matter concerning the affairs of the departments, services, institutions or districts under County Administrative Officer supervision." The CAO 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 CAO's supervision and makes recommendations on transferring personnel a services between them. The CAO, in cooperation with the Auditor-Controller, supervises the budget, and reviews all requests for additional personnel and makes recommendations to the Board on those matters. Finally, upon direction from the Board, the CAO may assist in performing evaluations of department heads, and recommend to the Board appointment, reassignment, reduction or discipline up to and including termination. However, the Board is ultimately charged with performing evaluations and retains appointing authority over non- elected department heads. The residents and voters of Humboldt County review the performance of elected officials, even though the Board adopts the annual budgets of the departments within which those elected officials