Score: 0 (0/19/0)
Santa Cruz County Grand Jury • 2019-2020

Santa Cruz County’s Public Defense Contracts How Complex Contracts Misled County Leaders

Published: June 27, 2019 94 pages
View Original PDF

Findings and Recommendations 12 findings

F1
The County Administrative Office lacks the resources necessary to be the sole administrator of major contracts such as the public defense contracts.
Related Recommendations (1)
R1
The Board of Supervisors should within the next 60 days instruct the County Administrative Officer to transfer responsibility for initiating and administering any major contract for delivery of services to County residents to a department or comparable organizational unit with the human resources to actively manage the contract. (F1)
F2
Negotiating multi-year, fixed price contracts for public defender services has cost the County several millions of dollars and created a windfall for public defense contractors.
Related Recommendations (1)
R2
The Board of Supervisors should condition approval of any future proposal to pay a public defense contractor additional compensation, whether because a case involves special circumstances or otherwise, upon the presentation of evidence demonstrating that in the absence of additional compensation, the total compensation paid to the contractor would be inadequate. (F2)
F3
No one person or department within County government knows exactly how much total compensation the County pays to the public defense contractors, because payment records commingle some fee payments with cost reimbursements.
Related Recommendations (1)
R3
In the interest of transparency, the County Administrative Officer and the Auditor-Controller should work with Lawrence Biggam, the Watsonville landlord, and the Watsonville janitorial and utility providers to implement within the next six months an arrangement by which the County pays Mr. Biggam the amounts due to the Watsonville vendors and Mr. Biggam pays the Watsonville vendors. (F3)
F4
The County’s portrayal of its public defense services is not transparent.
Related Recommendations (2)
R4
In the interest of transparency, the Board of Supervisors should instruct the County Administrative Officer to prepare and present for approval a document directing County staff (a) to use the term “public defense” instead of “public defender” to refer to the services that private defense contractors and Criminal Defense Conflict Program panel attorneys provide, (b) to refrain from referring to a public defense contractor or any member of their staff as a public defender, deputy public defender, or other “defender,” and (c) to refer to Budget Unit 59 using a word that the County Administrative Officer has determined does not suggest that Budget Unit 59 is a department. (F4)
R5
The Board of Supervisors should instruct the County Administrative Officer to prepare and present for approval a request to the County’s public defense contractors and the Criminal Defense Conflict Program panel attorneys, with respect and no suggestion of criticism, to refrain from referring to themselves or any peer as a public defender, deputy public defender, or other “defender.” (F4)
F5
The County’s accounting for separate overhead subsidies has for years caused the County to understate the compensation of the County’s public defense contractors in line-item budgets and in reports to the Board of Supervisors.
Related Recommendations (3)
R6
The Board of Supervisors should instruct the County Administrative Officer to prepare and present for approval a policy that the County will not reimburse contractors for the cost of separate overhead items such as liability insurance, employee health insurance, or office space as one of the County’s obligations to the contractor. (F5, F6)
R7
The Board of Supervisors should instruct the County Administrative Officer to prepare and present for approval a policy that the County will not provide goods or services to contractors in lieu of cash. (F5, F6)
R8
The County Administrative Office and the Auditor-Controller should find a way to present the actual cost of the compensation paid to each public defense contractor on the County budget, beginning with the 2019–2020 fiscal year. (F5)
F6
The County’s duty to fund public defense services does not require the County to provide public defense contractors with free office space.
Related Recommendations (3)
R6
The Board of Supervisors should instruct the County Administrative Officer to prepare and present for approval a policy that the County will not reimburse contractors for the cost of separate overhead items such as liability insurance, employee health insurance, or office space as one of the County’s obligations to the contractor. (F5, F6)
R7
The Board of Supervisors should instruct the County Administrative Officer to prepare and present for approval a policy that the County will not provide goods or services to contractors in lieu of cash. (F5, F6)
R9
The Board of Supervisors should instruct the County Administrative Officer to require, within the next 60 days, the public defense contractors to sign a customary use agreement with the County and, in the case of the alternative public defense contractors, pay reasonable compensation to the County for the use of the space. (F6)
F7
When the County provides free office space to a contractor, the Controller’s Office does not know to ask whether the cost of the office space should be included in the contractor’s compensation for tax purposes.
Related Recommendations (1)
R10
The Auditor-Controller should within the next 60 days take such steps as are appropriate to ensure that the County is reporting to the Internal Revenue Service the provision of office space, utilities, and janitorial services in Watsonville to the public defense contractors, as the law requires. (F7)
F8
The County’s contract policies and standard forms are not integrated with each other, are difficult to use, are not available to the public, are incomplete, and in some cases are poorly written.
Related Recommendations (15)
R11
The Board of Supervisors should within the next 90 days instruct the County Administrative Officer to work with the Auditor-Controller, the Purchasing Agent, and County Counsel to propose a timeline for revising the County’s policies and procedures generally, including the implementation of the recommendations in this report concerning contract rules that Board of Supervisors decides to implement. (F8–F12)
R12
The Policies and Procedures Manual should include a statement identifying the policies and procedures that have been promulgated by the authority of the Board of Supervisors, citing the source of the authority for the Board of Supervisors to adopt the policies and procedures, and describing in reasonable detail the procedure for amending or revising the policies and procedures. (F8)
R13
The County should present the online version of the Policies and Procedures Manual in a manner comparable to the online version of the County Code. (F8)
R14
The Policies and Procedures Manual should include a “readability policy” (i.e., a statement that County policies and contracts should be understandable by the County employees who can reasonably be expected to have to use or understand them) to appear at the beginning of the Policies and Procedures Manual and apply to each Title of the Policies and Procedures Manual. (F8)
R15
A County readability policy should include a requirement to the effect that (a) each paragraph of a policy or contract must have a unique reference number, (b) each paragraph of a policy or contract must have a descriptive heading, (c) each paragraph of a policy or contract should address only one idea, (d) any requirement of a policy or contract to do something must identify a party or person as being responsible for doing the thing, and (e) the organization of any policy or contract should be predictable. (F8)
R16
The County Administrative Office and the Auditor-Controller should work with the Purchasing Agent and County Counsel to rewrite the provisions of Policies and Procedures Manual Title I Section 300 in accordance with a County readability policy and move the provisions into an appropriate place or places in the Policies and Procedures Manual Title III Section 100. (F8)
R17
The County Administrative Office should work with the Purchasing Agent and County Counsel to integrate the Policies and Procedures Manual with the County’s contract templates, including department-specific templates. (F8)
R18
The County Administrative Office should work with the Purchasing Agent and County Counsel to ensure that the County’s contract templates and contract rules are consistent with each other. (F8)
R19
The County Administrative Office should work with the Purchasing Agent and County Counsel to include in the Policies and Procedures Manual a section that contains most of the County’s rules concerning the form and substance of a contract and that identifies the locations of any additional rules concerning the form and substance of a contract. (F8)
R20
The County’s contract rules should identify, or have a procedure for identifying, an individual who, with respect to each contract, will be responsible for ensuring that the County’s contract rules are followed. (F8)
R21
The County’s contract rules should (a) provide for a checklist of the County’s rules concerning the form and substance of a contract, which should remain in the contract’s electronic file, on which the person responsible for the contract, with respect to each such rule, certifies that the contract complies, states that the rule is inapplicable with an explanation why, or explains how the contract does not comply and why and (b) require the CAO Analyst to confirm that the checklist is complete, that any exceptions are appropriate, and that the reasons for any exceptions are sufficiently documented. (F8)
R22
The County’s contract rules should include a policy (a price justification policy) that (a) applies to appropriations above an amount to be specified in the price justification policy (e.g., more than $300,000), (b) defines acceptable ways to evaluate cost, (c) requires that, when a contract is forwarded to the CAO Analyst, the department also submit a memo demonstrating that using one of the acceptable ways to evaluate cost establishes that the cost is justified, and (d) if possible, records the CAO Analyst’s acceptance of the cost justification memo on the SCZCM1000 Report. (F8)
R23
The County’s contract rules should require that, for each service contract, the appropriate department has a written plan for measuring the performance of the contract that includes, as appropriate (a) one or more reports that the contractor will submit to the County, (b) other ways that the County will measure performance, (c) a description of how the department will analyze the performance data, and (d) a description of how the department will use the analysis. (F8)
R24
The County’s contract rules should require that, with respect to any contract that provides for payments for different purposes, the department work with the Controller’s Office, at the time of contract initiation and each amendment or renewal, to agree upon a set of code phrases to distinguish one payment from the other, require the contractor to identify the appropriate code phrase on the contractor’s invoices, and instruct the Controller’s staff to include the appropriate code phrase in the description of the payment. (F8)
R25
The duties of the Clerk of the Board with respect to contracts should include, in addition to verifying that all required signatures are present, confirming that the agreement is properly dated, that each page is numbered, and that there are no blank spaces in the document (other than for initials). (F8)
F9
The County’s public defense contracts violated written County policies without consequences.
Related Recommendations (1)
R11
The Board of Supervisors should within the next 90 days instruct the County Administrative Officer to work with the Auditor-Controller, the Purchasing Agent, and County Counsel to propose a timeline for revising the County’s policies and procedures generally, including the implementation of the recommendations in this report concerning contract rules that Board of Supervisors decides to implement. (F8–F12)
F10
Standard forms are an excellent way to implement some County policies, but they must be used to be effective.
Related Recommendations (1)
R11
The Board of Supervisors should within the next 90 days instruct the County Administrative Officer to work with the Auditor-Controller, the Purchasing Agent, and County Counsel to propose a timeline for revising the County’s policies and procedures generally, including the implementation of the recommendations in this report concerning contract rules that Board of Supervisors decides to implement. (F8–F12)
F11
County leaders misinterpret the meaning of County Counsel’s approval of a contract “as to form.”
Related Recommendations (2)
R11
The Board of Supervisors should within the next 90 days instruct the County Administrative Officer to work with the Auditor-Controller, the Purchasing Agent, and County Counsel to propose a timeline for revising the County’s policies and procedures generally, including the implementation of the recommendations in this report concerning contract rules that Board of Supervisors decides to implement. (F8–F12)
R26
The County should change County Counsel’s certification on a contract from “Approved as to Form” to a phrase that is less likely to mislead anyone about the function of County Counsel, such as “County Counsel has advised the initiating department with respect to this Agreement.” (F11)
F12
The County lost potentially valuable information when the County destroyed copies of contracts with, and reports submitted by, the public defense contractors.
Related Recommendations (2)
R11
The Board of Supervisors should within the next 90 days instruct the County Administrative Officer to work with the Auditor-Controller, the Purchasing Agent, and County Counsel to propose a timeline for revising the County’s policies and procedures generally, including the implementation of the recommendations in this report concerning contract rules that Board of Supervisors decides to implement. (F8–F12)
R27
The County’s contract rules should require the County to retain all records pertaining to the services of a contractor until such time as the County’s record retention policies permit the destruction of all the records. (F12)

Additional Recommendations 1

These recommendations are not explicitly linked to specific findings.

Agency Responses 1

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

No Responses Found 2

Government entities assigned to respond to this report. No response documents have been linked in our database.

Santa Cruz County County
Santa Cruz County Board of Supervisors Elected County Office