Agrees Purchasing provided the Grand Jury with the referenced industry standard cost of a

Recommendations 7

• R1

  Page 39
  The County should encourage CAL-Card use by re-examining and reducing restrictions to eliminate as many obstacles to card use as is practical. Response: County of Santa Cruz Auditor-Controller – REQUIRES FURTHER ANALYSIS The Auditor-Controller and General Services Director will re-examine current restrictions and determine if any change in those restrictions is warranted. Any benefits resulting from a change in those controls must be weighed against the risks associated with a lack of controls; fraud, waste and misuse of County funds. The results of this analysis and any proposed changes will be provided to the Board of Supervisors in December 2009 when the Board is next scheduled to hear updates to the County’s Policy and Procedure Manual. Response: County of Santa Cruz Board of Supervisors – REQURIES FURTHER ANALYSIS Both the Auditor’s Office and the General Services Department will re-examine current policies and procedures, analyze the risk impact of increasing the thresholds, and determine whether any change in those restrictions are warranted. Any benefits resulting from a change in those controls must be weighed against the risks associated with a lack of controls. Results of this effort will be part of the next County Policies and Procedures update at the end of 2009, as necessary.
• R2

  Page 39
  The County should revise and increase card limits for higher-level personnel, with accompanying revisions to “Guidelines for Purchases” and related Purchasing Policy Manual sections. Response: County of Santa Cruz Auditor-Controller – REQUIRES FURTHER ANALYSIS For Everything Else There’s CAL-Card 33 2008–2009 Santa Cruz County Grand Jury Final Report with Responses The Auditor-Controller and General Services Director will review current card limits and determine if any changes in those restrictions are warranted. Any benefits resulting from a change in those controls must be weighed against the risks associated with a lack of controls; fraud, waste and misuse of County funds. The results of this analysis and any proposed changes will be provided to the Board of Supervisors in December 2009, when the Board is next scheduled to hear updates to the County’s Policy and Procedure Manual. Response: County of Santa Cruz Board of Supervisors – REQUIRES FURTHER ANALYSIS Both the Auditor’s Office and the General Services Department plan to meet and examine the current policies and procedures, analyze the risk impact of increasing the thresholds, and then formulate a joint recommendation. Results of this effort will be part of the next County Policies and Procedures update at the end of 2009, as necessary.
• R3

  Page 39
  The County should establish a list of pre-approved service vendors that meet Living Wage, Green Purchase, and other requirements and allow those services to be purchased via CAL-Card. Response: County of Santa Cruz Auditor-Controller – WILL NOT BE IMPLEMENTED Service vendors are not appropriate to be paid through the CAL-Card process with limited exceptions. CAL-Card does not have the capability of supporting 1099 reporting required by the IRS. The County must report service payments over $600 per vendor to the IRS annually. The County cannot capture vendor information from CAL-Card, other than manually, which would be cost prohibitive. Response: County of Santa Cruz Board of Supervisors – WILL NOT BE IMPLEMENTED Due to 1099 required reporting, it is not appropriate for pay for service vendors using a CAL-Card. There are limited pre-approved exceptions when the vendor is a corporation and not subject to the County obtaining 1099 information.
• R4

  Page 40
  The County should simplify the processes of billing, reconciliation, and questioned item resolution for CAL-Card purchases to reduce paperwork and burden on individual users. Response: County of Santa Cruz Auditor-Controller – REQUIRES FURTHER ANALYSIS The Auditor-Controller and General Services Director will review the current procedures and determine if simplification is possible. The results of this review and any proposed changes will be provided to the Board of Supervisors in December 34 For Everything Else There’s CAL-Card 2008–2009 Santa Cruz County Grand Jury Final Report with Responses 2009 when the Board is next scheduled to hear updates to the County’s Policy and Procedure Manual. We currently require the departments to handle their questioned charges and returns, because they are the ones most knowledgeable about the transaction. Although some parts of the reconciliation process may be automated in the future, the department or employee making the purchases will still need to ultimately be responsible for the CAL-Card charges made. Response: County of Santa Cruz Board of Supervisors – REQUIRES FURTHER ANALYSIS The Auditor-Controller and General Services Director will review the current procedures and determine if simplification is possible. The results of this review and any proposed changes will be provided to the Board of Supervisors in December 2009 when the Board is next scheduled to hear updates to the County’s Policy and Procedure Manual. The Auditor-Controller currently requires the departments to handle their questioned charges and returns, because they are the ones most knowledgeable about the transaction. Although some parts of the reconciliation process may be automated in the future, the department or employee making the purchases will still need to ultimately be responsible for the CAL-Card charges made.
• R5

  Page 40
  The County should automate CAL-Card billing and reconciliation to maximize rebates for on-time payments. Response: County of Santa Cruz Auditor-Controller – REQURIES FURTHER ANALYSIS The Auditor-Controller and General Services Director will review the current procedures and determine if any automation or procedural changes are possible to maximize the receipt of available rebates. The results of this review and any proposed changes will be provided to the Board of Supervisors in December 2009, when the Board is next scheduled to hear updates to the County’s Policy and Procedure Manual. Response: County of Santa Cruz Board of Supervisors – REQUIRES FURTHER ANALYSIS The Auditor-Controller and General Services Director will review the current procedures to determine whether any automation or procedural changes are possible to maximize the receipt of available rebates. The results of this review and any proposed changes will be provided to the Board of Supervisors in December 2009, when the County Policies and Procedures Manual is next updated.
• R6

  Page 41
  The County should create incentives, such as recognition and rewards, to encourage employees and departments to promote the use of CAL-Card. For Everything Else There’s CAL-Card 35 2008–2009 Santa Cruz County Grand Jury Final Report with Responses Response: County of Santa Cruz Auditor-Controller – WILL NOT BE IMPLEMENTED Expenditures made on behalf of the County should be made according to the procedures established by the County based upon the most cost effective and appropriate method rather than personal incentives which might appear to influence the purchaser’s independence when selecting a vendor or method of payment. CAL- Card already institutes its own reward system by the use of rebates. Response: County of Santa Cruz Board of Supervisors – WILL NOT BE IMPLEMENTED Expenditures made on behalf of the County are to be made according to the procedures established by the County based upon the most cost effective and appropriate method rather than personal incentives which might appear to influence the purchaser’s independence when selecting a vendor or method of payment. CAL- Card already institutes its own reward system through the use of rebates.
• R7

  Page 41
  The County should request an optimization audit from Visa and U.S. Bank to examine how the savings from use of CAL-Card could be maximized. Response: County of Santa Cruz Board of Supervisors – HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IMPLEMENTED IN THE FUTURE The Purchasing Division will pursue this effort in their future work plan when staff have sufficient time to provide the necessary information and U.S. Bank’s schedule can accommodate the request. Responses Required Note: The responses of the County of Santa Cruz Purchasing Department were incorporated into the responses from the Board of Supervisors and the Board of Supervisors is identified as the respondent. Respond Within / Respondent Findings Recommendations Respond By County of Santa Cruz 60 days 2, 5, 7, 12 Board of Supervisors 1-7 September 1, 2009 County of Santa Cruz 90 days 2, 4, 5, 8 12 Auditor Controller 3, 5, 6 October 1, 2009 County of Santa Cruz 90 days 1-3, 6-7, 9-11 Purchasing Department 1-5 October 1, 2009 Sources Tours/Facilities Visits Central Stores/County Warehouse 36 For Everything Else There’s CAL-Card