⚠️ Aviso de traducción: Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 23 findings
F1
The audit found four recurring deficiencies. These are repeats of prior year findings. a. Lack of Timely Processing: Disbursements were paid in excess of 30 days past the invoice date of the vendor billing. The Auditor staff was not able to perform this function in a timely manner due to the departments not submitting claims for payment to the Auditor's office in a timely manner. b. Sheriff Inmate Welfare Reconciliation: Although the Inmate Trust bank account is being reconciled to the accounting records on a monthly basis, the balance held in the account does not appear to be reconciled to an open listing of balances held for each inmate. The County could not provide a listing of balances held for inmates that reconciled to the bank balance. c. Compensated Absences: For the close of FY 2011/2012, the audit exposed a negative balance of $25,202 in the County's Compensated Absences Account. In simple terms, the County paid out over $25k to employees for vacation time, leave time, and comp time before the benefits were earned. d. Risk Management – Landfill: The County does not have adequate insurance coverage for the landfill. The audit found two new items requiring correction this year:
F2
a. Outside Bank Accounts: There is an inadequate review of all outside bank accounts. Various departments of the County hold bank accounts outside the County Treasury for which the purpose of these accounts is to collect credit card payments. There are several accounts that the County Auditor Controller's office has not been obtaining monthly bank statements and reconciliations from the departments and the reconciled balance for one bank account had not been recorded on the general ledger of the County. Animal Control: There is a lack of controls within the Animal Control department and department employees are not following policies and procedures. Even though the Animal Control department is not authorized to accept cash, the department still accepts cash and an employee writes a personal check to cover the amount of cash received, deposits the personal check with department deposit, and takes the cash. Good internal control requires proper cash handling. The risk of errors or irregularities is increased when department employees are not following proper policies and procedures. Plumas County Audit Report
F3
The General Fund's Unassigned Fund balance is down from $410,299 in 2011 to zero as of June 30, 2012.
F4
The County's Reserve Fund has been used to cover temporary shortfalls and to pay bills. GASB 54 (Governmental Accounting Standards Board) calls for a target balance of 8% of the previous year's General Fund revenues, or a minimum of $2 million to be in the Reserve Fund account. The Reserve Fund balance was $454,253 as of June 30, 2012. Over the last 11 years, the County has spent on average $397,353 more per year from the
F5
General Fund than it is taking in.
F6
The County Auditor reported that the County has not been funding its Retiree Health Benefit Program. As such, the potential liability to the County as of this writing is approximately $5.4 million dollars.
F7
similar size and population of Plumas County. Plumas County is losing experienced DPO's to other counties, due to better
F8
opportunity, advancement possibilities and salary.
F9
When the Probation Department lost a line supervisor, the Board of Supervisors would not authorize the funding to replace that staff member.
F10
SB678, enacted in 2009, grant monies took a 94% decrease, and going from $400,000 to $24,000 in 2012, further exacerbating the department's funding issues.
F11
A BoS Member stated that "arming probation officers would place them in a higher cost retirement category, costing the County money". It was suggested probation call a deputy if they got "in trouble." Lack of adequate availability due to Sheriff's Office personnel makes this an officer safety issue. The Plumas County Grand Jury found this comment to typify the County Board of Supervisor's attitude towards both officer and public safety and was found to be short sighted.
F12
The Board of Supervisors mandated the Probation Department move to the Courthouse Annex, while every staff member interviewed felt the move an ill-conceived and an unwarranted waste of time and resources.
F13
In spite of the number of high risk offenders, there are no Deputy Probation Officers (DPO) authorized to carry firearms; this is due to the fact that there is no Policy and Procedure in place regarding "Use of Force" as well as the lack of funds for required training.
F14
Probation Officers have personal safety concerns in dealing with increasing numbers high risk offenders, partially due to AB-109. Plumas County Probation Department Report
F15
There are varied perceptions by Probation Office Staff of overall Judicial oversight.
F16
Due to the lack of personnel there is high case/workloads resulting in low morale. Currently there are approximately 275 adult probationers and 30 juvenile probationers.
F17
There is no Line Probation Supervisor for the Probation Officers.
F18
There are currently 9 vacant positions out of 21 full time positions.
F19
Staff members use their own vehicles to come to the Court House from the Probation Department due to few County vehicles being available.
F20
The Chief Probation Officer (CPO) has nearly 20 years of experience.
F21
The Probation Department and the Sheriff Department have a cooperative working relationship.
F22
The District Attorney and the Probation Department have a cordial working relationship.
F23
Interaction between the Board of Supervisors and the Chief Probation Officer continues to be confrontational, demeaning, and unprofessional toward the CPO.
Recommendations 15
-
R1The Grand Jury recommends that the County immediately correct the deficiencies found during the audit. These are repeats of prior year findings. a. Modify procedures to ensure that County departments submit invoices to the Auditor for processing and payment in a timely manner. b. Reconcile the Inmate Trust bank account to an open listing of balances held by each inmate on a monthly basis. The detailed listing of inmate balances should be printed and maintained as an audit trail showing that this procedure was performed. c. Review balances of compensated leave on a regular basis to determine that employees are not being paid for more time than what has accrued. d. Maintain adequate insurance coverage for the landfill to minimize the risk of loss. e. Take steps to re-negotiate its employee retirement and sick leave policies to be more in line with other counties of similar size and population.
-
R2The County needs to correct the deficiencies found during the audit. a. Record on the County general ledger all bank accounts in the County's name, reconcile all outside bank accounts, and forward the information to the Auditor Controller monthly. b. All County departments must follow County policies and procedures for cash handling. c. All department employees must follow policies and procedures. Plumas County Audit Report CONCLUSION: Turning the Ship Around For the past several years, Plumas County has shown little interest in tackling the County's financial problems and getting its fiscal house in order. It seemed the attitude that prevailed from the Board of Supervisors all the way down to every department was, "we just have to hang in there for a while, get by with less, and all will be right again." This attitude resulted in the County spending more on public services and its own processes than it was taking in. During these years, Plumas County has shown a lack of cohesive teamwork with each department competing with other departments for the limited funding. In simple terms, not working together, but fighting together. This conflict was in fact the major reason the previous County Auditor Controller resigned in early 2012. The Grand Jury is pleased to report that there is a new attitude coming to the fore in Plumas County. It is an attitude of determination and self-responsibility. This is good to see. Perhaps last year's stinging report from the Grand Jury had a positive effect. No one knows for sure, but there is definitely a new attitude in the halls of the County Courthouse these days. The transition from not taking responsibility to one of shared responsibility was not easy. This is to be expected when any type of positive change occurs. Positive and effective change is always met with resistance, from within and from without. However, to the County's credit, it seems to have come thru this rough period intact, and is now on a new path of teamwork and constructive problem solving. This does not mean that all is well and no problems exist. Plumas County has monumental challenges that must be met in the coming years. The County must be determined to maintain conservative administrative practices regarding the County's financial management in order to avoid further erosion of its economic base. This report is focused only on the audit report for FY 2011/2012, and does not show the positive changes that are taking place behind the scenes this year. The current fiscal year (FY 2012/2013) is the first year in recent memory in which the County is operating under a balanced budget. In August 2012 with the implementation of several budget workshops and the help of a sharp and strong local budget consultant; a balanced budget was hammered out. The Grand Jury has no audit report information that confirms this, but according to the Plumas County Auditor, the fiscal bleeding appears to have stopped and one can hope that next year's Grand Jury report will show that the County has got its fiscal house in order. Although the County is still in poor financial shape, it seems the ship is turning around and heading in the right direction. Plumas County Audit Report REQUEST FOR RESPONSES: Pursuant to Penal Code section 933.05, the Grand Jury requests responses as follows: From the following governing bodies: The Plumas County Board of Supervisors
-
R3Schools establish regular system to inventory and restock Emergency Supplies.
-
R4Revise Gun/Weapon on Campus procedure to include more detail and ensure student and personnel safety.
-
R5Plan in place to secure funding for automated alert system at each Elementary and Jr/Sr High Schools.
-
R6The District requires a timeline for establishing an Off-campus Evacuation Center. The District requires all drills occur, at least once with all school personnel and students,
-
R7within the first 90 days of the start of school.
-
R8Provide additional onsite communication radios to school sites, particularly to classrooms located on the perimeter of each campus.
-
R9Establish regular schedule to collaborate with school personnel, law enforcement and pertinent agencies regarding school safety. REQUEST FOR RESPONSES: Pursuant to Penal code section 933.05, the grand jury requests responses as follows: From the following governing bodies: The Plumas County Grand Jury requests a response, from issuance of this report, from the Board of Education The Plumas County Grand Jury requests a response, from issuance of this report, from the Superintendent of Schools The governing bodies indicated above should be aware that the comment or response of the governing body must be conducted subject to the notice, agenda and open meeting requirements of the Brown Act. Reports issued by the Civil Grand Jury do not identify individuals interviewed. Penal Code Section 929 requires that reports of the Grand Jury not contain the name of any person or facts leading to the identity of any person who provides information to the Civil Grand Jury. Plumas County Legal Salary Report Why the Big Difference? Plumas County Legal Salary Report EXECUTIVE SUMMARY: The District Attorney and County Counsel are two valuable resources to Plumas County. While both departments operate in the legal arena, they are unique in the services they provide the County and its citizens. County Counsel The County Counsel is the attorney for the County. County Counsel represents the Board of Supervisors and provides civil legal counsel and advice to the Departments of Plumas County. District Attorney The District Attorney is the chief law enforcement officer in the County. While a District Attorney's duties are not limited to criminal prosecution, California law provides that the District Attorney's most essential duty is investigating and prosecuting criminal offenses on behalf of the citizens of the County. These two important positions, along with the Sheriff's Department are responsible in great part for the security and safety of all County employees and the residents of Plumas County. Did the Board of Supervisors make decisions regarding salary for these two critical positions after executing a formal project management process? Does the Board of Supervisors place more value on protecting themselves against litigation than it does ensuring the safety and security of the average citizen? The Grand Jury decided to investigate this issue and report on the disparity between the administrative salaries of these two important Departments and is therefore the subject of this report. BACKGROUND: In August of 2010, the Board of Supervisors (BoS) elected to hire a County Counsel and discontinue utilizing contracted counsel. The County had utilized the services of a contract counsel (Cota Duncan & Cole and Jones & Mayer) for approximately eight (8) months, after which attorney James Reichle contracted to perform County Counsel duties until he was appointed County Counsel in August of 2009. Brian Morris, Deputy County Counsel assisted as County Counsel between March of 2010 and August of 2010. Plumas County Legal Salary Report Contract counsel cost the county approximately $300,000 for the period August 26, 2008 through June 23, 2009. The BoS, in an effort to cut costs and find counsel which would be more accessible, decided to hire a County Counsel hoping to pay much less for the valuable service. The BoS and the County Administrative Officer (CAO) determined the salary range required to attract quality candidates, hired the recruiting firm Ralph Andersen & Associates and "flew" the position at the $168,000 top salary range. The BoS did not use benchmarks to determine a salary range but instead used their best guess determining a number which would attract the interest of a potential applicant. Five candidates were interviewed for the position, including the current County Counsel. The Plumas County job descriptions of March 2010 indicated that the District Attorney was to be compensated at $95,724 per year and County Counsel was to be compensated at $82,008 per year. In fact, County Counsel started his service at $150,000 per year; received a raise of $10,000 after the first year ($5,000 after six months and $5,000 after the first year) and then, subject to a satisfactory performance evaluation, a 5% raise after the second year; bringing his salary up to $168,000 per year after two years of service. In comparison, the District Attorney has received a standard longevity increase and after nine (9) years of service is currently being compensated $103,000 per year. APPROACH: The Grand Jury compared Plumas County data with data of other counties of similar size in California and additionally, with the four counties in our immediate vicinity. The Grand Jury made some assumptions in order to make salary comparisons. We assumed that in general, county population would be the most significant factor determining the salaries and work loads of the CC and DA in each county. The statistical frequency of DA cases prosecuted would be based upon population and, to some extent upon other demographic factors which we assumed to be similar for most of the counties surveyed. Likewise, the number of county business transactions, employee issues and frequency of litigation cases were assumed to be based upon the size of the county. Of course, the size of the staff in each department (CC and DA) would have an effect on the work load. It is assumed that the population of the county would also generally determine the revenue for the county, and therefore would influence the possible salary range for the CC and DA. Work load for the District Attorney's office was determined by the total number of cases prosecuted by the DA's office divided by the number of prosecutors handling those cases (See Appendix A). Work load for the County Counsel's office, for lack of specific data to the contrary, is assumed to be the same for each county based upon the CC's job description. The Grand Jury looked at job descriptions, budgeting, work load, longevity and salary ranges for both of the Plumas County positions. We compared work load, job description and compensation for the CC and DA to those of the CC and DA in other California counties of similar population and to those counties immediately adjacent to Plumas County. Plumas County Legal Salary Report DISCUSSION: The pay disparity between Plumas County's County Counsel (CC) and District Attorney (DA) is 163%, and is the greatest among the twelve counties we looked at. No other county in the study pays their DA less than Plumas County and only Mono and Butte counties pay their CC more than Plumas County. The County Counsel in Plumas County serves as legal counsel for the County, advising the Board of Supervisors and all County Departments as their needs dictate. The CC basically protects the County from needless and excessive litigation costs. Additionally, the County Counsel serves as the Chief Negotiations Officer for the County, negotiating employee labor and salary issues. The Plumas County District Attorney (DA) is responsible for helping to ensure the safety of all Plumas County residents. This requires prosecuting crime, representing the County in cases against criminals, authorizing search warrants, maintaining the felony calendar, juvenile and drug court calendars and in-custody charging; in essence maintaining public safety. The District Attorney's salary is $34,005 below the average salary of District Attorneys in the counties we looked at (See Appendix B). The County Counsel's salary is $22,141 above the average salary of County Counsels in the counties we looked at. While the Grand Jury does not wish to diminish the role of either of these positions, we are concerned about the pay disparity and the fact that budget cuts were apparently heavy in the DA's office while funds were increased for the CC's office. The budgeted salaries and benefits for the County Counsel's office for the fiscal year 2011 – 2012 were up 30% from the previous year. The salaries and benefits for the District Attorney's office were down 16% from the previous year. The fiscal year 2011 – 2012 budget reduced the DA's office by 0.25 positions while the CC's office was allowed to keep their 3 positions. This Grand Jury understands that the budgeting process is complex and that utilizing simplified comparisons could appear irresponsible. The simple fact is that the District Attorney's office appears to have been asked to do more with less while the County Counsel's office appears to be receiving more resources. In 2012 the DA's office handled approximately 800 misdemeanors and 200 felonies, relying on two prosecutors to manage the entire work load; the DA and the Assistant DA. Counties of similar size and workload have more prosecutors handling the case load. Further monetary cuts have left the District Attorney's office with $5,100 to prosecute cases for the rest of the fiscal year. This $5,100 must cover all outside expenses such as expert witnesses, outside investigations, etc. Plumas County Legal Salary Report County Population vs. Salary Differences Approximated cc DA Population Salary Salary CC vs DA (%) County Mono 151,621 177,314 14,000 117% 102% 18,000 115,183 117,356 Mariposa 102% Inyo 19,000 144,392 147,095 Plumas 103,000 168,000 163% 20,000 Colusa 179,509 86% 22,000 154,015 Glenn 28,000 112,158 114,594 102% 112,885 119% Lassen 34,000 134,732 Calaveras 108,915 94% 45,000 115,698 San Benito 56,000 153,354 160,235 104% Tehama 118,207 126,760 107% 64,000 Shasta 140,875 98% 178,000 143,087 Butte 220,000 194,963 200,422 103% 70,000 180% 160% 60,000 140% 50,000 120% 40,000 100% 80% 30,000 60% 20,000 40% 10,000 20% 0% 0 Calaveras Tuolumne Inyo Del Norte Lassen San Benito Tehama Mariposa Plumas Colusa Glenn Mono Amador CC versus DA Salary Comparison Population Reports issued by the Civil Grand Jury do not identify individuals interviewed. Penal Code Section 929 requires that reports of the Grand Jury not contain the name of any person or facts leading to the identity of any person who provides information to the Civil Grand Jury. Plumas County Legal Salary Report
-
R10-14Why the Big Difference? Plumas County Legal Salary Report .....
-
R15-22The Thin Blue Line Gets Thinner Plumas County Jail Report .....
-
R23-30In the Crosshairs Plumas County Probation Department Report .....
-
R31-35Who's in Charge Here? Chester Public Utilities District Report .....
-
R36-52A Small Town with Big Problems Grizzly Lake CSD Report .....
-
R53-58II PLUMAS COUNTY CIVIL GRAND JURY ROSTER 2012/2013 We the members of the 2012/2013 Civil Grand Jury are proud to have served on such a worthy assembly. We hope our work will help improve conditions here in Plumas County and we want to thank all of you for entrusting us with this very important task. Doyle, Dennis Self Employed Graeagle Foreperson Foreperson /pro tem Civil Engineer - Retired Byrne, Martin Quincy McNeill, Kyle Treasurer Realtor Chester White, Cynthia Correspondence Secretary Self-Employed Quincy Deini, Rebecca Parliamentarian Eastern Plumas Hospital Portola Hogg, Cindy Recording Secretary Head Start Manager Quincy Murray, Mark Sergeant of Arms Retired Police Officer Chester McMurtry, Rodger Member Retired Taylorsville Martinez, Regina Member Eastern Plumas Hospital Portola Simpton, Robert Information Technology Semi-Retired Clio Watson, Jeffrey Member Plumas National Forest Quincy Self Employed Strate, LaVerne Member Chester Dougan, Mark Public Health Employee Member Clio Correira, Caroline Member Nursing Student Quincy Brownrigg, Deborah Member Seneca Hospital District Chester "Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has." - Margaret Mead Ш PLUMAS COUNTY GRAND JURY PO Box 784 Quincy, CA 95971 Caroline Correira June 3, 2013 Cindy Hogg The Honorable Ira Kaufman Presiding Judge Cynthia White Plumas County Superior Court Debbie Brownrigg Re: 2012/2013 Plumas County Grand Jury Final Report Dennis Doyle Dear Judge Kaufman, On behalf of the 2012/2013 Plumas County Grand Jury, I am pleased to present this Jeffrey Watson final report to you and the citizens of Plumas County. Kyle McNeill The primary function of the Grand Jury is the examination of all aspects of county government and special districts, seeing that government agencies are being run LaVerne Strate efficiently, honestly and fairly. We took our job seriously. Members of the Grand Jury worked tirelessly meeting as a panel and in special committees. We toured several Mark Dougan county facilities, including the penal institution located in East Quincy. We reviewed thousands of pages of documents and met with or interviewed over sixty agency and departmental representatives and employees. All together thousands of hours were Mark Murray spent in the preparation of the final report. Martin Byrne Each year, the Grand Jury has to choose what issues to address and where to focus its resources to best serve the public. Our goal was to investigate issues that were Rebecca Deini important to the community and where we thought the Grand Jury could best contribute. We chose a wide range of topics from the vitally important issue of our Regina Martinez schoolchildren's safety to mismanagement of Community Service Districts. Not only did we point out shortcomings, but also we made suggestions on how to improve the Robert Simpton system. We also gave praise to those departments that are doing a great job. We hope that our suggestions will be heard and implemented. Rodger McMurtry I am very proud and fortunate to have served as Foreperson of the 2012/2013 Plumas County Grand Jury. Every member of the Grand Jury has been dedicated, dauntless and honorable. It has been a pleasure and honor to serve with them. Sincerely, Dennis /2013 FINAL REPORT DISTRIBUTION LIST The Honorable Judge Janet Hilde The Honorable Judge Ira Kaufman Plumas County Auditor / Controller Plumas County Board of Supervisors Plumas County Treasurer / Tax Collector Plumas County Clerk Plumas County Counsel Plumas County District Attorney Plumas County Court Executive Officer Plumas County Jail Commander Plumas County Libraries Plumas County Sheriff Plumas County Special District Association (For distribution to Special Districts) Plumas County Superintendent of Schools Plumas County Grand Jury California Attorney General's Office California Grand Jurors Association California State Archivist Chester Public Utilities District Grizzly Lake Community Services District Local Agency Formation Commission (LAFCo) Smith & Newell CPA's A complete report is available on the following web site: http://www.countyofplumas.com/index.aspx?nid=216 V this page intentionally left blank Plumas County Audit Report A COUNTY STILL STRUGGLING Plumas County Audit Report EXECUTIVE SUMMARY: Plumas County continues to face significant financial challenges as the economy struggles to recover from the recession. Property tax revenues continued their downward trend declining $450,000 from the previous year. Sales tax revenue and hotel tax revenues continued to increase, but not enough to offset the property tax decrease. Total County reserves remain positive, although available cash reserves are problematic. In seven of the last eleven years, Plumas County has depleted its reserve (savings) to make ends meet. The General Fund account balance (the County's checking account used to pay bills) continues to decline. In FY 2011/2012, the County's General fund balance declined by $687,004 as the County continued to spend more than it received. The State continues to look to local governments to solve its cash flow and revenue problems. Most significantly was the passage of Assembly Bill 109 (AB-109) in 2011. AB-109, also known as Criminal Justice Realignment Act, transferred the responsibility and the cost of housing low risk inmates to local county jails. Plumas County felons who would normally be transferred to a State prison are now incarcerated in the County Jail. AB-109 has placed a substantial burden on Plumas County and it threatens the County's ability to ensure public safety. The Board of Supervisors and management have made substantial cuts in spending by eliminating or reducing non-essential services, reducing the number of employees, employee's hours and benefits. Additionally, in a major attempt to prevent further overspending, the County took significant action in August 2012 by passing a structurally balanced budget for FY 2011/2012. Plumas County received an "unqualified opinion" in the independent auditor's report of fiscal year (FY) 2011/2012, which means that the County's accounting requirements and practices were followed correctly and there were no exceptions noted. That is where the good news ends. Plumas County is spending more than it is taking in, and in so doing, it has depleted its reserves, and is the subject of this report. BACKGROUND: Section 925 of the California Penal Code requires that the Grand Jury examine the financial accounts and records of the County on an annual basis. In addition, California Government Code section 25250 requires the Board of Supervisors to conduct an annual audit of all County accounts. An outside independent auditor conducts this audit. Section 926 of the Penal Code allows the Grand Jury to enter into a joint contract with the Board of Supervisors to employ an audit for both of these purposes. As in previous years, the independent audit firm of Smith and Newell of Yuba City, CA performed the audit. Plumas County Audit Report APPROACH: The Grand Jury felt it was time to report to the citizenry what is really going on with the County's finances in a manner that could be understood by every reader, professional and laypersons alike. The Grand Jury interviewed and took testimony of the County Auditor, the County's financial consultant, all members of the County Board of Supervisors (BOS) and a co-owner of the independent audit firm of Smith & Newell. DISCUSSION: The General Fund is the chief operating fund of the County. It is used in part to pay its bills. During FY 2011/2012, the County's total General Fund revenues were $21,399,982 down $950,503 from the previous year, and yet, expenditures were only down $688,583 from the previous year. Herein lies the problem, Plumas County is spending more than it is taking in. As of June 30, 2012, the General Fund had a remaining balance of $3,674,622 in the account. The following chart shows how the County is spending more money than it is taking in. PLUMAS COUNTY MAIN GENERAL FUND FOR OPERATIONS $30,000,000 Outflow $25,000,000 $20,000,000 Income $15,000,000 Outflow Difference Income $10,000,000 $5,000,000 Difference $0 -$5,000,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year Ending 6/30 $22.765 $23.119 $22.317 $22.350 $21.399 $ in Millions $17.817 $17.830 $17.905 $19.744 $24.059 $23.298 Income Outflow $ in Millions $16.549 $17.507 $18.965 $22.887 $23.985 $24.433 $23.682 $22.918 $22.340 $21.652 $18.014 Difference $ in Thousands $ 1,268 ($184,086) $398,558 $799,434 ($121,527) ($865,303) ($373,657) ($384,518) ($600,221) $ 9,759 ($252,161) Source: Plumas County Auditor Plumas County Audit Report REVENUES: Plumas County revenues increased over the previous year by $436,400 bringing the total income to $51,927,680. Of that total amount, 54.52% were funds received from State and Federal programs and grants; 30.51% came in from various taxes (Property, Tourist and Sales Taxes, etc.). The remaining 14.97% came in from a wide assortment of charges for licenses, permits, fees and fines. These percentages are the same as the previous year. The following graph shows an illustrative picture of where the County funds come from. Revenues by Source – Governmental Activities FY 2010/11 FY 2011/12 Taxes 30.36% 30.51% Licenses & Permits 1.08% 1.55% FY 2010/11 Fines & Forfeitures .76% FY 2011/12 .77% Use of Money & Propery 1.15% 1.16% Intergovernmental 56.62% 54.52% Charges for Services 8.24% 9.67% Miscellaneous 1.79% 1.82% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% Source: Smith & Newell Audit Report for year ending 6/30/2012 Plumas County Audit Report EXPENDITURES: The County continued to make improvements on the expense side of the ledger spending the largest percentage of its income (28.92%) on Public Safety (Sheriff and Law Enforcement, etc.), an increase of 6.97%. 15.61% went to Public Assistance programs, 15.52% for Health and Welfare services, and 16.59% for Public Works and Facilities. The County spent 14.5% on its own operations, down $598,823 from last year. The remaining 8.86% was spent on Capital Outlay, Education, Culture & Recreation, and Debt Service, down 3.03% from the previous year. The following graph shows an illustrative picture of how County funds were spent. Expenditures by Function – Governmental Activities FY 2010/11 FY 2011/12 General Government 14.50% 15.49% Public Protection 28.92% 26.70% Public Assistance 15.61% 16.89% Public Ways & Facilities 16.59% 12.96% Health & Welfare 15.52% 16.06% Education 1.41% 1.53% Culture& Recreation .77% .79% FY 2010/11 Debt Service – Principal 1.10% 1.04% FY 2011/12 Debt Service – Interest 1.56% 1.58% Capital Outlay 4.02% 6.96% 0.00% 10.00% 15.00% 20.00% 25.00% 5.00% 30.00% Source: Smith & Newell Audit Report for year ending 6/30/2012 Plumas County Audit Report COUNTY ASSETS: The County's investment in capital assets as of June 30, 2012 amounted to $51,241,917. This includes a broad range of capital assets including land, infrastructure, (roads and bridges), buildings, tools and equipment. COUNTY DEBT: As of June 30, 2012, the County had a total long-term debt outstanding of $24,414,777 as compared to $24,773,820 in the prior year. During the year, there was a retirement of debt amounting to $557,125 and an increase in post-employment benefits of $198,082. UNFUNDED LIABILITY: An unfunded liability is a liability that has no funds put aside to cover its potential expense. An unfunded liability is what the actuary determines as the cost to cover shortfalls from market losses, demographic changes, overly optimistic investment returns by the pension plan administrator or other benefit improvements that were not covered by the contribution rates collected from the employee or the employer. The County has a huge unfunded liability in its Retiree Health Benefit program. For years, the program was funded by returns from investments in Stocks, Bonds and other investments. With the poor economy, these investments have not met their normal return and therefore the resulting shortfall is left to the County. Under current policies, a County employee's sick time is accrued from year to year, and when an employee retires, a percentage of that sick time, depending upon their length of service, is paid to the retiring employee. This is as an additional benefit to their retirement plan, and puts a financial burden on the unfunded liability account. FINANCIAL HIGHLIGHTS: The County's assets exceeded liabilities at the close of FY 2011/2012 by $72,318,722 (net assets). Of this amount, $85,520 is unrestricted and may be used to meet ongoing obligations. $36,829,235 is restricted for specific purposes, and $35,403,967 is invested in capital assets. The County's governmental funds (funds received from State and Federal sources) increased by $1,168,570 in FY 2011/2012 to a total of $39,394,275. The County's total reserves remain healthy, but the General Fund reserve (savings) is declining. The County in essence eliminated the Unassigned Funds account by decreased its balance to zero. Plumas County Audit Report The County's investment in capital assets increased by $815,529. The increase was primarily because of newly added assets within the Sheriff's Department. Total added assets were greater than total depreciation. The County's total long-term debt decreased by $359,043 in comparison with the prior year. • FINDINGS: F1. The audit found four recurring deficiencies. These are repeats of prior year findings. a. Lack of Timely Processing: Disbursements were paid in excess of 30 days past the invoice date of the vendor billing. The Auditor staff was not able to perform this function in a timely manner due to the departments not submitting claims for payment to the Auditor's office in a timely manner. b. Sheriff Inmate Welfare Reconciliation: Although the Inmate Trust bank account is being reconciled to the accounting records on a monthly basis, the balance held in the account does not appear to be reconciled to an open listing of balances held for each inmate. The County could not provide a listing of balances held for inmates that reconciled to the bank balance. c. Compensated Absences: For the close of FY 2011/2012, the audit exposed a negative balance of $25,202 in the County's Compensated Absences Account. In simple terms, the County paid out over $25k to employees for vacation time, leave time, and comp time before the benefits were earned. d. Risk Management – Landfill: The County does not have adequate insurance coverage for the landfill. The audit found two new items requiring correction this year: F2. a. Outside Bank Accounts: There is an inadequate review of all outside bank accounts. Various departments of the County hold bank accounts outside the County Treasury for which the purpose of these accounts is to collect credit card payments. There are several accounts that the County Auditor Controller's office has not been obtaining monthly bank statements and reconciliations from the departments and the reconciled balance for one bank account had not been recorded on the general ledger of the County. Animal Control: There is a lack of controls within the Animal Control department and department employees are not following policies and procedures. Even though the Animal Control department is not authorized to accept cash, the department still accepts cash and an employee writes a personal check to cover the amount of cash received, deposits the personal check with department deposit, and takes the cash. Good internal control requires proper cash handling. The risk of errors or irregularities is increased when department employees are not following proper policies and procedures. Plumas County Audit Report F3. The General Fund's Unassigned Fund balance is down from $410,299 in 2011 to zero as of June 30, 2012. F4. The County's Reserve Fund has been used to cover temporary shortfalls and to pay bills. GASB 54 (Governmental Accounting Standards Board) calls for a target balance of 8% of the previous year's General Fund revenues, or a minimum of $2 million to be in the Reserve Fund account. The Reserve Fund balance was $454,253 as of June 30, 2012. Over the last 11 years, the County has spent on average $397,353 more per year from the F5. General Fund than it is taking in. F6. The County Auditor reported that the County has not been funding its Retiree Health Benefit Program. As such, the potential liability to the County as of this writing is approximately $5.4 million dollars. RECOMMENDATIONS: R1. The Grand Jury recommends that the County immediately correct the deficiencies found during the audit. These are repeats of prior year findings. a. Modify procedures to ensure that County departments submit invoices to the Auditor for processing and payment in a timely manner. b. Reconcile the Inmate Trust bank account to an open listing of balances held by each inmate on a monthly basis. The detailed listing of inmate balances should be printed and maintained as an audit trail showing that this procedure was performed. c. Review balances of compensated leave on a regular basis to determine that employees are not being paid for more time than what has accrued. d. Maintain adequate insurance coverage for the landfill to minimize the risk of loss. e. Take steps to re-negotiate its employee retirement and sick leave policies to be more in line with other counties of similar size and population. R2. The County needs to correct the deficiencies found during the audit. a. Record on the County general ledger all bank accounts in the County's name, reconcile all outside bank accounts, and forward the information to the Auditor Controller monthly. b. All County departments must follow County policies and procedures for cash handling. c. All department employees must follow policies and procedures. Plumas County Audit Report CONCLUSION: Turning the Ship Around For the past several years, Plumas County has shown little interest in tackling the County's financial problems and getting its fiscal house in order. It seemed the attitude that prevailed from the Board of Supervisors all the way down to every department was, "we just have to hang in there for a while, get by with less, and all will be right again." This attitude resulted in the County spending more on public services and its own processes than it was taking in. During these years, Plumas County has shown a lack of cohesive teamwork with each department competing with other departments for the limited funding. In simple terms, not working together, but fighting together. This conflict was in fact the major reason the previous County Auditor Controller resigned in early 2012. The Grand Jury is pleased to report that there is a new attitude coming to the fore in Plumas County. It is an attitude of determination and self-responsibility. This is good to see. Perhaps last year's stinging report from the Grand Jury had a positive effect. No one knows for sure, but there is definitely a new attitude in the halls of the County Courthouse these days. The transition from not taking responsibility to one of shared responsibility was not easy. This is to be expected when any type of positive change occurs. Positive and effective change is always met with resistance, from within and from without. However, to the County's credit, it seems to have come thru this rough period intact, and is now on a new path of teamwork and constructive problem solving. This does not mean that all is well and no problems exist. Plumas County has monumental challenges that must be met in the coming years. The County must be determined to maintain conservative administrative practices regarding the County's financial management in order to avoid further erosion of its economic base. This report is focused only on the audit report for FY 2011/2012, and does not show the positive changes that are taking place behind the scenes this year. The current fiscal year (FY 2012/2013) is the first year in recent memory in which the County is operating under a balanced budget. In August 2012 with the implementation of several budget workshops and the help of a sharp and strong local budget consultant; a balanced budget was hammered out. The Grand Jury has no audit report information that confirms this, but according to the Plumas County Auditor, the fiscal bleeding appears to have stopped and one can hope that next year's Grand Jury report will show that the County has got its fiscal house in order. Although the County is still in poor financial shape, it seems the ship is turning around and heading in the right direction. Plumas County Audit Report REQUEST FOR RESPONSES: Pursuant to Penal Code section 933.05, the Grand Jury requests responses as follows: From the following governing bodies: The Plumas County Board of Supervisors
* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.