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HomeMy WebLinkAbout01/27/2012OFFICE OF THE CITY MANAGER January TO: Honorable Mayor and City Council FROM: Alan Tandy, City Manager,/���ch SUBJECT: Generallnformation Miscellaneous News • Congratulations go out to the Rabobank Arena staff, organization and fans, as Rabobank Arena was ranked the fo minor hockey league venue of 201 1 by Stadium Journey Maga Condors are averaging 5,000 fans per home game this season - good for sixth best out of the 20 team ECHL. • The California Center for Public Health Advocacy is currently 1 Bakersfield on its web site as the latest City to become a Healtr Active Living (HEAL) City. Bakersfield is one of 95 California cities designation. • As you are aware, City staff continues to discuss the future of o� Control operations with the County. At present time the County triple City costs without any service improvements. The County Controller performed an audit of the County's Animal Control oK and the results are concerning to us. They paint a picture showin� proper financial controls and incomplete records - at the same t are trying to unreasonably raise the City's costs. A memo and a the audit are enclosed. • We have received some great news - the Wastewater Treatment Expansion Project has been selected to receive the Out Wastewater Project Award for the American Society of Engineer� 9. The project was selected out of a pool of 36 eligible projects. Th will be bresented in Februarv durina an awards bresentation in Fe Honorable Mayor and City Council General Information January 27, 2012 Page 2 • We are cautiously optimistic that the council meeting schec February 1 st will be a comparatively quick one- no closec scheduled and no meal is planned! Redevelopment News ■ Unfortunately we received a report that the bill which wo� delayed the elimination of the redevelopment agency does r enough support to pass the Legislature by the Feb. 1 deadli continues to move forward with meeting deadlines and requirei set forth in the original legislation. High Speed Rail News � The California State Auditor's Office released a follow up repor High Speed Rail Project this week. It is safe to say the report does the project's case to move forward. The report states the "funding situation has become increasingly risky and the authorit oversight persists." An article on the report is enclosed, as well c sheet on the report issued by the Auditor's office. The entire report is available at: http://www.bsa.ca.aov/pdfs/reports/201 1-5� � Earlier this week the Madera County Board of Supervisors vote formally oppose the High Speed Rail Project. The resolution outlin of the same concerns other governing bodies, including the City have had with the planning and outreach related to the project. Budget News ➢ The City's budget process for FY 2012-13 kicked off this week. cautiously optimistic we may be able to restore some critical pos over the past few years during this budget cycle. Unfortunately closely follow the State's budget process, as it faces an estimc billion deficit and no definitive solutions to balance its budget as c Event Schedule There are three Condors games at Rabobank Arena during the upcomir week: Honorable Mayor and City Council General Information January 27, 2012 Page 3 Reports For your information, we enclose the following information: ➢ The Streets Division work schedule for the week beginning Jan 30t� AT:rs:ch cc: Department Heads Roberta Gafford, City Clerk OFFICE OF THE CITY MANAGER MEMORANDUM January 2t TO: Honorable Mayor and City Counci FROM: Alan Tandy, City Manager SUBJECT: Kern County Animal Control and Future Contracts In the December 16, 2011 "General Information" memo, we discussed thE Kern's desire to triple our contract costs for sheltering animals, with no services. We are now in receipt of an audit conducted on County Animal Control by the County Auditor-Controller, a copy of which is enclosed. Some excerpts include: �"The findings in ovr audit indicate a severe breakdown separation of duties along with a lack of accovntability collections and other deficiencies in internal controls. A i internal control structure is important to gvard against potentia and fravd. We believe that the department shovld reorgani� reassign staff duties in order to assure the integrity of financial r� and safegvard County assets. In our opinion, because of the effects of the matters discussed preceding paragraph, the department's current procedure controls do not reasonably assure the integrity of the accc records as they relate to cash and the safeguarding of the ca: receipts entrusted to the department." Honorable Mayor ar Jai General record keeping and monitoring were inadequate to p► accovnt for all sources of revenue." �"These conditions significantly increase the likelihoo misappropriation and led to the following errors and irregularitie • The cash box closing report did not always balance deposit amount." • "Not all transactions were recorded." •"Insufficient monitoring of online license revenue. department had not transferred online license renewal pa} from the bank accovnt to the operating fund since Jvly 20 a result, the revenue in operating fund was understated." In addition to the above areas of concerns, there were additional fi related to inappropriate expenditures, inadequate equipment inv procedures, inadequate documentation and justification for vehicle retention, and lack of adequate record keeping to "justify time-off or overi Summary Comment This audit raises serious concerns related to the appropriateness and acc of County Animal Control's accounting and record keeping procedures. 1 serious problem that needs to be addressed before the County dei unreasonable increases from the City. In short, Kern County should h� financial house in order on animal control issues before it attempts to trip costs. How could the information they provided to justify the increase be � in light of this! ANN K. BARNETT Auditor-Controller-County Clerk Nancy M. Lawson Assistant Auditor-Controller-County Clerk County Administrative Center 1115 Truxtun Avenue, Second Floor Bakersfield, CA 93301-4639 FAX 661-868-3560 Board of Supervisors Kern County Administrative Center 1115 Truxtun Avenue Bakersfield, CA 93301 Board Date Auditor-Controller: 661-868-3599 County Clerk:661-868-3588 Registrar of Voters (Elections): 661-868-3590 800-452-VOTE TTY Relay 800-735-2929 Faac 661-868-3768 AUDIT OF ANIMAL CONTROL DEPARTMENT FOR FISCAL YEARS ENDED JUNE 30, 2010 AND 2009 (Fiscal Impact: None) We are filing our auditor's report for the Animal Control Department for fiscal years ended June 30, 2010 and 2009. A copy of our report, including findings and recommendations with department's response is attached. The following is a summary of our audit: Report: Adverse Opinion Findings: 10 Minor Findings: 6 Previous Findings: 3 Repeat Findings: 2 Therefore, IT IS RECOMMENDED that your Board receive and file this report. Sincerely, Ann K. Barnett Auditor-Controller-County Clerk � : �� � � , � ��i i�iii cc: County Administrative Office Department of Public Health ANIMAL CONTROL DEPARTMENT COUNTY OF KERN REPORT OF CURRENT INTERNAL CONTROLS AND FINANCIAL RECORDS FOR FISCAL YEARS ENDED JUNE 30, 2010 AND 2009 Ann K. Barnett Auditor-Controller-County Clerk ANIMAL CONTROL DEPARTMENT COUNTY OF KERN TABLE OF CONTENTS FOR FISCAL YEARS ENDED JUNE 30, 2010 AND 2009 '': Auditor's Report ............................................................................................................................1 Comparative Statement of Revenue and Expenditures: For Fiscal Years Ended June 30, 2010 and 2009 ............................................................... 2 Comparative Schedule of Expenditures: For Fiscal Years Ended June 30, 2010 and 2009 ............................................................... 3 Comparative Schedule of Net County Cost: For Fiscal Years Ended June 30, 2010 and 2009 ............................................................... 4 Notes to the Financial Statements .................................................................................................. 5 Findingsand Recommendations ................................................................................................... 7 Department's Response .......................................................................... Attachment ANN K. BARNETT Auditor-Controller-County Clerk Nancy M. Lawson Assistant Auditor-Controller-County Clerk County Administrative Center 1115 Truxtun Avenue, Second Floor Bakersfield, CA 93301-4639 FAX 661-868-3560 Boaxd of Supervisors County of Kern AUDITOR'S REPORT Auditor-Controller: 661-868-3 599 County Clerk: 661-868-3588 Registrar of Voters (Elections): 661-868-3590 800-452-VOTE TTY Relay 800-735-2929 FAX 661-868-3768 We have audited the cash and revenue receipts and the current internal controls over cash proceeds of the Animal Control Department for the fiscal years ended June 30, 2010 and 2009. Our audit was primarily directed at reviewing department policies and procedures in order to provide reasonable assurance that cash and receipts are safeguarded and that the department is complying with statutory requirements and County policies governing the authorized care, management and collection of money, and verifying that the accounting records materially reflect the collections of the department. The management of the department is responsible for establishing and maintaining adxninistrative and accounting controls. Because of inherent limitations in any system of controls, errors or irregularities may nevertheless occur and not be detected. Although our audit was not designed to disclose all errors or weaknesses, we believe that our audit provides a reasonable basis for our opinion. The findings in our audit indicate a severe breakdown in the sepaxation of duties along with a lack of accountability over collections and other deficiencies in internal controls. A proper internal control structure is important to guard against potential errors and fraud. We believe that the department should reorganize and reassign staff duties in order to assure the integrity of financial records and safeguaxd County assets. In our opinion, because of the effects of the matters discussed in the preceding paragraph, the department's current procedures and controls do not reasonably assure the integrity of the accounting records as they relate to cash and the safeguarding of the cash and receipts entrusted to the department. A Comparative Statement of Revenue and Expenditures, Schedule of Expenditures and Schedule of Net County Cost for fiscal years ended June 30, 2010 and 2009 axe included in this report. They are presented for informational purposes only and are taken from the County's unadjusted Financial Management System (FMS) for those years, and for which specific classifications have not been audited. r:�:w: . M, ' � Auditor-Controller-County Clerk _ __ __ __ 1 REVENUE ANIMAL CONTROL DEPARTMENT COUNTY OF KERN COMPARATIVE STATEMENT OF REVENUE AND EXPENDITURES FOR FISCAL YEARS ENDED JUNE 30, 2010 AND 2009 License and Permits Animal Licenses Total License and Permits Fines, Forfeitures and Penalties Forfeitures and Penalties Total Fines, Forfeitures and Penalties Aid From Other Governmental Agencies State Motor Vehicle Realigrunent State Health Realignment State-Aid Mandated Cost Reimbursement Total Aid From Other Governmental Agencies Charges for Current Services Impound Lease Law Pound Operating and Adoption Fees Other Reimbursements Other Services for Governmental Agencies Photo Copies Total Charges for Current Services Other Revenue Returned Check Charge Miscellaneous Other Revenue OFS/Operating Transfer In Total Other Revenue Total Revenue Total Expenditures (From Schedule of Expenditures) , 2010 2009 472,012 $ 367,699 472,012 367,699 320 320 894,114 99,128 993,242 35,274 323,874 7,245 311,271 30 .1 • 1' 696,651 45,443 230,969 973,063 32,394 353,106 10,555 498,807 677,694 894,862 420 23,415 23,835 2,167,103 350 17,287 1,029 18,666 2,254,350 (4,891,613) (5,067,554) EXCESS (DEFICIT) OF REVENUE OVER EXPENDITURES $(2,724,510) $(2,813,204) 2 ANIMAL CONTROL DEPARTMENT COUNTY OF KERN COMPARATIVE SCHEDULE OF EXPENDITURES FOR FISCAL YEARS ENDED JUNE EXPENDITURES Salaries and Employee Benefits Salaries and Wages FICA Contribution County Retirement 2010 AND 2009 E� 2010 1,930,070 $ 139,584 614,113 2009 1,928,917 141,762 540,923 Deferred Compensation Match 5,694 4,325 Employee Health Benefits 543,931 625,209 Retired Employee Health Benefits 29,995 33,651 Unemployment Compensation Insurance - Internal Service 19,266 4,093 Qualified Flexible Benefits 9,975 15,397 Workers' Compensation Insurance 42,860 98,228 Total Salaries and Employee Senefits 3,335,488 3,392,505 Services and Supplies Clothing and Personal Supplies Communications - Telephone Communications - Radio and Microwave Household Expense Insurance UF Insurance Maintenance - Equipment Maintenance - Structures, Improvement and Grounds Medical Dental and Lab Supplies Memberships Office Expense Professional and Special Services Publications and Legal Notices Rents and Leases, Equipment Rents and Leases, Structures Special Departmental Expense Transportation and Travel Utilities Total Services and Supplies TOTAL EXPENDITURES � 43,440 35,096 15,570 13,212 31,454 82 753 2,092 182,766 275 65,264 566,557 2,967 3,692 120 165,158 360,976 66,651 1,556,125 $ 4,891,613 34,477 26,404 12,687 14,454 46,352 79 587 3,321 149,850 150 96,840 699,373 193 3,747 120 140,782 377,546 68,087 1,675,049 $ 5,067,554 ANIMAL CONTROL DEPARTMENT COUNTY OF KERN COMPARATIVE SCHEDULE OF NET COUNTY COST FOR FISCAL YEARS ENDED JUNE 30, 2010 AND 2009 SUDGETED NET COUNTY COST Estimated Revenue Adjusted Appropriation Total Budgeted Net County Cost ACTUAL NET COUNTY COST Total Revenue Total Expenditures Total Actual Net County Cost OVER (UNDER) BUDGETED NET COUNTY COST 2010 $ 2,556,494 2009 $ 2,302,283 (5,053,967) (5,079,106) (2,497,473) (2,776,823) 2,167,103 2,254,350 (4,878,463) (5,064,727) (2,711,360) (2,810,377) $ 213,887 $ 33,554 Note: The expenditure activity in this report does not include amounts that were budgeted in the previous year, and therefore may not tie to the Schedule of Expenditures. � ANIMAL CONTROL DEPARTMENT COUNTY OF KERN NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEARS ENDED JUNE 30, 2010 AND 2009 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. REPORTING ENTITY In October 2009, as part of a structural realignment and reorganization, Animal Control Department was added as a division to Department of Public Health and is under the adxninistrative control of Matt Constantine, Director of Public Health since October 2009. The primary function of Kern County Animal Control is to ensure public protection from dangerous animals and from diseases that can be transmitted from animals to humans. As of April 19�', 2011 Animal Control Department had 46 employees, including four (4) extra-help. B. ACCOUNTING BASIS Animal Control Department uses the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenue is recognized when susceptible to accrual (i.e., when it is "measurable and available"). "Measurable" means that the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Animal Control Department considers revenue available if it is collected within 90 days after year-end. Expenditures are recorded when the related fund liability is incurred. Expenditures are recorded on a modified accrual basis when they are normally expected to be liquidated with current financial resources. C. RECORD MAINTENANCE The Statement of Revenue and Expenditures for the Fiscal Yeaxs Ended June 30, 2010 and 2009 was generated from the unadjusted Financial Management System (FMS) of the County. D. EXPENDITURES Expenditures are paid by County warrants issued through the Auditor-Controller- County Clerk's office, by use of a County purchasing caxd and by journal vouchers for services provided by County departments. E. TRUST FUND The department manages the Animal Licenses-City of Bakersfield Fund 22022. This fund is a depository for revenue belonging to the City of Bakersfield. The department 5 prepares quarterly reports and vouchers to pay the amounts due to City of Bakersfield. F. SPECIAL REVENUE FUNDS The department manages the following special revenue funds: 1. Animal Care Donations Fund 22021 — A depository of cash donations made to Kern County Animal Control. The fund is used to reimburse the department for expenditures incurred in connection with improving the condition of the animals. 2. Animal Care Fund 22023 — A depository of revenue received from the auction of Arabian horses. The fund is used to provide funding to augment enforcement of animal cruelty, neglect or abuse cases, provide care for animals and provide an educational program that addresses all aspects of animal cruelty and abuse. 3. Animal Control — Feline Carcasses Fund 22024 — A depository of revenue received from the sale of feline carcasses. The department has discontinued the practice of selling carcasses and intends to close the fund. 4. Sterilization Fund 22027 — A depository of revenue which consists of 10% of all licensing fees (excluding 10% of Bakersfield City's Animal License fees collected by the department) and the proceeds from the sale of the spay/neuter voucher. This fund is used to pay the veterinarian invoices for redeemed vouchers under the low-cost spay/neuter voucher program. :� ANIMAL CONTROL DEPARTMENT COUNTY OF KERN FINDINGS AND RECOMMENDATIONS FOR FISCAL YEARS ENDED JUNE 30, 2010 AND 2009 CURRENT FINDINGS AND RECOMMENDATIONS 1. Revenue Recording, Receipting and Deposit Process Prior to the start of our audit, the department was operating under a weak revenue recording and deposit structure. The lack of policies and procedures governing the accuracy and integrity of the department's records resulted in the following conditions: • Many of their employees were receipting payments and handling cash with no appropriate supervisory oversight or verification. • There was no separation of duties over cash handling, recording and deposit functions. • Reliability of system records was compromised. The inherent feature within the cash receipts system (Chameleon) allowed users to override receipt dates thereby altering the original deposit information. • General record keeping and monitoring were inadequate to properly account for all sources of revenue. These conditions significantly increase the likelihood of misappropriation and led to the following errors and irregularities: a. The cash box closing report did not always balance to the deposit amount. The department uses the Chameleon system to record and receipt payments by cash, check and credit caxd. The cash box closing report is generated daily and is used to reconcile deposits to the bank. Transactions in 2010 that were tested revealed that: � There were 11 separate incidents where the cash box closing report was greater than the amount deposited. In each case, the difference in the amount was identified from receipts that were dated back to the eaxlier deposit date (pre-dating). In eight (8) of the 11 transactions, an estimated $588 of revenue receipted was not deposited. • There were three (3) separate incidents where the amount recorded on the cash box closing report was less than the amount deposited. The difference was caused by receipted amounts that were subsequently voided. b. Not all transactions were recorded. Customers at the Animal Control clinics were issued a copy of the license application when they purchased dog licenses. The information on the application was then recorded and receipted into Chameleon. Prior to the audit, license applications were not retained with the deposit information and could not be located for verification purposes. However, during the course of the audit, the Auditor was able to locate and secure a single box containing applications. From this box, the Auditor identified a total of 30 applications that could not be traced in Chameleon. The amount of revenue from these applications that could not be traced to Chameleon was approximately $900. The total extent of unrecorded applications is tmknown. Several factors led to this situation: 7 • There were not documented policies and procedures to give staff direction on cash handling procedures and record keeping. • There was no appropriate supervisory oversight. • There was no sepaxation of duties. • License applications were not pre-numbered and were not tracked. • The department did not log, verify and reconcile revenue collected from the clinics to the applications issued. License applications contain important transaction information that should be filled in by the relevant employee; for example, their initials, license date and amount pa.id. However, because the department did not enforce this requirement, information on many license applications tested was incomplete. c. Dog licenses were not sold in sequential order. This was a prior audit finding. There was no procedure in place to ensure that each dog license sold in the field, over the counter and through the mail was recorded and receipted in Chameleon and deposited in the bank. The following exceptions were noted during testing: • Six out of 52 dog licenses sampled were not recorded into Chameleon and were unaccounted for. • One out of 52 tags sampled was receipted and a tag was issued, but transaction was later voided without supervisor approval and deposit could not be located. • One dog license number that was recorded on an application form was different from the license number that was recorded in the system for the same customer. It is unknown which license was sold to the customer leaving the other license unaccounted for. d. Checks deposited against unrelated receipts. Banking records for deposits randomly selected for 2010 were examined and traced to corresponding receipts. The name of the check payer did not match the name on the receipt for three checks tested. Auditor telephoned dog owner to confirm that parties were unrelated. e. There was no formal procedure in place to log and account for all revenue collected from the outlying areas. f. Checks received through the mail were not logged or accounted for. This was a prior finding. g. Lengthy lag time of deposits fi�om Lake Isabella. Revenue from the Lake Isabella Shelter was held from deposit for a long period of time. Thirteen separate deposits from Lake Isabella Shelter were tested; the average lag-time between the dates of receipts to the date of deposit was 48.85 days. h. Insufficient monitoring of online license revenue. The department had not transferred online license renewal payments from the bank account to the operating fund since July 2010. As a result, the revenue in operating fund was understated. i. The department had not reconciled deposits to the Auditor-Controller's FMS System since June 2010. j. Revenue was incorrectly classified as detailed by the following errors: • Promotional fees of $45 that were collected from Lake Isabella included charges for different items. This fee was not applied to the appropriate revenue codes in the system but instead recorded as a lump sum. Because of this, the correct revenue codes were understated while the incorrect code was overstated. 0 • There was one instance where a transaction item was entered to an incorrect fee code. • For two receivable accounts tested, revenue was applied to the incorrect fee code. We recommend that: a. Cash box closing reports always agree to the deposit amount. There should be appropriate separation of duties and verification by a supervisor to ensure Chameleon records are consistent with County records. We also recommend that user's ability to override receipts in the system be restricted. Transactions should be receipted the day they are entered into Chameleon. b. The department address any occurrence of shortages in revenue and deposit in accordance with Administration Bulletin #6. The department should develop, implement and enforce procedures to ensure proper record keeping, separation of duties and appropriate supervisory oversight. Revenue collected from clinics should be logged, verified and reconciled to license applications. All applications should be duly recorded and receipted in Chameleon in a timely manner. All pertinent information on the license application must be completed and retained for audit purposes. c. The department develop, implement and enforce procedures to account for all licenses issued and sold. Licenses issued in sequential order enable the department to more effectively identify and manage any occurrence of missing licenses. d. The department develop procedures to ensure that customer's payment by cash, check or credit card is correctly deposited. e,f. The department ensure revenue from the outlying areas and through the mail is logged, properly accounted for and verified. g. Revenue from Lake Isabella be deposited in a timely manner to prevent any occurrence of loss or theft. h. Online payrnents be properly monitored, recorded and transferred to the operating fund. - i. The deparhnent bring the revenue reconciliation up-to-date, and perform a monthly reconciliation thereafter. j. The department, per GAAP and state guidelines, classify revenue accurately using the correct code. 2. Safeguarding of Cash There was a lack of control over cash handling as evidenced by the following conditions: a. Many employees had access to the safe and keys to the office. b. $75 from the authorized revolving change fund was missing. c. The department did not properly log collections from Mojave. There was $85 in the safe that could not be traced to the log. d. Shortages and overages were not being handled properly. Shortages in collection that occurred were not always communicated to management. An incident was identified where an employee deposited her own personal check to cover a shortage. e. Checks were not restrictively endorsed upon receipt. G: We recommend that: a. Access to the safe and keys to the office be restricted to key personnel only. b,d. Shortages in authorized funds be addressed in accordance with Administrative Bulletin #6 while overages be handled in accordance with Administrative Bulletin #5. The department should develop, implement and enforce procedures to verify and reconcile the authorized change fund and cash collection to records to ensure proper communication and handling of overages and shortages. c. Revenue from Mojave be properly and correctly logged and accounted for. e. Checks be immediately and restrictively endorsed. 3. Accounts Receivable The department typically bills customers for quarantine and dog bite inspections. Prior to the audit, the department also billed customers on a case by case basis for dog impound and kennel board charges through a payment plan. There was significant weakness in the general receivable process due to the following reasons: a. There was no written policy governing the procedures for creating and recording receivable amounts in the Chameleon system. b. The integrity and validity of the account balances were compromised due to: • The lack of proper record keeping and documentation supporting the creation, approval and adjustment of the accounts. • The lack of separation of duties. The same employee was responsible for creating, approving, adjusting, receipting and depositing receivable amounts. This was a prior audit finding. • The unrestricted access in Chameleon to create and adjust receivable amounts. Employees who had access to receipt transactions into Chameleon could also create a receivable balance. • The inherent feature within Chameleon that allowed receipt dates to be altered. There were 14 separate receivable accounts identified that had balances posted to a future date beyond 2011. These entries resulted from a combination of clerical errors and for unknown reasons. Consequently future deposit records would be overstated by these entries. c. The control over the accuracy and monitoring of individual account balances and general total receivable balance was deficient for the following reasons: • The total receivable balance was overstated because it contained accounts for license fee charges which are not billable. There were 265 such accounts identified in Chameleon ranging from fiscal year 1998 to 2010. Thirteen accounts sampled from 2010 were either due to clerical errors or manipulation. • The total receivable balance was overstated because it contained accounts for adoption fee charges which are not billable. There were 119 accounts identified in Chameleon ranging from fiscal years 1998 to 2010. Twelve accounts sampled from 2010 were either due to clerical errors or manipulation. • Individual account balances were overstated. Six out of seven accounts (excluding licenses and adoptions) tested reflected inaccurate balances that were either fully paid or should have been reduced by a partial payment. 10 • Outstanding amounts prior to 2006 that were deemed uncollectible, continued to remain part of the total receivable balance in Chameleon. • One account was excluded from the list that was sent to the collection agency. • The outstanding amount was not correct for three separate accounts sent to the collection agency. d. As of the audit, the department did not have a method of identifying accounts from Chameleon that were already sent to the collection agency. As a result, the same accounts would be resent the next cycle. e. The department did not reconcile the general receivable control balance to the amounts collected from the collection agency. We recommend that: a. A written policy be developed, implemented and enforced on the procedures regarding creation, recording and adjustment of all accounts receivable. b. The department establish and retain proper documentation to support the approval and adjustment of the receivable amount and to implement proper separation of duties and sufficient oversight. Chameleon access to receivable creation and maintenance should be limited to key personnel. Furthermore, as a preventive control, the ability for users to override entry dates in Chameleon should no longer be allowed and be accordingly revoked in the system. c. Procedures are developed to ensure the accuracy of the individual accounts and the total receivable balance. Uncollectible amounts should be written off and sent to the Board of Supervisors for relief from accountability. d,e. The department develop a method to identify accounts that have already been sent to the collection agency and to update the information in Chameleon. Accounts receivable items outstanding, collected and sent to collection agency, should be reconciled periodically for appropriate follow up efforts. 4. Contract Compliance Seven out of nine contracts were tested. The lack of procedures and control over the compliance monitoring and the enforcement of contract terms resulted in the following deficiencies: a. The department did not adequately monitor the contract with the City of Bakersfield: � The department had not billed for two quarterly payments of $83,525 since June 2010. As of the audit this amount was $167,050. • In a separate agreement the department is entitled to 90% of County animal license fees collected by the City of Bakersfield. However, the department had not determined the amount of its share or followed up with the City for payment. • The department erroneously underpaid the City by $1,209 in 2008. b. The department has not reviewed the annual compensation rate from Cities of Arvin and Tehachapi since the commencement of the contracts in 2001. Rate charges have not been revised to reflect increases in costs. c. Billings were not timely or accurate: • The department did not bill and collect two years' worth of payments from City of Tehachapi until over a year later. In addition, another invoice was 11 billed over a year later. Payments relating to three quarters in 2010 were erroneously receipted in the system in 2009. • The department billed Arvin City twice for August 2010. d. The costs of tranquilizer and euthanasia solution were not deducted from the monthly payments to an outside contractor since the inception of the contract in 2008. The cost was estimated to be $720 for 11 bottles. In addition the same contractor did not provide a number of services as required by the contract terms. e. The department did not perform quarterly billings for two contracts as required by the contract terms. f. There was no written documentation or records supporting the termination of the agreements with the Cities of Delano and Maxicopa as specified by the respective contracts. g. Between June 2009 and September 2010, the department provided three bottles of euthanasia solution to the City of Arvin. This was not part of the contractual agreement and the department was not reimbursed. We recommend that: Procedures be developed and implemented to ensure that appropriate parties are duly invoiced for all contractual services rendered by the department in accordance with contract requirements. In addition, there should be proper follow up to ensure invoices are paid in a timely manner. We also recommend that adequate procedures be developed to ensure that compliance with contractual terms is achieved. Respective contracts should be reviewed to determine if contract terms require revision in the area of service rendered or received, reporting requirements and annual compensation. 5. Voiding Procedures The department voided transactions in Chameleon to rectify clerical errors a.nd to apply accounts receivable. Data extracted between 2007 and 2010 identified over 4,500 void entries that were processed during this time frame. There was no control over the use of void entries due to the following reasons: a. The department did not have a policy or procedure in place to govern the use of void entries. b. All voided receipts in Chameleon were processed without supervisory approval and did not include a written reason for the void. Five out of 48 voided receipts tested were not reasonable entries. c. Voiding was not restricted to key personnel. Many employees had system access to process voids in Chameleon. We recommend that a formal policy and procedure be developed, implemented and enforced to govern the use of voids for appropriate purposes. There needs to be appropriate supervisory authorization and approval for voided receipts and a reason for the void documented on the receipt. We further recommend that access to voiding be restricted in the system to key personnel. 12 6. Trust and Special Revenue Funds The department is responsible for managing four special revenue funds and one trust fund, as detailed in the Notes to the Financial Statement. The department did not exercise managerial oversight over these funds. a. At June 30, 2010, special revenue fund 22021 had a balance of over $29,000 and b. � special revenue fund 22023 had a balance of over $60,000. The department did not initiate transfers to move the money into the operating fund. Therefore, the general fund had to bear additional burden that could have been alleviated by the transfers. There was no procedure in place to ensure that trust fund monies were handled in compliance with legal requirements. The required disbursement of $47,000 for trust fund 22022 (Animal license-City of Bakersfield) had not been made to the City of Bakersfield since June 2010 and the remaining County's portion of $50,000 had not been transferred to the operating fund. The department did not reconcile department records to County records to assure accurate accounting of the special revenue fund and trust fund deposits. We recommend that: a. The department actively review availability of operating transfers and make transfers at least once a year. b. Trust funds be reviewed and funds be timely disbursed to the appropriate agency in accordance with contract terms. c. Procedures be developed, implemented and enforced to ensure sufficient record keeping and timely reconciliation of department's records to the official County records. 7. Fee Schedule a. Fees were charged for stray animal intake ($5) but were not on the fee schedule approved by the Board of Supervisors. b. Although fees may be reduced at the discretion of the Director, the department could not provide any form of documentation to support the approval for "special or reduced" fees charged as a promotion. c. There were several different inconsistencies identified fee schedule and the department's fee schedule in differences identified were as follows: between the Board approved the Chameleon system. The • Seven types of fees on the approved fee schedule were not set up in Chameleon. • The amount for one fee type in Chameleon was less than the amount on the approved fee schedule. • Three fee types set up in Chameleon were not on the approved fee schedule. We recommend that the department charge fees that are set and approved by the Board. A written approval should support a change of fees. Ordinance Code 8.13.120 states, "The fees shall remain in effect until modified by subsequent ordinance of the board of supervisors." The department should review fees and adjust accordingly to fees set and approved by the Board of Supervisors. The fee amount in Chameleon should be updated to reflect the new fee. 13 8. Bank Reconciliation The department had not reconciled its bank account since June 2010. As a result, the Auditor identified four instances where the credit card amounts collected as per department's record did not match the corresponding Electronic Record of Deposit (EROD). We recommend that the department perform a regulax and periodic bank account to ensure errors and irregularities are identified and manner. reconciliation of the resolved in a timely 9. Expenditures a. Cell phone usage The Auditor identified a total of 2,010 minutes of personal calls that were certified as business. These minutes were incurred over a three-month to two-year period and were made by three separate users. b. Travel claim There was a claim for two weeks of travel that did not have Board of Supervisors approval. We recommend that: .,� b. The department request a refund for all known personal calls that were certified as business calls and ensure that employees correctly certify calls. Travel exceeding five days be approved by the Board of Supervisors in accordance with Chapter 3, sections 302.5 and 303.2 of the County policy. 10. Missing Receipt Bool�s a. There was an inconsistency in the information recorded between the receipt book log and the books on hand; five employees confirmed they had receipt books; however, these books were not included on the log. b. The department was not able to furnish two (out of 50) receipt books listed on the log. We recommend that procedures be developed to ensure records accurately reflect inventory of all used and unused receipts and that all receipt books are accounted for. STATUS OF PRIOR RECOMMENDATIONS 1. Dog Tags & Receipt Sooks We recommended the department consistently maintain the logs for dog tags and receipt books. All dog tags sold should be associated with a receipt. Current Status: Not Adopted (See Current Finding #l.c &#10) 2. Accounts Receivable We recommended: a. The department separate duties of receiving collections and recording payments into Chameleon and cross train employees in these functions. [[� b. Accounts receivable items billed, received, and outstanding be reconciled to the control balance. c. The department develop a method to identify unpaid accounts that have become delinquent. d. The department transfer all accounts receivable currently on the Environmental Health Services Department system, Envision, to Chameleon so that all open accounts axe being billed. e. Adjustments to accounts receivable should be approved by a supervisor. Current Status: a-e Not Adopted (See Current Finding #4) d-Adopted 3. Purchasing Card We recommended, per County policy, purchasing cards only be used by the employee to whom the card was issued and not be loaned to other employees. We also recommended supporting documentation of a purchase include the employee's (cardholder's) signature to verify the items purchased. Current Status: Adopted MINOR FINDINGS AND RECOMMENDATIONS 1. Controlled Substance Inventory a. Fatal Plus • There was an inconsistency in the name of the employee issued the drug on the inventory log compared to the name on the usage log. • Supervisors did not sign off or review the usage log. • The controlled substance policy form had not been updated to include current employees. b. The Acepromazine inventory count revealed 98 pills in a bottle rather than 8 as indicated on the log. c. The Ketamine inventory count revealed that 2 bottles were not properly logged when received. We recommend that: a. Procedures be implemented and enforced to ensure that records are consistent and accurate. Supervisors should review usage log and sign off accordingly. The controlled substance policy form should be updated to reflect all current employees. b. The inventory count is reconciled to the log regulaxly. c. The inventory log is updated perpetually when items are received. 2. Equipment Inventory a. The Capital Asset Listing test revealed that five (5) out of nine (9) items sampled could not be located by the department. 15 b. Two out of ten computer items sampled were not found on the department's internal list. c. Nine out of 13 firearms sampled were not found on the Firearm Listing. This listing did not include cost or acquisition date. We recommend that the department follow the Kern County Policy and Administrative Procedures Manual Section 406, to ensure that all equipment items are properly accounted for and recorded on a list. The information on the list should include the item description, cost, acquisition date and location". 3. Payroll Twenty timesheets tested did not have Form 24s or any other record keeping system to justify time-off or overtime. We recommend that procedures be implemented to ensure that all approvals are mainta.ined to support time reported on timesheets. 4. Dog License and Vaccine Inventory • The license log did not reflect the name of employees who were issued six separate boxes of licenses. • The department did not keep inventories on vaccines like Rabies, Bordatella, Recombinant and DHPP. We recommend that the license log be updated to reflect complete and accurate information and that inventory on vaccines be performed and documented. 5. Home Retention Vehicle and Fuel Expense • There was no documentation explaining the basis and determination for vehicle home retention. • Employees with home retention vehicles did not submit the monthly Home Retention Vehicle Usage forms. • There was no verification performed to ensure that fuel charges on the billing statement were supported by receipts and chaxge tickets and that charges were both reasonable and accurate. We recommend that: • In accordance with Section 1115.2 of Kern County Policy and Procedures, the department ensure that appropriate documentation explaining the basis for vehicle home retention assignment are established and retained for audit purposes. In addition, employees should complete and submit to the department head the home retention usage form on a monthly basis. • In accordance with Section 1107.2 of the County Policy and Procedures, the department ensure that billings are validated with appropriate back up documentation and that charges are both accurate and reasonable. 16 6. Conflict of Interest Policy and Statement of Economic Interest • There was no procedure implemented to detertnine that all employees have signed and reviewed the Conflict of Interest Code. • One out of six (6) designated filers did not file the Statement of Economic Interest form 700. We recommend that procedures be developed to ensure that all employees review and sign the Conflict of Interest Code and that all designated filers for Form 700 have filed in a timely iiiY�iiiil�i� 17 � AMERICAN SOCIEiY OF CIVIL ENGINEERS REGION 9 Region 9 Board of Governors 2011 — 2012 Jennifer B. Epp, P.E., M.ASCE Chair/Director Central Coast Regional Water Quality Control Board 530.867.2663 iennifer.b.epp(a�qmail.com Rich Haller, P.E., M.ASCE Governor, At-Large Vice Chair Santa Ana Watershed Project Authority 951.354.4220 rhaller(a�sawpa.orq Jay Higgins, P.E., M.ASCE Governor, Los Angeles Section Treasurer URS Corporation 818.406.4896 ia rL.higgins(a�urs.com Brent C. Siemer; P.E., F.ASCE Governor, San Francisco Section Secretary of Internal Affairs 707.263-0363 brent,siemer(�a,gmail.com Fareed S. Pittalwala, P.E., M.ASCE Governor, Sacramento Section Secretary of External Affairs RBF Consulting 916.928.1113 fpittalwala an,rbf.com Kathy Haynes, P.E., M.ASCE Governor, San Diego Section Kennedy/Jenks Consultants 858.676.7509 Kat�Havnes .KennedyJenks.com Camilla M. Saviz, Ph.D., P.E., M.ASCE Governor, At-Large University of the Pacific 209.946.3 77 January 12, 2012 Mr. Louis Sun City of Bakersfield 6901 McCutchen Road Bakersfield, California 93313 Dear Mr. Sun: On behalf of the American Society of Civil Engineers, Region 9, I am very plE the City of Bakersfield Wastewater Treatment Plant 3 Expansion project the award of ASCE Region 9 Outstanding Wastewater Project. Projects eligible for the Region 9 awards were projects that received an aw� ASCE Sections within Region 9 in 2011. We selected one Project of th specific project awards from a pool of over 36 eligible projects. Informatioi can be found at www://asce.orq/reqion9. The 2011 Region 9 Awards will be presented during the Awards Dinner oi Sacramento, Catifornia at the Hyatt Regency at Capitol Park. Th representatives from the National Society and members from throughout the The ASCE Region 9 Project Awards are presented to the project owner a One plaque will be presented to the project team at the Awards Dinner cei using the attached form to indicate if you will be able to accept the awarc ceremony. We recognize that these successful projects are often the res� multiple firms and individuals. Anyone involved with your project is encou attend the Awards Dinner. You may purchase registrations for as many g� and to forward the registration form to other project members. Additiona purchased for any member of the project team. Also, for the Awards Program, could you please provide us with a short write words or less) as you would like to see it presented in the printed A�n (enclosed is a sample from a previous program for your use). Please e-mai to Ikc.consultinq(c�sbcqlobal.net. Thank you for all you do to further the Civil Engineering profession! I look fc February. If you have any questions, feel free to contact Kath�ynesCa�KennedyJenks.com, or by telephone at 858.676.7509. Regards, �_..r ,/ State Auditor says high-speed rail project increasingly risky - San Franci... http://www.examiner.com/transportation-po: State Auditor says high-speed rail project increasingly risky The newly published California State Auditor's 82 page report, named High-Speed Rail Authority Follow-Up says the success or failure of � upon the Authority's ability to obtain between $85.6 and 105.1 billion by 2033. In addition it raises serious issues with the Authority's program management and the project as a whole. Overall findings: • The overall financial situation has become increasingly risky. They say only $12.5 billion [3.5 feds and available state bonds of 9 billic matched] have been secured for a program estimated to cost between $98.1 and $117 billion. • The cost estimates do not include phase one's operating and maintenance costs, yet based on data in the plan these costs could tot� billion from 2025 through 2060. • There are no details about the current largest potential funding source, the federal government. • The ridership numbers have been reviewed by a"handpicked group," and even they presented several long —term concerns. • There have been inappropriate contracting practices such as splitting Information Technology services totaling 3.1 million into 13 indi� vendor. The report notes that "the State contracting Manual expressly prohibits agencies from splitting contracts to avoid competitive • Contractors and subcontractors outnumber its employees by 25 to one. The oversight is lacking and as a consequence they are not � therefore lacking the correct information in order to make critical decisions. Example: There appears to be significant differences in � regional contractors' reports and what the Program Manager summarized and reported to the Authority, thus demonstrating the Progr provided the Authority with misleading information." • The Authority is missing statements of economic interest for some of its contractors despite the conflict-of-interest code requirement: not require any of its subcontractors to file statements of economic interest. As a result, the Authority has no way to verify that subco real or perceived conflicts of interest. Recommendations: Ad�e� • The Authority should clearly report total costs including projected operating and maintenance for the program. It should also disclose that the 2012 draft business plan assumes that the State will only be receiving profits for the first two years of operation in 2022 and 2023 and will potentially will not receive profits again until 2060 in exchange for the almost $11 billion it assumes it will receive from the private sector. • The legislature should draft legislation that establishes an independent ridership group. • The Authority should continue to fill vacant positions • The Authority should establish written policies and procedures for tracking whether all designated employees and consultants including subcontractors have completed and filed their statements of economic interests on time, thereby identifying any potential conflicts of interest. • To ensure that the Program Manager's progress reports are accurate, consistent and useful, the Authority should conduct monthly comparisons of the Program Manager's and regional contractors' progress reports to verify consistency. • In order to be aware of and respond effectively to circumstances that could significantly delay or halt the program, the Authority shoul soon as possible. In the meantime they should designate and require Authority staff to attend risk-management meetings and worksf • The Authority should monitor the Program Manager's risk-management practices to ensure that either it or the Program Manager idei appropriately addresses risks. • To effectively manage its contracts, the Authority should develop procedures to detect and prevent contract splitting. The Authority's response: "While generally agree with our conclusions and stated that it will take steps to implement our recommendati assessment that the Authority's funding situation is risky. The Authority also disagreed with some of our conclusions and recommendatior progress report." Executive Summary http://www.bsa.ca.qov/reports/summarv/2011-504 Fact Sheet in PDF Format i�. ,���, ii��r '_:_.._---.. ;� ��'� ,, ��: �ate: January 24, 2012 The California State Auditor's Office released the following report tod High-Speed Rail Authority Follow-up Although the Authority Addressed Some of Our Prior Concerns, Its Funding Situation Has Become and the Authority's Weak Oversight Persists BACKGROUND Created in 1996 to develop and implement intercity high-speed rail service, in addition to its other duties the High-; Authority (Authority) manages the voter-approved Safe, Reliable, High-Speed Passenger Train Bond Act for the 2� provides $9 billion from the sale of general obligation bonds for construction of a high-speed rail network (program an audit to determine the Authority's readiness to manage these funds and reported in April 2010 concerns about i planning, weak oversight, and lax contract management. The Authority continues to expect construction to occur i but has now, more than doubled the cost estimate for phase one and extended the timeline for it to be fully operati KEY FINDINGS During our review of the Authority's progress in addressing issues we raised in our April 2010 report, we noted the • The program's funding situation has become increasingly risky—in its 2012 draft business plan, the Authority phase one of the program will cost between $98.1 billion and $117.6 billion, yet has only secured about $12.5 ✓ The plan has not identified viable alternatives in the event that its planned funding sources do not materi� on securing tens of billions of dollars of federal funding, yet fails to present specific steps for acquiring the ✓ The plan lacks key details regarding costs and revenues which compromises the Authority's transparenc� ■ The full cost of the program is not clearly presented and the operating and maintenance costs for ph� estimate to be almost $97 billion, are not included in the plan. ■ The Authority projects securing private sector investments over four years beginning in 2023 yet did draft business plan that this is based on the concession that private sector investors will receive all o operating profits from 2024 to 2060 in return for their investment. ✓ The success of the program hinges largely on the accuracy of its ridership projections—fundamental to tf projections and to private investors' interest in the program. However, the Authority has not fully address the accuracy of the model's long-term projections. The Authority may have compromised providing effective oversight by placing the largest portion of the progr� construction and oversight in the hands of contractors—in particular, the entity that manages the program (Prc By relinquishing significant control to the Program Manager, the Authority may not be aware of or have addre: significant concern that could impact the program. ✓ Similar to our prior audit, we found over 50 errors and inconsistencies of various types in three Program � progress reports we reviewed and noted several significant discrepancies between the regional contracto those of the Program Manager. The Authority inappropriately split its information technology (IT) services valued at $3.1 million into multiple c� than competitively bid the contract—when it renewed its IT services. In addition to the initial contract, the Autr individual contracts over a 15-month period that ranged from $105,655 to $249,999.99 for similar services witl KEY RECOMMENDATIONS Paqe 1 of 2 STREETS DIVISION — WORK SCHEDULE Week of Jan. 30, 2012 — Feb. 3, 2012 Resurfacinq/Reconstructinq streets in the followinq areas: ResurFacing & Reconstructing streets in the area south of Planz Rd and west of Wible permitting) Miscellaneous Streets Division projects: Video inspection of City owned Sewer & Storm lines to evaluate condition of pipes Repairing Curb & Gutters at Bus Stops in various areas Crack Sealing on "H" St from California Ave to Brundage Ln (weather permitting) (CDBG funded area) Installing & Repairing curb, gutter & sidewalks in the area ea� south of Palm St. THIS SPACE INTENTIONALLY LEFT BLANK Paqe 2 of 2 STREETS SWEEPING SCHEDULE Monday, Jan. 30, 2012 All sweepers are assigned to sweeping streets that are not on a set sweeping schedu Tuesday, Jan. 31, 2012 All sweepers are assigned to sweeping streets that are not on a set sweeping schedu Wednesday, Feb. 1, 2012 Between Panorama Dr. & Bernard St. -- Union Ave. & Loma Linda Dr. Between River Blvd. & E. Columbus St. — Panorama Dr. & Columbus St. Between College Ave. & Azalea Ave. — Mountain Dr. & Raval St. Between Ming Ave. & White Ln. — Allen Rd. & Buena Vista Rd. Thursday, Feb. 2, 2012 City areas between Kentucky St. & Quincy St. — Owens St. & Virginia St. Between Union Ave. & Washington St. — E. Truxtun Ave. & Brundage Ln. Between Progress Rd. & Old River Rd. — Panama Ln. & Pacheco Rd. (alignment) City areas between Progress Rd. & Old River Rd. — Meadow Falls Dr. & Rose Creek I Fridav, Feb. 3, 2012 Between Buena Vista Rd. & Allen Rd. — Harris Rd. & Panama Ln. Between Buena Vista Rd. & Mountain Vista Dr. — Panama Ln. & Birkshire Rd. Between 178 Hwy. & Paladino Dr. — W. Columbus St. & Morning Dr. City areas between Sterling Rd. & Morning Dr. — 178 Hwy. & College Ave. Between Valley St. & Lene PI. -- !78 Hwy & Hickory Dr. Between 178 Hwy. & Reynard Rd. — Kern Canyon Rd. & McKenna St. Between Stockdale Hwy. & Joseph Dr. — McDonald Wy. & N. Stine Rd.