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• Redevelopment Agency Reviews• Property Tax Audits• State Mandated Cost Audits• Other Local Government Audits
2013 State Controller’s Conference with County Auditors
DoubleTree Hotel Sacramento
SCO Audits
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Presented by:
JEFFREY V. BROWNFIELD, CPA, CHIEF
DIVISION OF AUDITS (916) 324-1696
WALTER BARNES, CHIEF
SPECIAL AUDITS (916) 327-5050
STEVEN MAR, CPA, CHIEF
LOCAL GOVERNMENT AUDITS BUREAU (916) 324-7226
JIM L. SPANO, CPA, CHIEF
MANDATED COST AUDITS BUREAU (916) 323-5849
SCO Audits
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• Division of Audits - Overview • RDA Asset Transfer Reviews• Property Tax Audits• State Mandated Cost Audits• Other Local Government Audits • SCO Website• Questions
Agenda
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• On or before January 1, 2015, the Controller shall develop internal control guidelines to prevent fraud and detect financial errors and post to the SCO website
• Input from:– League of California Cities,– California State Association of Counties, – California Special Districts Association, and– California State Association of County Auditors
AB 1248 – Controller: Internal Control Guidelines Applicable to Local Agencies
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• Review Universe 402 Agencies• Final Reports Issued 87• Reports In-Process 121• Total Dollar Findings $3.4 Billion• Anticipated Completion Date December 31, 2014
RDA Asset Transfer Review Update and Results
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COMMON FINDINGS:• Unallowable transfers of fixed assets (buildings, property,
parks, etc.) to the City, County, City and County or other local agency (generally an EDC)
• Transfers of housing assets (including Low/Mod assets) directly to the Housing Agency
• Assets not transferred (still on the former RDA’s books) to the successor agency
• Other unallowable transfers –cash transfers, including bond proceeds to the City, County, City and County or other local agency
RDA Asset Transfer Review Update and Results (continued)
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1. Can the counties remove ERAF prospectively beginning with fiscal year 2013-14 or 2014-15 depending on timing?
2. If a prospective adjustment is allowed, how will the SCO handle prior year audits where the SCO noted an audit finding?
3. Can the counties use the Contra Costa method or the SCO method to distribute unitary taxes?
Property Tax ERAF and Unitary Apportionment Corrections
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• SCO Role in the Mandate Process– Division of Accounting and Reporting– Division of Audits– Interaction with the Commission on State Mandates (CSM)– Interaction with counties and county representatives
• Filed County ClaimsFY 2011-12 629 claims $56 Million
FY 2010-11 779 claims $113 Million
FY 2009-10 952 claims $234 Million
FY 2008-09 1,032 claims $167 Million
State Mandated Cost Audits
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• 2012-13 Published County Audits– 14 audits (consisting of approximately three years of
claims) – $65 million in claimed costs and $15 million in adjustments
(primarily ineligible costs), a 23% error rate• 2013-14 Budget Act Funding for Local Agencies
– $48 million for FY 2004-05 through FY 2011-12 claims• April 30, 2013, Deficiency for Local Agencies - $1.9 billion
– $720 million for funded programs– $380 million for unfunded programs– $800 million for 15 years Proposition A payment plan (FY
2003-04 and prior years)
State Mandated Cost Audits (continued)
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• Outstanding County Appeals (Incorrect Reduction Claims) with the CSM:– 14 filed in the following years (7 are for mental health
programs): 2005 – 1 2007 – 3 2010 – 2 2013 – 5
2006 – 1 2009 – 1 2012 – 1
• Pending Mandates Redetermination– Sexually Violent Predators Program Effective FY 2011-12
• New Mandated Programs – FY 2012-13 - Tuberculosis Control Effective FY 2002-03– FY 2013-14 - California Public Records Act Effective FY 2001-02
• Alternatives to Filing a Mandate Claim
State Mandated Cost Audits (continued)
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WWW.SCO.CA.GOV
Links to Audit and Oversight Reports, and More Information• Controller's Redevelopment Asset Reviews• Controller's Audits of State and Local Agencies • Controller's Revenue Audits • Controller's Oversight of Independent Auditors' Audits of Local
Agencies • Search for Additional Audits • Information on Ordering Printed Copies of Controller's Audits
SCO Website
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Questions
