Report 2011-123 All Recommendation Responses

Report 2011-123: Oil Spill Prevention and Administration Fund: The Department of Fish and Game and the Office of Spill Prevention and Response Need to Improve Their Administration of the Spill Fund (Release Date: August 2012)

Recommendation #1 To: Fish and Wildlife, Department of

To prepare and report accurate fund condition statements for inclusion in the governor's budget each year, Fish and Game should ensure that staff in its budget branch follow written procedures to develop fund condition statements.

60-Day Agency Response

Fish and Game developed written procedures for completing fund condition statements. It also stated that its budget branch has been following these procedures since fiscal year 2011–12. In addition, Fish and Game indicated that, as required by the Department of Finance, starting in fiscal year 2012–13, the budget branch is also completing the Prior Year Adjustments to Special Funds Worksheet (worksheet). (See 2013-406, p. 212)

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #2 To: Fish and Wildlife, Department of

To prepare and report accurate fund condition statements for inclusion in the governor's budget each year, Fish and Game should train both new and existing staff on how to prepare fund condition statements for inclusion in the governor's budget.

60-Day Agency Response

Fish and Game stated that its budget branch has a primary analyst and back-up analyst assigned to develop fund condition statements and that both current analysts have been trained in using its new written procedures and the worksheet. Fish and Game explained that if staff change, either due to attrition or assignment changes, new staff will be trained in using the written procedures and the worksheet to ensure that the budget branch continues to follow these procedures when developing the fund condition statements. (See 2013-406, p. 212)

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #3 To: Fish and Wildlife, Department of

To ensure that three-year projections of the spill fund's revenues, expenditures, and fund balances, all of which are used to determine fee rates, are based on accurate financial information, the spill office should develop written procedures directing staff on how to prepare the three-year projection, including steps to verify the accuracy of the financial information in the projection. In developing these procedures, the spill office should consult with Fish and Game's accounting branch and budget branch to confirm that these procedures are thorough and complete.

60-Day Agency Response

Fish and Game developed written procedures that direct staff on how to prepare the three-year projection of the spill fund's revenues, expenditures, and fund balances. (See 2013-406, p. 212)

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #4 To: Fish and Wildlife, Department of

To ensure that three-year projections of the spill fund's revenues, expenditures, and fund balances, all of which are used to determine fee rates, are based on accurate financial information, the spill office should consider the reduction in the spill fund's costs, as a result of the recovery of indirect administrative costs, when projecting its fund balance moving forward.

Annual Follow-Up Agency Response From October 2014

The department followed Department of Finance procedures, using official state accounting records (Calstars and State Controller's Office balances) to prepare the fund condition statement contained in the 2014-15 Governor's Budget. The data contained in these documents account for all activity in the fund, including prior year adjustments that take into account the reduction in the fund's costs as a result of the recovery of indirect administrative costs. The department will continue to follow these procedures, ensuring that the reduction in the fund's costs is accounted for when projecting the fund balance moving forward. The documentation provided to the State Auditor identifies on the source documents the numbers used to develop the 2014-15 fund condition statement.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Fish and Wildlife provided a fund condition statement and its supporting documentation, which originated from official state accounting records. Whereas the previous fund condition statement prepared by the spill office was an informal document that included amounts unsupported by official accounting records, Fish and Wildlife's new fund condition statement reconciles with the amounts reported in the State's accounting records. However, the fund condition statement does not show what impact, if any, the reduction in indirect administrative costs would have on the overall fund balance.

Annual Follow-Up Agency Response From November 2013

Please refer to our one-year response.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

This has been completed. The accounting office has calculated the amount that will be recovered to the fund for 2011-12, and has estimated amounts to be recovered for 2012-13 and 2013-14. While this information was not avalable at the time the 2013-14 Governor's Budget was finalized, these amounts will be accounted for in the fund balance projection that will be displayed in the fund condition statement in the 2014-15 Governor's Budget. Once the fund balance projections are finalized for the 2014-15 Governor's Budget, DFW will send a copy of the fund condition to the California State Auditor.

California State Auditor's Assessment of 1-Year Status: Pending

The department's response indicated that although it had completed this recommendation, it would not be able to provide documentation to support the full implementation until a later date. Thus, we assessed the implementation as "pending."

6-Month Agency Response

The department has calculated the amount that will be recovered to the spill fund for the 2011-12 fiscal year, and has estimated amounts to be recovered for the 2012-13 and 2013-14 fiscal years. The department stated that this information will be accounted for in the fund balance projection that will be displayed in the fund condition statement in the 2014-15 Governor's Budget.

California State Auditor's Assessment of 6-Month Status: Pending

The department's six-month response was submitted three months late. In addition, no documents were provided to support its assertion that the recommendation was fully implemented. The department agreed to provide this documentation as part of its one-year response.

60-Day Agency Response

Fish and Game stated that its budget office will factor the recovery of indirect administrative costs in its determination of the spill fund's share of these recovered costs. It also indicated that the spill office will consider this recovery when estimating fund projections. (See 2013-406, p. 212)

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #5 To: Fish and Wildlife, Department of

To prevent under- or over-recovery of federal funds, Fish and Game should regularly reassess whether using budgeted expenditures or actual expenditures will produce the most accurate results.

Annual Follow-Up Agency Response From September 2014

The U.S. Department of Interior has approved the department's Indirect Cost Rate Proposals (ICRP) for 2013-14 and 2014-15, both of which are based on actual expenditures. The department will continue to assess whether budgeted or actual expenditures will produce the most accurate results in future ICRP submittals. Documentation has been provided to the State Auditor to demonstrate the use of actual expenditures in the approved 2013-14 and 2014-15 ICRPs.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Fish and Wildlife provided copies of the federally approved Indirect Cost Rate Proposals for fiscal years 2013-14 and 2014-15. In addition, Fish and Wildlife provided a document that compared the resulting underrecoveries when using actual vs. budgeted expenditures. The document showed that using actual expenditures resulted in a more accurate number. Fish and Wildlife has stated that it will continue to perform this assessment annually.

Annual Follow-Up Agency Response From November 2013

Please refer to our one-year response.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

This has been completed. The CDFW has submitted its Indirect Cost Rate Proposal (ICRP) for 2013-14 to the U.S. Department of Interior (DOI). Based on direction from the DOI, the federal indirect cost rate contained in this proposal is based on actual expenditures. The department will work closely with DOI on ICRP submittals in future fiscal years to determine whether budgeted or actual expenditures will produce the most accurate results. Once the ICRP is approved DFW will send an approved copy to the California State Auditor.

California State Auditor's Assessment of 1-Year Status: Pending

The department's response indicated that although it had completed this recommendation, it would not be able to provide documentation to support the full implementation until a later date. Thus, we assessed the implementation as "pending."

6-Month Agency Response

The department has submitted its Indirect Cost Rate Proposal (ICRP) for 2013-14 to the U.S. Department of Interior (DOI). Based on direction from the DOI, the federal indirect cost rate contained in this proposal is based on actual expenditures. The department will work closely with DOI on ICRP submittals in future fiscal years to determine whether budgeted or actual expenditures will produce the most accurate results.

California State Auditor's Assessment of 6-Month Status: Pending

The department's six-month response was submitted three months late. In addition, no documents were provided to support its assertion that the recommendation was fully implemented. The department agreed to provide this documentation as part of its one-year response.

60-Day Agency Response

Fish and Game stated that its accounting services branch (accounting branch) submits its Indirect Cost Rate Proposal annually to the U.S. Department of Interior and that in November 2012, the accounting branch will be preparing the new proposal for fiscal year 2013–14. Fish and Game asserted that it will reassess the method used at that time as well as make adjustments as needed. (See 2013-406, p. 213)

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #6 To: Spill Prevention and Response, Office of

To ensure that the spill office continues to work consistently with other entities to resolve issues with the use of staff and equipment and that it has the necessary resources to carry out its operations, the spill office should develop written policies and procedures with Fish and Game enforcement regarding staffing decisions.

1-Year Agency Response

Coordination guidelines have been signed and adopted between OSPR and CDFW Enforcement. The guidelines are currently being implemented.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

The department stated that coordination guidelines have been signed and adopted between OSPR and CDFW Enforcement. The department also stated that the guidelines are currently being implemented.

California State Auditor's Assessment of 6-Month Status: Pending

The department's six-month response was submitted three months late. In addition, no documents were provided to support its assertion that the recommendation was fully implemented. The department agreed to provide this documentation as part of its one-year response.

60-Day Agency Response

Fish and Game explained that it has completed draft guidelines regarding the coordination of the spill office and Fish and Game enforcement and the current target for adoption of these guidelines is January 1, 2013. (See 2013-406, p. 213)

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #7 To: Spill Prevention and Response, Office of

To ensure that the spill office continues to work consistently with other entities to resolve issues with the use of staff and equipment and that it has the necessary resources to carry out its operations, the spill office should develop written policies and procedures with Fish and Game's IT unit regarding the coordination of response to system outages.

1-Year Agency Response

Coordination guidelines have been signed and adopted between OSPR and CDFW's IT unit. The guidelines are currently being implemented.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

The department stated that coordination guidelines have been signed and adopted between OSPR and CDFW Enforcement. The department also stated that the guidelines are currently being implemented.

California State Auditor's Assessment of 6-Month Status: Pending

The department's six-month response was submitted three months late. In addition, no documents were provided to support its assertion that the recommendation was fully implemented. The department agreed to provide this documentation as part of its one-year response.

60-Day Agency Response

Fish and Game stated that it has completed draft guidelines regarding the coordination of the spill office and Fish and Game's IT unit, and the current target for adoption of these guidelines is January 1, 2013. (See 2013-406, p. 213)

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #8 To: Spill Prevention and Response, Office of

To ensure that the spill office continues to work consistently with other entities to resolve issues with the use of staff and equipment and that it has the necessary resources to carry out its operations, the spill office should develop written policies and procedures with the State Lands Commission (State Lands) regarding its disclosure of budget change proposals affecting the spill fund.

60-Day Agency Response

The spill office and State Lands have completed a memorandum of understanding (MOU) regarding the spill fund. State Lands stated that this MOU will ensure that the two entities share budget change concept proposals, budget change proposals, and the spill fund's fund condition and fund projection information. (See 2013-406, p. 214)

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #9 To: Lands Commission, State

To comply with state law, State Lands should develop time sheet review procedures to ensure that its employees charge the spill fund only for oil spill prevention activities and that those charges are accurate.

60-Day Agency Response

State Lands has updated its time reporting instructions, which are included in its employee information guide and are accessible by all State Lands' employees on its intranet. State Lands' executive officer also sent a memorandum to all State Lands' managers and supervisors emphasizing the importance of the time report review and approval process. Finally, it stated that administrative staff have also been directed to conduct time reporting training for all staff. (See 2013-406, p. 214)

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation for Legislative Action

To eliminate confusion about the authority of the spill office and its relationship with Fish and Game, the Legislature should consider amending state law to clarify its intent regarding the administrator's authority.

Description of Legislative Action

N/A

California State Auditor's Assessment of Annual Follow-Up Status: Unknown

All Recommendations in 2011-123

Agency responses received after June 2013 are posted verbatim.