Report 2012-121.1 Recommendation 3 Responses

Report 2012-121.1: Department of Parks and Recreation: Weak Procedures Have Led to Inconsistent Budgetary Reporting and Difficulties in Measuring the Impact of Efforts to Keep Parks Open (Release Date: February 2013)

Recommendation #3 To: Finance, Department of

To ensure transparency and accurate reporting, in those instances when Finance believes it is necessary to adjust amounts that departments have reported for presentation in the governor's budget, causing them to be different from the amounts reported to the State Controller, Finance should develop a policy and procedures to fully disclose the need for the adjustments it makes, including a reconciliation to the amounts reported by the State Controller.

6-Month Agency Response

Policy and procedures have been developed to provide transparency of the effect of any budget or policy adjustments Finance makes that affect past year amounts shown in the fund condition statements but has not been included in the year-end financial statements submitted to the State Controller's Office (SCO). The policy and procedures will be implemented this fall for the development of the 2014-15 Governor's Budget. Also, as noted in our January 23, 2013 and April 12, 2013 responses, we have established an enhanced process for departments and Finance to reconcile fund condition statements with departments' year-end financial statements and the SCO's fund balances.

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

60-Day Agency Response

Finance has developed policy and procedures to provide transparency of the effect of any pending legislation that affects past year amounts shown in the fund condition statements but has not been included in the year-end financial statements submitted to the State Controller's Office (SCO). The policy and procedures will be implemented this fall for the development of the 2014-15 Governor's Budget. Also, as noted in the department's January 23, 2013 response, Finance has established an enhanced process for departments and Finance to reconcile fund condition statements with departments' year-end financial statements and the SCO's fund balances. Finance included a copy of the policy statement it plans to include in future budget letters and training.

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

Finance plans to implement its policy statement in the fall 2013 for development of the 2014-15 Governor's Budget. The policy statement is incomplete because it limits disclosure of changes Finance makes to the effect of any pending legislation that affects past year amounts shown in the fund condition statements but has not been included in the year-end financial statements submitted to the State Controller's Office (SCO). The policy statement does not address any other changes that Finance may potentially make to adjust amounts that departments have reported for presentation in the governor's budget.

All Recommendations in 2012-121.1

Agency responses received after June 2013 are posted verbatim.