Report 2018-133 Recommendation 4 Responses

Report 2018-133: Fallen Leaf Lake Community Services District: Its Billing Practices and Small Electorate Jeopardize Its Ability to Provide Services (Release Date: July 2019)

Recommendation #4 To: Emergency Services, Office of

To further ensure that local fire agencies receive proper reimbursement for responding to incidents, Cal OES should recommend to the Agreement Committee that it include the following steps in the new fire agreement, anticipated to be effective starting in 2020:

1) Require local fire agencies to submit documents showing approval by their governing bodies of the average actual salary rates included on the salary form that the local fire agencies submit to Cal OES.
2) Require local fire agencies to submit documentation to support their average actual salary rates.
3) Revise the salary form and reimbursement invoice form so that authorized representatives of local fire agencies sign them under penalty of perjury.

1-Year Agency Response

July 17, 2020 One Year Update:

1) Require local fire agencies to submit supporting documentation showing that their governing body approved their submitted average actual rate forms;

Cal OES along with the CFAA Committee members addressed CSA's recommendations as a Committee and finalized stated recommendation through negotiations for a 4 year-8 month Agreement effective May 1, 2020, through December 31, 2024.

The consensus of the CFAA Committee (the Committee) determined that requiring local fire agencies to submit supporting documentation showing that their governing body approved their submitted average actual rate forms was not a best practice. The process of applying the methodology of determining salary rates (previously average actual rate) is an administrative function, generally performed by financial administrative staff. The concern of over implementing this particular recommendation was primarily in regard to the timeliness of fire agencies being able to update salary rates and have them applied timely and in parallel with the response activities through the CFAA. Rates have to be on file at the time of dispatch for reimbursement, and this would almost certainly delay having that ability. Agency's salary rates may change throughout the year through contract negotiations, and the proposed recommendation to have the governing body approve salary rates may significantly delay the submission of the updated rates to Cal OES, which could result in underpayments to the local agency.

Cal OES, along with the Committee, believes there are better approaches to support the accuracy of reported salary rates, such as conducting salary survey audits on local fire agencies. Cal OES has established a three-year contract with the State Controller's Office to ensure fire agencies report reasonable salary rates. These audits will continue to be conducted each year and shared with the Committee members once completed. The Committee feels this provides sufficient oversight of the salary rate calculations. However, CSA's recommendations will be reviewed as salary survey audits are being conducted and a discussion with the Committee during quarterly meetings will ensue Cal OES follow-up with best practices.

2) Require local fire agencies to submit documentation to Cal OES supporting their average actual salary rates;

In addition to the yearly audits, Cal OES has agreed to implement, by consensus of the Committee to establish a Committee yearly "review" process at one or more of our quarterly meetings. The process will include as noted in the Agreement:

"California Fire and Rescue Mutual Aid System Agencies will be required upon request to provide Cal OES supportive documentation used to establish rates and method of pay. Cal OES will request yearly samples from selected agencies for review by Cal OES and the Committee. Upon request, the California Fire and Rescue Mutual Aid System Agencies will have thirty (30) calendar days to provide Cal OES with required information. This process does not supersede the Examination and Audit process as outlined in this Agreement."

The annual review process joined with the formal annual salary survey audits being conducted by the State Controller's Office through an interagency agreement, provides for more efficient and effective oversight of the salary rates, not to mention, makes aware that the Committee is establishing an oversight and collaborative review process.

3) Revise the salary survey and reimbursement invoice forms to show that the authorized representatives of local fire agencies sign them under penalty of perjury.

The Authorized Representative is currently required to attest to the best of their knowledge that the information in the salary survey and reimbursement invoice forms is correct. Through consensus of the Committee, it agreed to update the survey and invoice to reflect: "As an authorized representative of my agency/dept., I certify to the best of my knowledge and belief, and under penalty of perjury that this information is correct. Furthermore, my signature below represents acceptance by my agency/dept., as a cooperator, to comply with the authorities, terms and conditions of the CFAA. I also agree to comply with all cooperator agency internal accounting expense and reimbursement standards.

The Committee will continue to evaluate and monitor local government fire agencies rates, methods and submissions based on the Agreement's terms established by the Committee to the best of its ability. Furthermore, it will continue to refine and implement best practices as a Committee through negotiations and consensus.

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

Cal OES's responses for parts 1 and 2 of the recommendation demonstrate that the committee considered the recommendation and determined that mitigating controls (audits and reviews) should accomplish the same outcome more efficiently. Thus, we consider these parts of the recommendation resolved.

Cal OES implemented part 3 of the recommendation.

6-Month Agency Response

Cal OES completed an Executive Level CFAA meeting in order to provide direction to the CFAA committee.

The CFAA expired on December 31, 2019. An extension from January 1, 2020 to April 30, 2020 was signed by all parties.

The CFAA committee met on January 6, 2020 to begin renegotiations and will continue through the month of April. Cal OES staff informed the committee of the three CSA recommendations. The committee agreed to continue discussions regarding the recommendations and consider incorporating or improving the process into the new CFAA.

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

60-Day Agency Response

Cal OES is currently working with our local government committee members to determine the list of priorities for the new CFAA agreement. Once consensus is made, a meeting with executives from USFS, Cal Fire, and Cal OES will be held. This will determine the next steps in the renegotiation process. When renegotiation meetings begin, Cal OES staff will inform the committee of the three CSA recommendations.

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

All Recommendations in 2018-133

Agency responses received are posted verbatim.