Report I2019-4 All Recommendation Responses

Report I2019-4: Gross Mismanagement Led to the Misuse of State Resources and Multiple Violations of State Laws (Release Date: August 2019)

Case Number I2017-0840

Recommendation #1 To: Food and Agriculture, Department of

CDFA:

Ensure that its audit office conducts biannual compliance audits for all district agricultural associations and that the office prioritizes auditing district agricultural associations on the watch program.

Agency Response From October 2019

CDFA reported that it requested that its audit office schedule the association for a compliance audit between the spring and summer of 2020. As of October 2019, it has not provided confirmation of when the audit is scheduled, nor has it explained how it will ensure that it will conduct biannual compliance audits for all district agricultural associations, prioritizing those on the watch program.

California State Auditor's Assessment of Status: Partially Implemented


Case Number I2017-0840

Recommendation #2 To: Food and Agriculture, Department of

CDFA:

Consider exercising its authority to assume any or all rights, duties, and powers of the board of the association. If CDFA agrees to implement this recommendation, it should assume responsibility for implementing our recommendations to the association.

Agency Response From October 2019

As noted in our report, CDFA stated that it was premature to assume the rights, duties, and powers of the board of the association, with which we disagreed. Nevertheless, CDFA reported that its staff has been attending all monthly association board meetings, reviewing meeting agendas and monthly financial reports, as well as assisting the association with the development of appropriate policies and procedures. It further stated that it is scheduling monthly teleconferences with association staff and will confirm that the association has access to CDFA's online training materials. It stated that in July 2019, the CEO and four board members attended training tailored for their positions.

California State Auditor's Assessment of Status: Fully Implemented


Case Number I2017-0840

Recommendation #3 To: Food and Agriculture, Department of

CDFA:

Provide district agricultural associations with timely notifications from the Department of Motor Vehicles' Employer Pull Notice Program and follow up to ensure that the district agricultural associations take appropriate action.

Agency Response From October 2019

CDFA estimated that it would begin enrolling association CEOs in the program and start monitoring driving records in October or November 2019 and stated that it is still exploring options for the associations to monitor permanent staff through the program. CDFA said it will schedule a meeting with the DMV regarding this component. It estimated that it would fully implement this recommendation by November or December 2019.

California State Auditor's Assessment of Status: Partially Implemented


Case Number I2017-0840

Recommendation #4 To: Food and Agriculture, Department of

CDFA:

To the extent that its authority allows, oversee implementation of our recommendations to the association.

Agency Response From October 2019

In July 2019, CDFA reported that it had two telephone meetings with the association board chair and vice chair to discuss our recommendations and identify a path forward for each recommendation. It has also been providing monthly updates regarding the association's efforts to implement the recommendations.

California State Auditor's Assessment of Status: Partially Implemented


Case Number I2017-0840

Recommendation #5 To: Food and Agriculture, Department of

Association:

Take appropriate disciplinary action against the CEO, the maintenance supervisor, and all other permanent and temporary employees who engaged in the improper governmental activities that we identified.

Agency Response From October 2019

In August 2019, CDFA reported that it would consult with the CEO and the board on the matter. In September 2019, it clarified that it would work with the board specifically on potential disciplinary action against the CEO. In October 2019, it stated that its human resources department had reviewed our report and was waiting on additional information from the association before it makes a recommendation regarding disciplinary action. It did not provide an anticipated completion date for this recommendation.

California State Auditor's Assessment of Status: Pending


Case Number I2017-0840

Recommendation #6 To: Food and Agriculture, Department of

Association:

Recoup the money from the CEO, the deputy manager, and the maintenance supervisor for their inappropriate purchases.

Agency Response From October 2019

In August 2019, CDFA reported that it would consult with the CEO and the board regarding the recommendation, even though the recommendation involves potential collections from the CEO. It later reported that the board president and vice president would start reviewing receipts and other evidence to identify inappropriate purchases and that recouping any monies will be based on evidence. It said that the CEO's role would be to provide data. In September 2019, CDFA reported that the association agreed to repay $1,259 for alcohol purchases. In October 2019, CDFA reported that it had requested receipts for the inappropriate purchases and that all but one board member had reimbursed the association for the inappropriate alcohol purchases. It estimated that the association would fully implement the recommendation by November or December 2019.

California State Auditor's Assessment of Status: Partially Implemented


Case Number I2017-0840

Recommendation #7 To: Food and Agriculture, Department of

Association:

Recoup the actual costs from the maintenance supervisor for his personal use of a state vehicle.

Agency Response From October 2019

CDFA reported that it has requested a record of the maintenance supervisor's personal miles driven using a state vehicle by late October 2019. It was unclear who would provide the information to CDFA, but it estimated the association would fully implement the recommendation by November or December 2019.

California State Auditor's Assessment of Status: Pending


Case Number I2017-0840

Recommendation #8 To: Food and Agriculture, Department of

Association:

Recoup all travel expenses from employees and board members who exceeded the allowable travel reimbursement amounts for lodging and meals or who improperly traveled to banned states.

Agency Response From October 2019

In September 2019, CDFA reported that it had requested travel claims from the association related to out-of-state travel. In October 2019, CDFA stated that it asked the association to prepare a worksheet to help identify the inappropriate travel. It estimated that the association would fully implement the recommendation by November or December 2019.

California State Auditor's Assessment of Status: Pending


Case Number I2017-0840

Recommendation #9 To: Food and Agriculture, Department of

Association:

Develop appropriate controls for the propane tank, including securing access to the propane tank key. The association should consider installing a meter and creating, maintaining, and auditing a propane usage log.

Agency Response From October 2019

CDFA reported that the association removed the propane tanks and provided CDFA with an invoice for their removal. CDFA stated that it toured the grounds in July 2019 and confirmed their removal.

California State Auditor's Assessment of Status: Resolved


Case Number I2017-0840

Recommendation #10 To: Food and Agriculture, Department of

Association:

Train all staff who have purchasing authority on relevant state laws and CDFA and association accounting policies. This training should specifically focus on requiring the submission of itemized receipts and preventing inappropriate or illegal purchases.

Agency Response From October 2019

CDFA reported that in July 2019, the CEO provided information substantiating training sessions he provided. It is reviewing the materials and will work with the association to ensure the proper guidance was provided. It stated that it will also provide additional training on this topic to association staff and estimated that the recommendation would be fully implemented by October or November 2019.

California State Auditor's Assessment of Status: Partially Implemented


Case Number I2017-0840

Recommendation #11 To: Food and Agriculture, Department of

Association:

Establish an appropriate segregation of duties between credit card holders and those who reconcile the credit card statements.

Agency Response From October 2019

CDFA reported that in July 2019, the CEO provided information substantiating training sessions he provided. It is reviewing the materials and will work with the association to ensure the proper guidance was provided. It stated that it will also provide additional training on this topic to association staff and estimated that the recommendation would be fully implemented by October or November 2019.

California State Auditor's Assessment of Status: Partially Implemented


Case Number I2017-0840

Recommendation #12 To: Food and Agriculture, Department of

Association:

Formally adopt, train staff on, and follow the Fairs and Expositions branch's accounting procedures manual, as well as CDFA's Controlled Substances and Alcohol and Incompatible Activities policies.

Agency Response From October 2019

CDFA reported that in July 2019, the CEO provided information substantiating training sessions he provided. It is reviewing the materials and will work with the association to ensure the proper guidance was provided. It stated that it will also provide additional training on this topic to association staff and estimated that the recommendation would be fully implemented by October or November 2019.

California State Auditor's Assessment of Status: Partially Implemented


Case Number I2017-0840

Recommendation #13 To: Food and Agriculture, Department of

Association:

Implement the State Administrative Manual sections pertaining to inventory control and vehicle usage.

Agency Response From October 2019

CDFA reported that in July 2019, the CEO provided information regarding implementation of inventory and vehicle usage controls. It stated that it is reviewing the materials provided and will work with the association to ensure controls are in accordance with State Administrative Manual requirements. It stated that it will also provide additional training on this topic to association staff and estimated that the recommendation would be fully implemented by October or November 2019.

California State Auditor's Assessment of Status: Partially Implemented


Case Number I2017-0840

Recommendation #14 To: Food and Agriculture, Department of

Association:

Require employees and board members to submit travel expense claims for their travel expenses (except airfare and car rental) and ensure that future travel-related expenses and reimbursements adhere to all applicable state laws and the Governor's Executive Order B-06-11.

Agency Response From October 2019

CDFA reported that in July 2019, the CEO provided information substantiating training sessions he had provided on the issue. CDFA stated that it is reviewing the materials and will work with the association to ensure proper guidance was provided to association staff. It also stated that it will provide additional training on this topic to association staff and estimated the recommendation would be fully implemented by October or November 2019.

California State Auditor's Assessment of Status: Partially Implemented


All Recommendations in I2019-4