Report 2018-133 Recommendation 7 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 #7 To: Fallen Leaf Lake Community Services District

To rectify the excessive reimbursement amounts it received for strike team assignments, the district should, by December 31, 2019, develop and implement a plan for returning to the paying agencies the excessive reimbursements it received for 2016 through 2018.

1-Year Agency Response

The District has developed and implemented a plan to determine the amount, if any, of excessive reimbursements received for the years 2016 through 2018. To that end, the District's plan has consisted of two parts: 1) conducting an internal audit for fire seasons 2016-2018; and 2) engaging in regular communications with the Governor's Office of Emergency Services (Cal-OES) and any other agencies that contact the District. Those items have been accomplished.

The California Employment Development Department (EDD) conducted its own audit of the District's compensation of firefighter interns as independent contractors rather than employees. The EDD had initially concluded on February 27, 2020 that for the period of January 1, 2017 to December 31, 2019, the total amount the District owed for Personal Income Tax (PIT) was $4,679.05. However, the EDD further determined as of March 2, 2020 that the interns were independent contractors and abated the monetary determination. The EDD made the adjustment to its initial assessment, but required the District to pay a balance of $33.10 for interest owed, which the District has paid in March 2020.

Furthermore, the District's Fire Chief has had multiple communication with Cal-OES representatives regarding its recent submission of the 2020 Salary Survey for Fire Strike Teams. Cal-OES has informed the District that its previously enacted Resolutions regarding Strike Team regular and overtime pay are appropriate, as is the District's 2020 Salary Survey.

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

We disagree with the district's response that it fully implemented our recommendation. Although the district stated that it implemented a two-part plan including conducting an internal audit for fire seasons 2016-2018, it provided an audit of its financial statements for the year ended June 30, 2019, which was not responsive to our recommendation.

Additionally, the district stated that its plan included engaging in regular communications with the Governor's Office of Emergency Services and any other agencies that contact the District, yet the district could not provide evidence of discussions or agreements reached.

6-Month Agency Response

DISTRICT'S RESPONSE TO NUMBER 7: The District has developed and begun implementation of a plan to determine the amount, if any, of excessive reimbursements received for the years 2016 through 2018. To that end, the District's plan consists of two parts: 1) conducting an internal audit for fire seasons 2016-2018; and 2) engaging in regular communications with the Governor's Office of Emergency Services (Cal-OES) and any other agencies which contact the District. This plan has been put into motion. The District has been conducting its own internal audit, which is expected to be completed in the Second Quarter of 2020. District officials conducted a teleconference with representatives of Cal-OES on August 15, 2019, to discuss the process of review of any excessive payments to the District during the period in question. The District's Fire Chief has been in communication with Cal-OES representative Auburn Diede since that teleconference regarding the status.

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

All Recommendations in 2018-133

Agency responses received are posted verbatim.