To comply with state contracting laws and policies that protect the State's interest, Public Health should recoup the overpayment made to the San Diego State University Research Foundation (research foundation), if applicable.
CDPH has completed its review of the personnel expenditures billed under the contract from July 1, 2007 through June 30, 2010 and has determined that there was no overpayment and a recoupment of funds is not necessary.
BSA found that two individuals had a budgeted time base in the contract of 25% time. In 14 of the invoices BSA reviewed, salaries were billed and reimbursed in excess of 25% time.
The amounts billed were for appropriate costs incurred in completion of the agreed-upon services. The contract stated that "Cumulative line item shifts of up to $25,000 or 10% of the annual agreement total may be made, whichever is greater, up to a cumulative annual maximum of $50,000, provided the annual agreement total does not increase or decrease." The contractor was required to seek prior approval from CDPH for such line item changes, but the contract stated "line time shifts meeting this criteria shall not require a formal agreement amendment."
Over the course of the three-year contract, the contractor identified several instances when these individuals spent more time on a project deliverable than originally anticipated and identified other budgetary savings to cover the increased salaries, in accordance with the contract payment provisions. CDPH approved these requests and line-item shifts did not exceed the contract limits. In Years 1 and 2, sufficient savings were available within the budgeted salary amounts to cover increases in some staff time. In Year 3, savings from "Other Operating Expenses" covered the increased staff time.
• On December 14, 2012, CDPH submitted a public records request to the Bureau of the State Audits (BSA) to obtain the working papers that speak to this overpayment (Attachment 1). On January 15, 2013, BSA mailed the working papers to CDPH. By June 30, 2013, CDPH will complete its review of these records and determine whether a recoupment of costs is necessary.
Public Health submitted a Public Records Act request to the state auditor to obtain the documentation that supports the overpayment cited in our report. Public Health stated that, once it receives the information, it will review the documents and initiate a recoupment process, if deemed necessary.
Agency responses received after June 2013 are posted verbatim.