Report 2012-112 Recommendation 4 Responses

Report 2012-112: Office of the Secretary of State: It Must Do More to Ensure Funds Provided Under the Federal Help America Vote Act Are Spent Effectively (Release Date: August 2013)

Recommendation #4 To: Secretary of State, Office of the

To enhance the value of the HAVA spending plan as a transparency and accountability tool for the Legislature, the Office should make the following modifications to its annual HAVA spending plan:

Clearly state the methodology used to report prior HAVA expenditures in the HAVA spending plan. Such a methodology should use the financial information contained in its accounting system.

Reconcile the prior HAVA expenditures with the year-end financial reports the Office provides to the California State Controller's Office.

Present prior HAVA expenditures by activity and by specific appropriation.

1-Year Agency Response

The current HAVA Spending Plan was developed with the Department of Finance (DOF) and the Legislative Analyst's Office (LAO) several years ago. The SOS was in contact with DOF regarding specific areas where additional financial information might aid in understanding how HAVA funds are expended or administered. The DOF indicated its preference for receiving the HAVA Spending Plan and supporting documentation in the format that was originally agreed to by the Legislature, the LAO, and the DOF. Through the budget and reporting process, the SOS worked closely with the Legislature and the DOF, but no additional information was requested and all parties indicated their continued preference for the Spending Plan in its current format.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

We disagree with the Secretary of State's decision not to implement this recommendation. As we state on pages 28 and 29 of our audit report, the historical spending information reported in the HAVA spending plan contained variances - sometimes amounting to millions of dollars - from the information contained within the Secretary of State's accounting system. Providing the Legislature with financial information that is not based on its accounting records unnecessarily diminishes the value of the HAVA spending plan, which serves as a key transparency and accountability tool for the Legislature.

6-Month Agency Response

The current HAVA Spending Plan was developed with the Department of Finance (DOF) and the Legislative Analysts Office several years ago and the SOS is reluctant to make unilateral changes to the document. The SOS has been in contact with DOF regarding specific areas where additional financial information might aid in understanding how HAVA funds are expended or administered. At this time, the DOF has indicated its preference for receiving the HAVA Spending Plan and supporting documentation in the format that was originally agreed to by the Legislature and the DOF. Through the budget and reporting process, the SOS will continue to work closely with the Legislature and the DOF to identify areas where additional information would be helpful and/or useful.

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

We are skeptical as to whether the SOS plans to ultimately implement our recommendation. The SOS is waiting for the end of the fiscal year 2014-15 budget cycle to see if either the Legislature or the Department of Finance request the changes we list in our recommendation. Nevertheless, we stand by our recommendation given our report's conclusion that the SOS has provided the Legislature with historical spending information on HAVA that could not be corroborated by its accounting records. We discuss these concerns in more detail on pages 28 through 30 of our audit report.

60-Day Agency Response

The current HAVA Spending Plan was developed with the Department of Finance (DOF) and the Legislative Analyst's Office several years ago and the SOS is reluctant to make unilateral changes to the document. The SOS has been in contact with DOF regarding specific areas where additional financial information might aid in understanding how HAVA funds are expended or administered. At this time, the DOF has indicated its preference for receiving the HAVA Spending Plan and supporting documentation in the format that was originally agreed to by the Legislature and the DOF. Through the budget and reporting process, the SOS will continue to work closely with the Legislature and the DOF to identify areas where additional information would be helpful and/or useful.

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

All Recommendations in 2012-112

Agency responses received are posted verbatim.