Report 2012-121.1 Recommendation 1 Responses

Report 2012-121.1: Department of Parks and Recreation: Weak Procedures Have Led to Inconsistent Budgetary Reporting and Difficulties in Measuring the Impact of Efforts to Keep Parks Open (Release Date: February 2013)

Recommendation #1 To: Parks and Recreation, Department of

To ensure that it reports consistent amounts to Finance and the State Controller, the department's budget office should develop and implement detailed procedures that describe how to use the year-end financial statements to report prior-year accounting information to Finance. These procedures should include steps to ensure that the ending fund balances reported in the most recent governor's budget and the State Controller's budgetary report agree, and that the subsequent year's beginning fund balances in the governor's budget do not carry forward any differences.

1-Year Agency Response

The Departments Budget Office staff created procedures regarding the process for reconciling year-end financial statements between the Department of Finance (DOF) and the State Controllers Office (SCO). These procedures were created and tested when reconciling the financial statements for the last fiscal year (FY). Revisions were made, based on recent changes made by DOF, and the procedures were finalized.

Attached procedures (Fund Condition, Schedule 10R Procedures, Support Schedule 10 Procedures, and Year-End Reports) include detailed policies and procedures to ensure that the Department provides reporting of consistent amounts of prior-year accounting information, expenditures, and prior-year adjustment amounts to DOF and SCO. These procedures provide specific steps to ensure that the ending fund balances agree, and specify how to identify, investigate, resolve, and report differences by the Budget and Accounting Offices.

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

6-Month Agency Response

In addition to policies and procedures developed by the Budget Section of the Administrative Services Division, the Department of Finance has implemented a new reporting procedure through the form DF 303 that requires dual reporting from the Accounting and Budget Officers as well as validation by a higher classification in the reporting chain (i.e, Assistant Admin Deputy, Admin Deputy, Chief Deputy)of expenditures and adjustments.

Training at the Department of Finance on the new procedure was mandatory for accounting and budget personnel. DPR personnel attended the training and have incorporated the detailed procedures from the training into Department procedures.

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

Although the department's budget office has developed more detailed procedures that describe how to report prior-year accounting information to Finance, those procedures do not include steps to ensure that the ending fund balances reported in the most recent governor's budget and the State Controller's budgetary report agree. Additionally, the department's budget office has not integrated the new reporting procedures developed by Finance into their procedures.

60-Day Agency Response

The Budget office has written procedures to ensure that ending fund balances reported in the most recent governor's budget and the State Controller's budgetary report agree.

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

Although the department's budget office has developed written procedures to ensure that year-end reporting submitted to Finance is accurate and consistent with the governor's budget and the State Controller's reporting, those procedures are high-level and do not describe how the department will use its year-end financial statements to facilitate consistent reporting to Finance and the State Controller. Additionally, the procedures developed by the budget office do not ensure that the ending fund balance reported in the most recent governor's budget agrees with the ending fund balance in the State Controller's budgetary report.

All Recommendations in 2012-121.1

Agency responses received after June 2013 are posted verbatim.