To assure the Legislature and the public that future proposed park service reductions and closures are appropriate to achieve any required budget reduction, the department should develop individual park operating costs and update these costs periodically. These individual park costs should include all direct and indirect costs associated with operating the park, and the aggregated costs of all the individual parks should correspond with the related fiscal year's actual expenditures needed to operate the department's park system. Additionally, when proposing park service reductions or closures in the future, the department should compare the most recent cost estimates to the amount the department determines is necessary to fully operate its 278 parks at the 2010 level to determine the actual amount of the reductions or closures needed.
In January 2014, the Department released its Park Unit costing report. The increased level of fiscal information provided in this report and in the future will allow for a greater understanding regarding how departmental funding is allocated amongst the various State parks in support of Californias State Park System.
In developing this report, the costs for the park system fall into two main categories of expenditures:
Direct Expenditures - These are the direct expenditures for providing services in a park unit, from the district level down—identified as staffing and operating expenses in this report.
Indirect Overhead Expenditures - These include the cost of support services for the park unit and support provided by the Departments Headquarters operation—identified as distributed admin and core programs in this report.
The Departments Fiscal Tracking System, reports expenditures to the district level of the State Park System. The Department developed estimates for how those expenditures should be distributed among the various parks in the system. Included in the report is the Departments estimate of how the district expenditures are distributed among the parks for both FY 2010-11 and projected for FY 2013-14. The Departments examination of the State Park Systems budget focused on the support budget expenditures—not Capital Outlay or Local Assistance Expenditures—in order to capture those costs that best reflect the costs of operating individual parks within a park system. Going forward, the Department is tracking expenditures for the park system at the park unit level and will release expenditures at this the park unit level annually.
In 2013, the Public Resources Code 5007 was amended resulting in the deletion of the requirement to compare most recent cost estimates to the amounts determined necessary to fully operate our parks at the 2010 level when proposing park service reductions or closures.
The department provided us with park operating costs for fiscal year 2010-11 which met our expectations and while we acknowledge the department's efforts to implement our recommendation, effective September 2013 state law was amended removing the requirement for the department to determine the amount necessary to fully operate its 278 parks at the 2010 level. As a result, that portion of our recommendation has been resolved.
The department also provided us with projected park costs for fiscal year 2013-14 which also appear to meet our expectations. We have assessed this recommendation as fully implemented provided the department continues with its current methodology to determine park operating costs and report those amounts to the Legislature beginning in fiscal year 2013-14, as we recommended in a subsequent report dated September 2013 (Department of Parks and Recreation: Flaws in Its Budget Allocation Processes Hinder Its Ability to Effectively Manage the Park System, Report 2012-121.2).
On July 1, 2013 the Department began reporting expenditures for the fiscal year 2013/14 by park unit. These costs will be tracked at the park unit throughout the year and will correspond with the fiscal year's actual expeditures. The 2013/14 expenditures will be compared to the 2010 expenditures after June 30, 2014, the close of the fiscal year. Budgets for individual park units will be compiled from the data and year by year comparisons will be made going forward.
The department provided us with a three-phase methodology which it is in the process of implementing. For phase one (calculating fiscal year 2010-11 expenditures by park unit) the department has collected park level expenditures for fiscal year 2010-11 from its park districts. However, the expenditures are not yet complete because not all of the districts allocated their overhead to the individual parks and the department has not yet allocated its headquarters overhead costs to the parks. Additionally, the department has not identified a process for ensuring that the total fiscal year park level expenditures reconcile with the corresponding fiscal year's actual expenditures. For phase two (defining process to track current year expenditures), although the department requires the park districts to begin tracking expenditures by park unit beginning July 1, 2013, it does not expect to compare the fiscal year 2013-14 expenditures to the 2010 expenditures until after the close of the fiscal year. For phase three (developing budgets for individual parks) the department indicates that year by year comparisons will be made going forward but does not provide any specifics or timeframes. The department has not provided documentation to substantiate its claim of fully implemented.
A methodology for reporting expenses at the park unit level has been tested and verified. Field personnel will be tracking expenditures at the park unit level for all fiscal years starting with the current 2013/14 budget year. By tracking costs at the park unit level the department will be able to compare current costs with those of the 2010 level at which Parks were operating.
Although the department has established a methodology to address our concern and its need to identify operating costs at the park unit level, the department is still in the process of implementing its three phase approach. Specifically, the department has collected park level costs for fiscal year 2010-11 from its park districts but not all of the districts allocated their overhead to the individual parks. Also, the department has not yet allocated its headquarters overhead costs to the park level. Additionally, the department has not identified a process for ensuring that the total fiscal year park level costs reconcile with the corresponding fiscal year's actual expenditures. Further, for the second phase the department required every section, headquarters and field personnel, to begin tracking expenditures by park unit wherever possible starting July 1, 2013. However, it has not provided documentation to substantiate its claim.
Agency responses received after June 2013 are posted verbatim.