Report 94106 Summary - October 1995
Department of Fish and Game
:Administrative Processes Need Improvement
HIGHLIGHTS
The department:
- Improperly allocated indirect costs.
- Mismanaged the use of restricted funds.
- Internal auditor found weaknesses still exist in procurement and purchasing.
- Headquarter staff grew faster than field staff over the past 10 years.
Results in Brief
The Department of Fish and Game (department) is responsible for maintaining native fish, wildlife, plant species, and natural areas. This includes habitat protection to ensure the survival of all species and natural areas. The department is also responsible for the diversified use of fish and wildlife, including recreational, commercial, scientific, and educational. Our review focused on whether the department manages its administrative costs in a reasonable manner, as well as the department's management of those funds that are restricted for specific purposes. We also determined what steps the department has taken to address the purchasing and contracting weaknesses that its auditors have identified at regional offices and at headquarters. Further, we developed a ten-year trend showing how the department has distributed its staff between headquarters activities and field activities. Finally, we reviewed a sample of department expenditures related to the cleanup and ongoing assessment of the 1991 chemical spill near Dunsmuir, California, and policies and procedures for responding to similar spills. Specifically, we noted the following concerns:
- The department is allocating some of its costs as indirect costs (also called administrative costs) even though these costs are directly chargeable to a particular program. When this occurs, the programs that are inappropriately sharing these costs are being forced to pay, even though they have not benefited in any way from the expenditures. Contributing to this problem is the fact that the department has not had a written cost allocation plan since fiscal year 1992-93. Improperly allocating costs has contributed to the flaws in the management of certain departmental funds that are restricted.
- The department's management of restricted funds is flawed because it does not always capture the actual costs of program activities funded by these restricted funds, has made inappropriate loans from restricted funds, and does not provide its managers with sufficient accounting information to allow them to properly manage these funds. The department has taken steps to address some of these deficiencies. It has created a "Fund Manager" position to assist managers in the administration of their funds, but more improvement is needed.
- In 1993, the discovery of numerous irregularities at one of the regional offices led the department's auditors to do similar audits of headquarters and the other four regional offices. These audits have confirmed that weaknesses in the department's purchasing of goods and services are not restricted to only one regional office but are widespread. These audits found that the department was often not preparing purchase orders until after the purchased goods had been received, that the department was not ensuring that it had evidence of the receipt of goods or services before making payments to the vendor, and that it was not always taking advantage of vendor discounts.
- In addition, the department's award and management of contracts for services is not always effective. Internal audits of consultant contracts and the Adopt-A-Lake Program found problems in the award and management of contracts. In our review of 43 sole-source contracts, 13 did not provide sufficient justification for the reasonableness of the contract price paid by the department.
- Our analysis of the department's Salaries and Wages Supplement data over a ten-year period indicates that the department's headquarters has grown at a faster pace than its field activities. Although we acknowledge that the data used for this analysis is less than perfect, it was the best information the department had available. Also, we found that the ratio of executive and administrative staff to total department staff is higher than that of two other comparable departments. However, the comparison of one department with another must be viewed with caution.
- We found that the department has not always used highlevel positions appropriately. It created and retained exempt positions inappropriately and used a temporary help Career Executive Assignment (CEA) position to compensate a retired annuitant that did not meet Department of Personnel Administration guidelines and criteria for CEA classification.
- Although the department properly accounted for the charges to the Dunsmuir chemical spill, the costs for goods and services used in response to the spill were not always justified. In one instance, the department made excessive payments for computers.
Recommendations
The department needs to improve its administrative processes. Specifically, it should:
- Revise its cost allocation methodology to ensure that costs are charged to the appropriate programs and paid by the proper fund;
- Improve its management over the expenditure of restricted revenues to ensure these revenues are spent for targeted purposes as expressed in state law;
- Assign responsibilities related to its purchasing, payment, and contracting practices to appropriately trained employees and hold these employees accountable for adherence to these practices to ensure that state purchasing and contracting laws and regulations are followed;
- Better distinguish field staff positions from headquarters staff positions so it can properly evaluate the need for new headquarters positions; and
- Improve its controls over the procurement of goods and services when competitive bidding is not used to ensure that the costs for these goods and services are reasonable.
Agency Comments
The department generally agreed with our conclusions and recommendations. However, it took exception to the approach we used to conduct a 10year study of the ratio of headquarters to field positions.
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