2008 Statewide Issues

The number of instances of control deficiencies and noncompliance excludes two issues that are not specific to any one program or department, but rather encompass all programs and are therefore statewide issues.

• The State has yet to comply with federal provisions requiring a schedule that shows total federal awards expended for each individual federal program because California's automated accounting system identifies revenues for each federal award, but is not expenditures. Because of this limitation of the accounting system, the State uses total federal cash receipts by program to prepare the schedule of total federal awards rather than funds expended by program. Further, our office must determine the major federal programs to audit using total cash receipts rather than expenditures as required. This has been an ongoing issue that we have reported each year since fiscal year 1995-96.
• The State still does not have adequate written policies and procedures to, nor did it, accurately calculate the state and federal interest liability by program as required in its agreement with the federal government for cash management. Such agreements are required to provide the federal government assurance that those receiving federal funds do not request the funds prior to when they are needed.
• The database the State uses to prepare its statewide cost allocation plan, which is used to recover a portion of the State's costs for administering federal programs, is problematic in that the programming is difficult to understand and inadequately documented, and errors are difficult to identify and correct. Further, the State did not submit required information to the federal government with the proposed cost allocation plan.
• The State cannot ensure local governments are taking prompt and appropriate corrective action to address audit findings after it receives the local governments' audit reports. However, the federal government requires the State to issue management decisions on audit findings within six months of receiving these reports. This condition is partly attributable to the amount of time the State Controller's Office (SCO) takes to certify audit reports and forward the reports and corrective action plans to the appropriate state departments. We found that for 26 of the 58 counties, the SCO took between 1.2 months and 9.2 months to certify the reports and forward them to the appropriate state entities.

Pages 29-39 of the 2008 Single Audit report describe the issues.