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Controller's audit finds weak controls on impound account, inconsistent grant practices; department concurs and will forward guidelines
Summary
A controller performance audit found insufficient assurance that the Department of the Environment charged the solid-waste impound account only for intended purposes, inconsistent grant scoring and weak grantee monitoring; the department concurred with recommendations and committee continued the item to May 7 to receive impound-account guidelines.
The Controller's Office presented a performance audit of the Department of the Environment that identified weaknesses in how impound-account funds are charged and how grants and contracts are scored, monitored and evaluated.
Controller staff said the impound (solid waste) account is a primary funding source for the department and represented approximately 70% of the department's budget in FY 2005 in the review period. The audit found the department often allocated nearly half of impound-account costs using budget estimates and workload allocations rather than actual time tracking. Controller staff recommended a timekeeping system that separates impound-funded work, periodic adjustments to allocations (quarterly or annually), publishing an annual plan for impound funds in advance of the budget process, procurement of accounting services to audit impound usage, and independent verification of waste-diversion impacts.
The audit reviewed grant agreements and found small, non-independent evaluation panels, inconsistent scoring criteria (in one program only 10% of the score counted toward environmental goals), unclear grant agreements without tight performance targets, missing performance reports, undocumented site-visit monitoring and a lack of final grantee evaluations. For the Living Classroom project at Heron's Head/Heron's Head Point, the audit documented construction delays and recommended the department get help from the Port or Public Works for construction management; the audit also recorded that additional California Coastal Conservancy funds had been added to bring total project budgets to about $941,000.
Controller staff estimated that $213,000—6$585,000 in grant dollars reviewed were charged inappropriately to the impound account; the audit examined all 2004'2005 grants charged to the impound account and a sample (~40%) of other grants. Department Director Jared Blumenfeld told the committee his staff concurred with the recommendations, said the department is implementing a 5-year impound expenditure forecast and grant guidelines vetted in public hearings, and agreed to forward the guidelines to the committee clerk. Public commenters urged continued oversight; some questioned whether impound funds were used for World Environment Day events in 2005 and asked for clearer accountability. The committee closed public comment and continued the item to May 7 to allow staff and the controller's office to provide follow-up materials and implementation updates.
