Report 2016-111 Recommendations

When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below, is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor's assessment of auditee's response based on our review of the supporting documentation.

Recommendations in Report 2016-111: City of Irwindale: It Must Exercise More Fiscal Responsibility Over Its Spending So That It Can Continue to Provide Core Services to Residents (Release Date: November 2016)

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Recommendations to Irwindale, City of
Number Recommendation Status
1

To address the structural deficit in its general fund, the city should seek long-term solutions to balance its budget so that its expenditures do not exceed its revenues. These solutions should include eliminating the reliance on one-time gains to fund ongoing expenses and identifying opportunities to further reduce spending. The city should document its approach in a long-term financial plan that should account for the following: a forecast of at least five to 10 years into the future, updates to long-term planning activities as needed to provide direction to the budget process, and an analysis of its financial status; revenue and expenditure forecasts; and plan-monitoring mechanisms, such as a scorecard of key indicators of financial health.

Pending
2

To ensure that employee compensation aligns with job statements, the city should review its salary incentives and modify the eligibility criteria so that they match the job requirements.

Pending
3

Considering that the city's retirement benefits are more generous than those of most comparable cities, and in light of its financial situation, the city should reduce its employee benefits costs by negotiating with employee bargaining groups and key management employees for the elimination of further city contributions to the PARS supplemental benefit plan or at least and increase in participant contributions to cover the full employee share of the plan's costs, recognizing that under California case law the city may not destroy vested pension rights legislatively.

Pending
4

To minimize the use of its reserves to reduce long-term liabilities, the city should annually determine whether it has sufficient funding to cash out employee leave balances. Additionally, in future labor negotiations, the city should explore the possibility of eliminating or reducing voluntary leave balance cash-outs by employees, and eliminate sick leave cash-outs altogether.

Pending
5

As a prudent financial practice, the city should collect receipts for all reimbursable council expenses and update its expense reimbursement policy to eliminate exceptions to this rule.

Pending
6

To reduce costs, the city should consider eliminating its current resident prescription drug benefit program and replacing it with the prescription discount card program offered by the League of California Cities that would provide discounts on prescriptions to residents at no cost to the city.

Will Not Implement
7

If the city chooses not to participate in the prescription discount card program offered by the League of California Cities, it should at least take the following step related to its current prescription drug benefit program: Align its prescription drug benefit program with its established purpose--to treat conditions proven to be caused or worsened by the city's mining activities--and limit the availability of benefits to only those medications approved for the treatment of such conditions.

Will Not Implement
8

If the city chooses not to participate in the prescription discount card program offered by the League of California Cities, it should at least reduce the cost of its current prescription drug benefit program by enacting limits--similar to those in its resident vision benefits--on the number or dollar amount of prescriptions an individual can receive each year.

Will Not Implement
9

To reduce the costs of its resident prescription drug benefit program, the city council should follow the recommendations of its consultant by approving the following: align copayments by increasing those paid by residents 50 years of age and older to the same level as those paid by residents who are 49 years or younger.

Will Not Implement
10

To reduce the costs of its resident prescription drug benefit program, the city council should follow the recommendations of its consultant by approving the following: implement coordination of benefits provisions, where applicable, to designate the city as a secondary payer to residents' primary insurance coverage.

Will Not Implement
11

To eliminate the need for police officer overtime, the city should evaluate the possibility of contracting for police services with the Los Angeles County Sheriff's Department or another law enforcement agency as an alternative to operating its own police department.

Will Not Implement
12

While the city is considering recommendation #11, and if it should choose not to contract for police services, it should ensure that its police department is adequately staffed by performing a staffing analysis that includes a determination of the costs and benefits of officer overtime versus hiring additional officers.

Pending
13

While the city is considering recommendation #11, and if it should choose not to contract for police services, it should promote public safety and equity among its police officers by implementing a rotational order for scheduled overtime to prevent some officers from working excessive shifts.

Pending
14

To help ensure that it receives the best value for contracts it exempts from competitive bidding, the city should revise its purchasing policy to require its staff to perform a price analysis and prepare a cost justification form and place the document in each contract file as evidence that the contract price is fair and reasonable.

Pending
15

To help ensure that it receives good-quality services, the city should monitor all spending for contracted services. The city should also require its staff to perform post-contract evaluations of professional services contracts, particularly for those continuing services contracts it exempts from competitive bidding.

Pending
16

The Housing Authority should consider options to provide low-income housing opportunities to more people. Additionally, if the Housing Authority intends to continue providing low-income housing opportunities in the future, the city should examine the available funding mechanisms to continue providing low-income housing before it exhausts its Housing Authority Fund balance.

Will Not Implement
17

To ensure that all residents have an equal chance to participate in the Housing Authority's housing programs, the city should remove the long-term residency priorities from any future housing programs.

No Action Taken
18

To help identify and prevent potential fraud, the city should develop and implement a fraud policy, following the guidelines provided by the Association of Certified Fraud Examiners.

Pending
19

To ensure that it continues to properly manage its debt, the city should prioritize developing and implementing a debt management policy.

Pending


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