Report 2010-117 All Recommendation Responses

Report 2010-117: General Obligation Bonds: The Departments of Water Resources and Finance Should Do More to Improve Their Oversight of Bond Expenditures (Release Date: May 2011)

Recommendation #1 To: Finance, Department of

To enhance the value of the Bond Accountability Web site, Finance should require administering agencies to provide information about the actual amounts of bond funds spent on posted projects at least semiannually.

Annual Follow-Up Agency Response From October 2013

In our original response to the Auditor, we explained that having state agencies report twice a year on "the actual amounts of bond funds spent on posted projects" would be very costly and provide little added value.

State agencies report when bond funds are "committed" to a project and the various applicable dates of when a project will be constructed and where it will be located. We believe that providing a greater level of detail about actual expenditures of bond funds would require setting up significant new tracking systems and would lead to considerable variability in the data reported. We believe the current level of detail provided on the website is the greatest level of detail we can provide with any certainty of accuracy without making significant changes to our tracking systems.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From November 2012

As noted in our July 2011 response, Finance currently requires agencies to post amounts awarded to each project and subsequently to post the actual amount incurred, if different, when the project is complete. We believe this information meets the requirements outlined in Executive Order S-02-07. We do not believe that reporting actual amounts expended, during the life of thousands of grants and projects, provides any more benefit compared to the added cost to complete the work.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Recommendation #2 To: Finance, Department of

To enhance the value of the Bond Accountability Web site, Finance should develop a tracking and review process to periodically assess the completeness of the project information posted to the Web site. Such a process should include a review of whether state agencies are describing, in terms the public can easily understand, the expected or realized benefits of bond-funded projects.

Annual Follow-Up Agency Response From October 2013

In our original response to the Auditor, we indicated that "Finance will continue to review state agencies' reporting compliance during department audits and during special project reporting compliance reviews. As noted in our audit reports, our methodology includes a project reporting compliance review during each bond audit."

While the Auditor has deemed our response as "not implementing", we believe that we are implementing this recommendation. Our Office of State Audits and Evaluations (OSAE) conducts periodic audits and reviews of all agencies administering bond funds. During the bond audits, OSAE reviews management controls over project status reporting and on a sample basis reviews the completeness of project data posted to the website. Also, as conditions change that require new or different appropriations in the annual budget act additional updates are made to the website to reflect changes made to the allocation of bond funds.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From November 2012

Finance will continue to review state agencies' reporting compliance during department audits and during special project reporting compliance reviews. As noted in our audit reports, our methodology includes a project reporting compliance review during each bond audit.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Recommendation #3 To: Finance, Department of

To ensure that expenditures were consistent with bond laws and that the project achieved the intended benefits or outcomes agreed to when the project was originally awarded, Finance should conduct audits of, or approve and assure that, Water Resources and other agencies obtain audits of, Strategic Growth Plan bond expenditures.

Annual Follow-Up Agency Response From November 2012

As of July 2011, Finance has issued four additional Strategic Growth Plan (SGP) department bond audit reports and Finance is currently auditing Water Resources. Additionally, in fiscal year 2011-12 we completed audits of 69 grant awards totaling over $95 million in bond proceeds. As previously noted, all state agencies administering SGP bonds have either entered into an interagency agreement with Finance to conduct audits or have made arrangements with other entities, with the approval of Finance, to conduct the required audits. Accordingly, we will continue to conduct audits as required by Executive Order S-02-07. All bond audit reports are posted the Bond Accountability website at www.bondaccountability.ca.gov.

Completion Date: November 2012

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Recommendation #4 To: Water Resources, Department of

To provide the public with accurate and complete information on the bond-funded projects it administers, Water Resources should develop and consistently use a formalized, documented review process that will provide greater assurance that project information posted to the Bond Accountability Web site is regularly updated and contains accurate information.

Annual Follow-Up Agency Response From October 2017

In general, DWR is has met Recommendation 1.2, in that we are providing the required program and project level information to the Bond Accountability website. However, BSA is requesting that DWR provide a level of detail which is in excess of those established by the Department of Finance (DOF). Therefore, we will not be providing the suggested, excess detail. Additionally, DWR is reviewing the posted information against the Bond Sale Master Project list to ensure that the project information is consistent across the various tracking systems.

It should also be noted that DWR is in full compliance with the DOF guidelines and that DWR continues to work directly with the Natural Resources Agency (CNRA) to ensure that the 3-part bond accountability is approved to be posted on the web site. DWR has also developed an internal website review report to ensure the integrity of the information posted to the website and is developing more complete written procedures for the review and posting of information to the Bond Accountability website. It should also be noted that these actions are "interim" actions because DWR continues to work with CNRA to ensure the successful migration of DWR bond accountability information to the new Agency Bond Consolidated Reporting System (ABCRS).

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From September 2015

Please see 2012 response.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From November 2013

Please refer to our 2012 response.

Estimated Completion Date:

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From December 2012

It should also be noted that DWR is in full compliance with the DOF guidelines and that DWR continues to work directly with the Natural Resources Agency (CNRA) to ensure that the 3-part bond accountability is approved to be posted on the web site. DWR has also developed an internal website review report to ensure the integrity of the information posted to the website and is developing more complete written procedures for the review and posting of information to the Bond Accountability website. It should also be noted that these actions are “interim” actions because DWR continues to work with CNRA to ensure the successful migration of DWR bond accountability information to the new Agency Bond Consolidated Reporting System (ABCRS).

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Recommendation #5 To: Water Resources, Department of

To ensure that its expenditures of bond funds achieve the intended purposes, Water Resources needs to strengthen its monitoring of project deliverables. For example, it should review the policies and practices of its various divisions, ensuring that periodic progress reports are obtained from grant recipients, and that final site visits document the results of the reviews performed.

1-Year Agency Response

In its one-year response, Water Resources provided evidence that it updated various policy manuals establishing expectations for conducting site visits and ensuring that deliverables are obtained. For example, Water Resources' division of flood management developed a desk reference manual that includes project close-out procedures and a checklist for staff to follow. Key aspects of this close-out process include ensuring and documenting that project objectives are met. Similarly, Water Resources' Division of Integrated Regional Water Management developed written procedures establishing expectations for conducting site visits and specifying items to evaluate during such visits. Water Resources also provided examples of documented site visits it had performed. (2013-406, p. 249)

Response Date: June 2012

California State Auditor's Assessment of 1-Year Status: Fully Implemented

All Recommendations in 2010-117

Agency responses received after June 2013 are posted verbatim.