Report 2015-047 Recommendation 9 Responses

Report 2015-047: The State Bar of California: Its Lack of Transparency Has Undermined Its Communications With Decision Makers and Stakeholders (Release Date: May 2016)

Recommendation #9 To: Bar of California, State

To ensure that it accounts appropriately for information technology project costs and their related funding sources, the State Bar should develop a reasonable method for allocating information technology project costs.

Annual Follow-Up Agency Response From August 2018

Staff developed a method for allocating indirect costs to/from information technology projects and building projects, which was reviewed with the Finance & Planning Committee on March 8, 2018 and May 17, 2018. The Final Proposed Budget adopted by the State Bar in February 2018 accurately reflects project accounting that is consistent with this method. A written cost allocation policy and procedures is expected to be finalized by January 2019.

  • Estimated Completion Date: January 2019

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

Annual Follow-Up Agency Response From December 2017

The State Bar is in agreement with the recommendation that a written policy regarding cost allocation for IT projects should be adopted. Cost allocation will vary by project, but a policy requiring the funding source and cost allocation methodology for each project to be identified is consistent with the Bar's commitment to improving the fiscal and operational management of the State Bar, emphasizing integrity, transparency, accountability and excellence. This recommendation will be implemented with the submission of the Bar's final budget in February 2018.

  • Estimated Completion Date: February 2018

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

1-Year Agency Response

IT projects have been fully incorporated in State Bar cost allocation methodology as reflected in the Bar's 2017 adopted budget.

  • Completion Date: March 2017
  • Response Date: May 2017

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

Although the State Bar says it has fully incorporated IT projects into its cost allocation methodology as reflected in its 2017 adopted budget, it did not provide us with a written methodology for allocating IT project costs.

6-Month Agency Response

Allocation methodology completed and analysis conducted. Conclusion of the analysis was that $1,211,193 of the IT Special Assessment Fund balance should remain restricted, and $3,642,377 of the IT Improvement Fund balance should remain unrestricted.

  • Completion Date: October 2016
  • Response Date: November 2016

California State Auditor's Assessment of 6-Month Status: Pending

While the State Bar provided us an updated reconciliation of its IT Special Assessment Fund and Technology Improvement Fund, it did not provide a methodology for allocating information technology projects. We will reassess the State Bar's implementation of this recommendation after the State Bar provides us with its methodology.

60-Day Agency Response

IT project costs have been tracked properly and separately by project in the existing Oracle financial system. Staff also reconciled and corrected the issues related to inter-fund transfers and mingling of restricted and unrestricted funds/resources in previous years. Staff is still working on a cost allocation plan for future information technology project costs, and expects to complete this effort by 9/30/2016.

  • Estimated Completion Date: 09/30/2016
  • Response Date: July 2016

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2015-047

Agency responses received are posted verbatim.