Report 2012-110 Recommendations and Responses in 2015-041

Report 2012-110: Special Interest License Plate Funds: The State Has Foregone Certain Revenues Related to Special Interest License Plates and Some Expenditures Were Unallowable or Unsupported

Department Number of Years Reported As Not Fully Implemented Total Recommendations to Department Not Implemented After One Year Not Implemented as of 2014-041 Response Not Implemented as of Most Recent Response
California Natural Resources Agency 2 2 2 2 2
California Office of Emergency Services 2 5 1 1 1
Department of Motor Vehicles 2 5 4 4 3
Department of Parks and Recreation 2 1 1 1 1

Recommendation To: Emergency Management Agency

To make certain that money from the special plate funds pay only for allowable and supportable activities, Cal EMA should maintain documentation to support its charges to the antiterrorism fund. For example, it should ensure that employees submit signed time reports to support the time they spend on antiterrorism-related activities.

Response

The State Auditor found that while Cal OES has demonstrated how it allocates its overhead expenses, Cal OES has not demonstrated that those overhead expenses paid using antiterrorism fund money are, as required by California Vehicle Code Section 5066(e), exclusively for purposes directly related to fighting terrorism.

Cal OES maintains documentation on charges to the antiterrorism fund. California Vehicle Code Section 5066(e) states that within the definition of "exclusively for purposes directly related to fighting terrorism," "[e]ligible activities include, but are not limited to, hiring support staff to perform administrative tasks...and hazardous materials and other equipment expenditures." The overhead expenses in question are the support staff performing administrative tasks. The law explicitly allows those costs to be paid from the antiterrorism fund. In addition, trailer bill language effective 7/1/13 eliminated the 5 percent administrative cap. Therefore, unless Cal OES administers funds passed onto grantees, there is no limit to administrative costs related to antiterrorism funds. Cal OES uses Program Cost Account (PCA) codes to charge specific positions and hours to different funding sources. Support staff performing administrative functions bill their hours to the PCA code for distributed administration. A portion of distributed administration costs are billed to the antiterrorism fund in accordance with California Vehicle Code Section 5066(e).

It should also be noted, in the Governor's Budget for 2013-14, the Governor proposed the replacement of $500,000 General Fund appropriated to Cal OES and used by the California Specialized Training Institute with $500,000 antiterrorism funds to provide courses within the Criminal Justice Section that are related to Terrorism training. The Legislature approved that budget change proposal.

  • California State Auditor's Assessment of Status: Pending
  • Estimated Completion Date: April 2013
  • Response Date: October 2015

Recommendation To: Motor Vehicles, Department of

Motor Vehicles should periodically assess the cost and benefits of updating its automated systems to reflect current per-plate administrative costs. If Motor Vehicles determines that doing so is cost-effective, it should update its automated systems to reflect the up-to-date administrative costs for all these plates.

Response

Computer programming for the revised administrative service fee for all plate programs was completed on December 31, 2014.

Corrective action is completed.

  • California State Auditor's Assessment of Status: Fully Implemented
  • Completion Date: December 2014
  • Response Date: September 2015

Recommendation To: Motor Vehicles, Department of

Motor Vehicles should assess the extent to which it has charged fees for special plates that are not consistent with those prescribed in statutes and take appropriate action.

Response

Computer programming for the $1 reflectorized fee was completed on December 31, 2014.

Corrective action is completed.

  • California State Auditor's Assessment of Status: Pending
  • Estimated Completion Date: December 2014
  • Response Date: September 2015

Recommendation To: Motor Vehicles, Department of

Motor Vehicles should ensure that the fees it lists in its application for special plates, as well as any other publications, are supported by the appropriate statutes.

Response

Computer programming to correct the $1 fee discrepancy was completed on December 31, 2014. In addition, the DMV updated its website and publications to accurately reflect the correct fees. However, during an audit follow-up in 2015, the State Auditor identified a publication discrepancy due to a DMV staff error. The DMV addressed the issue and corrected the error.

Corrective action is completed.

  • California State Auditor's Assessment of Status: Pending
  • Estimated Completion Date: December 2014
  • Response Date: September 2015

Recommendation To: Motor Vehicles, Department of

To ensure that programs supported by special plates receive appropriate amounts of revenues due to them, Motor Vehicles should annually collect all fees for special plates that are no longer on a vehicle but are retained by the plate owner.

Response

The DMV completed a purge of Special Interest License Plates and Environmental License Plates with unpaid retention fees on September 4, 2015. The purged plates are now available for new purchasers and this alternative action achieves the intent of the recommendation.

Corrective action is completed.

  • California State Auditor's Assessment of Status: Will Not Implement
  • Response Date: September 2015

Recommendation To: Parks and Recreation, Department of

To make certain that money from the special plate funds pay only for allowable and supportable activities, Parks and Recreation should ensure that environmental fund money budgeted to its offices is supported by the proportion of the offices' activities that state law allows.

Response

The Budget Act 2015-16 didn't appropriate any special plate funds to the Department of Parks and Recreation. Should a future Budget Bill appropriate special plate funds to the Department, the Department would analyze the appropriate uses of the funds, and if appropriate, utilize internal controls to distribute specialized funds to a separate PCA (program cost account) to ensure only appropriate expenditures are made with the funds within the Natural Resources Division.

No Attachment

  • California State Auditor's Assessment of Status: Pending
  • Estimated Completion Date: September 2015
  • Response Date: September 2015

Recommendation To: Natural Resources Agency, California

To make certain that money from the special plate funds pay only for allowable and supportable activities, Resources should use all appropriate funding sources to pay for any expenses that benefit multiple programs in proportion to the benefits these programs actually receive. Further, it should ensure that its allocation of such expenses to different funds is equitable and supported.

Response

Will not implement. The statute does not require allocation of administrative costs in the manner described by the report. Expenditures will continue to be used in a manner consistent with the statute and as specified in the budget appropriated by the Legislature

  • California State Auditor's Assessment of Status: Will Not Implement
  • Response Date: September 2015

Recommendation To: Natural Resources Agency, California

To ensure that the governor and Legislature have sufficient and appropriate information with which to make decisions on the most effective use of environmental fund money, Resources should submit to the governor and Legislature the annual and triennial reports containing the information that state law requires.

Response

This recommendation has been fully implemented. The reports have been published and provided to the Legislature for both fiscal years 2012-13 and 2013-14.

  • California State Auditor's Assessment of Status: Pending
  • Estimated Completion Date: January 2014
  • Response Date: September 2015

Current Status of Recommendations

All Recommendations in 2015-041