Report 94106 Summary - October 1995
Department of Fish and Game:
Administrative Processes Need Improvement
- Improperly allocated indirect costs.
- Mismanaged the use of restricted funds.
- Internal auditor found weaknesses still exist in procurement and purchasing.
- Headquarter staff grew faster than field staff over the past 10 years.
Results in Brief
The Department of Fish and Game (department) is responsible for
maintaining native fish, wildlife, plant species, and natural
areas. This includes habitat protection to ensure the survival
of all species and natural areas. The department is also responsible
for the diversified use of fish and wildlife, including recreational,
commercial, scientific, and educational. Our review focused on
whether the department manages its administrative costs in a reasonable
manner, as well as the department's management of those funds
that are restricted for specific purposes. We also determined
what steps the department has taken to address the purchasing
and contracting weaknesses that its auditors have identified at
regional offices and at headquarters. Further, we developed a
ten-year trend showing how the department has distributed its
staff between headquarters activities and field activities. Finally,
we reviewed a sample of department expenditures related to the
cleanup and ongoing assessment of the 1991 chemical spill near
Dunsmuir, California, and policies and procedures for responding
to similar spills. Specifically, we noted the following concerns:
- The department is allocating some of its costs as indirect
costs (also called administrative costs) even though these costs
are directly chargeable to a particular program. When this occurs,
the programs that are inappropriately sharing these costs are
being forced to pay, even though they have not benefited in any
way from the expenditures. Contributing to this problem is the
fact that the department has not had a written cost allocation
plan since fiscal year 1992-93. Improperly allocating costs has
contributed to the flaws in the management of certain departmental
funds that are restricted.
- The department's management of restricted funds is flawed
because it does not always capture the actual costs of program
activities funded by these restricted funds, has made inappropriate
loans from restricted funds, and does not provide its managers
with sufficient accounting information to allow them to properly
manage these funds. The department has taken steps to address
some of these deficiencies. It has created a "Fund Manager"
position to assist managers in the administration of their funds,
but more improvement is needed.
- In 1993, the discovery of numerous irregularities at one of
the regional offices led the department's auditors to do similar
audits of headquarters and the other four regional offices. These
audits have confirmed that weaknesses in the department's purchasing
of goods and services are not restricted to only one regional
office but are widespread. These audits found that the department
was often not preparing purchase orders until after the purchased
goods had been received, that the department was not ensuring
that it had evidence of the receipt of goods or services before
making payments to the vendor, and that it was not always taking
advantage of vendor discounts.
- In addition, the department's award and management of contracts
for services is not always effective. Internal audits of consultant
contracts and the Adopt-A-Lake Program found problems in the award
and management of contracts. In our review of 43 sole-source contracts,
13 did not provide sufficient justification for the reasonableness
of the contract price paid by the department.
- Our analysis of the department's Salaries and Wages Supplement
data over a ten-year period indicates that the department's headquarters
has grown at a faster pace than its field activities. Although
we acknowledge that the data used for this analysis is less than
perfect, it was the best information the department had available.
Also, we found that the ratio of executive and administrative
staff to total department staff is higher than that of two other
comparable departments. However, the comparison of one department
with another must be viewed with caution.
- We found that the department has not always used highlevel
positions appropriately. It created and retained exempt positions
inappropriately and used a temporary help Career Executive Assignment
(CEA) position to compensate a retired annuitant that did not
meet Department of Personnel Administration guidelines and criteria
for CEA classification.
- Although the department properly accounted for the charges
to the Dunsmuir chemical spill, the costs for goods and services
used in response to the spill were not always justified. In one
instance, the department made excessive payments for computers.
The department needs to improve its administrative processes.
Specifically, it should:
- Revise its cost allocation methodology to ensure that costs
are charged to the appropriate programs and paid by the proper
- Improve its management over the expenditure of restricted
revenues to ensure these revenues are spent for targeted purposes
as expressed in state law;
- Assign responsibilities related to its purchasing, payment,
and contracting practices to appropriately trained employees and
hold these employees accountable for adherence to these practices
to ensure that state purchasing and contracting laws and regulations
- Better distinguish field staff positions from headquarters
staff positions so it can properly evaluate the need for new headquarters
- Improve its controls over the procurement of goods and services
when competitive bidding is not used to ensure that the costs
for these goods and services are reasonable.
The department generally agreed with our conclusions and recommendations.
However, it took exception to the approach we used to conduct
a 10year study of the ratio of headquarters to field positions.