Report 2013-036 Recommendation 4 Responses

Report 2013-036: Indian Gaming Special Distribution Fund: Counties' Benefit Committees Did Not Always Comply With State Laws for Distribution Fund Grants (Release Date: March 2014)

Recommendation #4 To: San Diego, County of

To comply with state law, benefit committees should ensure that they obtain sufficient documentation from grant applicants to demonstrate that proposed projects mitigate casino impacts. If applicable, that documentation should demonstrate that the requested funding represents a correct proportionate share of the costs attributable to casino impacts.

6-Month Agency Response

The California State Auditor has marked this audit finding as Pending. The San Diego IGLCBC is of the opinion that this finding is implemented. The County has implemented a protocol in the 2013-2014 grant cycle that includes County Counsel and committee staff reviews grant applications, and makes recommendations to the San Diego IGLCBC for applications that need additional information. Attached is a training notice, announcing meetings that were held on February 7th and 14th this year for potential applicants to review statutory requirements for nexus to gaming facility impacts, and requesting documents clearly show proportional impacts. Once applications were submitted, the San Diego IGLCBC had the opportunity to review and ask questions following a review by committee staff and County Counsel. This is shown by the attached agenda and meeting minutes from the April 9, 2014 meeting of the IGLCBC. This review resulted in significant changes to applications, shown in the meeting materials attached for the subsequent meeting, an additional meeting held on April 24, 2014, prior to the committee recommending any grants for approval. The IGLCBC will continue to consider this implemented due to procedures and practices that contain review and public discussion for committee recommendations.

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

Although San Diego County's benefit committee marked this status as "Not Fully Implemented," its response states that it believes the recommendation has been fully implemented, and the documentation it provided confirms that assessment. Therefore, we assessed the recommendation as fully implemented.

60-Day Agency Response

The audit report includes a discussion of the three grants reviewed by the Bureau of State Audits. The audit report highlights that the grant applications included demonstrate the grant will mitigate casino impacts, but finds inadequate demonstration of the proportional share of the costs attributable to casino impacts. The IGLCBC has increased the amount of documentation requested from grant applications over the past three grant cycles, and will continue to require documentation that demonstrates proportional share of the costs attributable to casino impacts. A change in state law, signed in September 2012 and effective January 1, 2013, amended Government Code section 12715(b)(1)(a), requiring Each grant application shall clearly show how the grant will mitigate the impact of the casino on the grant applicant, was enacted partway through the audit period and provided additional guidance. The IGLCBC will continue to request additional information and include a process to have applicants document the grants to meet this requirement. As was explained to the Bureau of Audits, IGLCBC staff provides training for grant applicants, a review of applications before they are shared with the IGLCBC by IGLCBC Staff and Counsel, an oral presentation process for applicants, and for the past three grant cycles, including the 2013-2014 cycle that is underway the IGLCBC has also asked for additional information to supplement the record as the IGLCBC reviews and makes final grant determinations. The IGLCBC will continue to consider this under advisement and will review applications for consistency with the law and documentation of how they mitigate proportional impacts from gaming facilities.

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

San Diego did not provide documentation to substantiate implementation of this recommendation.

All Recommendations in 2013-036

Agency responses received are posted verbatim.