Chapter 2 – Fiscal Management

The Program Compliance Evaluation and Internal Audit Units shall review departmental operations for compliance with departmental and State policies, procedures, directives, regulations, and statutory requirements in order to enhance the effectiveness of departmental operations by providing to The Director, Executive Staff, and field managers current information for effective planning and decision-making.

This section establishes requirements for program compliance evaluations and for fiscal compliance and internal control audits.

PFABProgram and Fiscal Audits Branch (see OACC) shall assist the Director and other departmental executives with increasing the effectiveness of management by systematically reviewing departmental activities to provide recommendations for improvements. The reviews shall determine:

• Compliance with existing laws, rules, court and legislative mandates, regulations, directives, standards, and policies.

• The reliability and integrity of information.

• Efficient and effective use is made of resources.

• The safeguarding of State assets.

• The accomplishment of established objectives and goals for operations or programs.

Inmate Appeals, headquarters, shall notify the Chief, PFABProgram and Fiscal Audits Branch (see OACC) of all thirdlevel appeals ruled in favor of the inmate and of repetitive noncompliance detected through the inmate appeal process.

The incumbents shall ensure the monitoring of all fiscal transactions by implementing ongoing reviews and audit evaluations of same within their facilities and parole regions.

The reviews conducted by PFABProgram and Fiscal Audits Branch (see OACC) shall provide management with reports regarding the levels of operational compliance with departmental and State directives, internal monitoring methodology, actions taken to correct deficiencies, and assessments of current operational and program status.

The evaluation function provides a means of:

• Improving management of the facilities and headquarters through systematic operational compliance reviews and data collection which:

  • Provides for early identification of operational problem areas with recommendations for solution.

  • Coordinates departmentwide resolution of problems.

  • Increases communication between departmental managers at all levels.

  • Ensures consistent compliance with, and adherence to, operational application of goals and the philosophy of the Department.

• Systematically reporting and recording information regarding the activities of the Department by:

  • Biennial evaluations and appropriate follow-up of each of the Department’s operational units.

  • Special reviews of identified or potential problem areas initiated by direction of Executive Staff or request of field managers.

  • Periodic reviews of operational areas to evaluate the effectiveness of specific changes in policy, procedures, and/or regulations for the purpose of problem-solving and determining if improvements may be made.

  • Management and dissemination of collected data regarding identified operational or noncompliance areas.

PFABProgram and Fiscal Audits Branch (see OACC) shall establish an Annual Work Plan (AWP) for:

• Conducting program compliance evaluations of headquarters and field operations.

• Conducting postevaluation progress reviews as required to evaluate implementation of corrective actions on identified deficiencies.

• Monitoring compliance with specific court-imposed mandates.

• Conducting departmental administrator-requested special reviews.

• Conducting preaudits of ACAAmerican Correctional Association Standards for Adult Institutions to enable preparation for the accreditation audits conducted by the Commission on Accreditation for Corrections (CACCommission on Accreditation for Corrections).

• Conducting internal and fiscal compliance audits which ensure compliance with the Financial Integrity and State Manager’s Accountability Act of 1983.

The AWP shall be prepared and distributed by PFABProgram and Fiscal Audits Branch (see OACC) to Executive Staff for review and comment. Upon resolution of any Executive Staff concerns, it shall be submitted to the Assistant Director, OOCOffice Of Compliance (see OACC) (ECEvidence Code&ISDInformation Services Division (see EIS)) by each October 1 for approval.

The following definitions apply to the reviews by PFABProgram and Fiscal Audits Branch (see OACC):

• Evaluation Scope.

  • Delineation of the procedures, programs, operations, and activities that shall be reviewed.

• Evaluation Liaison.

  • A staff person designated at each review location to serve as liaison between the local and review team staff, and to facilitate the team’s review by expediting information-gathering and access to documents and records.

• Evaluation Worksheet.

  • A checklist noting all the departmental requirements related to the review scope which serves as the source document for the review findings report. PFABProgram and Fiscal Audits Branch (see OACC) shall update the review worksheets to ensure that they reflect current law, policy, and procedure.

• Action Plan.

  • A formal written plan submitted by the administrator responsible for detailing proposed actions to correct any deficiencies noted in the evaluation findings. Action plans shall:

    • Fix the responsibilities and specify the actions to be taken for correcting deficiencies.

    • Establish the time limits within which corrective actions shall be completed.

PFABProgram and Fiscal Audits Branch (see OACC) shall schedule on-site program compliance evaluations for headquarters divisions and field units no less than once during each two-year period. The evaluation scope, methodology, and frequency shall consider the technical resources from other divisions with functional responsibility for specific operations, which may be used to assist with the evaluation. The schedule shall note additional staff resources with specific technical expertise which may be necessary to assist PFABProgram and Fiscal Audits Branch (see OACC) staff.

Each headquarters division and field unit shall be notified in advance of the schedule for program compliance evaluations. The notice shall include a copy of the evaluation worksheets to be used. If a scheduled evaluation date conflicts with an exceptional activity or event, the head administrator may request rescheduling of the review.

An entry interview shall be held with the responsible administrators prior to beginning the evaluation to discuss the scope, method, and to identify local resources required to assist with the evaluation. At this time a staff person shall be designated to serve as liaison between the headquarters division/field unit and the evaluation team.

The program compliance evaluation shall cover all operations governed by departmental policies, procedures, and regulations, and shall consist of:

• Comparing local supplemental procedures to the appropriate departmental policies, procedures, regulations, and directives.

• Comparing local operational practices with the written procedures governing the operations.

• Using the evaluation worksheets to carry out the evaluation plan. These worksheets list departmental policies, procedures, and regulations which govern headquarters and field operations.

• Evaluating any operational areas not governed by facility procedures, but identified by departmental administrators as being of specific concern.

• Inspecting the physical plant with respect to fire/life safety and sanitation with an emphasis on actions which have been taken to correct deficiencies cited in the most recent State Fire Marshal Report and Environmental Health Survey.

• Interviewing staff members who administer, manage, supervise, and implement procedures.

• Reviewing documentation and records to verify past and current practices.

• Directly observing operational practices.

At the conclusion of each evaluation, an exit interview shall be conducted with the local administrators to discuss the evaluation findings and provide them with a rough copy of the completed evaluation worksheets.

Within three weeks, a formal report of the evaluation findings and recommendations shall be prepared in draft form and forwarded to the responsible division head and local administration for review and comment. The administrator shall respond within four weeks after receipt of the formal draft report by submitting a Plan of Action for correcting any deficiencies noted and discussion of any findings considered to be in error.

The rebuttal of findings and/or proposed action plans shall be reviewed and approved by the appropriate Deputy Director or Assistant Director in consultation with PFABProgram and Fiscal Audits Branch (see OACC) and/or Assistant Director, OOCOffice Of Compliance (see OACC). PFABProgram and Fiscal Audits Branch (see OACC) shall be consulted on any rebuttals. The appropriate Deputy Director or Assistant Director shall make any necessary changes to the Action Plan and shall forward the plan to PFABProgram and Fiscal Audits Branch (see OACC) within one week of receiving it. The Deputy Director or Assistant Director shall provide a summary of the Action Plan package with an approval block for approval by the Director or Chief Deputy Director.

PFABProgram and Fiscal Audits Branch (see OACC) shall within two weeks of receipt of the Action Plan from the responsible division, combine the draft report, the related responses, and the Action Plan, and shall prepare a final report for submittal to the Assistant Director, OOCOffice Of Compliance (see OACC).

The Assistant Director, OOCOffice Of Compliance (see OACC), shall within two weeks forward the final report to the Director/Chief Deputy Director for approval. Rebuttals not resolved by the division shall be brought to the attention of the Director/Chief Deputy Director at that time for final decision.

Upon approval, copies shall be distributed to all of the following:

• YACA.

• Responsible Deputy Director or Assistant Director.

• Local administrator.

• LADLegal Affairs Division (see OLA)-PMU for retention in the Department’s policy files.

If during the course of an evaluation findings indicate an emergency situation, it shall be immediately reported to:

• Assistant Director, OOCOffice Of Compliance (see OACC).

• Local administrator.

• Responsible Deputy Director or Assistant Director.

A progress review of corrective actions shall be scheduled approximately 90 days after approval of the Action Plan by the Director/Chief Deputy Director, unless another interval is appropriate in a unique situation. Progress reviews shall follow the same process as the program compliance evaluation but shall be limited to operations which required corrective action. The approved Action Plan shall be the reference document for the progress review.

By the close of the fiscal year, PFABProgram and Fiscal Audits Branch (see OACC) shall provide to the Director, Chief Deputy Director, and appropriate Deputy Directors and Assistant Directors, a summary of significant noncompliances which occurred at more than one location.

Court compliance evaluations shall be scheduled to ensure that court mandates are met. Court compliance evaluations shall follow the same process as program compliance evaluations except that:

• The on-site evaluations shall compare the local operations with the requirements imposed by court order, injunction, settlement agreement, or other court mandate.

• Action plans to correct deficiencies noted in the findings shall be submitted by the field unit to the appropriate Deputy Director or Assistant Director, and to PFABProgram and Fiscal Audits Branch (see OACC) within two weeks following the exit interview and receipt of the rough completed evaluation worksheets. Any disagreements or clarifications of action plans shall be resolved by the Deputy Director/Assistant Director and PFABProgram and Fiscal Audits Branch (see OACC) and/or Assistant Director, OOCOffice Of Compliance (see OACC), during this time.

• The review worksheets and resulting Action Plan shall be incorporated into a final report by PFABProgram and Fiscal Audits Branch (see OACC) and submitted to the Assistant Director, OOCOffice Of Compliance (see OACC), within two weeks after receipt of the Action Plan from the facility.

• The Assistant Director, OOCOffice Of Compliance (see OACC), shall then forward the report within one week to the Director/Chief Deputy Director for approval.

  • Rebuttals not resolved by the division shall be brought to the attention of the Director/Chief Deputy Director at this time for final decision.

• Upon approval, copies shall be distributed to YACA; the responsible Deputy Director or Assistant Director; the local administrator; and to applicable court monitors.

Special reviews shall be scheduled as directed by the Assistant Director, OOCOffice Of Compliance (see OACC). Special reviews shall follow the same process as program compliance evaluations except that:

• The formal report shall be submitted by the Assistant Director, OOCOffice Of Compliance (see OACC), to the requesting administrator and to the Director/Chief Deputy Director.

• Formal notice of special review dates may not be practical depending on the nature and urgency of the review. Exceptions to the standard times shall be discussed in the final reports.

ACAAmerican Correctional Association preaudits shall be scheduled prior to an audit by the CACCommission on Accreditation for Corrections to assist the facilities with preparation for the accreditation audit. ACAAmerican Correctional Association preaudits shall simulate the CACCommission on Accreditation for Corrections’s audit plan.

Preaudits shall be conducted using the same process as program compliance evaluations except that the on-site reviews shall compare the local operations with the ACAAmerican Correctional Association Standards for Adult Institutions.

These audits shall be conducted in accordance with the SAMState Administrative Manual, Chapter 20000 to ensure all of the following:

• Reliability and integrity of information.

• Compliance with policies, plans, procedures, laws, and regulations.

• The safeguarding of assets.

• Economical and efficient use of resources.

• The accomplishment of established objectives and goals for operations or programs.

They shall follow the same process as the program compliance evaluations except that on-site reviews shall compare the local operations with the requirements of the Audit Guide for the Evaluation of Systems of Internal Control prepared by the DOFDepartment Of Finance.

As stated in SAMState Administrative Manual 8080, the Financial Integrity and State Manager’s Accountability Act of 1983 (GCGovernment Code 13400 through 13407) requires that the head of each State agency shall establish and maintain an adequate system of internal control within their agency.

The DOFDepartment Of Finance is no longer responsible for granting exemptions from internal control procedures.

Accounting Systems Section

• It is the policy of the CDC to delegate this responsibility to the Accounting Systems Section which overseas the Department’s accounting systems and procedures.

Facility Accounting Office

• Each facility accounting office shall establish and maintain, in accordance with SAMState Administrative Manual procedures, a system of internal control which is adequate to safeguard assets, provide reliable data, promote operational efficiency, and encourage adherence to prescribed policies.

• In the event a certain internal control procedure cannot be properly implemented, an exemption can be requested from the Accounting Systems Section. Such a request shall be submitted in writing with a description of the internal control procedure at issue and why this procedure cannot be properly implemented. This request shall also include a complete description of the proposed alternative procedure and how the alternative procedure adequately meets the internal control objectives.

• The requests for exemption from internal control procedures shall be addressed to:

• Department Accounting Systems Section, Room 211-S P.O. Box 942883 Sacramento, CACorrectional Administrators 94283-0001

Alternative procedures shall not be implemented until written approval from the Accounting Systems Section is received.

The Assistant Director, OOCOffice Of Compliance (see OACC), or designee shall be responsible for ensuring that the contents of this article are kept current and accurate.

PCPenal Code § 5057.

GCGovernment Code §§ 1330 and 13400 – 13407.

SAMState Administrative Manual Chapter 20000.

Financial Integrity and State Manager’s Accountability Act of 1983.

ACAAmerican Correctional Association Standards for Adult Institutions.

Audit Guide for the Evaluation of Systems of Internal Control prepared by the DOFDepartment Of Finance.