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Wednesday, February 20, 2013

Official Audit Appears to Indicate State Park Finances Are in Disarray

• Analysis Raises Questions of Oversight of Malibu Units and Procedures for Monitoring of Projects


An audit prepared by California State Auditor Elaine Howle at the request of the Joint Legislative Audit Committee, confirms that for many years the state Department of Parks and Recreation reported “different fund balance amounts” to the Department of Finance than it reported to the State Controller’s Office for both the State Parks and Recreation and the Off-Highway Vehicle Trust Fund.
“In most cases, the fund balance amounts that the department’s budget office reported to Finance for use in preparing the governor’s budget were less than the amounts its accounting office reported to the State Controller,” the report states.
“Although the department has known about these differences for years, neither current staff nor documentation we reviewed in the department’s accounting and budget files could explain what originally caused the differences or why the issue was not resolved until the fall of 2012.
“The department correctly used its year-end financial statements for reporting that it received $117.5 million in transfers for the off-highway vehicle fund in fiscal year 2010–11, Finance made an adjustment reducing the transfer amount to $62.6 million based on proposed legislation. This reduction—totaling nearly $55 million—contributed to the understatement of the department’s ending fund balance when compared to the State Controller’s budgetary report.
“The department lacked policies and procedures to handle such changes by Finance and to ensure that the department’s highest levels of management were informed of the change and the effects on its fund balance.”
The audit also revealed that SPR has been using outdated and incomplete data to determine operating expenses and has no idea how much it costs to run each unit.
 “The department does not budget or track expenditures at the park level,” the report states.
“As part of its analysis to select parks for closure, the department estimated the cost of each park. However, these estimates were outdated and incomplete, making it difficult to measure the impact of its efforts to keep parks open through its partnership agreements.”
Although no Malibu-area parks were among the list of 70 parks slated for closure, Angeles District State Park units, including Point Mugu, Leo Carrillo, Point Dume, Malibu Lagoon, Malibu Creek, and Topanga State Parks and other local parks have been impacted by years of cuts to staffing and maintenance during the state budget crisis.
The report finds that “the department’s announcement of its plan to close up to 70 parks may have been premature. State law that became effective March 2011 requires the department to determine the amount of a required budget reduction in future budget acts by using as its baseline the amount necessary to fully operate its 278 parks at the 2010 level.
“However, the department has not yet determined that baseline amount nor has it compared the baseline to its appropriation to determine whether the results created a condition that would trigger required park service reductions or closures.”
The report concludes: “To ensure that it adheres to the statutory requirement to reduce services or close parks to achieve any required budget reductions in the future, the department should determine the amount necessary to fully operate its 278 parks at the 2010 level. Moreover, the department should document its calculations and ensure that they include all costs associated with the operation of parks in 2010.
“To address the possibility of any future park service reductions or closures, the department should develop a detailed process for evaluating the criteria that it must consider in selecting parks for reduced services or park closures. To ensure transparency to the public and to demonstrate that it followed its process, the department should also document the details of its analyses that support its selection of parks for reduced services or closures.
“To assure the Legislature and the public that future proposed park service reductions and closures are appropriate to achieve any required budget reduction, the department should develop individual park operating costs and update these costs periodically.
“These individual park costs should include all direct and indirect costs associated with operating the park, and the aggregated costs of all the individual parks should correspond with the related fiscal year’s actual expenditures needed to operate the department’s park system.
“Additionally, when proposing park service reductions or closures in the future, the department should compare the most recent cost estimates to the amount the department determines is necessary to fully operate its 278 parks at the 2010 level to determine the actual amount of the reductions or closures needed.”
The State Senate Natural Resources and Water and Assembly Water, Parks and Wildlife committees will host a joint hearing on Feb. 20, to review the California Department of Parks and Recreation.
The committees will review the recent audits of undisclosed funds and the State Parks compliance with 2012 legislation.
No criminal charges have been filed as a result of the investigation, but many questions remain about the departments operation and policies.

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