CITY OF LOS ANGELES, CALIFORNIA

Transcription

1 COST ALLOCATIONPLAN37 FOR DEPARTMENT ADMINISTRATION AND SUPPORT, AND COMPENSATED TIME OFF INDEPENDENT AUDITOR'S REPORT

2 FOR DEPARTMENT ADMINISTRATION AND SUPPORT, AND COMPENSATED TIME OFF TABLE OF CONTENTS Page(s) Independent Auditor's Report Schedule of Department Administration and Support Salary Base, Administration and Support Costs, and Rates by Department to be Applied in Fiscal Year Schedule of Compensated Time Off Salary Base, Compensated Time Off Costs, and Rates by Department to be Applied in Fiscal Year Notes to Schedules

3 U.S. BANK TOWER. 633 WEST 5TH STR ET, SUITE 3320 LOS ANGELES, CA (213) TELEPHONE (213) FAX psonandsimpsoncpas.com SIMPSON & SIMPSON CEIUIFIED PUBLIC ACCOUNTANTS FOUNDING PAIUNER5 BRAINARD C. SIMPSON, C PA MELBA W SIM PSON, C PA Honorable Members of the City Council City of Los Angeles, California INDEPENDENT AUDITOR'S REPORT We have audited the accompanying schedules of Department Administration and Support Salary Base, Administration and Support Costs, and Rates; and Schedule of Compensated Time Off Salary Base, Compensated Time Off Costs, and Rates by Departments (Schedules) of the City of Los Angeles, California (City) Cost Allocation Plan 37 for the fiscal year ended June 30, 2013 as listed in the table of contents. Management's Responsibility for the Schedules Management is responsible for the preparation and fair presentation of the Schedules in accordance with Title 2 in the Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 225, "Cost Principles for State, Local, and Indian Tribal Governments" (formerly Office of Management and Budget Circular A-87), which is a comprehensive basis of accounting other than generally accepted accounting principles, as described in Note 1. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Schedules that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on the Schedules based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Schedules are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Schedules. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Schedules, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the Schedules in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the schedules. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 1 The CPA. Never Underestimate The Va lu e ~"

4 Opinions In our opinion, the Schedules referred to above present fairly, in all material respects, the overhead rates to be applied in fiscal year for certain City departments for the fiscal year ended June 30, 2013 in accordance with the basis of accounting described in Note 1. Emphasis of Matters As described in Note 1, the Schedules were prepared for the purpose of calculating Department Administration and Support, and Compensated Time Off overhead rates for certain City departments in accordance with Title 2 in the Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 225, "Cost Principles for State, Local, and Indian Tribal Governments" (formerly Office of Management and Budget Circular A-87), which is a comprehensive basis of accounting other than generally accepted accounting principles. Restriction on Use This report is intended solely for the information and use of the City management, City Council, others within the City, and the U.S. Department of Housing and Urban Development and is not intended to be and should not be used by anyone other than these specified parties. i~~( d~~ Los Angeles, California March 9,

5 SCHEDULE OF DEPARTMENT ADMINISTRATION AND SUPPORT SALARY BASE, ADMINISTRATION AND SUPPORT COSTS, AND RATES BY DEPARTMENT TO BE APPLIED IN FISCAL YEAR DEPARTMENT/ Cost Center Department Administration and Support Salary Base Administration and Support Costs Rates AGING (Note 2) Balance of Department Special Fund (Title V) $ $ ANIMAL SERVICES 16,403,451 3,993, % BUILDING & SAFETY 57,186,381 12,678, % CITY ADMINISTRATIVE OFFICER CRA, Petroleum Admin., Proprietary, Capital Projects (Physical Plant) Disaster Grants Coordination 1,324, , ,288 37, % 15.79% CITY ATTORNEY Criminal Direct at User's Site (Proprietary/CRA) Direct in City Space (CDD, Housing Authority) 37,517,058 9,769,637 13,088,066 3,419,343 3,179, , % 26.13% 26.26% CITY CLERK Elections Special Assessment Section 8,064, ,810 1,067,184 1,968, % % COMMUNITY DEVELOPMENT (Note 2) Balance of Department As Needed Employees CONTROLLER Direct Billed (at User's Site) Direct Billed (in City Space) CULTURAL AFFAIRS DEPARTMENT ON DISABILITY ELPUEBLO 778, , , ,192 3,226,394 2,662, , , , , % 75.46% 82.52% 50.60% 60.54% The accompanying notes are an integral part of this schedule. 3

6 SCHEDULE OF DEPARTMENT ADMINISTRATION AND SUPPORT SALARY BASE, ADMINISTRATION AND SUPPORT COSTS, AND RATES BY DEPARTMENT TO BE APPLIED IN FISCAL YEAR (Continued) Department Administration Administration and Support and Support DEPARTMENT/ Cost Center Salary Base Costs EMERGENCY PREPAREDNESS Emergency Prep. Policy & Public Info. $ 716,291 $ 629,191 FINANCE Revenue Collections 21,264,482 3,428,791 Cash Management & Street Bonds 829, ,319 FIRE Civilian 6,079,230 1,417,869 Sworn (Firefighters & Paramedics) 327,190;665 72,312,209 Field Support Rate, Sworn Only 312,963,113 48,733,239 GENERAL SERVICES Materials Testing 6,310, ,083 Print Shop 2,394, ,105 HOUSING (Note 2) Grant-Funded Housing Enforcement Internal Administration NIA LIBRARY 49,680,250 8,492,356 LOS ANGELES CONVENTION CENTER 11,638,680 2,696,176 MAYOR Executive/Policy 5,485, ,234 Grant-Funded & Special Programs 6,961,339 1,067,282 Direct in City Space 80,050 NEIGHBORHOOD EMPOWERMENT 930,858 2,051,622 PERSONNEL Custody Care (Jails) 4,377, ,854 Grant-Funded & Special Programs 233,209 69,471 Rates 87.84% 16.12% 16.43% 23.32% 22.10% 15.57% 10.83% 10.44% 17.09% 23.17% 17.10% 15.33% 0.00% % 20.08% 29.79% The accompanying notes are an integral part of this schedule. 4

7 SCHEDULE OF DEPARTMENT ADMINISTRATION AND SUPPORT SALARY BASE, ADMINISTRATION AND SUPPORT COSTS, AND RATES BY DEPARTMENT TO BE APPLIED IN FISCAL YEAR (Continued) Department Administration Administration and Support and Support DEPARTMENT/ Cost Center Salary Base Costs PLANNING $ 18,125,619 $ 7,697,707 POLICE Civilian 157,025,623 23,106,392 Sworn (Police Officers) 842,370, ,428,163 Field Support Rate, Sworn Only 830,643, ,355,954 PUBLIC WORKS Board Office Direct: Public Services 720,171 44,543 Contract Administration Construction Inspection 20,355,387 2,101,777 Engineering Stormwater Facilities Engineering 3,441, ,161 Wastewater Facilities Engineering 21,464,477 5,068,215 Privately Financed Improvements Engineering 7,121,182 1,703,622 Street Improvements Engineering 10,648,372 2,536,228 Municipal Facilities Engineering 11,410,599 2,696,702 General Mapping & Survey 4,324,548 1,049,782 Sanitation Solid Waste Program 73,639,785 4,041,214 Wastewater/Flood Control 102,576,754 3,932,245 Street Lighting 14,934,271 3,843,459 Street Services (Street Maintenance) 64,991,101 7,555,118 RECREATION AND PARKS 109,064,069 14,897,960 TRANSPORTATION 93,724,404 11,061,275 zoo 12,626,398 2,687,642 Rates 42.47% 14.72% 30.56% 31.22% 6.19% 10.33% 23.39% 23.61% 23.92% 23.82% 23.63% 24.27% 5.49% 3.83% 25.74% 11.62% 13.66% 11.80% 21.29% The accompanying notes are an integral part of this schedule. 5

8 SCHEDULE OF COMPENSATED TIME OFF SALARY BASE, COMPENSATED TIME OFF COSTS, AND RATES BY DEPARTMENT TO BE APPLIED IN FISCAL YEAR DEPARTMENT/ Cost Center Compensated Time Off Salary Base Compensated Time Off Costs Rates AGING Balance of Department Special Fund (Title V) $ 2,616,183 $ 493,411 37, % 0.00% ANIMAL SERVICES 13,772,510 3,090, % BUILDING & SAFETY 51,668,810 11,283, % CITY ADMINISTRATIVE OFFICER CRA, Petroleum Admin., Proprietary, Capital Projects (Physical Plant) Disaster Grants Coordination 9,036,743 1,899, % 0.00% CITY ATTORNEY Criminal Direct at User's Site (Proprietary/CRA) Direct in City Space (CDD, Housing Authority) 73,330,792 15,065,199 73,330,792 15,065,199 73,330,792 15,065, % 20.54% 20.54% CITY CLERK Elections Special Assessment Section 3,255, ,011 4,570, , % 20.93% COMMUNITY DEVELOPMENT Balance of Department As Needed Employees (Note 6) 17,480,463 3,666, % CONTROLLER Direct Billed (at User's Site) Direct Billed (in City Space) 10,935,843 2,329,895 10,935,843 2,329, % 21.31% CULTURAL AFFAIRS 2,219, , % DEPARTMENT ON DISABILITY 867, , % ELPUEBLO 642, , % The accompanying notes are an integral part of this schedule. 6

9 SCHEDULE OF COMPENSATED TIME OFF SALARY BASE, COMPENSATED TIME OFF COSTS, AND RATES BY DEPARTMENT TO BE APPLIED IN FISCAL YEAR (Continued) DEPARTMENT/ Cost Center Compensated Time Off Salary Base Compensated Time Off Costs Rates EMERGENCY PREPAREDNESS Emergency Prep. Policy & Public Info. $ 2,080,301 $ 403, % FINANCE Revenue Collections Cash Management & Street Bonds 20,650,512 4,745, % 0.00% FIRE Civilian Sworn (Firefighters & Paramedics) 17,558,594 4,108, ,434,196 33,446, % 12.65% GENERAL SERVICES Materials Testing Print Shop 5,215,733 1,029,764 1,956, , % 20.69% HOUSING Grant-Funded Housing Enforcement Internal Administration 34,613,100 6,645,084 34,613,100 6,645,084 34,613,100 6,645, % 19.20% 19.20% LIBRARY 41,774,398 8,380, % LOS ANGELES CONVENTION CENTER 6,051,445 1,304, % MAYOR Executive/Policy Grant-Funded & Special Programs Direct in City Space 3,820, ,456 2,164, ,109 3,820, , % 17.00% 15.56% NEIGHBORHOOD EMPOWERMENT 1,386, , % PERSONNEL Custody Care (Jails) Grant-Funded & Special Programs 26,849,412 6,337,374 26,849,412 6,337, % 23.60% The accompanying notes are an integral part of this schedule. 7

10 SCHEDULE OF COMPENSATED TIME OFF SALARY BASE, COMPENSATED TIME OFF COSTS, AND RATES BY DEPARTMENT TO BE APPLIED IN FISCAL YEAR (Continued) Compensated Compensated Time Off Time Off DEPARTMENT/ Cost Center Salar~ Base Costs PLANNING $ 17,196,348 $ 3,495,695 POLICE Civilian 158,346,840 45,026,572 Sworn (Police Officers) 677,857, ,050,404 PUBLIC WORKS Board Office Direct: Public Services 5,214,745 1,028,841 Contract Administration Construction Inspection 20,318,799 4,296,153 Engineering Stormwater Facilities Engineering 52,695,931 11,253,073 Wastewater Facilities Engineering 52,695,931 11,253,073 Privately Financed Improvements Engineering 52,695,931 11,253,073 Street Improvements Engineering 52,695,931 11,253,073 Municipal Facilities Engineering 52,695,931 11,253,073 General Mapping & Survey 52,695,931 11,253,073 Sanitation Solid Waste Program 138,776,072 32,096,040 Wastewater/Flood Control 138,776,072 32,096,040 Street Lighting 12,697,630 2,538,852 Street Services (Street Maintenance) 52,304,479 14,457,993 RECREATION AND PARKS 59,494,660 13,797,630 TRANSPORTATION 71,576,267 17,634,861 zoo 10,390,347 2,138,373 Rates 20.33% 28.44% 30.84% 19.73% 21.14% 21.35% 21.35% 21.35% 21.35% 21.35% 21.35% 23.13% 23.13% 19.99% 27.64% 23.19% 24.64% 20.58% The accompanying notes are an integral part of this schedule. 8

11 FOR DEPARTMENT ADMINISTRATION AND SUPPORT, AND COMPENSATED TIME OFF NOTES TO SCHEDULES Note 1 -Accounting Policies The City of Los Angeles (City) prepares its Cost Allocation Plan (CAP) in accordance with Title 2 in the Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 225, "Cost Principles for State, Local, and Indian Tribal Governments" (formerly Office of Management and Budget's Circular A-87). The Department Administration and Support CAP is prepared for certain City departments (see Note 2) to allow for the recovery of administrative overhead costs incurred within departments from Federal and State grants. The administrative costs included in the Department Administration and Support CAP represent the actual costs incurred in fiscal year as reported in the City's basic accounting system, Financial Management System (FMS). Costs reported in FMS are accounted for on the cash basis method of accounting. The administrative and support indirect costs are not always the same as the City's General Administration and Support Program (GASP). Expenditures are included in the Department Administration and Support CAP if they conform to the following criteria: benefit the department as a whole; are not directly charged to a Federal or State grant; are not direct operating expenditures; and are costs which are not practical to directly bill, even though they might be considered allocable to direct operations. Actual costs incurred during fiscal year are added to "carry forward" amounts, which represent the difference between the costs theoretically recovered in fiscal year and the costs entitled to be recovered in fiscal year The sum of the actual and carry forward costs (i.e., total allocated costs) is divided by departmental administrative and support salary base (see Note 3) to calculate overhead rates for each department cost center (see Note 4). Overhead rates are calculated for "direct" departments, which are departments that do not provide services to other City departments, and for "support" departments with direct cost objectives. Overhead rates of support departments are only calculated for the "direct" components of such departments. The Compensated Time Off (CTO) rates are to be used only when sick, vacation, and other CTO hours are not directly charged to a fee or grant project (see Notes 5 and 6). For employees who charge only part of their hours worked to a grant, their time off is usually not being charged to the project, so the cost of that time off may be recovered using the compensated time off rates. For employees whose entire annual salary is charged to a fee or grant, CTO is recovered as they take their time off, and the CTO rate is not to be used. When applicable, CTO costs should be billed to granting agencies or recipients of special services, either as a separate line item, or as an adjustment to salaries, increasing net salaries to gross salaries. When the CTO rate is applied to net salaries, the amount derived is added to net salaries to create gross salaries. The derived gross salaries become the base against which the fringe benefit rate and other indirect cost rates are applied. 9

12 FOR DEPARTMENT ADMINISTRATION AND SUPPORT, AND COMPENSATED TIME OFF NOTES TO SCHEDULES (Continued) Note 2- Departments with no Department Administration and Support Rates The City does not calculate Department Administration and Support rates for the Departments of Aging, Community Development, and Housing. These departments have been presented to be consistent with the presentation of the City's Central Services Cost Allocation Plan. The Department of Aging cannot recover administrative costs from its grants due to grant expenditures limitations. Department Administration and Support rates are not computed for Departments of Community Development and Housing because they bill their administrative and support costs directly to the grants. Note 3 -Department Administration and Support CAP - Salary Base and Overhead Rates The salary base used to calculate overhead rates includes salaries of line employees only. It includes compensated time off and excludes overtime and unused sick and vacation pay. Line employees are those employees directly involved with the administration of the grant program. Note 4- Cost Centers and Cost Categories Cost centers are determined based on department functions. As the City reorganizes its departments, cost centers are revised to adjust to the City's reorganization. Cost centers are also revised to allocate costs more accurately to the proper organizational units, and to accommodate the inclusion of allowable but previously unrecovered cost. The cost categories are the Department Administration and Support costs, and CTO costs for each cost center, as discussed in Note 1. There were four major changes in cost centers and cost categories from CAP 36 to CAP 37: (1) The Los Angeles Police Department (LAPD) started providing security services for City buildings effective January LAPD absorbed staff formerly in the Department of General Services - Building Services cost pool. Since the allocation method remains the same, the cost for LAPD was included in the Building Services cost pool, as there is no Central Services cost pool for LAPD. (2) Liability Claims were reinstated for some departments/organizations. They are included in the Cost Allocation Plan in accordance with the City's Tort Liability Risk Retention/Self-Insurance Program that was approved by the U.S. Department of Labor on June 7, Specifically, Liability Claims were allocated only to single cost center departments, to the Los Angeles Police Department, and to the Controller's Office. The remaining costs and extraordinary or large claims were allocated to "Other" (an 10

13 FOR DEPARTMENT ADMINISTRATION AND SUPPORT, AND COMPENSATED TIME OFF NOTES TO SCHEDULES (Continued) Note 4- Cost Centers and Cost Categories (Continued) unallowable category). The Liability Claims costs allocable to all departments/ organizations, including those with multiple cost centers, will be reinstated in CAP 38. (3) The City Administrative Officer (CAO) submitted data for CAP 37, and is included in the allocations to all departments. The CAO was excluded from the CAP for only one year, CAP 36, therefore this reinstatement will not affect the CAP 37 carry forward. However it will be "new" in CAP 38, and the carry forward will be adjusted therein. (4) The City Attorney- General (formerly called Municipal) Counsel and three cost pools in the Information Technology Agency (IT Services, Communication Services, and Telecommunications) were reinstated in CAP 37. These indirect cost pools are now allocated by work order and costs can be attributed to the benefitting departments. As these costs are "new" in CAP 37 (having been excluded for more than two years), the carry forward is adjusted accordingly. Note 5- Compensated Time Off CAP- Salary Base and Overhead Rates The salary base used to calculate the CTO rates includes salaries for actual hours worked (without CTO). The CTO cost includes salaries paid to employees who are on paid leave such as: Sick Leave Injury on Duty Vacation Jury Duty Holiday Bereavement Leave Military Leave Preventive Medicine Family Illness Floating Holiday Workers' Compensation (Salary continuance paid by the employing department) Note 6- Cost Center with no Compensated Time Off Rate The City does not calculate CTO rate for the Community Development Department - As Needed Employees since this cost center consists of part-time employees who are not entitled to compensated time off. 11