Wednesday, March 31, 2010

Kern County Supervisors' Discretionary Fund is $2.1 million

The Administration and Audit Committee (Committee) of the 2009-2010 Kern County
Grand Jury report addresses the operation of a funding source of the Kern County budget,
under the discretion and control of the Board of Supervisors (BOS), which the Committee
has identified as the “Supervisors’ Discretionary Fund” (SDF). For the fiscal year ending
June 30, 2009, there was approximately $2.1 million of taxpayer dollars in the SDF
which could be disbursed. The review of the SDF identified the following major
• the failure of the BOS to subject the anticipated disbursements from the
SDF to the normal budgeting approval process;
• oversight and reporting of the disbursements from the SDF is non existent;
• there is no policy addressing the funding of the SDF and unused funds are
carried over from year to year.
The Committee’s comments are not meant to detract from the fine work and reputation of
the many organizations which were the recipients of the questioned disbursements.
Nothing suggests participation was inconsistent with the procedures presumed to be in
place at the County level.
The Committee has not determined if the SDF should exist at all or if the SDF is to exist
in the future; however, through this report the Committee has attempted to suggest
safeguards which should be put in place.
The Administration and Audit Committee of the 2009-2010 Kern County Grand Jury
conducted an inquiry and investigation into the function of the Kern County Board of
Supervisors pursuant to California Penal Code §925.
During the investigation of the BOS, the Committee became aware the BOS was
directing County funds to various governmental units, agencies and non-profit
organizations within the County which appeared to be outside the normal budgetary
approval process. Subsequent investigation indicated the size of the Fund (SDF) for the
2009-2010 fiscal year to be approximately $2.1 million. The accumulated amounts are
not equally distributed among the Supervisors. At the beginning of the 2009-2010 fiscal
year each Supervisor had accumulated approximately the following amounts in the
Discretionary Fund: the First District Supervisor has $342,000, the Second District
Supervisor $212,000, the Third District Supervisor $409,000, the Fourth District
Supervisor $792,000 and the Fifth District Supervisor $291,000.
The official budget of the County of Kern contains no reference to any category of the
type which the Committee has identified as the “Supervisor’s Discretionary Fund” (SDF).
The Jury’s investigation indicated the amount of the SDF is included in a category titled
Special Services Budget unit 1040 which contains appropriations for a variety of services
and programs including Assessment Appeals Board expenses, contributions for employee
group life insurance premium, expenses for special studies and projects, consulting and
professional services expenses and general Board of Supervisors expenses not allocated
to individual supervisorial districts. In addition, the County’s contributions to private
non-profit agencies, the Kern Economic Development Corporation, Local Agency
Formation Commission, Kern Council of Governments and obligations incurred under
the County’s economic incentive program are also included in this budget unit.
As stated above when it came to the attention of the Committee an SDF existed, an
inquiry was made to the Auditor-Controller and to the County Administrative Office to
confirm the existence of the Fund. An interview of each County Supervisor was
conducted and the details of expenditures and the processes for disbursement were
discussed. Further, discussions were conducted with the County Administrative Officer
and County Counsel as to the operation of the SDF. Finally, the Committee reviewed
various documents and records pertaining to disbursements from the SDF.
1. Each Supervisor has an amount of appropriations set aside in an SDF over which
the Supervisor has sole authority in spending. Although the discretionary
spending is approved by the entire Board during public session it is usually a
Consent Agenda item and generally not publicly discussed.
2. The Grand Jury County Services and Special Districts Committee and the Audit
and Administrative Committee investigated a disbursement from the SDF to Sand
Canyon Volunteer Fire Department. The inquiry indicated $41,160 was disbursed
to the Sand Canyon Volunteer Fire Department (contract obligation between Kern
County and Sand Canyon Volunteer Fire Department) for the construction of a
100 x 100 foot prefabricated metal building to house fire equipment. During the
Grand Jury’s investigation it was disclosed the land for the building had not been
secured, the agreement with the fabricator specified a building 60 x 100 feet, the
Sand Canyon Volunteer Fire Department was not certified by the Kern County
Fire Department and the Department, through internal fighting, had two Boards of
Directors, each claiming to be the Certified Board (See Grand Jury report Sand
Canyon Volunteer Fire Department). The County has been made a party to a
Workers Compensation suit as a result of this involvement with Sand Canyon
Volunteer Fire Department.
3. The Committee investigated a disbursement of $9,000 from the SDF to the
Catholic Diocese of Fresno for school uniforms. The investigation indicated that
$10,080 was spent by Catholic Charities to secure the uniforms.
4. The Committee investigated disbursements to the El Tejon Unified School
District for fiscal years 2004-2005 ($9,600), 2005-2006 ($9,600), 2006-2007
($8,000), 2007-2008 ($9,600), 2008-2009 ($9,600) and 2009-2010 ($3,200 to
date). The Committee was informed this was for the Family Resource Center to
handle social services for the mountain communities.
5. The Sheriff’s Department, Mental Health Department, Kern Medical Center,
several Kern County Cities and numerous other organizations received
disbursements from the SDF over the five year period investigated.
6. Funding for the SDF has been sporadic. In some years $200,000 per Supervisor
has been allocated into the Fund. In other years the Fund has not had any
7. The Committee observed the SDF has been used to balance Supervisor’s budget
The Committee believes there is little, if any, general public knowledge concerning the
existence or size of the SDF. It appears selective/aggressive organizations or
departments, through word of mouth or past practices, have learned about the existence
of the SDF and informally asked or applied to a particular Supervisor for funding.
It should be noted no instances of obvious political abuse came to the attention of the
Committee during the investigation. However, the Committee believes the existing
process is unwise and unhealthy. Whether real or perceived, alliances are created and
favor curried by reason of such disbursements.
The Committee’s inquiries indicated that many County Departments, Special Districts
and other organizations have received various amounts over the five years of the SDF
investigated. Many of the disbursements should have gone through the normal budgetary
process as many of the monies went to Departments which have budgets.
Oversight exercised over the SDF is lax or non existent. As noted in the findings,
agreements which were secured were poorly drafted and the facts of the request were not
well researched. In addition, no follow up was performed to insure the funds were spent
in the manner intended.
The Committee recognizes the Supervisors will be reluctant to discontinue the use of the
SDF. The Committee believes the controls over the disbursement of the funds should be
strengthened. The funding of the SDF should be limited. Carryover of the SDF from
year to year and from Supervisor to succeeding Supervisor should be discontinued.
1. The oversight of funds disbursed from the SDF should be strengthened and there
should be a written agreement as to how the funds are to be spent and a report
prepared for review by all members of the BOS.
2. The SDF funding amount should be limited to $100,000 per year per each
Supervisor with no carryover of unused funds.
3. County Departments should not be allowed to use the SDF to circumvent the
budgeting process.
4. SDF should not be used to adjust for budget overdrafts.
The Committee reviewed and used excerpts from the Marin County 2000-2001 Grand
Jury report on the Supervisors’ Discretionary Fund in preparing this report.
The Kern County Board of Supervisors should post a copy of the report where it will be
available for public review.
Note: Present and past Kern County Grand Jury Final Reports and Responses can be
accessed through the Kern County Law Library and on the Kern County Grand Jury

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