The project was supposed to find savings and inefficiencies in county departments, but it cost more than it saved, the report found.
RIVERSIDE
COUNTY, CA — A scathing grand jury report released this month found that a
four-year "cost cutting" project in Riverside County — for which the
county doled out more than $36 million — was woefully wasteful.
"While
the grand jury found some limited evidence of cost savings and other benefits,
no evidence was provided that the KPMG County Transformation Project came close
to paying for itself," the grand jury report found. "There still may
be considerable savings and other benefits to be derived if the county follows
up on recommended initiatives from the project. However, unless and until new
savings and benefits are realized, there is more justification to label the
project wasteful rather than beneficial."
The
"KPMG County Transformation Project" was initially approved by the
Riverside County Board of Supervisors in September 2015. At that time, the
county agreed to pay international accounting and consulting firm KPMG $761,600
to find efficiencies and cut costs in public safety services, including the
sheriff's department, the district attorney's office, the public defender's
office, and the probation department.
Over
the next two years, the contract was amended to pay KPMG millions more to find
savings and inefficiencies in 20 additional county departments, including the
executive office.
In
total, the county agreed to pay KPMG $36.4 million for its services.
The
2019-2020 Riverside County Civil Grand Jury report entitled "KPMG County
Transformation Project: Benefit or Millions Squandered?" also found other
expensive missteps, including the attempted implementation of a Workday
computer system in Human Resources that was canceled and cost the county
"at least an additional $8 million."
The
grand jury also found that the county abandoned a key initiative to track
performance by departments and the board of supervisors, despite promising to
do so. The county "has not followed-up on KPMG recommendations that could
yield further savings and efficiencies," the report found.
Evidence
provided to the grand jury by the county's executive office to support
completion on some of KPMG's recommendations "was incomplete, dubious,
misleading, or not provided at all. Thus, the veracity of information provided
to the board is questionable," the report found.
Moreover,
even though the cost of the KPMG contract expanded to more than 54 times the
size of the original September 2015 agreement, the county sought no additional
bids for any of the amendments, the grand jury report found.
The
county also paid KPMG "a considerable hourly rate for tens of thousands of
hours of work without quantifiable deliverables," which was in conflict
with board policy, the report found.
There
was some "limited cost savings" from the KPMG County Transformation
Project in the county's purchasing and fleet services departments, but not so
in other departments, according to the report.
"
... assertions by the [executive office] to the board of supervisors of greater
savings exceeding the cost of the project have not been supported and are
questionable," the report found.
The
grand jury report recommends that the board of supervisors "direct, track,
and report on departments continuing implementation of KPMG
recommendations." The report also recommends that the county establish an
independent agency, such as an internal audit department, to track management,
completion, and results of similar projects.
In
the future, before the board makes large amendments to professional services
contracts, it must first put the projects out for competitive bids, the report
also recommended.
The
sheriff as well as supervisors on the Riverside County board have 60 days to
respond to the report. The Riverside County Executive Office has 90 days to
respond.
Patch.com
By Toni McAllister, Patch Staff
August 24, 2020
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