HomeMy WebLinkAboutStaff Report 10937
City of Palo Alto (ID # 10937)
Policy and Services Committee Staff Report
Report Type: Action Items Meeting Date: 10/13/2020
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Summary Title: Status Update - CSD Fee Schedule Audit
Title: Staff Recommends the Policy and Services Committee Recommend the
City Council Accept the Status Updates on Recommendations From the
Community Services Department Fee Schedule Audit
From: City Manager
Lead Department: Community Services
Recommendation
Staff recommends the Policy and Services Committee recommend that the City
Council accept the attached Status of Audit Recommendations resulting from the City
Auditor’s Community Services Department Fee Schedule Audit.
Background
The City Auditor’s Office issued the Community Services Department (CSD) Fee
Schedule Audit on February 14, 2017. The full audit report can be found here.
The audit objective was to determine if department fees cover the cost of services to
ensure:
• Financial sustainability of CSD programs;
• Customers pay the appropriate share of service costs, including direct costs
and the indirect cost rate related to the service;
• City programs are subsidized in accordance with the City’s cost recovery policy
and that the financial impact of subsidies on total cost recovery is clear.
The City Auditor made three recommendations to strengthen the department’s cost
recovery procedures and processes for monitoring program costs. The key
recommendations were:
1. The City Manager’s Office should coordinate with the City Attorney’s Office
and the Administrative Services Department to revise the City’s cost recovery
policy and Questica budget system procedures to clarify which fees are not
subject to laws limiting fees to cost recovery.
2. CSD should create a procedure to implement the City’s User Fee Cost
Recovery Level Policy and incorporate relevant and useful elements from its
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existing “Class Cost Recovery Policy,” which can then be rescinded.
3. CSD should work with the Administrative Services Department (ASD) and the
Information Technology Department to configure SAP or include a
requirement for the proposed new enterprise resource planning system to
align cost centers with CSD programs.
Discussion
The final open audit recommendation (Recommendation #3) was completed in this
review cycle. Details on its implementation are described in Attachment A. With City
Council approval, this will be the final status report on this audit.
Attachments:
Attachment A: Status Update
Attachments:
• Attachment A: Status Update
STATUS OF AUDIT RECOMMENDATIONS
FEE SCHEDULE AUDIT – ISSUED 2/4/17
Page 1
The City Manager has agreed to take the following actions in response to the audit recommendations in this report. The City Manager will report
progress on implementation six months after the Council accepts the audit report, and every six months thereafter until all recommendations have been
implemented.
Recommendation
Responsible
Department(s) Original Response and Target Date
Reviewed and Verified by the City Auditor’s Office
Current Status
(Complete, In
Progress, or
Not Started)
Implementation Update and Expected
Completion Date
Finding: Most Community Services Department (CSD) programs recover costs consistent with City policy; however, CSD does not consistently apply its cost
recovery policies and procedures
3. CSD should work with ASD and the
Information Technology Department to
configure SAP or include a requirement
for the proposed new enterprise
resource planning system to align cost
centers with CSD programs.
CSD Concurrence: Agree
Target Date: 7/1/2018
Action Plan: While we will begin
working on this in earnest,
realistically, we anticipate that we
will not fully implement this
recommendation for at least two
budget cycles. We are currently
working with ASD to better align
CSD’s Cost Centers in SAP with our
individual lines of business. We
expect we will complete much of this
recommendation by 7/1/2017 but
that there will be additional clean up
in the next budget year.
Complete November 2019 Management Update:
CSD and the Budget Office have completed the
clean up alignments that were identified in the
FY 20 budget cycle, as described in the March
2019 update and now consider this
recommendation complete. CSD staff also use
the Base Budget Adjustment Period that the
Budget Office delineates as a time to review
cost centers and staff allocations to ensure
that cost centers remain aligned with CSD
Programs. This will be an ongoing, annual
process for CSD.
Expected Completion Date:
July 1, 2019
March 2019 Management Update:
CSD and the Budget Office have completed
cost center alignments to account for
programs clearly under cost centers. CSD has
proposed several additional budget clean up
items that will take effect in SAP July 1, 2019.
Expected Completion Date:
July 1, 2019
June 2018 Management Update:
2 Community Services Department: Fee Schedule Audit
Recommendation
Responsible
Department(s) Original Response and Target Date
Reviewed and Verified by the City Auditor’s Office
Current Status
(Complete, In
Progress, or
Not Started)
Implementation Update and Expected
Completion Date
No change. Staff have identified several clean-
up items to further improve cost center
alignment to programs. Staff will complete
these clean-up actions over the next several
months.
Expected Completion Date: November 2018.
November 2017 Management Update:
CSD has worked with Budget Office staff to
better align cost centers with CSD programs.
Staff have already updated cost centers for the
Children’s Theatre and Human Services and are
in the process of updating Recreation, Teen
Programs, and Cubberley. Staff have also
reviewed CSD staff assignments to ensure that
positions are assigned to the appropriate cost
centers. Staff anticipates that this review of
staff and budget by program should be
substantially complete this fall but will likely
require clean-up at the beginning of FY 2019.
Expected Completion date: 11/1/18