Overview
SDE did not properly administer its police detail operation; specifically, it did not uniformly assess a 10% administration fee to all hiring entities, and this resulted in revenue being lost and the PDF operating at a loss. In addition, SDE did not obtain required supporting documentation for police details. As a result, SDE could not ensure the solvency of the PDF, and without the proper documentation, SDE could not be certain that officers were paid correctly for all details worked.
SDE Did Not Charge Police Detail Administration Fees in Many Cases; This resulted in Operating Loss.
SDE can charge an administration fee of 10% to hiring entities for police details to cover SDE’s administrative expenses; however, in many cases the administration fee was not charged. We selected 60 detail payments and found that for 35 of them, SDE did not charge an administration fee when it could have done so. This resulted in $1,255 of potential lost revenue. This administration fee is intended to cover payroll expenses. Without the administration fee income, SDE is likely to deplete the PDF and require subsidies from its appropriated funds to continue to operate. The PDF operated at a loss during our audit period; it began with a balance of $22,211.26 on July 1, 2015 and had been reduced to $1,555.79 as of December 31, 2016.
SDE Did Not Ensure That Required Documentation Was Obtained to Support Officers’ Detail Payments.
SDE did not ensure that required documentation was obtained to support officers’ detail payments. Specifically, in our review of documentation for 117 work detail payments to officers, we found that some lacked either a police work detail slip or the signature of a site supervisor. We noted the following issues:
- Of the 117 police work detail slips requested, 99 were provided. Two of the slips corresponded to work details that were ultimately canceled. Sixteen (14%) could not be provided.
- One of the 99 police work detail slips provided did not include hours worked.
- Nineteen (19%) of 99 police work detail slips were not signed by the site supervisor.
Authoritative Guidance
SDE’s Police Details Unit Coordinator Procedures list the entities that pay the 10% administration fee, but do not state specifically what the fee is for or how SDE will fund the Police Detail Unit when an entity is not charged the fee. However, the procedures state, “Most city/state funded or community type details are exempt from admin/service fees.”
The Government Finance Officers Association, whose website states that its “mission is to advance excellence in state and local government financial management,” has written a best-practice document titled “Establishing Government Charges and Fees.” This document gives recommendations for developing charges and fees, stating that governments should “calculate the full cost of providing a service in order to provide a basis for setting the charge or fee” and “review and update charges and fees periodically.” Although SDE does not have to follow this guidance, we feel it would be a best practice to help SDE determine how much to charge hiring entities for police details to ensure that it covers its cost of operating the PDF.
In addition, Section 229.08 of SDE’s Paid Police Details policy states,
To ensure compensation you must complete the detail form and reflect the accurate time of arrival, departure, and actual hours worked. The site foreman and then the detail officer must sign the detail form.
Reasons for Improper Administration
SDE’s policies for police details did not address the collection of administration fees. According to the police detail coordinator, the administration fee is a negotiated charge and only hiring entities willing to pay the fee are charged.
The police detail coordinator told us that SDE policy required officers to complete and submit signed work detail slips. However, the officers do not always provide the slips to the police detail coordinator and cannot always get a site supervisor’s signature. If a hiring entity pays SDE for the police detail without disputing the hours worked by an officer, the police detail coordinator pays the officer despite not getting work detail slips that are signed by the site supervisor.
Recommendations
- SDE should develop policies addressing all business functions of PDF operations, including the collection of an administration fee from all hiring entities to ensure that it charges them enough to support PDF operations.
- SDE should ensure that payments for police details are supported by the required documentation. Officers should complete and return the required work detail slips to support hours worked and obtain the signatures of site supervisors to substantiate those hours.
Auditee’s Response
The Coppinger administration recognized immediate concerns regarding the police detail operation. Several improvements have been implemented since transition to ensure proper documentation, accountability and oversight as a result of on-site auditor discussions. An annual independent accounting assessment will be performed to highlight further operational improvements if needed.
a. With this critical feedback from OSA, the police detail operation will undergo a transformation that includes: reconciliation responsibilities being shifted to SDE Finance and definitive guidelines regarding uniform collection of administrative fees to make this operation self-sustaining.
b. SDE will implement a new policy and procedure for detail operation that will require officer’s detail slips to be signed by a supervisor and proper supporting documentation be submitted prior to officer’s detail payments being made.
| Date published: | August 27, 2018 |
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