COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

 

DATE:

July 19, 2004

BOARD MEETING DATE:

July 27, 2004

 

TO:

Honorable Board of Supervisors

FROM:

John L. Maltbie, County Manager

SUBJECT:

2003-04 Grand Jury Responses

 

Recommendation

Accept this report containing responses to 2003-2004 Grand Jury recommendations on the following: Sexual Assault Cases in San Mateo County; Grand Jury Whistleblower Recommendation; San Mateo Medical Center Billings and Collections; and San Mateo County Purchasing Division.

 

Discussion

The 2003-2004 Grand Jury issued reports on Sexual Assault Cases in San Mateo County on April 29, 2004; Grand Jury Whistleblower Recommendation on May 3, 2004; San Mateo Medical Center Billings and Collections on May 27, 2004; and the San Mateo County Purchasing Division on June 10, 2004. The County is mandated to respond to the Grand Jury within 90 days from the date that reports are filed with the County Clerk and Elected Officials are mandated to respond within 60 days. The report pertaining to Sexual Assault Cases requires direct responses from the Sheriff and the District Attorney. Reports pertaining to Medical Center Billings and Collections and the Purchasing Division require direct responses from the Controller’s Office. Combined responses from the County and the Controller’s Office have been prepared for the Purchasing Division and Medical Center Billings and Collections.

 

Vision Alignment

This response to the Grand Jury’s findings and recommendations keeps the commitment of responsive, effective and collaborative government through goal number 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

Sexual Assault Cases in San Mateo County

Recommendations:

2. The Board of Supervisors should improve sexual assault case procedures to meet the concerns of the involved agencies by directing:

2.1 The originators of the Adult Sexual Assault Protocol to update the procedures to require all police and forensic nurse interviewers of sexually assaulted adults have more intensive training in how to interview adult rape trauma victims.

Response: Concur. The Keller Center, in collaboration with other county and community agencies, has provided training yearly to over 200 police officers, CPS workers, District Attorney staff and Medical/Nursing Providers in intensive one and two day courses. A portion of these courses is dedicated to adult interviewing techniques. Now that an Adult Sexual Assault Team Multidisciplinary Committee meets monthly, a plan for continued adult interview training will be formulated within this team.

2.2 The Keller Center staff to ensure that RTS counselors arriving at the center within 30 minutes are provided adequate time to meet with the victim before commencing the forensic exam and interview.

Response: Concur. The Keller Center staff does ensure that Rape Trauma Services (RTS) counselors arriving at our center within the 30 minute time period are provided adequate time to meet with the victim before commencing with the forensic examination and interview. It is sometimes the victim’s choice not to wait for a counselor before beginning the exam and interview.

    2.3 The Keller Center to consider how satellite offices for forensic exams and interviews might be established for special circumstances.

    Response: Disagree. At this time, the Keller Center does not have adequate staff, resources, or insurance coverage to provide services outside of the Keller Center located at San Mateo Medical Center.

6. The Board of Supervisors should direct the Keller Center and Child Protective Services to embark on a study with the DA, or engage a consultant to analyze San Mateo County case data and data from RTS to determine:

    Why many sexual assault cases reported to the police are not referred to the DA

    Why half of the DA’s sexual assault cases are not prosecuted

    Why so many sexual assault cases involve children

    Why the number of sexual assault cases increase every year

    Why the volume of unknown assailants has increased

    How San Mateo County data compares with other counties of similar demographics.

Response: Disagree. Neither the Keller Center nor Child Protective Services have the resources available to fund a research study of this magnitude.

7. The Board of Supervisors should improve the process of tracking and reporting all sexual assault cases by directing the Keller Center to continue to pursue the development or acquisition of an effective tracking system that includes cases referred to the DA, DA’s disposition, and court disposition, among other tracking criteria necessary to maintain the NCAC grant.

Response: Concur. The Keller Center is working diligently to incorporate an access tracking system and is training new staff to maintain this system. However, the Keller Center only tracks victims seen within the Center and not all victims in the County.

9. The Board of Supervisors should direct the Keller Center and the DA should direct the Victims Center to pursue opportunities for grants or other state-sponsored resources for victims of crime to fund forensic examinations at the Keller Center and full testing of DNA samples from all sexual assault cases.

Response: Concur in part. The Keller Center has always pursued grants to improve operations. Most recently, the Center was accredited by the National Children’s Alliance, which is accompanied by a $10,000/year grant. The money is being used to contract with a Child Interview Specialist for the Center. The Center does not have a grant writer on staff and relies on staff and foundation help in this area. Grant writing is done within the context of running operations. Grants that fund forensic exams and full DNA testing should be pursued by other criminal justice agencies.

Grand Jury Whistleblower Recommendation

Findings:

Generally agree with findings.

Recommendations:

1. By October 1, 2004, the Board of Supervisors should modify the proposed ordinance:

To include coverage for members of the public, vendors and others serving the County;

To include information about protection under California Labor Code Section 1102;

To change the title of the ordinance to encompass this broader coverage.

Response: Concur. The ordinance adopted by the Board of Supervisors provides that all persons may file complaints. “Persons” is not restricted and permits employees, vendors and others to file complaints. The title of the ordinance “Reporting of Improper Governmental Activity” identifies the subject matter and by not identifying any reporter retains that broad coverage. The ordinance passed by the Board of Supervisors makes reference to California Labor Code Section 1102, but as a local ordinance, should not incorporate a state statute.

2. Upon adoption of the pending ordinance, or if no ordinance is adopted, the Board of Supervisors should immediately direct the County Manager to:

    2.1 Adopt a policy or procedures that include:

Purpose of the policy or procedure

Individuals and organizations covered

Definitions of actions to be reported

How to file a complaint

Roles and responsibilities of the reporting party

Roles and responsibilities of parties receiving the complaint

The potential impact of the complainant of filing a claim

Information regarding retaliatory action and alternatives regarding resolution

Penalties for false reporting

Expectations regarding confidentiality

A general description of the investigation process

The complainants expectation of communication of results of the investigation

Action the complainant may take if retaliation results from filing a complaint

Steps to monitor that problems disclosed in the whistleblower process do not reoccur

    Response: Concur. The ordinance itself directs the County Manager to adopt policies and procedures for implementation of the ordinance.

    2.2 Include information about the County’s whistleblower policy in all employee manuals, on County contracts and on County purchase orders.

    Response: Concur in part. Information on the Whistleblower ordinance will be provided as one of the documents that all new employees must sign within the 30 days of employment. We do not agree it should be included in County contracts or purchase orders which govern the requirements of that transaction and not general policies of the County.

    2.3 Establish a single point of contact for all such complaints within the Board of Supervisors offices or assign coordination to an outside agency under contract to the County. Complaints should be referred by this control point to the Board of Supervisors staff, County Counsel or the District Attorney, as appropriate, for investigation with provision to request regular status reports to the Board of Supervisors.

    Response: Concur in part. By the terms of the ordinance, the County Counsel’s office will serve as the provider of complaint forms. The policies and procedures to be issued by the County Manager will ensure efficient management and coordination of the complaints.

    There will be follow-up in future Grand Jury quarterly updates on the status of policies and procedures to implement the ordinance.

San Mateo Medical Center Billings and Collections

Findings:

We generally agree with the Grand Jury findings and are encouraged by the number of times that the Grand Jury acknowledged the improvements that have been made in billings and collections at the San Mateo Medical Center over the past 18-24 months. SMMC converted to the Siemens Patient Accounting System in September 1999. The impact of this conversion cannot be underestimated. Unfortunately fully adequate system testing was cut short due to the impending Y2K deadline in January 2000. It is acknowledged that the Patient Accounting System was not fully operational resulting in backlogs in claims processing and follow-up.

Patient Financial Services staff has been working with the Information Services Department’s Health Applications Unit and Siemens consultants to essentially redesign the Patient Accounting System. SMMC is continually reviewing processes and reporting for further improvement. Over the past year SMMC has reviewed and updated key Master Files and Profiles to ensure optimum settings to increase cash collections and revenue. SMMC views this process as an ongoing task. Major changes have already been implemented to assure optimal use of the Patient Accounting system. System changes include developing statement protocols so that patient statements are generated within a specified number of days after discharge and transferred to Revenue Services when payment is not received within the specified timeframe. SMMC has implemented the Siemens’ Receivable Management Workstation, an online collection tool that automates the assignment and presentation of accounts to billers for follow-up. In addition to sharing knowledge on optimizing use of the Siemens system, the Siemens consultants have offered their observations on best practices at other health care facilities. PFS management and supervisors have used this information to make improvements in its workflow processes. Cash collections have steadily increased as improvements are implemented.

SMMC continuously monitors its own performance through weekly and monthly reports of key indicators including cash collections and monthly adjustments. Two key indicators are reported monthly to the SMMC Board of Directors, Net AR days and cost to collect per dollar of cash collections. Other indicators will be reported as they are developed.

Recommendations:

1. The Controller should:

    1.1 By October 1, 2004, conduct a benchmark analysis of comparable medical centers for billings and collections best practices and performance.

    Response: Concur. Controller’s study will commence on or before October 1, 2004.

    1.2 By January 1, 2005, perform an audit of SMMC’s billings and collections practices and performance. This audit should include a review of the “categorization” process to ensure that insurance coverage is being sought for patients where possible.

    Response: Concur. Controller’s study will commence on or before January 1, 2005. The Controller’s Audit Division is currently performing a study, the primary purpose of which is to determine if patients are properly classified as indigents. This study was requested by the County Manager’s Office as part of a larger study being directed by the Controller’s Office to determine the most cost effective approach to satisfy the County’s legal obligation to provide indigent health care.

2. The Board of Supervisors should direct SMMC’s Revenue Committee to:

    2.1 Meet at least monthly on an on-going basis;

    Response: Concur. The Revenue Committee has been meeting on a bi-weekly basis and will meet at least monthly in the future.

    2.2 Review administrative losses, insurance denials, bad debt, collections by Revenue Services, and unbilled accounts on a monthly basis;

    Response: Concur in part. The Revenue Committee in its current format is not the forum to discuss these issues. It is the responsibility of Patient Financial Services management in collaboration with the Revenue and Reimbursement Manager to review these areas against budgeted targets monthly.

    2.3 Assess new billings and collections initiatives on a monthly basis;

    Response: Concur. The charter of the Revenue Committee is to bring together clinical and financial managers to discuss revenue improvement initiatives for the revenue cycle. PFS managers continuously assess new billings and collections initiatives and routinely notify the Reimbursement Manager of these initiatives. In addition, PFS staff works with clinical managers on new initiatives as evidenced by the recent implementation of the Ron Robinson Senior Care Center and the Burlingame Long Term Care facility that included active PFS involvement.

    2.4 Invite third parties to meetings on an ad hoc basis to provide outside perspective, e.g., patients, payers, billings and collections staff from other hospitals.

    Response: Concur in part. The Revenue Committee in its current format is not the forum to discuss these issues. PFS Managers and Supervisors regularly attend trainings and seminars with third parties, including payers, billings and collections staff from other hospitals. In addition, ad hoc meetings are held as appropriate to discuss specific issues.

    3. The Board of Supervisors should direct the Chief Financial Office of SMMC to develop a billings and collections strategic plan by October 31, 2004, and to provide quarterly updates on the progress to the strategic plan to the County Manager. The plan should include input from the “Revenue Committee,” incorporate the benchmark analysis from the Controller’s Office, and include:

    Response: Disagree. The Chief Financial Officer and the Director, Patient Financial Services annually develop a strategic plan to improve revenue cycle operations and develop key performance metrics. These metrics are developed based on projected improvements related to system application maximization, the reimbursement environment and regulatory requirements. Actual performance against metrics is already presented monthly to the SMMC Board of Directors.

    3.1 Specific targets established or revised for:

    3.1.1 AR days by payer and overall based on benchmark information;

    Response: Disagree. SMMC currently monitors overall AR days and AR days by high volume payers (e.g., Medicare and Medi-Cal). We disagree with the notion that AR days should be compared by payer against a benchmark because AR days can be highly volatile and subject to manipulation. According to Zimmerman & Associates, traditional indicators (e.g. AR Days) lack industry standardization and do not correlate to optimized performance. The calculation of AR days is based on patient discharge date. AR days begin to accrue at the time that the patient leaves SMMC whether or not the patient has health insurance. Therefore, when an uninsured patient receives Medi-Cal eligibility, the aging of the account is not readjusted to reflect the fact that the patient just got Medi-Cal. For example, if an uninsured patient is discharged on 12/8/03 & Medi-Cal eligibility is approved on 4/19/04 then the account is already 130+ days old when the Medi-Cal claim submission process is initiated.

    3.1.2 % of total charges for each “write off” category by payer and overall based on benchmark information;

    Response: Concur. SMMC currently monitors overall percentage of charges for each write off category by payer.

    3.1.3 AR days for internal billing (4 to 6 days) and aged-receivables based on benchmark information;

    Response: Concur. SMMC already monitors AR days on a weekly basis for internal billing and aged-receivables and is always focused on reducing days as external factors allow. See response to 3.1.1 for discussion of AR days based on benchmark information.

    3.1.4 Registration accuracy at 97%;

    Response: Concur in part. Patient Accounting reviews admissions and emergency department registrations on a daily basis and communicates errors to the admitting staff. This is an on-going process and to date the errors have been reduced. Registration accuracy is difficult to measure as information at the time of registration may be different from the information available at the time of billing. Either the patient provided inaccurate information or the information was accurate when asked but later changed. Staff will evaluate the current baseline accuracy rate and develop a registration accuracy target that will be higher than the baseline and will increase incrementally as the target is reached.

    3.1.5 “Clean submissions” at 98%;

    Response: Concur. SMMC uses DSG, a claims processing software system. DSG utilizes all edits for Medicare, Medi-Cal and insurance claims. Claims do not pass edit for submission to a payer unless they are clean. In addition, staff has met with Siemens, DSG and InfoIMAGE, the vendor that produces SMMC’s patient statements, to review claims processing edits and have made improvements in insuring clean submission. These efforts will be on going to assure continued improvement.

    3.1.6 Upfront payment collection at 10% (increased when pre-registration is implemented).

    Response: Concur. Payments for co-pays are already collected upfront and posted to patients’ accounts at the time of receipt. SMMC staff will be working on developing a target and it will probably be greater then 10%.

    3.2 Details for initiatives to reach targets that include integrated plans for training, tie-in with performance evaluation, tracking, and systems changes.

    Response: See response to recommendation 3.0 above. The Patient Services Training Coordinator reports to the Director, Patient Financial Services, and is responsible for orientation of all new registration staff, as well as the on-going training of existing registration staff throughout the Medical Center. This includes training on the use of the Siemens system and enhancements, as well as registration processes such as identification of patient financial status. The Patient Services Training Coordinator also prepares a bi-weekly newsletter, The Elixir, which is distributed to all registration staff. The Elixir includes information on new programs, system changes and general information affecting the registration and billing process. Performance standards for billing and collection targets are included in the evaluations of Patient Financial Services staff.

    3.3 Required changes to reporting and tracking:

    3.3.1 Track AR days, bad debt, denials and administrative losses by payer group;

    Response: Concur. SMMC currently tracks AR days, bad debt, denials and administrative losses by financial class.

    3.3.2 Track registration accuracy by registrar and create daily/monthly reports;

    Response: Concur. PFS will work with ISD to develop monitoring reports. However, tracking of accuracy is somewhat subjective based on information available/disclosed to the registrar at time of registration.

    3.3.3 Track upfront cash collections by registrar and create daily/monthly reports;

    Response: Disagree. SMMC currently monitors upfront cash collections by site and has created weekly reports to monitor collection activity.

    3.3.4 Track Revenue Services performance including ability to credit back collections from Revenue Services to the appropriate payer category;

    Response: Concur. SMMC currently monitors Revenue Services performance. Collections on accounts in pre-collect status are posted directly to patients’ accounts.

    3.3.5 Separate Medi-Cal Pending from Undetermined category;

    Response: Concur in part. SMMC will attempt to separate Medi-Cal Pending from the Undetermined category through ad hoc reporting. Establishing a new financial class for the Medi-Cal Pending accounts would entail major system modifications to both the Patient Management and Patient Accounting systems, as well as all ancillary systems that receive patient information. Extensive testing would also need to be done to assure that all pathways have been modified correctly. The cost/benefit of undertaking this modification will have to be evaluated.

    3.3.6 Separate Healthy Kids from Insurance/Commercial category;

    Response: Disagree. Healthy Kids is an insurance program and there is no need to distinguish it as a separate financial category. Healthy Kids has a distinct payer plan within the Insurance category so reporting and tracking of Healthy Kids revenue can be monitored on an ad hoc basis.

    3.3.7 Provide ability to move accounts out of Undetermined category.

    Response: Concur. SMMC currently does move accounts out of the Undetermined category and to other financial categories as appropriate when changes in patients’ financial status occur.

    3.4 Systems changes to support up front payment collection:

    3.4.1 Ability to flag past due accounts of patients registering for additional services;

    Response: Concur in part. As a Section 17000 safety net provider, SMMC cannot turn patients away on the basis of their payment history. However, staff will review ability to flag past due accounts in conjunction with the implementation of pre-registration services.

    3.4.2 Ability to provide estimates of co-pays and attempt to collect at the time of registration.

    Response: Concur. SMMC currently collects co-payments at the time of registration and posts these payments directly to the patients’ accounts.

4. The Board of Supervisors should direct the Patient Services Department of SMMC to conduct an analysis of the collections performance of Revenue Services by October 1, 2004, that includes:

    4.1 Characteristics of transferred accounts (e.g., self-pay accounts versus co-pays for Medi-Cal, $ size, days outstanding);

    Response: Concur. The Siemens system currently generates reports on the characteristics of transferred accounts including financial class and dollar amount.

    4.2 Characteristics of accounts that are successfully collected upon;

    Response: Concur. SMMC currently receives a monthly report from Revenue Services of accounts that are successfully collected upon.

    4.3 Pre-collect and bad debt collection rates;

    Response: Concur. SMMC will work with Revenue Services to develop a report to calculate pre-collect and bad debt collection rates.

    4.4 Qualitative feedback from Revenue Services on changes SMMC could make to enhance collectibility of accounts.

    Response: Concur. PFS staff currently meets with Revenue Services management on a bi-weekly basis. SMMC receives continuous feedback from Revenue Services on status of patients’ accounts. The one area that would possibly increase account collectibility is verification of patient address. SMMC is currently installing Siemens HDX eligibility verification software that includes linkage to the Equifax and other address databases. To the extent that this database is up-to-date then SMMC registration will be updated with current address information. HDX implementation will be in August 2004. Revenue Services evaluates the collectibility of transferred accounts and the applicability of charity care adjustments after evaluation of patients’ resources.

5. The Board of Supervisors should direct SMMC to assess the effectiveness of the “50% discount to patients for payment in 30 days” by October 1, 2004, and to modify and/or experiment with other ideas, e.g., providing 50% discount if payment made on or before discharge and 30% if made within 30 days, or charging an upfront flat fee ($10 to $30) for selected services.

    Response: Concur in part. It is difficult to “modify and/or experiment” with patient payment options as these options are linked to system programs that must be updated to accommodate new billing programs. In addition, any changes require adequate patient notification and continuous experimentation will result in patient confusion. Since the Center for Medicare and Medicaid Services (CMS) recently ruled that discounts are acceptable, SMMC is in the process of implementing a 50% prompt pay discount offered to self-pay patients for payment made in 30 days. SMMC will evaluate the effectiveness of the discount in a reasonable period of time. SMMC has offered this discount informally to self-pay patients and it has been well received. SMMC is currently reviewing and developing additional discounts for charity care patients.

6. The Board of Supervisors should direct SMMC to investigate or experiment with moving full pay accounts and self pay account balances more quickly to Revenue Services.

    Response: Disagree. Statement protocols have been implemented through Siemens that assure that patients are sent statements at a specified number of days after their discharge/visit. If payment is not received then accounts are automatically transferred to Revenue Services at Day 54. This allows time for the patients to pay SMMC directly, take advantage of the 50% prompt pay discount if applicable and reduces the commission that the SMMC pays for collection on self-pay accounts. Transferring accounts to Revenue Services more quickly would not give SMMC time to process its internal collection cycle or the patient to submit payment and would result in higher commission fees.

7. The Board of Supervisors should direct SMMC to work with Medi-Cal/Health Plan of San Mateo by October 1, 2004, to develop automated reports to flag accounts waiting for information or authorization prior to payment, assuming the contract with the Health Plan is still in place.

    Response: Disagree. The Health Plan of San Mateo currently processes claims as either pended or denied if accounts need additional information. A biller works the pended/denied claims to provide the necessary documentation. Receiving a report in advance would not change the processing of these claims.

8. The Board of Supervisors should direct SMMC to pilot a pre-registration function during FY ’05 with full deployment during FY ’06.

Response: Concur. SMMC understands the benefits of performing pre-registration for clinic patients and have assessed the number of staff required to support a full-time pre-registration unit based on the number of annual clinic visits. It has been determined that a minimum of 16 FTEs is needed to support a pre-registration unit. Given budget constraints, SMMC has been unable to move forward with implementation of a pre-registration unit.

9. The Board of Supervisors should direct SMMC to experiment with incentives or bonuses for employees tied to achieving billings and collections goals.

Response: Concur. SMMC will work with EPS to explore the possibility of creating an incentive/bonus program for collections staff.

10. The Board of Supervisors should direct SMMC to consider organizational changes to provide improved accountability for the billings and collections process, i.e., move Medical Records and/or Clinic Registration into Patient Financial Services.

    Response: Disagree. The current organizational structure provides accountability for the billings and collection process. Patient Financial Services is responsible for both Patient Access and Patient Accounting. Moving additional departments into Patient Financial Services would not improve accountability for the billings and collections process. For example, both Medical Records and Clinic Registration support dual functions, i.e., clinical and financial, that would not necessarily benefit from transferring organizational responsibility to Patient Financial Services. Patient Financial Services management/supervisory staff regularly meets with their counterparts in Medical Records and the Outpatient Clinics to discuss issues impacting billings and collections. There is additional operational benefit to be gained by moving these departments into PFS. In fact it would be counterproductive as PFS managers would necessarily assume operational responsibility for clinical areas that are out of context within Patient Finance and would therefore dilute the managers’ effectiveness.

11. The Board of Supervisors should direct SMMC to immediately ensure the directory and the Help Desk staff correctly reflect the location of the Cashier’s Office at the hospital. All signs leading to the Cashier’s Office should be English and Spanish.

    Response: Concur. This recommendation has already been implemented. Written directions in English/Spanish to the Patient Payment Unit located on the 3rd Floor of the Administration Building have been provided. These directions are given to patients asking where to make payments.

12. The Board of Supervisors should direct SMMC to immediately identify a more convenient location for the Cashier’s Office and to develop a plan a timeline for the move.

    Response: Disagree. Patient Payments has already been moved from the Cashier’s Office to the Patient Accounting area located on 3rd Floor of the Administration Building. In addition, payments can be made at any clinic location.

San Mateo County Purchasing Division

Findings:

Generally agree with findings.

Recommendations:

1. The Board of Supervisors should ensure that funding for the upgrade to the IFAS system includes a new purchasing module that is installed concurrent with the new accounting system modules.

    Response: Concur The Controller plans to complete an upgrade to the IFAS system during FY 2004-05. This upgrade includes an upgrade of the purchasing module.

2. The Controller should evaluate the IFAS purchasing module and ensure electronic order entry is installed, including purchase order submission edits prior to downstream processing.

    Response: Concur. After implementation of the IFAS upgrade during FY 2004-05, Employee and Public Services and the Controller will seek funding from the Board of Supervisors to evaluate the ability of the purchasing module to meet the requirements of this recommendation.

3. The Board of Supervisors should direct the Purchasing Division to:

3.1 Provide the Controller with input to the order entry edits that would be appropriate on purchase orders, and with types of reports the system should generate for Purchasing Division analysis, and evidence of non-compliance with County policy.

    Response: Concur. The Purchasing Manager will work closely with the Controller’s staff to evaluate the impact of the IFAS upgrade to be implemented in FY 2004-05, and to identify any additional information requirements.

    The Purchasing Division and the Controller work together regularly on the functionality of the IFAS purchasing module. For example, Controller’s staff has attended Purchasing staff meetings twice in the last eighteen months. Likewise, the Purchasing Manager is an active member of the Controller’s IFAS Steering Committee.

3.2 Survey all departments for suggestions to expand the types of goods that may be purchased using vendor agreements, and document a plan to aggressively negotiate these agreements.

    Response: Concur. Purchasing will incorporate this recommendation into its annual survey of departmental purchasing representatives. Additionally, departmental purchasing representatives will be reminded that they can request a vendor agreement any time the department believes it would be beneficial. The current Purchasing Customer Guide provided to all department purchasing representatives encourages departments to request a new vendor agreement anytime a department’s annual spending on a commodity exceeds $5,000 and/or requires a minimum of 12 purchases per year. The Purchasing Manager emphasizes this at all training sessions and the Buyers routinely receive and process these requests.

    In the last fiscal year the Purchasing Manager has met with the following departments to analyze their overall vendor agreement strategy: Sheriff’s Office (bio-terrorism commodities, general commodities), San Mateo Medical Center (food commodities, general commodities), Public Health (food commodities), Information Services (computers, servers, cell phones, general commodities), Court (files, general commodities), and the Human Services Agency (printing needs not provided by the Copy Center).

3.3 Update the purchasing guidelines to require electronic forms of purchase order submission and e-mail for communications regarding order clarifications or problems.

    Response: Concur. We agree that e-mail and/or electronic notification/communication of submissions and approvals will benefit the system and speed up the purchasing process. The Controller expects that the new IFAS purchasing upgrade will include this technology.

    Once the FY 2004-05 IFAS upgrade is implemented, Purchasing will update its guidelines accordingly.

3.4 Conduct formal training sessions for all new Customer purchasing representatives at least two times per year.

    Response: Concur. In calendar year 2003, Purchasing provided the following training:

Date

Course Title

# of Attendees

01/14/03

Purchasing Process and Procedure

57

02/19/03

Automated Vendor Agreement System (AVAS) Training

30

06/24/03

Purchasing Process and Procedure

40

    The Purchasing Process and Procedure training will next be offered on September 22, 2004, and the AVAS training will next be offered on September 29, 2004. These courses will be repeated again in the spring of 2005.

    Additionally, specialized training is offered to individual departments on a departmental request basis. Purchasing is discussed in terms of issues important to that department as well as in the context of countywide policy and procedure. In the last two years these training sessions have been conducted with the Sheriff’s Office, the Human Services Agency, Probation, and the San Mateo Medical Center. Information Services and Public Health have expressed interest in scheduling this training before the end of 2004.

    In addition, Purchasing personnel work with departmental staff on a daily basis, offering guidance on County purchasing policy and procedure.

3.5 Conduct a focus group at least once per year for discussion of process improvements and feedback between the Purchasing Division and customer departments.

    Response: Concur. Purchasing includes time for discussion of improvements and feedback at all its Departmental training sessions. (See the response to 3.4 above).

3.6 Provide buyers formal education or training in their respective specialty areas.

    Response: Concur. Purchasing staff identify training/education opportunities that would be beneficial to them, and based on need and resources, are sent to these programs. Training will continue to be encouraged.

    The following training has been completed in the past 18 months:

April 2003

California Association of Purchasing Professionals (CAPPO) training – online procurement resources (1hour)

Attended by Purchasing Manager and one Buyer

May 2003

CAPPO Purchasing Certification Training, modules 3 & 4 (16 hours)

Attended by Purchasing Manager

CAPPO Workshop to update statewide purchasing training curriculum (16 hours)

Attended by Purchasing Manager

California RecycleWorks Trade Show – “green” purchasing (8 hours)

Attended by Purchasing Manager and two Buyers

July 2003

Bioterrorism Response Conference/Trade Show (8 hours)

Attended by one Buyer

September 2003

Office Depot Training on implementation of new contract & vendor’s inventory and delivery capabilities (4 hours)

Attended by two Buyers

October 2003

Federal GAO Session on availability of federal contracts to local governments (4 hours)

Attended by Purchasing Manager and one Buyer

CAPPO Purchasing Certification Training, modules 1 & 2 (16 hours)

Attended by Purchasing Manager

January 2004

Via Factory Tour - trends in office chairs and furniture (8 hours)

Attended by one Buyer

Imagistics, Inc. Seminar – imaging and network technology (4 hours)

Attended by two Buyers

February 2004

BiRite Food Show – food industry trends (8 hours)

Attended by one Buyer

March 2004

NeoCom West Conference – workshops in textiles, healthcare, ergonomics (8 hours)

Attended by one Buyer

March 2004

Via Factory Tour – trends in office chairs and furniture (6 hours)

Attended by one Buyer

Pleion Factory Tour – reviewed production, inventory, and delivery capabilities with County’s module office furniture vendor (8 hours)

Attended by Purchasing Manager and one Buyer

April 2004

Pleion’s President toured several County buildings, interviewed several employees, and discussed ergonomic improvements with Purchasing Division (6 hours)

Attended by Purchasing Manager and one Buyer

May 2004

CAPPO Training on effective contract negotiations (8 hours)

Attended by Purchasing Manager and one Buyer

July 2004

Online Reverse Auctions (2 hours)

Attended by Purchasing Manager and four Buyers

4. The Controller should, not less frequently than annually, through its Internal Auditing Department, comply with Section 2.92.020(c) of the County Codes, which states “The Controller shall periodically conduct an audit of each Department to which purchasing authority has been delegated and shall submit a copy of any audit findings to the County Manager.

    Response: Concur in part. The Controller complies with the requirements of the Section 2.92.020(c) of the County Codes using an approach designed to cost effectively reduce risks associated with the purchasing function. The Controller conducts countywide surveys to identify potential risks related to the purchasing and payment cycle. The results provide the Controller a basis for planning its purchasing related audit work. As part of the Controller’s scheduled audits of departments, the Controller reviews internal controls over the purchasing function. The Controller coordinates with the Accounts Payable section of the Controller’s Office to identify and follow up exceptions in accounts payable transactions that indicate significant internal control risks. All findings and recommendations are reported to the County Manager.

    The Internal Audit Division complies with the professional standards for the practice in Internal Audits. Section 2000 of the Institute of Internal Auditors (IIA) standards states that a risk-based assessment should be used to determine the priorities of the internal audit activity. Accordingly, all audit work performed by the Internal Audit Division, with the exception of mandated audits, are based on risk analysis.

    The Controller agrees that purchasing functions performed by County Departments should be audited; however, the frequency and the scope of such audits should be based on the results of risk analysis rather then a pre-determined schedule.