MELBA W SIMPSON, CPA - Los Angelesclkrep.lacity.org/onlinedocs/2014/14-0992_misc_a_7-24... · 2015-06-22 · LOS ANCELLS, O.A 90071 (213; 736-6664 1 FI .[-PI IONE QI3) 736-6692 FAX

U.S. BANK TOWER 63 3 WrSl 5 if I SIR LET, SUITE 3 320

LOS ANCELLS, O.A 90071 (213; 736-6664 1 FI .[-PI IONE

QI3) 736-6692 FAX www.simpsonandsimpsoncpas.com

SIMPSON & SIMPSONCCRTiriFD PUBLIC. ACC OUNTANTS

FOUNDING PARTNERS BRA1NARD C SIMPSON, CPA

MELBA W SIMPSON, CPA

My 24, 2014

Audit and Governmental Efficiency CommitteeLos Angeles City Councilc/o City ClerkCity Hall, Room 395200 North Spring StreetLos Angeles, California 90012

Enclosed are four (4) bound copies of the City of Los Angeles Cost Allocation Plan 36 (CAP 36) for Central Services and Fringe Benefits audit report for the fiscal year ended June 30, 2012. These rates in CAP 36 are based on costs in fiscal year 2011-12 and to be applied in fiscal year 2013-14.

We conducted our audit of the schedules of Central Services and Fringe Benefits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the schedules are free of material misstatement. Our opinion on the schedules was unqualified and there were no significant audit findings.

If you have any questions, please contact us at (213) 736-6664.

Sincerely,

Simpson & Simpson

Enclosures: 4

Cc: Lillian Sedlak - Controller’s Office (with 8 enclosures)Victoria Orellana - Controller’s Office (with 1 enclosure) Sally Rocio - Controller’s Office (with 1 enclosure)

The CPA. Never Underestimate The Valuer

http://www.simpsonandsimpsoncpas.com

CITY OF LOS ANGELES, CALIFORNIA

COST ALLOCATION PLAN 36 FOR CENTRAL SERVICES AND FRINGE BENEFITS

INDEPENDENT AUDITOR’S REPORT FOR THE FISCAL YEAR ENDED JUNE 30,2012

CITY OF LOS ANGELES, CALIFORNIA COST ALLOCATION PLAN 36

FOR CENTRAL SERVICES AND FRINGE BENEFITS FOR THE FISCAL YEAR ENDED JUNE 30,2012

TABLE OF CONTENTS

Independent Auditor’s Report 1-2

Central Services Cost Allocation Plan 36Schedule of Salary Base, Allocated Costs and Rates by Department to be Applied in Fiscal Year 2013-2014 3-5

Central Services Cost Allocation Plan 36Schedule of Salary Base, Allocated Costs and Rates

Including Overtime by Department to be Applied in Fiscal Year 2013-2014 6-8

Fringe Benefits Cost Allocation Plan 36Schedule of Salary Base, Allocated Costs and Rates by Department to be Applied in Fiscal Year 2013-2014 9-11

Fringe Benefits Cost Allocation Plan 36Schedule of Salary Base, Allocated Costs and Rates

Including Overtime by Department to be Applied in Fiscal Year 2013-2014

Notes to Schedules

12-14

15-26

U.S. BANK TOWER 633 WEST 6TH STREET, SUITE 3320

LOS ANGELES, CA 90071 (213) 736-6664 TELEPHONE

(213) 736-6692 FAX wvAv.simpsonandsimpsoncDas.com

SIMPSON & SIMPSONCERTIFIED PUBLIC ACCOUNTANTS

FOUNDING PARTNERS BRAINARD C. SIMPSON, CPA MELBA W. SIMPSON, CPA INDEPENDENT AUDITOR S REPORT

Honorable Members of the City Council City of Los Angeles, California

We have audited the accompanying schedules of Central Services and Fringe Benefits (the Schedules) of the City of Los Angeles, California (City) Cost Allocation Plan 36 for the fiscal year ended June 30, 2012 as listed in the table of contents.

Management’s Responsibility for the Schedules

Management is responsible for the preparation and fair presentation of the Schedules in accordance with Title 2 in the Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 225, “Cost Principles for State, Local, and Indian Tribal Governments” (formerly Office of Management and Budget Circular A-87), which is a comprehensive basis of accounting other than generally accepted accounting principles, as described in Note 1. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Schedules that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on the Schedules based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Schedules are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Schedules. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Schedules, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the Schedules in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the schedules.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

The CPA. Never Underestimate The Value?"

Opinions

In our opinion, the Schedules referred to above present fairly, in all material respects, the overhead rates to be applied in fiscal year 2013-2014 for certain City departments for the fiscal year ended June 30,2012 in accordance with the basis of accounting described in Note 1.

Emphasis of Matters

As described in Note 1, the Schedules were prepared for the purpose of calculating Central Services and Fringe Benefits overhead rates for certain City departments in accordance with Title 2 in the Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 225, “Cost Principles for State, Local, and Indian Tribal Governments’’’ (formerly Office of Management and Budget Circular A-87), which is a comprehensive basis of accounting other than generally accepted accounting principles.

Restriction on Use

This report is intended solely for the information and use of the City management, City Council, others within the City, and the U.S. Department of Housing and Urban Development and is not intended to be and should not be used by anyone other than these specified parties.

Los Angeles, California June 19, 2014

CITY OF LOS ANGELES, CALIFORNIA CENTRAL SERVICES COST ALLOCATION PLAN 36

SCHEDULE OF SALARY BASE,ALLOCATED COSTS AND RATES BY DEPARTMENT

TO BE APPLIED IN FISCAL YEAR 2013-2014 FOR THE FISCAL YEAR ENDED JUNE 30, 2012

AllocatedDEPARTMENT/Cost Center_______ Salary Base _____ Costs_____ Rates

AGINGBalance of DepartmentSpecial Fund (Title V)

$ 2,791,9832,003,559

$ 753,84121,979

27.00%1.10%

ANIMAL SERVICES 18,452,638 6,168,767 33.43%

BUILDING & SAFETY 64,957,122 6,831,052 10.52%

CITY ADMINISTRATIVE OFFICER (Note 4) CRA, Petroleum Admin., Proprietary,

Capital Projects (Physical Plant)Disaster Grants Coordination

CITY ATTORNEY CriminalDirect at User’s Site (Proprietary/CRA)Direct in City Space (CDD, Housing Authority)

CITY CLERK ElectionsSpecial Assessment Section

COMMUNITY DEVELOPMENT Balance of Department As Needed Employees

CONTROLLERDirect Billed (at User’s Site)Direct Billed (in City Space)

CULTURAL AFFAIRS

DEPARTMENT ON DISABILITY

EL PUEBLO

- - 0.00%" " 0.00%

35,699,191 6,560,007 18.38%12,889,044 626,261 4.86%3,838,644 298,198 7.77%

2,618,171 1,297,757 49.57%1,102,627 967,404 87.74%

22,689,346 599,093 2.64%940,989 18,321 1.95%

920,425 25,420 2.76%274,211 100,443 36.63%

4,153,223 2,605,607 62.74%

992,218 66,849 6.74%

1,134,259 131,307 11.58%

The accompanying notes are an integral part of this schedule,

3




(Continued)

AllocatedDEPARTMENT/Cost Center__________ Salary Base Costs Rates

The accompanying notes are an integral part of this schedule,4


SCHEDULE OF SALARY BASE, ALLOCATED COSTS AND RATES BY DEPARTMENT

TO BE APPLIED IN FISCAL YEAR 2013-2014 FOR THE FISCAL YEAR ENDED JUNE 30,2012

(Continued)

AllocatedDEPARTMENT/Cost Center_________ Salary Base Costs Rates

POLICECivilianSworn (Police Officers)

202,119,844 $ 16,825,148 8.32%934,618,481 118,958,419 12.73%

PUBLIC WORKSBoard Office Direct: Public Services 652,712 -- 0.00%

Contract Administration Construction Inspection

21,150,319 1,180,105 5.58%

EngineeringStormwater Facilities Engineering 3,565,259 404,883 11.36%Wastewater Facilities Engineering 22,244,998 2,091,595 9.40%Privately Financed Improvements Eng. 7,382,859 1,012,063 13.71%Street Improvements Engineering 11,043,716 1,041,370 9.43%Municipal Facilities Engineering 11,826,018 1,303,709 11.02%General Mapping & Survey 4,484,936 270,445 6.03%

SanitationSolid Waste Program 72,404,698 75,188,063 103.84%Wastewater/Flood Control 103,652,066 24,532,092 23.67%

Street Lighting 16,988,099 4,372,921 25.74%

Street Services (Street Maintenance) 71,050,943 34,358,842 48.36%

RECREATION AND PARKS 115,755,815 35,991,997 31.09%

TRANSPORTATION 103,023,949 14,691,638 14.26%

ZOO 13,979,739 2,211,252 15.82%

The accompanying notes are an integral part of this schedule5

CITY OF LOS ANGELES, CALIFORNIA CENTRAL SERVICES COST ALLOCATION PLAN 36 SCHEDULE OF SALARY BASE, ALLOCATED COSTS

AND RATES INCLUDING OVERTIME BY DEPARTMENT TO BE APPLIED IN FISCAL YEAR 2013-2014

FOR THE FISCAL YEAR ENDED JUNE 30, 2012

Salary BaseIncluding Allocated

DEPARTMENT/Cost Center_______ Salary Base Overtime Overtime Costs Rates

AGINGBalance of Department $ 2,791,983 $ 4,877 $ 2,796,860 $ 9,914 0.35%Special Fund (Title V) 2,003,559 ” 2,003,559 " —

ANIMAL SERVICES 18,452,638 34,445 18,487,083 1,015,508 5.49%

BUILDING & SAFETY 64,957,122 2,819,629 67,776,751 639,741 0.94%



0.00%

0.00%

CITY ATTORNEYCriminal 35,699,191 1,740Direct at User’s Site (Proprietary/CRA) 12,889,044 39Direct in City Space (CDD, Housing Auth.) 3,838,644 -

CITY CLERKElections 2,618,171 35,453Special Assessment Section 1,102,627 654

COMMUNITY DEVELOPMENTBalance of Department 22,689,346 58,328As Needed Employees 940,989 —

CONTROLLERDirect Billed (at User’s Site) 920,425 14,892Direct Billed (in City Space) 274,211 1,868

CULTURAL AFFAIRS 4,153,223 2,837

DEPARTMENT ON DISABILITY 992,218 265

EL PUEBLO 1,134,259 30,710

EMERGENCY MANAGEMENTEmergency Prep. Policy & Public Info. 724,738 5,432

35,700,931 727,59612,889,083 -3,838,644 51,475

2,653,624 198,2671,103,281 116,575

22,747,674 129,409940,989

935,317276,079

4,156,060

992,483

1,164,969

730,170

20,807

432,858

5,796

5,139

2.04%0.00%

1.34%

7.47%10.57%

0.57%0.00%

0.00%7.54%

10.42%

0.58%

0.44%

0.00%

The accompanying notes are an integral part of this schedule6



FOR THE FISCAL YEAR ENDED JUNE 30,2012 (Continued)

DEPARTMENT/Cost Center

Salary BaseIncluding Allocated

Salary Base Overtime Overtime Costs Rates

FINANCERevenue CollectionsCash Management & Street Bonds

FIRECivilianSworn

GENERAL SERVICES Materials Testing Print Shop

HOUSINGGrant-Funded HousingEnforcementInternal Administration

LIBRARY

LOS ANGELES CONVENTION CENTER

MAYORExecutive/PolicyGrant-Funded & Special Programs Direct in City Space

NEIGHBORHOOD EMPOWERMENT

PERSONNELCustody Care (Jails)Grant-Funded & Special Programs

PLANNING

POLICECivilianSworn (Police Officers)

$ 21,067,824 $ 52 $ 21,067,876 S 190,380 0.90%821,515 " 821,515 38,689 4.71%

21,912,022 1,135,953 23,047,975 812,335 3.52%339,580,991 106,570,070 446,151,061 11,014,541 2.47%

6,360,879 814,491 7,175,370 187,425 2.61%2,562,090 79,704 2,641,794 71,167 2.69%

14,160,946 20,297 14,181,243 29,541 0.21%23,832,360 24,824 23,857,184 56,477 0.24%

6,075,268 8,372 6,083,640 - 0.00%

54,324,795 252 54,325,047 6,058,288 11.15%

13,837,369 875,260 14,712,629 1,472 0.01%

5,682,137 5,682,137 8,057 0.14%4,972,999 - 4,972,999 37,800 0.76%1,466,885 " 1,466,885 7,113 0.48%

1,475,759 1,087 1,476,846 15,054 1.02%

4,176,074 15,798 4,191,872 15,009 0.36%240,701 - 240,701 20,633 8.57%

19,435,072 248,707 19,683,779 489,465 2.49%

202,119,844 1,917,658 204,037,502 2,964,058 1.45%934,618,481 20,409,120 955,027,601 27,946,330 2.93%

The accompanying notes are an integral part of this schedule.7




DEPARTMENT/Cost Center Salary Base Overtime

Salary Base Including Overtime

AllocatedCosts Rates

PUBLIC WORKSBoard Office Direct: Public Services $ 652,712 $ 3,594 $ 656,306 $ 0.00%

Contract AdministrationConstruction Inspection 21,150,319 551,537 21,701,856 58,355 0.27%

EngineeringStormwater Facilities Engineering 3,565,259 1,692 3,566,951 43,282 1.21%Wastewater Facilities Engineering 22,244,998 15,767 22,260,765 256,682 1.15%Privately Financed Improvements Eng. 7,382,859 47,074 7,429,933 123,067 1.66%Street Improvements Engineering 11,043,716 31,293 11,075,009 116,410 1.05%Municipal Facilities Engineering 11,826,018 1,570 11,827,588 143,597 1.21%General Mapping & Survey 4,484,936 ” 4,484,936 21,744 0.48%

SanitationSolid Waste Program 72,404,698 5,571,165 77,975,863 8,556,457 10.97%Wastewater/Flood Control 103,652,066 2,187,755 105,839,821 7,538,008 7.12%

Street Lighting 16,988,099 921,464 17,909,563 118,081 0.66%

Street Services (Street Maintenance) 71,050,943 4,834,132 75,885,075 5,713,811 7.53%

RECREATION AND PARKS 115,755,815 725,177 116,480,992 5,077,386 4.36%

TRANSPORTATION 103,023,949 10,960,673 113,984,622 1,474,967 1.29%

ZOO 13,979,739 49,160 14,028,899 313,218 2.23%


CITY OF LOS ANGELES, CALIFORNIA FRINGE BENEFITS COST ALLOCATION PLAN 36

SCHEDULE OF SALARY BASE, ALLOCATED COSTS AND RATES BY DEPARTMENT


FringeBenefit

Salary Base Salary Base Allocated(Standard) (Special) Costs Rates

AGINGBalance of Department $ 2,735,829 $ 2,791,983 $ 1,227,689 36.05%Special Fund (Title V) 2,003,559 2,003,559 345,546 17.25%

ANIMAL SERVICES 18,226,716 18,452,638 8,171,756 42.52%

BUILDING & SAFETY 64,862,127 64,862,127 14,415,780 33.70%



CITY ATTORNEY CriminalDirect at User’s Site (Proprietary/CRA) Direct in City Space (CDD, Housing Auth.)

CITY CLERK ElectionsSpecial Assessment Section

COMMUNITY DEVELOPMENT Balance of Department As Needed Employees


CULTURAL AFFAIRS

DEPARTMENT ON DISABILITY

35,699,19112,889,0443,838,644

35,699,19112,889,0443,838,644

1,933,8881,102,627

2,618,1711,102,627

22,689,346940,989

22,689,346940,989

920,425274,211

920,425274,211

3,224,143 4,153,223

992,218 992,218

- 0.00%” 0.00%

12,723,234 32.94%4,348,291 31.04%1,359,090 32.71%

1,492,798 70.81%264,172 25.11%

7,520,739 33.15%609,963 64.82%

331,252 31.33%95,842 30.29%

1,669,585 49.16%

538,834 42.80%





(Continued)

FringeBenefit

Salary Base Salary Base AllocatedDEPARTMENT/Cost Center____________ (Standard) (Special) Costs Rates

EL PUEBLO $ 1,031,681 $ 1,134,259 $ 260,237 28.35%

EMERGENCY MANAGEMENTEmergency Prep. Policy & Public Info. 724,738 724,738 226,986 37.02%


20,874,458821,515

21,067,824821,515

8,249,683309,094

36.34%34.48%

FIRECivilianSworn

21,850,122339,580,991

21,850,122339,580,991

8,225,971235,890,422

35.30%69.33%

GENERAL SERVICESMaterials TestingPrint Shop

6,360,8792,562,090

6,360,8792,562,090

1,705,8701,040,508

32.24%46.04%


14,129,78723,547,959

6,024,487

14,129,78723,832,360

6,075,268

5,369,6649,936,5921,718,019

32.97%37.13%23.47%

LIBRARY 52,426,137 54,324,795 19,488,276 33.68%

LOS ANGELES CONVENTION CENTER 12,182,186 13,837,369 4,560,280 44.35%

MAYORExecutive/PolicyGrant-Funded & Special ProgramsDirect in City Space

5,610,2124,939,1521,448,552

5,682,1374,972,9991,448,552

1,350,7491,245,557

528,609

38.23%39.39%50.67%

NEIGHBORHOOD EMPOWERMENT 1,475,759 1,475,759 654,835 37.15%

PERSONNELCustody Care (Jails)Grant-Funded & Special Programs

3,250,334240,701

4,176,074240,701

1,682,67699,165

40.43%30.86%





(Continued)

FringeBenefit

Salary Base Salary Base AllocatedDEPARTMENT/Cost Center____________ (Standard) (Special) Costs Rates

PLANNING $ 19,383,250 $ 19,383,250 $ 17,104,572 32.07%

POLICECivilian 201,854,288 201,854,288 79,239,030 37.36%Sworn (Police Officers) 934,618,481 934,618,481 627,846,467 66.16%

PUBLIC WORKSBoard Office Direct: Public Services 652,712 652,712 161,803 28.35%

Contract AdministrationConstruction Inspection 21,150,319 21,150,319 7,292,810 32.00%

EngineeringStormwater Facilities Engineering 3,565,259 3,565,259 1,112,002 30.96%Wastewater Facilities Engineering 22,204,345 22,204,345 6,549,234 29.26%Privately Financed Improvements Eng. 7,375,470 7,375,470 2,002,053 26.91%Street Improvements Engineering 11,043,716 11,043,716 3,315,086 29.79%Municipal Facilities Engineering 11,795,614 11,795,614 3,319,515 27.91%General Mapping & Survey 4,484,936 4,484,936 1,023,212 22.58%

SanitationSolid Waste Program 68,792,542 72,404,698 32,785,363 44.35%Wastewater/Flood Control 103,369,024 103,369,024 39,624,955 35.37%

Street Lighting 15,877,863 16,988,099 5,783,197 34.47%

Street Services (Street Maintenance) 70,565,169 71,050,943 27,764,793 38.98%

RECREATION AND PARKS 91,876,049 115,755,815 58,680,091 62.62%

TRANSPORTATION 99,787,867 103,023,949 39,534,301 40.14%

ZOO 13,217,501 13,979,739 5,662,040 40.93%



SCHEDULE OF SALARY BASE, ALLOCATED COSTS AND RATES INCLUDING OVERTIME BY DEPARTMENT


DEPARTMENT/Cost Center

Salary Salary BaseBase Including Allocated

(Special) Overtime Overtime Costs Rates

AGINGBalance of Department Special Fund (Title V)

ANIMAL SERVICES

BUILDING & SAFETY

$2,791,9832,003,559

$ 4,877 $ 2,796,860 2,003,559

$ 80,137 160,155

2.87%7.99%

18,452,638 34,445 18,487,083 939,526 5.08%

64,862,127 2,819,629 67,681,756 2,300,041 3.40%



0.00%

0.00%

CITY ATTORNEYCriminalDirect at User’s Site (Proprietary/CRA)Direct in City Space (CDD, Housing Auth.)

35,699,19112,889,0443,838,644

1,74039

35,700,93112,889,0833,838,644

907,708289,869

94,153

2.54%2.25%2.45%

CITY CLERKElectionsSpecial Assessment Section

2,618,1711,102,627

35,453654

2,653,6241,103,281

649,11712,188

24.46%1.10%

COMMUNITY DEVELOPMENTBalance of DepartmentAs Needed Employees

22,689,346940,989

58,328 22,747,674940,989

510,609110,497

2.24%11.74%


920,425274,211

14,8921,868

935,317276,079

18,5395,417

1.98%1.96%

CULTURAL AFFAIRS 4,153,223 2,837 4,156,060 296,833 7.14%

DEPARTMENT ON DISABILITY 992,218 265 992,483 14,679 1.48%

EL PUEBLO 1,134,259 30,710 1,164,969 32,962 2.83%

EMERGENCY MANAGEMENTEmergency Prep. Policy & Public Info. 724,738 5,432 730,170 27,668 3.79%





(Continued)


SalaryBase

(Special)

$21,067,824821,515


$21,067,876821,515

AllocatedCosts

$ 650,721 6,077

3.09%0.74%

FIRECivilianSworn

21,850,122339,580,991

1,135,953106,570,070

22,986,075446,151,061

927,73134,462,512

4.04%7.72%

GENERAL SERVICES Materials Testing Print Shop


LIBRARY

6,360,8792,562,090

14,129,78723,832,360

6,075,268

54,324,795

814,49179,704

20,29724,824

8,372

7,175,3702,641,794

14,150,08423,857,184

6,083,640

141,052209,435

207,570631,636102,479

1.97%7.93%

1.47%2.65%1.68%





(Continued)

SalaryBase

(Special)


AllocatedCosts

PUBLIC WORKSBoard Office Direct: Public Services

Contract Administration Construction Inspection

EngineeringStormwater Facilities Engineering Wastewater Facilities Engineering Privately Financed Improvements Eng. Street Improvements Engineering Municipal Facilities Engineering General Mapping & Survey

SanitationSolid Waste Program Wastewater/Flood Control

Street Lighting

Street Services (Street Maintenance)

RECREATION AND PARKS

TRANSPORTATION

$ 652,712 $ 3,594 $ 656,306 $ 14,399

21,150,319

3,565,25922,204,345

7,375,47011,043,71611,795,6144,484,936

72,404,698103,369,024

551,537

1,69215,76747,07431,293

1,570

5,571,1652,187,755

21,701,856

3,566,95122,220,112

7,422,54411,075,00911,797,1844,484,936

77,975,863105,556,779

548,424

54,592323,295

98,043162,504162,41948,767

4,581,5154,561,442

2.19%

2.53%

1.53%1.45%1.32%1.47%1.38%1.09%

5.88%4.32%



FOR CENTRAL SERVICES AND FRINGE BENEFITS NOTES TO SCHEDULES

FOR THE FISCAL YEAR ENDED JUNE 30,2012

Note 1 - Accounting Policies

The City of Los Angeles (City) prepares its Cost Allocation Plan (CAP) in accordance with Title 2 in the Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 225, “Cost Principles for State, Local, and Indian Tribal Governments” (formerly Office of Management and Budget Circular A-87).

The costs allocated in the Central Services and Fringe Benefits CAPs, except for pension and retirement costs (See Note 3), represent the actual costs incurred in the fiscal year 2011-2012 as reported in the City’s basic accounting system, Financial Management System (FMS), adjusted by the “carryforward” amounts as described below. Costs reported in FMS are accounted for on the cash basis method of accounting. Actual costs incurred during the fiscal year 2011-2012 are then added to “carryforward” amounts, which represent the difference between the costs theoretically recovered in the fiscal year 2011-2012 and the costs entitled to be recovered in the fiscal year 2011-2012. The sum of the actual and carryforward costs (i.e., total allocated costs) is divided by departmental salary bases to calculate overhead rates for each department cost center. Overhead rates are calculated for “direct departments,” which are departments that do not provide services to other City departments, and for “support” departments with direct cost objectives. Overhead rates of support departments are only calculated for the “direct” component of such departments.

Overhead rates presented in the accompanying schedules will be negotiated with the U.S. Department of Housing and Urban Development (HUD), the City’s CAP cognizant agency. Final overhead rates to be applied in the fiscal year 2013-2014 will be developed and approved by HUD based upon this negotiation process. During the fiscal year 2012-2013, HUD contracted with the U.S. Department of Health and Human Services (HHS) to negotiate the overhead rates. HHS will continue to perform the negotiation of the City’s CAP for the fiscal year 2013-2014.

Note 2 - Central Services CAP - Salary Bases and Overhead Rates

The Central Services overhead rates are calculated and presented under two different methods, one utilizes a denominator of total salaries excluding overtime, the other uses a denominator of total salaries including overtime. Total salaries include salaries for all City employees included in each respective cost center. The overhead rates determined using total salaries excluding overtime are utilized for the majority of grant projects. For certain Federal and/or State projects, overhead rates using total salaries including overtime are allowed. Overtime rates were created with overtime costs in the salary base; costs allocated included gas (natural gas utility), petroleum products, water & electricity, and communication lease.

15




Note 3 - Fringe Benefits CAP - Salary Bases and Overhead Rates

The Fringe Benefits overhead rates are calculated and presented under two different methods. One method, which is described in the next paragraph, utilizes three salary bases: the standard Fringe Benefits salary base, the special Fringe Benefits salary base, and the fiscal year 2013-2014 proposed salary base. The other method uses a denominator of the special salary base plus overtime. The overhead rates determined using the standard salary base, special salary base, and the fiscal year 2013-2014 proposed salary base are utilized for a majority of grants projects. For certain Federal and/or State projects, overhead rates using a salary base including overtime are allowed. Overtime rates were created with overtime costs in the salary base; costs allocated included Workers’ Compensation, Medicare, and Unemployment.

The standard Fringe Benefits salary base, which does not include overtime, represents total salaries subject to retirement. Salaries subject to retirement equal total salaries less part-time and temporary employees’ salaries. The special salary base is equal to the standard Fringe Benefits salary base unless the amount of part-time and temporary employees’ salaries exceed 0.5% of the total salary base, in which case the salary base is then adjusted to include salaries for all employees (total salaries), including part-time and temporary employees.

The Fringe Benefits overhead rates computed with salary bases which do not include overtime are determined by calculating the Fringe Benefits rates for each individual cost pool (i.e., retirement, pensions, health insurance, etc.) and aggregating such rates to determine the final Fringe Benefits overhead rate for each department/cost center presented in the accompanying schedule. These individual cost pool rates, except for those relating to Medicare, Workers’ Compensation, and Unemployment, are calculated by dividing the individually allocated cost pool costs by the standard Fringe Benefits salary base. The Medicare, Workers’ Compensation, and Unemployment individual cost pool rates are calculated by dividing the allocated Medicare, Workers’ Compensation, and Unemployment costs by the special salary base.

As in the prior year’s CAP, Fire and Police Pension System costs are based on estimated rather than actual amounts. The Fire and Police Pension System is the City’s pension system for all sworn police, fire and paramedic employees. The City contributes to the Fire and Police Pension System in conformance with the requirements of the City Charter, Articles 17, 18 and 36. This estimate represents the pension costs in the City’s 2013-2014 Budget. Historically, actual expenditures have approximated the budgeted amount. A budget-based estimate is used rather than using actual costs from the two-year fiscal year, because the method of determining the amount of pension contribution to be paid by the City is based on actuarial computations and investment performance results, which may vary dramatically from year to year. Therefore, this cost is not at all well predicted by the actual costs from the earlier period.

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Note 3 - Fringe Benefits CAP - Salary Bases and Overhead Rates (Continued)

To be consistent with the estimate used for the pension costs, the City used an estimate for the Police and Fire sworn salary rate base for the Pension cost pool in the Fringe Benefits rate computation. This salary estimate is based on the salaries in the City’s 2013-2014 Budget.

Note 4 - Cost Centers and Cost Categories

In order to more accurately allocate costs to the proper organizational units, and to accommodate the inclusion of allowable but heretofore unrecovered costs, cost centers and cost categories are constantly reviewed for changes and updates.

There were four major changes in cost centers and cost categories from CAP 35 to CAP 36:

(1) The Office of the City Treasurer was consolidated into the Office of Finance as of July 1, 2011. For CAP 36, the cost centers of the former Office of the City Treasurer remained intact as in prior years and are now reported as part of the Office of Finance.

(2) The CAP rates for the Office of the City Administrative Officer (CAO) are not included.

(3) The cost data and relevant carryforward for the Information Technology Agency are reinstated in CAP 36.

(4) The Flex Benefit was discontinued for the majority of City employees in the fiscal year 2011-2012. This changed the allocation factor for Flex Benefits, Employee Assistance and CERS overhead from Total Equivalent Personnel (TEP) to number of department personnel hours.

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FOR THE FISCAL YEAR ENDED JUNE 30, 2012 (Continued)

Note 5 - Central Services CAP - Cost Allocation Bases

The City developed a Central Services CAP to allocate indirect City overhead costs to City departments. The bases used to allocate these costs are as follows:

COST CATEGORY COST ALLOCATION BASIS

Building Lease

Building Depreciation

Communications Lease

Report of expenditures from the General Services Department’s Property Management account, plus Public Works Financial Management and Personnel Services report of lease payments from special funds by department.

Based on GAAP depreciation expenses net of federal funding and allocated to departments based on square feet occupied. Library, Recreation & Parks, and Zoo allocations have been reduced to 15% of their total depreciation (represents administrative use only).

Information Technology Agency’s report by department of leased services costs.

Computer Assets Depreciation Based on GAAP depreciation expenses net of federal funding by department.

Equipment Expense Under Actual exoenditures from department equipment accounts$5,000

Equipment Depreciation GAAP depreciation expenses net of federal funding by department.

Gas (Utilities Expenditures) Based on gas company billings itemized by building, then allocated by square footage occupied by each department.

General City Purposes Equivalent personnel, all departments, reduced for proprietary departments who do not benefit from annual City audit.

Insurance Occupancy by each department in insured space, and assignment of insured equipment.

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Note 5 - Central Services CAP - Cost Allocation Bases (Continued)


Internal Service Units Fringe Benefits

Petroleum Products

Vehicle Depreciation

Water and Electricity

City Administrative Officer (CAO)

Budget

Employee Relations and Living Wage

General Support

Management & Policy Analysis and Department Liaison

Municipal Facilities

CAO, Internal Admin.

Cost of fringe benefits for indirect cost pools, determined by the Fringe Benefit Plan step-down report.

General Services Department’s record of usage by each department.

GAAP depreciation expenses net of federal funding by department.

Report of General Services payments itemized by building, then allocated by square footage occupied by each department.

CAO report of staff time and effort. 5% is allocated to "Council, City Administration."

Living Wage by CAO timekeeping records, remainder by equivalent personnel, to all departments except Department of Water & Power (DWP) since that department sets its own salaries.

Equivalent personnel.

CAO timekeeping records.

Average of Building Depreciation for single and multiple department uses.

Departmental analysis of administrative support provided to each cost center.

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COST CATEGORY

City Attorney

Civil Liability & Workers’ Compensation

Employee Relations

Land Use

Police Division

City Attorney, Internal Admin.

City Clerk

Council & Public Services

Records Management

COST ALLOCATION BASIS

City Attorney report of staff time and effort for the Civil Liability Section combined with the report of Workers' Compensation claims paid.

Equivalent personnel, excluding the Airports, Harbor and DWP.

City Attorney report of staff time and effort.

Allocated entirely to Police Department.


Allowable portion is allocated to the Council, the Mayor, and to all departments, based on the City Clerk report of staff time and effort. Portion serving departments are allocated based on equivalent personnel. Direct portion is allocated to "Other."

Count of boxes stored in the records center, which represents the amount of space occupied by each department's records.

City Clerk, Internal Admin. Departmental analysis of administrative support provided toeach cost center.

City Ethics Commission

Controller

Ethics Commission staff report of time and effort.

Accounts Payable

Budget and General Accounting

Weighted average of Payment Voucher (PV) Line Items, PV Receivers and Revenue Refund Line Items.

Average of transactions count distributed among all departments.

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Controller (Continued)

Cost Allocation Plan

FMS

Internal Audit

Payroll/Fiscal Systems

Cost pool is allocated evenly among all cost centers.

Count of documents keyed into FMS.

Department record of audit hours.

Equivalent personnel, with no allocation to DWP.

Single Audit Cost pool is allocated in two parts. One portion is allocated byactual grant funds received by departments as stated in the "Schedule of Grant Receipts and Recovered Indirect Costs." The remainder is allocated to other Controller cost centers. The split between these two portions is based on the actual documented work done by the section.

Workers' Compensation Based on a Personnel Department report of Workers' Compensation awards.

Controller, Internal Admin. Departmental analysis of administrative support provided to each cost center.

Emergency Management

City Dept. Emergency Prep. Emergency Management Department report of staff time andCoordination effort.

Emergency Management, Internal Admin.


Employee Relations Board Equivalent personnel, all departments.

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Finance

Citywide Collections Based on dollar amount of referrals as reported by the Office of Finance.

Finance, Internal Admin. Departmental analysis of administrative support provided to each cost center.

General Services (GSD)

Assets Management and Leasing

Building Services

An average of three statistics: Building Depreciation-Single, Building Depreciation-Multiple, and Building Leases.

Based on actual costs incurred, split out by building and Benefiting Department.

Construction Projects Report of maintenance project costs from General Services Construction Division.

Fleet Services General Services Vehicle Management System records of service provided.

Mail and Messenger Services

Report of postage costs maintained by General Services.

Parking Services

Supply Services

Square footage of space occupancy in City buildings having nearby City parking lots.

Proportional cost reports from General Services combining purchasing order amounts and warehousing costs.

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FOR THE FISCAL YEAR ENDED JUNE 30, 2012 (Continued)



General Services (GSD)(Continued)

General Services, Internal Departmental analysis of administrative support provided to eachAdmin. cost center.

Information Technology Agency (ITA)

IT Services

Communications Services

Telecommunications

ITA, Internal Admin.

Work order report of costs by departments.

ITA records of staff time and effort, computer connections, and radio usage.

ITA records of staff time and effort.


Mayor, Internal Admin. Departmental analysis of administrative support provided to each cost center.

Personnel

Support Services Equivalent personnel, all departments with weights assigned tocivilian and sworn, and allocations to DWP reduced to acknowledge that DWP provides certain support services inhouse.

Workers’ Comp. & Safety Report of Workers' Compensation awards provided by PersonnelDepartment with weights assigned to civilian and sworn.

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Personnel (Continued)

Personnel, Internal Admin. Departmental analysis of administrative support provided to eachcost center.

Public Works, Board Office

Commission & Department Equivalent Personnel allocated to Public Works Bureaus and Management offices only.

Financial Management and Equivalent Personnel allocated to Public Works Bureaus and Personnel Services offices only.

Public Works, Board Board Office analysis of administrative support provided to eachOffice, Internal Admin. cost center.

Public Works, Engineering

General Engineering Bureau of Engineering report of staff time and work effort.

Public Works, Engineering, Bureau analysis of administrative support provided to each cost Internal Admin. center.

Pensions, Police and Fire, Overhead

Full-time equivalent personnel for Fire Sworn and Police Sworn. This cost pool contains only the overhead costs allocated to Pensions. Pension costs are in the Fringe Benefits.

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City Employees Retirement System (CERS) Overhead

Retirement

Pensions

Full-time equivalent personnel excluding Police and Fire, Sworn, Airports, Harbor, and DWP. This cost pool contains only the overhead costs allocated to CERS. Retirement costs are in Fringe Benefits.

"Salaries Subject to Retirement" as included in the Budget Estimate for all civilian employees.

"Salaries Subject to Pensions" as included in the Budget Estimate for sworn Police and Fire personnel.

Flex Benefit Program Allocated to departments based on a payroll system report of cash in lieu payment recipients by department.

Employee Assistance Allocated to Police and Fire Sworn cost centers based on amountsprovided by Personnel. Allocated to all civilian employees based on total full time equivalent personnel.

Ordinance Life Insurance Allocated to departments based on the amount of premiums paid.

Medicare

Social Security

Part Time, Seasonal Temporary (PST)

Union Sponsored Benefits

Allocated to departments based on payroll records of Medicare payments by department.

Allocated to departments based on payroll records of Social Security payments by department. Direct departments are excluded from the allocation, except Aging Title V, CDD As Needed, Fire and Police Sworn Employees.

Allocated to departments based on payroll records of PST payments by department. Direct departments are excluded from the allocation, except Aging Title V, CDD As Needed, Fire and Police Sworn Employees.

Allocated to departments based on Personnel Department records of payments by MOU groups. Allocations to cost centers in multiple cost center departments are based on bargaining unit membership.

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Unused Sick/Vacation

Unemployment Insurance

Workers’ Compensation

Hiring Hall Fringe Benefits

Allocated to departments based on payroll records of payments by department.

Allocation is based on Personnel Department records of claim payments.

Personnel Department database report of claim payments per department. Allocations to cost centers in multiple cost center departments are based on equivalent personnel in office-work type cost centers. For departments with field workers, departments identify the cost center involved.

Allocated to departments based on expenditures in departmental Hiring Hall Fringe Benefits Accounts. Direct departments are excluded from the allocation.

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Documents

MELBA W SIMPSON, CPA - Los Angelesclkrep.lacity.org/onlinedocs/2014/14-0992_misc_a_7-24... · 2015-06-22 · LOS ANCELLS, O.A 90071 (213; 736-6664 1 FI .[-PI IONE QI3) 736-6692 FAX