Minutes from the Funding Reforms Work Group - Meeting #3

The last funding work group meeting focused on how to establish an electronic platform for funding.  The general consensus was that it was too time consuming and expensive to wait for the Controller and the Department to build out an interface that works with Neighborhood Councils.  Existing off the shelf funding programs, suchs as Quicken and Quickbooks, could be utilized immediately by all the Neighborhood Councils to deal with many funding matters.

The funding work group then ended with a quick run through and comments on all eight of the funding motion items.

The Department hopes to continue meeting with an ongoing funding work group and will look into dates in November for the next meeting.

The information from the funding work group meetings will be put together and presented this Saturday, October 22, 2011, at the Hollywood Consituent Center, 6501 Fountain Ave., Los Angeles 90068 for any final comments.  At that point, we will compile the report for Neighborhood Council comments and concerns.

Thanks for all of your feedback thus far.  We look forward to your continued input!

Neighborhood Council Funding Program

Work Group Meeting

Monday, October 17, 2011

Agenda and Minutes

Goals:

1. Gain a better understanding of the NC Funding Program

2. Formalize regular discussions and NC recommendations

3. Address Controller audit and City Council motions

4. Establish process for future discussions

Purpose To develop processes and policies to create a more efficient and transparent funding program.

I.      Welcome and Introductions

·       Randy Waller – Westlake North/South NC

·       Sharon Brewer – Encino NC

·       Frank Wada – Lincoln Heights NC

·       Ron Ostrow – Greater Griffith Park NC

·       Mike O’Gara – Sun Valley Area NC

·       Mary Garcia – Mid-Town North Hollywood NC

·       Tony Wilkinson - Panorama NC

·       Gustavo Moreno – Greater Echo Park Elysian NC

·       Esther Glaze - CANNDUNC

·       Marisol Espinoza – Controller’s Office

·       Daniel Gatica – Board of Neighborhood Commissioners

·       Amelia Herrera-Robles – Department of Neighborhood Empowerment

·       Rita Moreno – Department of Neighborhood Empowerment

·       Grayce Liu – Department of Neighborhood Empowerment

·       Recap by Rita of the first two funding meetings and what the funding motion is about; reviewed the notes from the first two meetings

·       Wanted to take the time today to also talk about putting together an ongoing funding work group that would resolve the funding problems that were discussed before

o   Concern that this group isn’t ready to propose problems and recommendations; there needs to be more meetings

o   Need to discuss financial control issues as well and need to standardized the system of funding records and record keeping, such as using Quicken, instead of simple templates

o   Department should state that this is a terrible motion and should not be used

§  Department needs to be removed from funding bookkeeping entirely; gave example that a DW can’t be paid because not enough funds in account due to error by the Department in charging this NC for business cards for another NC

§  Treasurers should be bonded

§  Check writing should be taken away from the Department

o   Challenge of just saying no is that CM Krekorian is an action oriented person who wants to pass legislation on the NC system; therefore, cannot be silent and must propose something

II.    Items for Discussion

·       Short-term

Ÿ  Controller audit

Ÿ  City Council motions

·       Long-term 

·  List of Problems & Solutions  

III.  Review

·       October 17th Discussion Topics:

·       PROPOSED: Development of electronic system for funding program

1.     Integrate P-card and FMS data for real-time tracking of expenditures and balance

a.     If can already access P-Card online from the bank, then this has already been accomplished

2.     Accept electronic submission and approval of budgets, demand warrants and reconciliation reports

a.     Better to buy off the shelf product rather than develop a custom system for thousands of dollars

b.     Whatever program is used, it needs a component of project management to track the amount being paid out for a specific project

                                                                        i.     This is simple accounts payable/encumbrance, e.g. “bylaws payable” to track how much has been spent

                                                                        ii.     This can be tracked by the existing electronic budget

3.     Provide interface to track and create financial statements and treasurer reports for board

a.     Buy off the shelf product

·  Rita shared the existing funding flow chart

1.     Comment that it has to go – too complicated  

a.     If need to shoehorn a system that doesn’t work, then NC’s will be paralyzed by trying to abide by the system

b.     Must institute GAP at the lowest level

                                                                  i.     Department response is that a lot of NC’s don’t have the capacity to even do any the basic level because skill levels are so different

                                                                  ii.     Response is that if you don’t understand it, then they should not be permitted to spend any money

2.     Comment that don’t want the Department to do data entry – increase mistakes – allow NC’s to do their own data entry

a.     Department cannot be completely removed from the process because have to check for veracity; system needs to support the Department in handling less pieces of paper and to track them

3.     Comment that NC’s should not try and conform to the Controllers FMS system, but just use a basic accounting system

a.     Controller rep stated that Controller will work with the Department to try and interface in the future even if they can’t do it now – did meet with the Department and the ITA and the Department is going to see what it can do with ITA

b.     Need to focus immediately on the management problem right now with off the shelf product

4.     Comment that will need a basic upload system and what their transaction id is and then Department can pull up the off the shelf system and then go to the bucket of uploaded documents to make sure it is a justifiable expense

·  Can’t NC’s go to outside folks to help with funding - Yes

1.     How many NC’s use outside funding help?

2.     How much does it cost?

3.     Department will look into answering the above questions

·  Comment that the only 2 options is: 1) buy off the shelf system or 2) hire an expensive consultant to develop something, which is complicated

1.     Find a system that pushes the work downwards as much as possible

2.     Accept electronic submissions – tell them what to do

3.     With off the shelf system – Department should put together the accounts and templates in the off the shelf system, such as Quickbooks, and provide it to each NC as opposed to allow the NC to create a bunch of different accounts themselves – hand the NC’s a disc with all these documents

4.     Harder for us to adapt to Controller as opposed rather than reverse engineering – IRS can work with the Quicken document of any tax payer

·  Question – thought the Department would be demonstrating a new electronic funding system – stated that is not the case – only system is the flow chart and manual except for an access database system

·  Question – wanted to go through the entire motion and address each item one by one

1.     Clarification that the only item left to provide recommendations is what is on the agenda

·  Question that if Quickbooks or Quicken is used, would a stakeholder who wanted to look at the information have to have the software, too – NO

·  Comment that this system can’t be done without additional Department staffing to work with Board members who need the help to be trained in

1.     Rita mentioned that the Department has always been understaffed to deal with funding and that the funding methods used are archaic; the Department is now trying to clean it up and take it to where it needs to be though – it takes time so even though the off the shelf seems like a magic bullet, it will still take time to implement

2.     Comment that Rita’s statement is exactly why the Department needs to be taken out from data entry and handling pieces of paperwork because they’ve been understaffed and City Council has not been willing to provide more resources – Department needs to throw up hands and state that enough is enough and allow the NC’s to do more of this work

a.     Off the shelf system is not a magic bullet, there is still a lot of things to work on, but the motion if passed as it is, the Department will not be able to support it

·  Question to Controller as to what they won’t do – Controller rep stated that they haven’t said they couldn’t do anything

1.     Comments that they said no cash, no direct access

2.     Comment that no human interface between the Department and the Controller is even working and gave example of a NPG that almost didn’t get paid, but 2 staff from each department couldn’t even solve it so could not support an electronic platform if humans can’t even handle

3.     Comment that Board members have sympathy for the Department staff because they know they are understaffed

·  Controller should loan some analyst help to the Department to handle funding so Controller would feel comfortable with the level of help

1.     Forget the interface – it will take too long

2.     Clarification that the Department has to verify paperwork and the Controller can only cut the check

·  Petty cash – Controller stated that NC’s don’t have to get rid of petty cash, but the way it was used before had no checks and balances so Department can reinstate if a proper petty cash system was put together but cannot handle that right now due to staffing

·  Comment that one of the work group members should be together a flow chart

• Questions to Consider

1.     Only one portal document submittals

a.     Department gets funding paperwork fax, email, hand carry or mail. 

b.     Comment that the Department should just limit the delivery method

c.     Some NC’s aren’t ready to have limited delivery methods

d.     Should not allow these NC’s to slow down the development of the system and should do a regional system of funding help that the NC who are not capable of doing funding and charge them for that system

                                                                        i.     Cannot be stuck with “not prepare to” excuse – just mandate a system and tell those who can’t to hire someone

                                                                        ii.     Grayce mentioned that another motion regarding regional governance/administration comes into play if using regional help

                                                                         iii.     Comment that any regional administration regarding funding should be temporary since it should only be until the Treasurer can be trained to do it and won’t need temp staff anymore 

2.     Need for electronic document (e.g. scanning) – when we get the reconciliations, receipts are sometimes all over the place instead of being taped to a piece of paper

a.     Suggestion that people don’t have equipment or knowledge of how to do this

b.     Others state to buy the equipment with NC funds and get training

3.     Retaining original documents

2.        Items from previous two meetings – jumped to end item because of time
3.        On-going meetings – jumped to end item because of time
• Continue discussion on list of problems and solutions

• Work group members wanted to go quickly through the funding motion items:

• Item 1 – Comment that the motion is poorly worded

                                                    i.     B and D is about item # 8 and should be combined

                                                   ii.     A and C is what the Department should be clarifying it

“INSTRUCT the Department of Neighborhood Empowerment, with assistance from the Controller to report back in 90 days on the status of the Neighborhood Funding Program and DONE’s efforts to (a) clarify the encumbrance process; and (b) standardize finanicial templates, forms and reporting; and (c) streamline approvals and management of the program; and (d) increase accountability.”

• Item 2 – Department has a budget template that was developed by NC leaders, but have received comments that it doesn’t work

                                                    i.     Need to use the off the shelf budget template otherwise NC’s will tinker

                                                   ii.     Also hard to know what is 10% of the budget line item and when NC’s are outside of that 

“ADOPT a policy that requires all Neighborhood Councils to utilize the budget and reconciliation templates provided by the Department of Neighborhood Empowerment and adhere to all budget and reconciliation deadlines.”

• Item 3 – this would be solved with an off the shelf program

“ADOPT a policy that requires all Neighborhood Councils to conform to the accounting system prescribed by the Department of Neighborhood Empowerment.”

• Item 4 – Department can do most of this already

                                                    i.     Problem is when the Department has the items, but lost it

                                                   ii.     Should not automatically freeze funds if lose Treasurer because can be sudden and not the fault of the NC’s

                                                 iii.     Training requirements was snuck in and should be taken out

                                                 iv.     Need to define dysfunctional

“ADOPT a policy that empowers the General Manager and Board of Neighborhood Commissioners to freeze funds if a Neighborhood Council does not comply with Council policy and Department of Neighborhood Empowerment mandates, or if any of the following circumstances exist: (a) the Neighborhood Council has failed to submit a budget in a timely manner; (b) an audit of the Neighborhood Council is past due; (c) the Neighborhood Council has made prohibited or inappropriate purchases; (d) the Neighborhood Council is not in compliance with training requirements; (e) the Neighborhood Council Board does not have a Treasurer; or (f) the Neighborhood is deemed dysfunctional.” 

• Item 5 – there is 100% objection to grants

                                                    i.     City Council needs to be reminded that charter states there is a 2 year funding

“CONTINUE a policy to prohibit the rollover of unemcumbered funds and DIRECT the Department of Neighborhood Empowerment, with assistance from the City Administrative Officer, Chief Legislative Analyst, and City Attorney, to report back on alternative funding models, including a grant based funding system.”

• Item 6 – will not get all the departments together this way

                                                    i.     Need to be able to roll over for more than one year

                                                   ii.     This kind of effort on this kind of item is nonsense

                                                 iii.     Rita referenced 2^nd meeting notes, page 3 for review

                                                 iv.     Most NC funds are not about encumbrances and too much detail

                                                  v.     Practical use is that NC and Department don’t have the same numbers for budgets

                                                 vi.     Don’t think NC Board members should be getting involved in capital improvements when there are hired people in the City who should be making these decisions

“DIRECT the Department of Neighborhood Empowerment, with assistance from the City Administrative Officer, Chief Legislative Analyst, City Attorney, Controller, and Board of Neighborhood Commissioners, to report back in 90 days with a mechanism for Neighborhood Councils to request rollover funds on a projects by project basis and as deemed appropriate by the Board of Neighborhood Commissioners or a committee comprised of representatives from the CLA, CAO, and DONE that (a) defines the types of projects that will qualify for rollover fundsl and (v) details the application and approval process; and (c) establishes deadlines to complete an approved project.”

• Item 7 – NC’s do not have 90 days to provide this information

                                                    i.     Equipment is $1000 or more and usable life of 3 years

                                                   ii.     All computer or electronic equipment must be tagged, too

                                                 iii.     Last request by the Department was 2009

                                                 iv.     There is a process to return equipment through General Services Department

“DIRECT the Department of Neighborhood Empowerment, with assistance from the City Administrative Officer, Chief Legislative Analyst, City Attorney, and Controller, to report back in 90 days on equipment purchases made by the Neighborhood Councils in fiscal year 2010-11 for city and proprietary departments and guidelines to maximize the benefit to the department and the Neighborhood Council.”

 

• Item 8 – see above Section III

“DIRECT the Department of Neighborhood Empowerment, with assistance from the City Administrative Officer, Chief Legislative Analyst, and the Information Technology Agency, to report back in 180 days on the feasibility of developing an electronic system for the Neighborhood Council Funding program that will (a) integrate purchase card and FMIS data for real time tracking of expenditures and fund balances; (b) accept electronic submission and approval of budgets, demand warrants and reconciliations; and (c) provide an interface to track and create financial statement and treasurer reports for the board.”

• Item 9 – Department would like to know how best to reach Treasurers

                                                    i.     Outreach – comments that this is not about true outreach, but just informing NC’s of final regulations

                                                   ii.     Need to get an email and not through the eblasts

                                                 iii.     Would like to see any regulations to be proposed as drafts and then give 90 days comment period to NC’s

                                                 iv.     Department will post the report back on November 1^st for comments for 2 weeks before final goes to the Council

“DIRECT the Department of Neighborhood Empowerment, upon adoption of these policies, to immediately notify all Neighborhood Councils of the changes to the policies and procedures that govern the Neighborhood Council Funding Program, and to report back in 90 days on their outreach efforts.”

Final Comments

• Comment that asking an agency to self identify and self correct is not fair to the Department – there is a conflict of interest
• Comment that the Department is coming to the NC’s, but will be ordering the comments – should be the NC’s doing the review
• Comment that this exercise came from attempted consolidation of the Department with CDD, and Department had to come up with a workable model
• Comment that some people are fighting the old Department, but this current Department is open in a way that has not happened before even with holding these meetings, the General Manager is reaching out and stating that we are working together; not us (NC’s) versus the Department; want to thank the GM for these meetings and work constructively with the Department
• Comment that NC’s should be working on focusing on getting the Department more staff
• Request for sign-in sheets and minutes – Rita will get them out to everyone who attended all the work groups
• Asking for next meeting date for funding work group – not 1^st M, T, W because folks have meetings – want to meet in a few weeks – Department will work it out and get dates out to everyone