Table of Contents


Senior Programs

Reason for Review

Penal Code Section 933.6 gives the Grand Jury authority to “...examine the books and records of any non-profit corporation established by or operated on behalf of a public entity.”  Based on information presented to the Grand Jury indicating there were irregularities within the “Senior Meals” program, the Grand Jury considered the potential benefits of reviewing the “Senior Meals” program and other entities receiving relatively small sums of money from or through the County of Amador.

Background

Consideration was given to reviewing entities receiving relatively small amounts of money from or through the County of Amador. The Grand Jury elected to review the following three entities:

Senior programs, including meals, legal services, transportation for medical services, and other information and assistance services for those 60 and older have been provided in Amador County by SERVICES, AREA 12, Mother Lode Seniors, Inc., and now by Common Ground Senior Services (COMMON GROUND). 

The Grand Jury’s review of the “Meals” program began with a letter to CITIZENS, SERVICES, and to AREA 12 requesting certain documents and information for the period July 1997 through June 2000.  The documents were received from AREA 12 in a timely manner.  Interviews were held with the Executive Director of AREA 12, and with individuals who work or have worked for AREA 12 and/or with the “Meals” program during the time it was operated by AREA 12 (July 1998 through October 2000). 

Both CITIZENS and SERVICES responded to the Grand Jury with letters stating they were “private, non-profit” entities not subject to review by the Grand Jury.  A legal opinion was obtained from Amador County Counsel indicating the Grand Jury had at least limited authority to review both CITIZENS and SERVICES based on the fact both have received funds from the County of Amador (see Appendix C for a copy of the opinion). 

A second letter to CITIZENS and to SERVICES referencing the Penal Code section giving the Grand Jury authority to investigate them was again met with written responses that they were not subject to review by the Grand Jury and that they were unwilling to cooperate with the Grand Jury. 

The Grand Jury then decided to seek an additional legal opinion from the Amador County District Attorney.  The District Attorney formulated an opinion, with the assistance of the California Attorney General’s Office, indicating the Grand Jury had the right to review both CITIZENS and SER

VICES (see Appendix C for a copy of the opinion).  The Grand Jury elected to proceed with a review of CITIZENS and SERVICES without their cooperation, but the Grand Jury found it difficult to keep straight the entities involved with the Senior Center, to determine who they are, the purposes they serve, and what functions they are playing in senior programs in Amador County.

Methodology

The Grand Jury obtained records and information from the California Department of Justice/Office of the Attorney General (Department of Charitable Trusts), the California Secretary of State, the County of Amador (records and minutes), the Amador County Director of General Services, the California Franchise Tax Board, the Internal Revenue Service, AREA 12, the Senior Center, as well as from individuals willing to meet with the Grand Jury who have and/or are working within the senior programs in Amador County. 

Persons interviewed:

Documents examined:

Facts

1.       CITIZENS received $30,000 from the County of Amador during the period July 1997 through June 2000, inclusive.

2.       SERVICES received $10,000 in 1997-1998 and $10,000 in 1998-1999 from the County of Amador, but did not receive funds during 1999-2000.  SERVICES requested $10,000 during 2000-2001 with a portion of that paid directly to others providing senior programs in Amador County.

3.       Twice, CITIZENS and SERVICES denied the Grand Jury’s request to review their operations.

4.       Under a contract dated August 14, 1984, Amador County gave $250,000 to CITIZENS to help construct the Senior Center.  Under the contract CITIZENS has certain obligations including a) to provide staff and funds to operate as a senior center; b) to annually prepare a program for the operation of the Senior Center which shall be reviewed by the County’s Board of Supervisors; c) to carry public liability insurance in the amount of $3 million and to name the County of Amador as an insured, and; d) to comply with the requirements for a program for senior citizens as set forth in Government Code 26227.  Further, under the contract the County has the right to take over CITIZENS’ interest in the Senior Center in the event CITIZENS breaches any of the terms or conditions of the contract.

5.       The County of Amador could not produce any evidence (specifically regarding programs or evidence of liability insurance coverage) that CITIZENS has fulfilled its obligations under the contract dated August 14, 1984.

6.       Interviews with the individuals who work, or have worked, in the seniors program indicated CITIZENS, SERVICES, AREA 12, and the senior services providers have a difficult time working together.

7.       CITIZENS and SERVICES both list raising money for the Senior Center as one of their purposes.

8.       The RRF-1 for SERVICES dated September 7, 2000 notes a fine in the amount of $190 had been paid to the California Franchise Tax Board during the reporting period for filing tax returns late.

9.       CITIZENS and SERVICES both use the name Amador Senior Center or The Senior Center.

10.   Neither Amador Senior Center or The Senior Center is a fictitious firm name filed with the Amador County Recorder’s Office.

11.   Tax returns for SERVICES disclose it is related through common membership, governing bodies, trustees, officers, etc., to CITIZENS.  However, the tax return for CITIZENS states it is not similarly related to SERVICES.

12.   The current provider of Senior programs, including meals, legal services, transportation for medical service and seniors information in Amador County is COMMON GROUND.

13.   The Settlement Agreement between AREA 12 and SERVICES dated May 8, 2000 notes proper documentation was not available from SERVICES for $130,960 in expenditures.

14.   Under the settlement agreement with AREA 12, SERVICES agreed not to apply to be the provider of senior services through AREA 12 for five years (through May 1, 2005). After that time, if SERVICES is selected to provide services it will be considered a high-risk provider for the initial term of the contract.

15.   Audits are performed on the senior service providers to verify compliance with conditions set for the receipt and use of State and/or Federal funds.

16.   Each County member of the Joint Powers Agreement (AREA 12) is responsible for any audit exceptions identified within its county.

17.   The furniture, fixtures and equipment at the Senior Center are owned by multiple entities, and a portion is subject to Federal or State Government restrictions, regulations and control and require proper accounting for compliance.

18.   The JPA (AREA 12) selects the senior service providers for the County.

19.   AREA 12’s purpose is to plan and administer home and community-based, long-term care service systems within Alpine, Amador, Calaveras, Tuolumne and Mariposa Counties, and its Board of Directors is made up of one Supervisor from each of the counties.

20.   The senior service provider purchases fuel for the delivery of senior meals from the County of Amador at the County’s cost.

21.   The Amador County Office of General Services monitors the use of fuel by the senior service provider.

22.   During the time Area 12 was acting as the provider for Amador County, there were abuses of the fuel privileges at the Amador County Corporate Yard.

23.   The County has no procedure in place to assure the funds provided for senior services are used for their intended purpose.

24.   Amador County elected or appointed officials and/or staff serve, or have served, on the Board of Directors of one or more of the non-profit entities reviewed in this report .

Findings

1.       The County of Amador has not enforced the terms and conditions of the contract with CITIZENS dated August 14, 1984.

2.       It is unclear what roles CITIZENS and SERVICES play in the providing of services to seniors.

3.       CITIZENS and SERVICES both representing themselves as The Senior Center creates confusion as to who is receiving the County’s funds, and serves no apparent purpose relative to the operation of the Senior Center.

4.       It would be more efficient and easier to account for County funds if the approved senior service provider is funded directly rather than through third-party intermediaries, such as CITIZENS or SERVICES.

5.       The lack of a mechanism to ensure that County funds provided to private entities are used on behalf of the County means that there is no accountability to the taxpayers or County administration.

6.       If the Amador County provider of senior programs is subject to audit exception(s), the County of Amador is responsible to the State and/or the Federal Government for the amount of said exception(s).

7.       Furniture, fixtures and equipment owned by multiple entities and/or subject to government restrictions at the Senior Center causes Amador County to be at risk if the items are not properly used and accounted for.

8.       The County has one fifth of the control over or within AREA 12 yet assumes all the risk associated with the Amador County service provider selected by AREA 12 if that provider fails to meet and follow government regulations.

9.       There is a perception of or potential for conflict of interest when elected or appointed County officials serve on the Boards of private entities receiving County funds.

Recommendations

1.       Amador County should enforce all of the terms and conditions of the contract dated August 14, 1984 with CITIZENS including CITIZENS’ obligation to provide the staff and funds to operate the Senior Center.

2.       If CITIZENS does not immediately cure the defaults under the contract dated August 14, 1984, the County should pursue its remedies under the contract, including taking possession of the Senior Center, and either operating it or contracting with a single entity for its operation.

3.       The County should fund the provider of senior services directly, not through CITIZENS, SERVICES, or any other intermediary.

4.       Funds received from the County by any entity should be disbursed with the stipulation that the funds will be used on behalf of the County and that the County, including the Grand Jury, has the right to inspect the books and operation of the entity receiving the funds.

5.       The Amendment to the JPA agreement making the counties financially responsible for senior service providers selected by AREA 12 should be reviewed and the County of Amador should attempt to get the amendment rescinded.

6.       The County should direct County Counsel to determine if it is possible to withdraw from AREA 12 and to fulfill the County’s senior needs in other ways.

7.       The Office of General Services should continue to monitor fuel used by the senior program provider.

Response Required 

As required in Section 933.05 of the Penal Code, the Amador County Board of Supervisors must respond to the findings and recommendations in the manner indicated on page one of this report.