Office of Linn County Auditor

Office of Linn County Auditor FY2017 Budget Review

Joel D. Miller Linn County Auditor January 20, 2016

of 14 VISION

Every person engaged in local government.

MISSION

To provide exceptional customer service in a cost effective manner, to ensure fairness in the elections process, to maintain accurate financial records, real estate data, and Board minutes.

EXECUTIVE SUMMARY

During FY2016, the Office of Linn County Auditor finally reached 100% of authorized staffing on 1/11/2016. The lack of staffing, inefficiency of Aumentum, and inability of Aumentum to provide reports in a timely manner to meet the statutory deadlines resulted in unforeseen costs for outside contractors and overtime for employees. There is no fact based reason to expect the overtime costs associated with Aumentum will decrease in the next fiscal year.

The general election in November of 2016 is expected to engage the largest number of voters who have ever voted in Linn County, as well as, the highest percentage of early (absentee) voters. This combination of early voters and Election Day voters is expected to drive our costs for this election to about $700K, which may have a negative effect on the County’s overall budget.

ORGANIZATION

Personnel – Barring any unforeseen circumstances, the number of full-time equivalent (FTE) positions should remain the same for the Office. We have no reason to believe the work requirements in Real Estate will be reduced by Aumentum within the next couple of years. In fact, Aumentum actually increased the workload in Real Estate due to the way it processes real estate transactions. Several Board members have witnessed first-hand the complexity of processing

of 14 transactions and no progress on simplifying transactions is likely to occur until or unless the overall system becomes stable.

In an effort to solidify the body of knowledge and the staffing required to administer multiple elections during the year, we split one FTE position into two permanent half-time positions. The split helped us avoid hiring as many temporary employees during elections by increasing the hours of the half-time positions as needed, as well as, expanded voter outreach.

According to Finance & Budget, the number of FTEs working in the Office now is less than the number of actual FTEs in FY2005. Here’s the breakdown for each year since FY2005:

FY2005 – 17.28 actual

FY2006 – 17.00 actual

FY2007 – 18.70 actual

FY2008 – 18.40 actual

FY2009 – 18.80 actual

FY2010 – 17.80 actual

FY2011 – 17.50 actual

FY2012 – 17.50 actual

FY2013 – 16.00 actual

FY2014 – 16.00 actual

FY2015 – 15.00 actual; 17 authorized

FY2016 – 17.00 actual on 1/11/2016; 17 authorized;

FY2017 – 17 authorized

of 14 BUDGET TRENDS

Fiscal Year Budget Appropriation Expenditures Unspent

2008 $1.651M $1.739M $1.698M $41K 2009 $1.934M $2.262M $2.253 $9K 2010 $2.016M $2.089M $2.016M $73K 2011 $2.105M $2.245M $2.166M $79K 2012 $2.160M $2.426M $2.306M $120K 2013 $2.217M $2.711M $2.698M $13K 2014 $2.386M $2.231M $2.159M $72K 2015 $2.112M $2.429M $2.407M $22K 2016 $2.274M $2.274M $1.075M* *As of 12/31/2015

BUDGET ASSUMPTIONS

Background - The Office of Auditor – Organization 02 - receives funds from the General Fund (101) and the General Supplemental Fund (102). Both funds are derived from property taxes. Organization 02 contains five functional divisions. Administrative Management Services (90100) and Real Estate Services (90103) are funded by Fund 101. Elections Administration (80000), General Elections (80001), and Local Elections (80100) are funded by Fund 102.

One general election is scheduled to occur in the FY17.

Assumptions noted if budget request noticeably different from preceding fiscal year.

Revenue – The revenue generated by the Office of Auditor is negligible due to cigarette, beer, and liquor permits declining in the unincorporated areas of the County.

Special elections are not included in appropriations or revenues unless officially confirmed during the budget preparation period. By law, Elections Services cannot recover 100% of the costs for administering school and city elections and the revenues from those elections never outweigh the costs.

of 14 Salary & Benefits – Objects 1001-1133 and 110-113B are taken directly from the P91 dated 1/8/2016. In FY16, the driver of Salary Part-Time (1004) has been elections and one FTE split into two part-time positions. The primary drivers of Overtime Bargaining Unit (1023) have been the productivity losses due to Aumentum and the lack of a fully trained FTE. Assumption: In FY17, we will still have overtime in Payroll due to the nature of payrolls, special projects, and the maintenance of two payroll systems (Novatime v paper).

Assumptions: In Real Estate, we will continue to incur overtime if the Deputy is consumed by Aumentum and statutory deadlines because she will be forced to divert resources to the statutory deadlines, thereby backing up daily transfer processing.

The amount of overtime in Payroll and Real Estate does not justify the hiring of additional personnel as the request-to-hire point in Payroll is about $58K of overtime and the request-to- hire point in Real Estate is about $45K in overtime.

Parts (241) - Unused line item

Fuels (250) – Gasoline for the county owned van used by Elections, as well as, gasoline used in the delivery van rented to deliver/pickup voting machines and gasoline used in rental cars used to support elections.

Stationery, Forms, Supplies (260) – Envelopes, letterhead, check stock, business cards, copier paper, and other office supplies used in every division

Magazines, Periodicals, Books (261) – Books are purchased to support the continuing education efforts of employees. Newspaper subscriptions are purchased so employees can remove deceased voters from the voter registration system, as well as, confirm that the legal notices submitted for publication are published as required. Newspapers purchased: Des Moines Register, Corridor Business Journal, Linn-Newsletter, Robins newspaper, Marion Times, and Mount Vernon-Lisbon Sun.

Election Supplies (264) – Used primarily in Local and General Elections for the purchase of supplies directly related to those elections. Used by Elections Administration to purchase supplies that cannot be charged to any election.

of 14 Voter Registration Supplies (264A) – Used to pay for voter registration forms, election-day registration forms, and envelopes. The affidavit envelope was changed prior to the general election, which decreased the requirement for one envelope used to mail out absentee ballots.

EAID Supplies (264B) – Unused line item

Copier Supplies (269) – Used primarily to pay for leased copiers and supplies not covered by warranties. Accounting Services has one multi-function B&W copier and two color multi-function copiers are used by all divisions. A low capacity multi-function copier is located at the Election Depot.

Assumption: One high capacity printer will be purchased to replace an existing almost worn out HP9000 printer.

Minor Equipment, Hand Tools (290) – Used to pay for the acquisition of PCs, printers, scanners, and voting machines not on IT’s replacement schedule.

Official Publications, Legal Notices (400) – Used to pay for newspaper notices and other announcements related to specific elections.

Typing, Printing, Binding (402) – Used to pay for non-ballot printing related to NCOA (National Change of Address) and NVRA (National Voting Rights Act) compliance activities, which are more costly during general elections due to more voter activity and more party/candidate activity. In addition, we plan to be more proactive in notifying voters of absentee voting in our office and at satellite polling places in order to reduce the cost of USPS postage required for two-way mailings.

Photocopying, Duplicating Services (403) – Unused line item

Printing of Ballots (405) – Used to pay for ballots related to specific elections.

Contract Carriers (410) – Unused line item

Contract Carriers – Voting Machines (410C) – Costs associated with renting trucks to deliver voting machines before elections and retrieve voting machines after elections.

of 14 Postage, Mailing (412) – Used primarily by Local and General Elections to pay the USPS for mail not processed by the County Mail Room, e.g., business reply postage used to return absentee ballots to Elections and postage used on any additional notices sent to voters by direct mail firms. Also used to pay for returned postage on tax bills mailed out by the Treasurer and for remailing the tax bills after the addresses have been updated. And finally, every odd year we cancel voter registrations, e.g., in January 2015, we mailed out over 9,000 voter registration cancellations. Assumption: In January 2017, we will mail out voter registration cancellations.

Employee Mileage Expense - Non-Educational (413) – Employees claim mileage for official business conducted using their privately owned vehicles (POV). Assumption: On 1/20/2015, the new Elections van arrived and employees have been encouraged to use it versus their POVs, which should continue to reduce employee mileage claims.

Election Official Mileage (413B) – Used to reimburse precinct election officials (PEO) for round trip mileage to training classes and polling places.

Phone (414) – Used to reimburse employees for using personal cell phones for official business. Also used to pay for cellular service for County owned cell phones, Wi-Fi hotspots, and pay-per-use phones used to support elections and precinct election officials. Assumptions: The Auditor receives full voice & data reimbursement, and one deputy and one assistant receive partial reimbursements. One deputy is assigned a County owned cell phone. The Auditor uses a County owned tablet. Other costs are driven by the number of elections. Another deputy will begin to receive reimbursements in FY2017.

Telephone Repair, Charges (414C) – Unused line item

Education, Training – Registration, Mileage, Per Diem (422) – Used to pay for the costs of web based and Iowa based continuing education and training courses, conferences, and seminars. Assumption: Employees holding certifications are expected to keep certifications current/active. Certifications are required in some positions. Some employees are expected to participate in state based organizations, e.g., ISAC, ISACA, SEAT, IIA (Institute of Internal Auditors), and ICIT.

of 14 One deputy has been designated by The Election Center as a Certified Elections Registration Administrator (CERA) and two employees are pursuing CERA certifications. Three employees have been designated by the State of Iowa as SEAT (State Elections Administrator Trained) certified. One employee is pursuing a Certified Government Finance Manager (CGFM) designation and another employee is a certified Geographical Information Systems Professional (GISP). Auditor Miller is certified as a CERA, a SEAT, and pursuing CGAP (Certified Government Accounting Professional) certification. Four employees in Accounting Services have been awarded and are maintaining Certificates in Accounting Compliance (CAC).

Education, Training – Out of State (422G) - Used to pay for the costs of out of state based continuing education and training courses, conferences, and seminars. Assumption: Employees holding certifications are expected to keep certifications current/active. Some new employees are expected to become certified and/or required to become certified to retain their positions. Some employees are expected to participate in national/international organizations, e.g., ESRI, IIA, GFOA, and The Election Center. The Auditor is planning to become CGAP certified in FY17 (Certified Government Auditing Professional). An additional $10K-$11K is being requested to train a deputy auditor and DBA on correctly “configuring” Aumentum – see Risks section, item #4.

Consultant Fees (423M) – Unused line item.

Web Page (423N) – Unused line item.

Legal, Court Related Services (425) – Used to pay for a subscription to two products offered by Thomson Reuters: Westlaw and Clear. Westlaw used as a legal resource in real estate, elections, and in accounting areas. Clear used to locate current addresses on deedholders/tax payers to ensure the information on the Annual Tax List is correct prior to being certified to the Treasurer.

Office Equipment Maintenance (444) – Unused line item.

Contract Maintenance Computers (448) – Used to cover the costs of service agreements on the large scale plotter and scanner used by Real Estate.

Contract Maintenance Voting Machines (448F) – Used to pay for service agreement on voting machines.

Change: New contract increased costs from $27K to $70K per year.

of 14 Polling Places Rent (456) – Used to rent polling places for elections. Assumption: With few exceptions, we do not pay more than $75 per voting place per election.

Election Miscellaneous Equipment Rental (459) – Used to pay for rental items needed to help elections run more efficiently or effectively

Notary Bond (466) – Used to pay for the fees associated with employees being notary publics (NP).

Custodial Services (471) – Unused line item.

Dues, Memberships (480) – Used for membership fees resulting from participation in local, state, national, and community organizations.

Contributions to Other Governments, Organizations (481) – Used to reimburse other governments for fees charged to the County.

Change: The Iowa Secretary of State charges counties to access I-Voters, the statewide central voter registration system, and the fee increased from 13.5 cents per voter to 16.5 cents per voter in FY17.

Election Officials (482) – Used to pay PEOs for working on election days and for attending training

Protection, Security Services (486) – Used to pay for peace officers in the polling places on election days. Assumptions: We have 86 precinct polling places with about 10 still located in schools or daycares. We assign peace officers to those schools/daycares during the hours children are present. Currently, these peace officers charge about $51 per hour. We assume that charge will remain constant for the FY17.

Contract Labor (487) – Outside labor utilized to supplement the Office as allowed by Code of Iowa 331.503(2).

Assumptions: Now that we are 100% staffed in Real Estate and we are unware of any employees planning on an extended leave in FY17, outside labor should be limited to Advantage to scan documents into Docuware, 2-1-1 to provide elections information to the public, application support for QuickCheck and TAU, and web hosting for locator services.

Taxable Expense (493) – Unused line item

of 14 Office Equipment, Furniture (636) – Used for office equipment and furniture.

Voting Machine Purchase (642) – Unused line item.

Data Processing Charges (710) – Unused line item for internal chargebacks

Central Store Charges (720) – Used line item for internal chargebacks.

Codes, Directory (721) – Unused line item for internal chargebacks

Micro Computer Supplies (722) – Unused line item for internal chargebacks

Duplicating, Printing Charges (730) – Unused line item for internal chargebacks

Copying (730A) – Unused line item for internal chargebacks

Postage (740) – Internal chargeback for postage processed by the Mail Room’s postage meter. Assumption: The general election will drive an increase in voter registration cards and other non-ballot Elections correspondence. The legal notices issued by Real Estate comprise the next greatest amount.

Postage Ballots (740A) – Internal chargeback for postage processed by the Mail Room's postage meter. Assumption: The majority of early voting in the general elections will be conducted by mailing ballots to voters.

Gas (750) – Unused line item for internal chargebacks

Vehicle Repairs (750A) – Internal chargeback by Sheriff’s mechanics for repairs performed on van used by Elections. Assumption: The new van should require few repairs in FY16.

Maintenance Garage Overhead (750B) – Unused line item for internal chargebacks

Telephone (780) – Internal chargeback by County’s IT department for providing voice services to desktop phone sets used by employees. Assumption: Every employee and every temporary assistant working at a desk have a phone handset.

Car Pool (790) – Unused line item for internal chargebacks

Salary, Administration (9703) – Unused line item for internal chargebacks

of 14 RISKS WITH THE POTENTIAL TO DEGRADE SERVICES AND/OR INCREASE THE COST OF SERVICES PROVIDED BY THE OFFICE OF LINN COUNTY AUDITOR

1. Election Services– optical scanning machines – Even though no machine has been in service for more than 8 years and they are regularly serviced by an outside vendor – especially prior to big elections - we have 3-6 machines fail in our all-precinct elections. We have spares, but the issue is perception, i.e., voters want to see their vote counted on the machines and when the machines fail, the voters have to place their ballot in the emergency slot and leave the polling place wondering if their ballot got counted. Current status: Risk eliminated by purchase of new voting system.

2. Election Services – vote tabulating server – The server’s operating system software cannot be updated due to Microsoft’s version limitations and the vendor’s software cannot be updated due to a legal agreement with the former vendor of the software. Currently, the system is isolated from the network, stable, and backed up, but a failure on an election night would be catastrophic. Current status: Risk eliminated by purchase of new voting system.

3. Election Services – high speed scanners – We rented high speed ballot scanners to count the absentee ballots cast in the November 2014 election. While the use of scanners reduced the risk involved with the former use of precinct optical scanning machines, staff had to manually key-in the precinct voting results data. An unintentional mis-keying of the data could

of 14 have resulted in incorrect unofficial results being reported to the public. Current status: Risk eliminated by purchase of new voting system.

4. Property Tax Services – Aumentum – Tax List and Valuation Reports – In FY15, the annual tax list was certified to the County Treasurer on 8/22/2014. In FY16, the tax list was certified to the Treasurer on 8/11/2015. While this allowed the Treasurer to avoid extending the penalty date of the taxes, it caused a loss of confidence in the County because of our failure to provide the tax bills when the public expected them. Likewise, the Valuation Report could not be produced by Aumentum until 1/13/2015 in FY15 and could not be produced by Aumentum until 1/14/2016 in FY16. Based upon our experience to date with the vendor, there is no fact based reason to believe we will be able to produce either report by their deadlines in FY16. Solution: Transfer at least one IT database analyst (DBA) position to the Auditor’s Office for direct, continuous support of Aumentum and spend up to $11K in training/travel costs to train a deputy auditor and the DBA on correctly “configuring” Aumentum for performance and efficiency.

5. Real Estate Services – Aumentum – The FY17 budget assumes that no additional headcount will be needed to sustain the current services in Real Estate; however, there is no reason to believe that overtime can or will be eliminated based upon the present performance of Aumentum. Fixes applied by the vendor to fix issues with the system for the Treasurer continue to break things for the Auditor and vice versa. And trying to keep Aumentum’ s Training, Production, and Test environments in operation is a full-time challenge. Current status: High risk to future statutory deadlines.

6. Accounting Services – Accounts Payable – GEMS – Recently, we discovered a situation where duties should be segregated in GEMS (vendor creation vs

of 14 ACH creation) but could not be segregated by the software. Although a solution may be in-hand, it has not been implemented. In the future, we may discover additional duties that should be segregated in order to maintain good internal controls. Our failure to maintain appropriate internal controls could result in anything from minor errors to outright misappropriation of funds. We likely have other areas in GEMS which should be segregated that we have not found, which may need to be audited once found and until a permanent solution can be implemented. After all, the lack of segregation in the vendor/ACH area has been occurring for years. Current status: Duties segregated via configuration change to GEMS. Risk eliminated.

7. Board of Supervisors - Information Technology (IT) – Customer Service – The Board’s/IT’s decision to avoid providing service level agreements (SLAs) to internal customers is a major risk because there are no assurances that anyone is assigned to our requests, there are no assurances anyone is working on our requests, there are no assurances that anyone will communicate what is occurring with our requests after a ticket number is assigned, and there are no known penalties for not resolving our issues. Current status: Board unwilling to implement SLAs; therefore, IT unwilling to implement SLAs. End result: Very little accountability and no one disciplined for a lack of performance.

8. Board of Supervisors – Human Resources (HR) – This budget presumes that the two open FTEs will be filled by the start of FY16. If the FTEs are not filled, then contract labor (temps) will be used to perform the work until the FTE positions are filled. The risk to Elections is minor because we have a large pool of trained temps who can perform almost any task. The risk is greater in Real Estate where we have experienced temps who may terminate prior to the FTE position being filled or the temps may be held over at additional, unbudgeted expense while the new employee is being

of 14 trained. Current status: On 1/11/2016, new employee began working in Real Estate. Risk declining as employee becomes more proficient in duties.

9. (New for FY17) – General election budget – Every general election, i.e., presidential and gubernatorial, has been more costly than the previous election, respectively. By using conservative estimates for the cost of the election, we may be underestimating the election by $100K-$200K. In the same manner as the Sheriff and Attorney cannot predict arrest rates and prosecution rates, respectively, no one can precisely predict how many voters will vote early versus at the polls versus overall turnout. The Auditor’s Office could require a budget amendment as soon as January 2017 after all of the election related bills are paid.