The Board of Supervisors Tuesday approved formation of a committee to respond to a grand jury report that identified numerous deficiencies in how a $36 million contract was handled by the Riverside County Executive Office, with unanswered questions regarding the transformative changes that the work was supposed to produce.
“The grand jury is pointing at the Executive Office,” Supervisor Kevin Jeffries said. “Only the Executive Office can answer these questions.”
County CEO George Johnson affirmed the EO would “take the lead in the response,” but he asked for two board members to scrutinize the staff’s work to be certain “we’re covering the right topics before bringing everything back to the full board for review.”
Jeffries and Supervisor Jeff Hewitt volunteered to serve on the committee, and the entire board agreed in a 5-0 vote.
The committee will assess what the civil grand jury uncovered during its months-long investigation into the KPMG contract and provide point-by-point answers by Nov. 10.
The 19-member grand jury returned with a report on Aug. 12 detailing what it described as questionable actions on the part of the EO in securing the KPMG work, as well as a range of doubts that the Netherlands-based professional services firm’s actions had really netted the savings and workflow improvements that it claimed.
KPMG was initially hired in the fall of 2015 to examine operations within public safety departments, notably the Sheriff’s Department and the District Attorney’s Office, to determine what changes might be necessary to make them more efficient and less costly. The original contact cost was $761,600.
In March 2016, the EO recommended, and the board agreed, to retain KPMG under a long-term compact to help public safety agencies implement modifications aimed at enhancing efficiency.
The agreement was amended several times — without competitive bidding — to include evaluations and revisions to practices and procedures in general government agencies, including the Animal Services, Human Resources and Information Technology departments.
The total cost of KPMG’s work eventually ballooned 54 times the original contract expenditure, according to the grand jury.
Supervisors Marion Ashley and John Tavaglione, both of whom retired at the end of 2018, were stalwart supporters of the contract, while Supervisor Kevin Jeffries and then-Sheriff Stan Sniff were openly opposed, routinely casting doubt on the need for such a significant commitment of county taxpayer dollars, which might otherwise have been invested in bulking up the sheriff’s patrol force.
When the KPMG contract closed in June 2019, Jeffries acknowledged that KPMG had “found what we wouldn’t have if it had been left up to us.”
KPMG executives stood by their work, saying it was incumbent on the county to see that reforms were enacted. There was particular emphasis on the County Performance Unit, and the need to monitor progress within each department. But as jurors noted, the CPU “has been largely abandoned.”
The jury was dubious about claims that the contract had resulted in $100 million in savings from workflow changes, mainly in public safety, over a two-year period.
According to the investigation, the EO represented that lower discretionary appropriations — $89 million — for the sheriff and DA during two fiscal years comprised most of the savings. But the grand jury concluded that, after specific documents were not provided, “claimed savings to the sheriff’s and district attorney’s offices since implementation of KPMG’s recommendations lack validation.”
The jury also questioned whether KPMG efficiency recommendations had led to improvements in sheriff’s ops, or the restoration of funds previously cut from the sheriff’s budget had paved the way to enhanced work patterns.
“No documented evidence of specific cost savings was provided to the grand jury by the EO or the Sheriff’s Department,” the jury stated.
Jurors found that the Department of Human Resources had benefited from changes that centralized recruiting to fill county positions, but in the Department of Information Technology, KPMG made recommendations concerning operational changes that the agency had already implemented, and officials said the firm’s “work was not helpful to the IT department,” according to the report.
Jurors also took issue with the EO crediting KPMG with a program to supply all Department of Animal Services officers with tablet devices to improve their fee collection efforts in the field. The change had been recommended by other entities, according to jurors, who said it was “misleading” to attribute the reform to the vendor.
The jury recommended that “key performance indicators” outlined under the CPU be more closely watched to document efficiencies and savings by agencies.
The panel additionally said the county needs to ensure competitive bidding is involved in all contracts over $500,000, pointing out that the KPMG’s agreements were repeatedly amended without the county giving any thought to inviting competitors.
Jurors lastly said the board should re-examine, in total, the initiatives put in place under the KPMG work to “achieve benefits and cost savings,” and that the board consider establishing a new “independent department,” similar to the Office of the Auditor-Controller, to measure to what extent agencies are following through with reforms and what the county is gaining.