California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 9 - Insurance Fraud
Article 5 - Organized Automobile Insurance Fraud Interdiction Program
Section 2698.77 - Grant Reporting and Audit

Universal Citation: 10 CA Code of Regs 2698.77

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) Each grantee shall submit annual reports to the Commissioner covering the preceding funding cycle. The reports shall consist of:

(1) An expenditure report, which shall include:
(A) All operation costs.

(B) Personnel: salaries and benefits.

(C) Explanation of any material variances from the proposed budget and strategic plan submitted with the grant application.

(2) A financial audit report prepared by an independent, qualified state or local government auditor or independent public accountant licensed by the State of California or the county auditor controller. The audit report shall certify that local expenditures were in conformance with the purposes of the program as specified in Section 1874.8 of the Insurance Code, these regulations, and the application for grant funding as approved by the grant award agreement.
(A) The auditor shall use county policies and procedures as the standard for verifying appropriateness of personnel and support costs.

(B) In the event that the program audit is included as part of an organization-wide audit, revenues and expenditures for the local program must be shown separately.

(3) A program report which shall identify and discuss the following items as they relate to the program:
(A) The number of investigations initiated and/or coordinated with the Fraud Division, California Highway Patrol and other law enforcement agencies.

(B) The number of arrests.

(C) The number of prosecutions.

(D) The number of convictions.

(E) The charged fraud and dollar savings realized as a result of reported prosecutions.

(F) The goals and objectives achieved by the grantees as set forth in the strategic plan including an explanation of any goal not achieved as identified in the strategic plan.

(G) A summary of the other activities directed toward the reduction of organized automobile insurance fraud activity in coordination with all interested insurers and other participating agencies.

(b) The annual reports shall be submitted to the Commissioner no later than two (2) months after the close of the grant funding cycle as specified in the application. A county may request, in writing, a single limited extension to a date certain for submission of the annual reports, in the event an organization-wide audit would delay submission of the required report(s).

(c) There shall be a grant liquidation period of sixty (60) days following the termination of the grant period during which costs incurred but not paid may be paid and deducted from the program budget.

(d) Except as provided in this section, financial audits under this program shall be performed in accordance with the standards set forth in the Government Accounting Standards Revised (July 1999) published by the Comptroller General of the United States, General Accounting Office. The above General Accounting Standards Revised (1999) are incorporated herein by this reference.

(e) The Commissioner shall perform the following audits and reviews:

(1) Fiscal audit of each grant program at least once every three years.

(2) An annual review of the grantee performance under the program

(3) Any additional audits or reviews of a grantee's program as are necessary for the effective and efficient administration of the program.

(f) The grantee shall cooperate with the Commissioner in the performance of the audits and reviews. The grantee shall provide access to all documents related to the program and fiscal operation of the grant program as deemed necessary by the Commissioner. Refusal to cooperate with the Commissioner under this subsection may constitute good cause for redistribution of the grant funding.

1. New section filed 7-7-2000 as an emergency; operative 7-7-2000 (Register 2000, No. 27). A Certificate of Compliance must be transmitted to OAL by 11-6-2000 or emergency language will be repealed by operation of law on the following day.
2. Certificate of Compliance as to 7-7-2000 order, including amendment of subsection (f), transmitted to OAL 10-12-2000 and filed 11-21-2000 (Register 2000, No. 47).

Note: Authority cited: Sections 1874.8 and 1874.81, Insurance Code. Reference: Sections 1872.8(b)(1), 1874.8(b) and (d) and 1874.81, Insurance Code.

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