Appendix

Scope and Methodology

The Joint Legislative Audit Committee (Audit Committee) directed the California State Auditor to examine Food and Agriculture’s oversight of the Pet Lover’s Fund. Specifically, we reviewed Food and Agriculture’s processes and plans for awarding grants and promoting the Pet Lover’s plate. The table below lists the objectives that the Audit Committee approved and the methods we used to address them.

Audit Objectives and the Methods Used to Address Them
AUDIT OBJECTIVE		METHOD
1	Review and evaluate the laws, rules, and regulations significant to the audit objectives.	Reviewed relevant state laws, rules, regulations, and best practices related to the Pet Lover’s program, including the authority and responsibilities of the Veterinary Board and Food and Agriculture.
2	To determine whether the program fund is administered in accordance with applicable requirements and Food and Agriculture is using funding for its intended purpose, conduct the following:: a. Identify the current balance available in the program fund. b. Identify the total amount of funding generated and awarded through the program since its inception. c. Determine the program fund’s annual costs, including administrative costs and expenditures for marketing and promotional activities.	Reviewed financial reports from Food and Agriculture and the DMV to identify the total funding generated and the current balance in the program fund. Reviewed financial reports to identify the total amount of grant funding awarded since the program’s inception and to determine the program’s annual costs, including administrative costs and expenditures for marketing and promotional activities. Assessed whether the administrative costs the Veterinary Board and Food and Agriculture incurred annually were within 25 percent of funds collected as state law requires.
3	Review and evaluate the process for distributing the program’s funds from the time Food and Agriculture receives them, including the length of time it takes for funds to pass through each stage before being awarded as grants, and whether the process for awarding grants meets statutory requirements.	Interviewed staff and reviewed documentation from Food and Agriculture to determine the time it took to disburse funds for grants, from receipt to payment of invoice. Food and Agriculture pays grants on a reimbursement basis. We reviewed an invoice from each grantee and found that Food and Agriculture paid them within a reasonable time frame.
4	Identify the efforts that Food and Agriculture has made to collaborate with eligible nonprofit organizations in developing and implementing the program. In addition, determine whether Food and Agriculture has contracted for marketing and promotional activities as allowed.	Interviewed staff and reviewed documents to determine whether Food and Agriculture contracted with a nonprofit organization for marketing and promotional activities. Also interviewed its staff to determine its future plans for marketing and promotional activities, including whether it plans to contract with a nonprofit organization for those services. Judgmentally selected three California specialized license plate programs—Arts, Kids’, and Whale Tail plates—based on the highest number of registered plates in fiscal year 2018–19 and similarities in the grant-awarding process. Interviewed staff at the sponsoring agencies of those programs and reviewed available documentation to identify the marketing practices they use for their programs. Also performed the same procedures for the CalAg plate because Food and Agriculture administers it.
5	Review and evaluate Food and Agriculture’s policies, procedures, and practices for awarding the program’s grants to veterinary facilities to determine the following: a. The process for awarding program fund grants is consistent with applicable requirements and best practices, including that the process prioritizes any specific characteristics of veterinary facilities. b. For a selection of approved and denied grant applications, evaluate whether Food and Agriculture awarded or denied grant funds consistent with statutory requirements.	Interviewed staff and evaluated a selection of denied and awarded grant applications, including the scoring of submitted applications, to determine whether Food and Agriculture prioritized any specific characteristics when awarding grants. Using the same selection of grant applications, evaluated documentation and interviewed Food and Agriculture staff to determine whether its process for awarding grants was consistent with applicable statutory requirements, relevant guidelines, and best practices. Interviewed staff and reviewed available guidelines and other relevant documents to assess whether Food and Agriculture’s practices ensured that it only awarded grants to eligible veterinary facilities as state law requires.
6	Identify the nonprofit organizations that contributed to the advancement of the program by securing plate registrations, and assess Food and Agriculture’s process for receiving input from these organizations.	Interviewed Food and Agriculture staff and reviewed relevant documentation to identify the nonprofit organization that contributed to the advancement of the Pet Lover’s program. Based on interviews with Food and Agriculture staff and review of available documentation, we concluded that Food and Agriculture’s practice for receiving input from this nonprofit organization was reasonable.
7	Review and assess any other issues that are significant to the audit.	Interviewed Veterinary Board staff and reviewed documentation to determine how it spent administrative funds in fiscal years 2013–14 through 2017–18, and whether the spending complied with statutory requirements.

Source: Analysis of Audit Committee’s audit request number 2019-121, state law, and information and documentation identified in the column titled Method.