Review of. County-wide Cell Phone. Authorization, Use and Oversight

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1 Review of County-wide Cell Phone Authorization, Use and Oversight Prepared for the Board of Supervisors of the County of Santa Clara Prepared by the Board of Supervisors Management Audit Division County Administration Building, East Wing, 10th Floor 70 West Hedding Street San Jose, CA (408) October 3, 2011

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7 Table of Contents Section Page Transmittal Letter Table of Contents I Scope, Methods and Background II 847 Underutilized Cell Phones III 333 Cell Phones Used Mainly For Access IV 452 Cell Phones With Mismatched Calling Plans V VI Excessive Cell Phone Costs Require Improved Policies and Additional Managerial Oversight Establishing Managerial Oversight and Accountability for County-wide Telephone Services VII Summary of Recommendations DEPARTMENTAL WRITTEN RESPONSES: CONTROLLER-TREASURER DEPARTMENT FACILITIES AND FLEET (FAF) INFORMATION SERVICES DEPARTMENT (ISD) OFFICE OF THE SHERIFF OFFICE OF THE COUNTY EXECUTIVE PROBATION DEPARTMENT PROCUREMENT DEPARTMENT SOCIAL SERVICES AGENCY VALLEY MEDICAL CENTER

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9 Report on Cell Phone Usage in the County of Santa Clara SECTION I Scope, Methods and Background On March 15, 2011, the Board of Supervisors requested the Management Audit Division to conduct a review of cell phone use and charges by County staff. This request followed an announcement by the Governor s Office that the State was substantially reducing the number of phones issued to State employees. The purpose of the analysis was to determine if similar opportunities exist to reduce the number of cell phones issued to County staff, as a means of achieving savings, and to identify other recommendations to establish or improve policies regarding cell phone use and the growth of other mobile communication devices. The request also reflected the knowledge that the decision to provide cell phone service to employees in the County of Santa Clara is made by individual departments, who order the service from contracts negotiated by the Procurement Department. The Board of Supervisors has not adopted centralized policies addressing under what circumstances employees should be provided cell phone service, and there is no centralized organizational responsibility for oversight and management of the County s more than 4,800 cell phone numbers that were in use as of December 31, Prior to authorizing individual cell phone assignments to employees, the type, purpose and extent of usage must be considered, as well as the existence of personal phone reimbursement policies, departmental pool phones and existing duplicative land-line telephones on employee desks, that could serve as alternatives to issuing individual cell phones. To conduct this analysis, Management Audit Division staff contacted representatives of the County s three primary contract cell phone providers, Sprint Solutions, Inc., Verizon Wireless and AT & T. Each provider was requested to provide cell phone usage and billing data for all County cell phone numbers under its contract during Calendar Year Sprint Solutions and Verizon Wireless were able to provide the complete data requested. AT & T was not. According to an AT & T representative, its contracted phone numbers with the County are divided into Foundation Account Numbers (FANs). Because of a change in the firm s computer systems, it was able to provide most 1 Board of Supervisors Management Audit Division

10 Report on Cell Phone Usage in the County of Santa Clara of the data requested for all of 2010 for one FAN, covering most County phone numbers, but not data on the number of phone calls made and received from each number, which limited our analysis of those phone numbers to one based on the minutes of service used. For a second FAN, accounting for cell phone numbers assigned to the Santa Clara Valley Health and Hospital System, all the types of data were provided, but were only available for an eight-month period, from May to December As a result, our analysis of this data had to be annualized, to estimate the full year savings of any changes proposed to the phone service. In terms of overall cell phone use and costs, our analysis included 4,815 cell phone numbers among the three primary providers that were active as of December The following table includes the total costs per phone number and costs per minute incurred during CY 2010 for each provider: Table 1 Annual Cell Phone Costs Per Phone Number and Per Minute By Provider for Three Cell Phone Providers, Calendar Year 2010 Active Phone Total Cost Cost Per Minutes Cost Per Provider Numbers For Actives Number of Use Minute Sprint 1,265 $519,967 $411 2,254, Verizon** 2, , ,733, AT & T Main , , AT & T SCVHHS ,947* 1,761* 298, Total 4,815 $1,519,597 $316 6,777, Total (Excl. ROV) 3,591 $1,512,661 $421 6,696, *These numbers were calculated based on an annualized cost, calculated by Management Audit Division staff because AT & T was only able to provide nine months data, from May through December of 2010 for this account. **Excluding the 1,224 Registrar of Votes phones used in elections, the average cost per number of Verizon phones was $362 per phone annually, or 18 cents per minute. 2 Board of Supervisors Management Audit Division

11 Report on Cell Phone Usage in the County of Santa Clara Based on the data in Table 1, the distribution of cell phone service between three vendors is illustrated in the following chart: 4,815 Active County Cell Phones as of December 31, ,265 Sprint 26% Verizon 62% AT & T 12% 2,989 Table 1 also shows that Verizon had the lowest cost per phone number, and per minute. However, this gross-level analysis of costs does not take into account differences in the mix of calling plans, usage and other factors among the three carriers. For example, the 2,989 numbers active as of December 2010 for Verizon included about 1,224 phone numbers assigned to the Registrar of Voters which had very little use, but also very little cost, as these phone numbers were used for phones provided for polling places during the election, and were only charged for actual use, rather than with a flat monthly rate, as occurs for most County cell phones. Eliminating that number of phones, the per phone service cost for Verizon is about $362 each, which is still the lowest per phone service cost. It should also be noted that the data AT & T provided for its account with SCVHHS, only covered May through December of Since there is a significant difference among different carriers in cost per phone, and cost per minute, the County should consider bidding cell phone service with an award to a single firm, based primarily by price, in order to achieve cost savings. Such a step would require development of a competitive bid by Procurement Department staff. Where circumstances exist that an employee s job requires a significant amount of remote communications from locations not well served by the selected vendor, exceptions can be granted to use alternative equipment when justified and documented. 3 Board of Supervisors Management Audit Division

12 Report on Cell Phone Usage in the County of Santa Clara To provide additional perspective on the County s use of cell phones, we also asked relevant County staff for information on the County s use of land-line phones, those which are hard-wired and sit on people s desks. Land-line phone service for all County departments is managed by the Information Services Department, except for the Santa Clara Valley Health and Hospital System and the Social Services Agency, which manage their own phones. Social Services Agency staff stated they believed that the Agency was given responsibility for its own phones because it is primarily State and federally funded, and managing its own phones would assist reimbursement of phone costs through the State and federal claiming process. SCVHHS staff reported that the Board of Supervisors gave the health system permission several years ago to separate from centralized land-line management and operate its own system, because of concerns over service response times. SCVHHS stated it has installed a different phone system than the rest of the County, which it manages and maintains with its own staff. ISD, SSA and SCVHHS staff provided information, which indicates that they have a combined 28,020 land-line phone numbers, with an approximate annual cost of $1,772,000, or about $51 per phone number annually, when the cost of toll-free incoming lines is excluded ($63 per phone number annually including the cost of tollfree incoming lines). Based on this information, land-line phone service is obviously substantially cheaper than cell phones, making it important to provide cell phones only to staff that need them for reasons that can t be fulfilled by land-line service. Combining the land-line phone information with the cell-phone information previously described, the total scope of County phone services is shown in the table on the following page. 4 Board of Supervisors Management Audit Division

13 Report on Cell Phone Usage in the County of Santa Clara Table 2 Summary of Annual Telephone Costs For the County of Santa Clara Active Phone Total Cost Cost Per Provider/Manager Numbers For Active Phones Number Cell phones Sprint 1,265 $519,967 $411 Verizon 2, , AT & T Main , AT & T SCVHHS ,947 1,761 Subtotal-Cell Phones 4,815 $1,519,597 $316 Land-line Phones Information Serv. Dept. 11, , SCVHHS 14, , SSA 2, , * Subtotal-Land-line Phones 28,020 $1,772,000 $63 Total-All Phones 32,835** $3,291,597 $100 *SSA s high per-line cost reflects its operation of three toll-free lines, whose costs could not be easily separated from other telephone voice costs. However, SSA staff reported that a review of one-month s bill showed that the monthly cost for one of the toll-free lines was $17,900, which would equate to an annual $209,800 cost. SSA staff stated that because it uses the same vendor as ISD for its phone service, it expects per line annual costs, excluding the toll-free lines, should be about the same as ISD s, which are $54 per line annually, as shown above. **Excluding 1,224 Registrar of Voters election phones, the total of all phones is 31,611 at a total cost of $3,284,661 or an average annual cost per phone of $104. Based on the consolidated Countywide telephone data in Table 2, the County has a total (excluding limited use Registrar of Votes election cell phones) of about 31,611 land-line and cell phones, costing at least $3.3 million annually. Based on the Fiscal Year authorized Countywide staffing of approximately 14,917 positions, current telephone resources average 2.20 telephone numbers per position, which includes one cell-phone number for every 4.2 positions, after excluding the 1,224 seasonal phones of the 5 Board of Supervisors Management Audit Division

14 Report on Cell Phone Usage in the County of Santa Clara Registrar of Voters. Further, a substantial number of positions would generally not be assigned a telephone of any kind, due to the nature of their work, such as nurses, correction officers, cadets and many others. Consequently, due to the significantly higher cost of cell phones and the potential duplication of land-line service, there may be some value in reevaluating the County s approach to phone service generally, and potentially eliminating land-lines for staff whose duties primarily require cell-phone use, and vice-versa. The remainder of this report describes key findings of the Management Audit Division analysis, and how it was conducted, along with recommendations regarding County cell phone policies going forward. The report identified several opportunities for potential savings by eliminating underutilized cell phones, better matching cell phone plans with actual usage, increasing pooling of cell phones, and reimbursing employees for use of personal phones when circumstances make this option the best choice for both the County and the employee. These issues are discussed in Sections II through IV. All of these opportunities can potentially generate significant cost savings for the County. However, the County s three cell phone service vendors were unable to provide detailed information identifying, on a line-by-line basis, each line that is linked to another line for purposes of determining monthly overage minutes. Consequently, to the extent that the elimination of underutilized lines would affect overage charges for linked lines, savings from eliminating underutilized lines would be reduced, but could not be calculated for this report. 6 Board of Supervisors Management Audit Division

15 Report on Cell Phone Usage in the County of Santa Clara SECTION II 847 Underutilized Cell Phones Of the County s 4,815 cell phone numbers, 847 phone numbers, or 17.6 percent, had limited use in Calendar Year Limited use was defined as phones with minimal voice and data use, as follows: 1) average use of six or fewer calls per month during 2010, 2) average use of 30 or fewer call minutes per month during 2010, or 3) use that averaged greater than six calls per month, only because the average was exceeded during three or fewer months in CY Eliminating these phones entirely in favor of land-line use, replacing them with a smaller number of pool phones, or having users use personal phones with reimbursement for the limited County use, would result in savings estimated at up to $239,847. Using the cell phone usage and billing data obtained from each of the three cell phone providers, Management Audit staff created spreadsheets showing the 2010 usage for each cell phone number assigned to the County. We limited the analysis to phone numbers that were active as of December 2010, excluding phones whose service was cancelled during the calendar year. We then calculated the average monthly voice usage for each phone number, in terms of the number of telephone calls made or received by that number. The purpose of this analysis was to identify phones with very low frequency of use, which we defined as phones that received or made an average of six or fewer phone calls per month. This standard was arbitrarily selected, based on a conservative assumption that the average monthly cell phone service charge was about $30, and that therefore use of only six calls or fewer calls per month would cost a minimum of $5 per call, which we viewed as excessive. In fact, our review showed that 7 Board of Supervisors Management Audit Division

16 Report on Cell Phone Usage in the County of Santa Clara cell phone plans used by the County generally ranged in cost from less than $20 per month to more than $100 per month, depending on the plan selected. In addition to analyzing the number of calls made or received by each phone number, we also looked at phones that made or received more than six calls per month, but had total usage of less than 30 minutes per month, which we again defined as very low usage, costing in excess of $1 per minute. Finally, we also identified what we termed intermittent use phone numbers, which are numbers where use averaged more than six calls per month, but had use exceeding that average figure in three or fewer months during the calendar year. Our thesis was that all these low use phones could be eliminated in favor of having staff used their assigned land-line phones, or replaced by reimbursements provided by the County to employees, on an as-needed basis, for use of their personal phones on County business. In departments where many cell phones have been issued, the option of establishing a cell-phone pool for sporadic needs could also be a more cost-effective solution. The following table and chart show the results of our analysis. Table 3 Low Use Cell Phone Numbers In the County of Santa Clara By Cell Phone Provider for Calendar Year 2010 Numbers Numbers Cell Phone Numbers With With Intermittent Total Numbers Annual Provider Analyzed 6 or Fewer Calls 30 Min. or Less Numbers Eliminated Savings Sprint 1, $108,482 Verizon 2, ,088 AT & T 561 N/A* ,277 Totals 4, $239,847 Percent 100.0% 11.9% 3.3% 2.5% 17.6% *As noted earlier, AT&T was only able to provide minutes of use, not numbers of calls. 8 Board of Supervisors Management Audit Division

17 Report on Cell Phone Usage in the County of Santa Clara 847 (17.6%) of County Cell Phones Underutilized or Fewer Calls Per Month (11.9%) 30 Minutes or Less Per Month (3.3%) Intermittent Use (2.5%) Total Low Use Phones (17.6%) As Table 3 shows, of the 4,815 phone numbers that were active as of December 2010, 848, or about 17.6 percent, had what we defined as low or intermittent usage, suggesting that these phones could be considered underutilized and potentially eliminated from County service. These employee cell phone requirements could be replaced by an arrangement in which County employees would receive reimbursement, probably on a per call basis, for use of their personal cell phones for County business. Alternatively, employees could use departmentally-pooled cell phones in some cases. Assuming the low-use phones identified were eliminated, the County, based on charges for these phones in Calendar Year 2010, would have saved $239,847. As noted earlier, in the case of phones that were active as of December 2010, but were only active for part of the calendar year, or in the case of the AT & T Health and Hospital System phone numbers for which only partial-year data was available, the savings was calculated on an annual basis, assuming 12 months of phone service. It should also be noted that we eliminated from the analysis any phones for which the annual savings was less than $10. This eliminated, for example, most of the approximately 1,200 phone numbers assigned to the Registrar of Voters. A review of the billings indicated that these phone numbers were generally only used in months when elections were held, and thus were probably assigned to election workers. Since the Registrar was only charged for the actual use of the phones, without a monthly charge in months where no use occurred, savings from eliminating these phones would be 9 Board of Supervisors Management Audit Division

18 Report on Cell Phone Usage in the County of Santa Clara small. Furthermore, we would view having a temporary election worker using their own phone as problematic in a situation where it is very important that workers be able to contact the Registrar s staff in the event of problems at an election precinct, for example. The savings shown in Table 3 would be offset by the reimbursements employees would receive for County calls on their personal phones. However, based on the low call volumes reflected in the analysis, those offsetting reimbursements would likely be very small. Retention of low-use cell phone numbers by departments could only be justified by departments based on some reason why cell phone access is needed for a particular employee regardless of use, such as a zero tolerance need for the staff member to be available to other department staff at all times. Based on the results of Table 3, the Board of Supervisors should direct County departments to review cell phone use by phone number and to provide justification for maintenance of cell phone numbers that had minimum use, as defined in this finding, as opposed to eliminating these phone numbers in favor of pooled phones, staff use of personal phones with reimbursement, or another approach. 10 Board of Supervisors Management Audit Division

19 Report on Cell Phone Usage in the County of Santa Clara SECTION III 333 Cell Phones Used Mainly for /Data Access An estimated 333 cell phones are used mainly to transmit or receive data, probably for access, rather than voice communication. Savings could be achieved by replacing these phones with reimbursements for the costs of providing staff County access on their personal phones, as is the current practice of the Public Health Department. This approach would produce estimated net savings of up to $146,358, reflecting the savings from eliminating phones, offset by the cost reimbursement provided for staff to get County on personal phones. As part of our analysis of phone use, we identified phone numbers, separate from the phone numbers included in Section II, that had low voice use, in terms of the average number of calls or number of voice minutes used per month, but instead had significant use for data transmission. Our threshold for these phones was an average of about 500 kilobytes of data usage or more per month. To put that limit in perspective, information provided on AT & T s website for wireless access estimated that checking requires about four kilobytes of data transmission, while reading a news headline requires about 10 kilobytes, and downloading a music tone requires about 120 kilobytes. Although the data we received did not permit assessing the use County staff made of data transmissions, our assumption is that most of it is probably County employees checking accounts. As in the case of Section II, savings in this area could be achieved by eliminating these phones being used primarily for data access, and instead reimbursing County staff for Board of Supervisors Management Audit Division 11

20 Report on Cell Phone Usage in the County of Santa Clara the cost of carrying out this function for County business on their personal cell phones. A model for this approach is provided by the Public Health Department, which conducted a similar internal analysis to that we have carried out Countywide, and has already adopted new cell phone policies as a result. Specifically, the Department adopted a policy providing monthly reimbursement of $16.00 to $38.24 per month, depending on the cell phone carrier, to employees in order to add County access to their personal phones or similar devices. The following table shows the number of phones, by carrier, that were identified as being used primarily for data access, and the potential savings if those phones were replaced by giving employees a monthly reimbursement for County access on their personal phones (currently estimated at $16.00 per month). As noted earlier, these phones and savings are separate from the phones identified in Section II, which had neither significant voice nor data use. Table 4 Primarily Data-Use Cell Phone Numbers In the County of Santa Clara By Cell Phone Provider for Calendar Year 2010 Cell-Phone Numbers High-Data Annual Potential Provider Analyzed Numbers Savings Sprint 1, $36,417 Verizon 2, ,750 AT & T ,191 Totals 4, $146,358 As the table shows, of the 4,815 phone numbers analyzed, 333, or about 6.9 percent, were phones used primarily for data access. If those phones were eliminated and replaced by a $16 per month reimbursement to employees to provide County access on their personal phones, the savings that would result total approximately $146,358 (To the extent that employee reimbursement for access on their personal phones is more than $16 per month, this savings would be reduced). The savings per phone by provider ranges from $351 to $456, because of differences in the cost of the individual County phone plans that would be replaced. Board of Supervisors Management Audit Division 12

21 Report on Cell Phone Usage in the County of Santa Clara SECTION IV 452 Cell Phones with Mismatched Calling Plans Our review of the County s 4,815 cell phones identified 452 cell phones with usage higher than the low-use thresholds established in Sections II and III, but with usage of minutes that was regularly less than the maximum pursuant to the calling plan purchased for these phones. By switching these phones to lower cost plans that provide fewer minutes, thereby better matching actual usage, the County could realize savings of up to $72,926 annually, assuming current usage is consistent with usage in CY The County s cell phones are purchased pursuant to contracts negotiated by the Procurement Department with three cell phone providers. When departments order cell phone service through those contracts, they have various options of service to order. Those options include cell phone plans that provide increased levels of minutes per month at correspondingly increased monthly fees. Typically, exceeding the limits at any level results in substantial additional charges for the overage. Accordingly, in addition to identifying phones with overall low use that could potentially be eliminated, our review also compared the average number of minutes used monthly for each cell phone number, for numbers that had some significant use, with the number of minutes permitted under the service plan assigned to that phone number. If the actual monthly usage was significantly below the plan minutes, we estimated how much money could be saved by shifting that phone to a plan that provided fewer minutes, but also had a reduced monthly service charge. We identified the number of minutes per month provided for each phone number either from specific 13 Board of Supervisors Management Audit Division

22 Report on Cell Phone Usage in the County of Santa Clara information supplied by the cell phone provider for each phone, or from the name of the service plan provided for the phone, where that name included a number reflecting the number of monthly minutes provided. In conducting this analysis, we noted that the data we received from the cell phone providers included few if any instances of penalty charges for exceeding the allowable minutes, even though the analysis identified phones that in fact exceeded the number of minutes provided, in some cases by substantial amounts. We asked representatives of the cell phone providers about this discovery, and were advised that the lack of penalty charges probably reflects the fact that many of the County s cell phone numbers were ordered via plans that pool the minutes of multiple phone numbers together, in the same way that a cell phone plan for a family provides a pool of minutes that may be used by different family members who have individual phones with different phone numbers. We attempted to sort out this issue by reviewing data provided by one of the three providers, to try and identify phones linked together for purposes of sharing minutes, but were not successful in doing so. We suspect that the minutes being used without penalty on selected phone numbers, represent minutes acquired via the phones identified in Section II and Section III, that have very little voice usage. Therefore, one possible effect of eliminating those phones is to increase the likelihood of penalty charges on phones that exceed the minutes of use permitted by the service plan assigned to each phone. It will therefore be very important, going forward, to realistically assign individual phones to service plans that accurately reflect the minutes of service expected to be used each month, and to monitor employee use of phones against those limits. The following table shows, by service provider, the number of phones we identified where the average minutes used per month should permit a less-expensive service plan to be used, and the estimated annual savings from doing so. 14 Board of Supervisors Management Audit Division

23 Report on Cell Phone Usage in the County of Santa Clara Table 5 Estimated Savings From Matching Service Plan Monthly Minutes To Average Minutes Actually Used, By Cell Phone Provider for Calendar Year 2010 Cell-Phone Numbers Numbers With Annual Provider Analyzed Plan Reduction Savings Sprint 1, $26,795 Verizon 2, ,416 AT & T 97* 24 4,715 Totals 4, $72,926 *AT & T provided calling plan information for only a portion of the cell numbers it provided to the County. As the table shows, approximately 10.4 percent of the numbers analyzed had cell phone usage, in terms of minutes of service used, that would have permitted the phone number to operate under a calling plan with fewer minutes included, and a reduced monthly access charge, saving an estimated $72,926, based on Calendar Year 2010 use. Due to the difficulty in determining which phone numbers are linked to others for minute-sharing purposes, we cannot estimate the amount of reduced plan costs that would be offset by penalty charges on lines that exceed the plan minutes allowed. 15 Board of Supervisors Management Audit Division

24 Report on Cell Phone Usage in the County of Santa Clara SECTION V Excessive Cell Phone Costs Require Improved Policies and Additional Managerial Oversight A review of the savings in Sections II through IV, on a departmental basis, found that 79 percent of the savings was accounted for in 10 departments, and four departments (VMC, Office of the Sheriff, Social Services and Probation) accounted for nearly 60 percent of the potential County-wide cost savings. Much of the potential savings can be traced to the need for more specific and comprehensive cell phone policies and procedures. Such procedures should more specifically identify the job titles and types of job duties that make staff eligible for a Countyprovided cell phone, and promote use of pooled phones or staff s personal cell phones, with reimbursement, as an alternative to a Countyissued phone. Once in place, such policies will only be as effective as the managerial oversight applied to the County s $1.5 million annual cell phone operations. As noted at the beginning of this report, cell phone service in the County is ordered at the department level, with departments placing orders under contracts with the three cell phone providers that were negotiated by the Procurement Department. Accordingly, in addition to looking at use of phones provided by the three cell phone providers, we also combined the data provided by the three providers on a 16 Board of Supervisors Management Audit Division

25 Report on Cell Phone Usage in the County of Santa Clara departmental basis, to show which departments, based on our analysis, have the greatest potential for savings by eliminating cell phones that get limited use. The following table provides this information for the 10 departments with the greatest potential for savings, based on Calendar Year 2010 use information provided by the three cell phone providers. Table 6 10 County Departments With the Greatest Potential Cell Phone Savings Based on Calendar Year 2010 Usage Data, Ranked by Estimated Savings Low-Use Data Wrong Call-Plan Total Total # Low Use Phone # Data-Use Phone Call-Plan Change Phone Potential Department Phones Savings Phones Savings Phones Savings Changes Savings VMC 124 $48, $45, , $120,894 SSA , , , ,282 Probation , , , ,066 Sheriff 53 26, , ,291 Public Health 35 14, , ,496 District Attorney 24 9, , ,091 Facil.-Bldg. Ops , , , ,685 Mental Health 28 10, , ,159 Communications 15 7, , , ,859 Child Support 12 7, , ,063 Total-10 Depts. 595 $197, $114, ,226 1,165 $362,886 Total-All Depts. 847 $239, $146, $72,926 1,632 $459,131 As the table shows, the 10 departments with the greatest potential savings, according to our analysis, included potential savings of $362,886 from eliminating phones with low use or primarily data use, or by changing to a more appropriate calling plan. This accounted for about 79 percent of the total savings identified in Sections II, III and IV of this report. In fact, about 59 percent of total savings was identified in only four departments, Valley Medical Center, the Office of the Sheriff, the Social Services Agency and the Probation Department. Projected potential savings by department is illustrated in the following chart: 17 Board of Supervisors Management Audit Division

26 Report on Cell Phone Usage in the County of Santa Clara $34,291 $62,282 Potential Savings By Department $54,066 $120,894 $20,496 $20,091 $96,244 $18,685 $10,859 $11,159 $10,063 SANTA CLARA VALLEY MEDICAL CENTER OFFICE OF THE SHERIFF SOCIAL SERVICES AGENCY PROBATION DEPARTMENT PUBLIC HEALTH DEPARTMENT OFFICE OF THE DISTRICT ATTORNEY FACILITIES-BLDG. OPERATIONS SCC COMMUNICATIONS MENTAL HEALTH DEPARTMENT CHILD SUPPORT SERVICES OTHER DEPARTMENTS In addition to evaluating the potential for savings from various departments by changes in cell phone usage, we also reviewed the existence of Countywide and departmental policies regarding cell phone use. The review included several Countywide policies in effect at different times, and the current policies of nine different departments. The most current Countywide policy was issued by the Controller s Office and is dated April 4, This policy was developed by the Controller s Office working with a committee of representatives from various departments. A copy of the policy is provided as an attachment to the Controller-Treasurer s response to this report. Key features of this Countywide policy include: Authorization of cell phones for all County department heads and elected officials. Authorization for other staff by department heads, with the following criteria: 18 Board of Supervisors Management Audit Division

27 Report on Cell Phone Usage in the County of Santa Clara a) the employee s duties require wide mobility and simultaneous access to a communications network; b) the employee requires business-critical two-way communication for which there is no reasonable alternative technology; c) the employee is required to spend significant time away from their office, and is required to be reachable during those periods and/or outside of working hours; d) the employee s duties require access to County and calendar software while out of the office; e) the employee must gather photographic evidence as part of their job; f) the employee needs to request emergency support and back-up while in the field, and; g) other special circumstances necessary for efficient and effective operation of County business that require use of a cell phone. A requirement that a specific call plan with a number of free minutes, a specific data plan if needed, texting availability or other services be specifically requested as part of seeking a County cell phone. Permission for reimbursement to employees for use of a personal phone on County business, if authorized by a department IT manager and department head, and if the employee agrees to follow County IT policies. This permission includes specific methods to calculate the employee s reimbursement for County use of their phone. A requirement that departments provide written guidance to staff receiving phones, including the minutes and other features of their calling plan, and its cost. Departments also must review phone assignments annually, and provide an inventory of their phones to the Controller s Office each August. The April 2011 policies replaced a 2000 Controller s Office policy specifically addressing reimbursement methods by employees using County phones for personal calls, and Board of Supervisors Management Audit Division 19

28 Report on Cell Phone Usage in the County of Santa Clara employees using personal phones for County calls, as well as a 1996 County Executive memo that authorized departments to order their own cell phone service, and provided some cell phone eligibility criteria. While the new Controller s Office standards are appropriate, we believe they should further emphasize the need to discriminate between staff who are receiving phones based on a zero tolerance need for access, so that a phone, and the associated costs, are warranted even if they are rarely or never used, and phones whose need has to be justified through actual use, which should be reviewed annually, with the option of terminating the phone service if the expected use does not occur. Right now the concept of staff being given a phone based on the need for access, regardless of actual usage, is implied in the Controller s criterion c.: Requirement to spend a significant amount of time out of the office and required to be contactable during and/or outside of working hours, criterion f.: Emergency support and back-up from a mobile environment, implying the need to provide certain staff a phone for safety reasons, and by the authorization for department heads and elected officials to have phones. However, providing a phone in these circumstances, regardless of actual usage, is not explicitly stated, and should be. For staff other than department heads and elected officials, providing a phone would need to be justified by a description of their duties in relation to the need for cell phone access. For other staff that receive cell phones based on a belief that mobile communications access would improve their efficiency, the policy should emphasize that these phones are subject to annual review and potential termination if the level of County business use does not justify providing a phone to the employee. Currently, the Controller s policy is implemented by having staff who want a phone fill out a form that allows them to check one or more of eight criteria they believe justifies the phone. The form is then signed by the employee and the supervisor approving the issuance of the phone. We recommend that in addition to checking off the criteria that the employee believes supports receiving a phone, they provide on the form a short narrative description, one or two sentences, describing how the criteria selected applies to their job duties. The Office of the Sheriff, during the exit conference for this report, Board of Supervisors Management Audit Division 20

29 Report on Cell Phone Usage in the County of Santa Clara provided information on phones it believes warrant retention, despite low use. It did so by providing a one sentence description of the staff position to which the phone was issued, how the phone is supposed to be used, and why the issuance was warranted. The Controller s policy also should be expanded to include language stating that the right to a cell phone shall not be based solely on the funding source for payment, such as a grant, but must include a demonstrated need for a phone. The District Attorney s Office s cell phone policy includes this type of language. It also should include language emphasizing a preference for use of pool phones to the extent possible, rather than individually assigned phones, or the use of personal phones for County business, with the appropriate reimbursement, when this option is available and appropriate for the circumstances. A review of the cell phone policies in nine departments included the Santa Clara Valley Health and Hospital System (Valley Medical Center), Public Health, Mental Health, Social Services Agency, Office of the District Attorney, Office of the Sheriff, Probation, Facilities and Fleet Building Operations, and the Department of Child Support Services. Our review found many of these departmental policies largely parroted the language of the Countywide policy from the Controller s Office, without providing significant additional guidance to staff. The Department of Child Support Services reported that it does not supplement the Controller s Office policies with additional departmental guidelines. Based on our review, a departmental policy should also include the following features, which are generally not present, including the following: A list of positions entitled by right to cell phones, which would presumably be positions that would have the zero tolerance need for access described previously, the basis of which should be specified in the department policy. For example, the District Attorney s Office policy provides cell phones to executive management, Supervising Deputy District Attorneys, lieutenants and call out investigators in the Bureau of Investigation, and support staff supervisors. The basis for providing phones for these positions should be provided in greater detail, but providing a specific list is a good start, and is not followed by all departments. 21 Board of Supervisors Management Audit Division

30 Report on Cell Phone Usage in the County of Santa Clara A description of duties that would authorize other Department staff to have cell phones, providing some Department-specific description of the criteria provided in the Countywide Controller s Office policy. For example, it is likely that a Child Protective Services or Adult Protective Services worker in the Social Services Agency would need a cell phone, because of their frequency of field work and associated safety concerns, but less likely that an Eligibility Worker would need a cell phone. Right now, the Office of the Sheriff s policy authorizes cell phones for staff for whom two-way radio contact is not feasible, and notes that cell phone access is not meant to replace radio use. This policy could be expanded to talk about specific patrol beats in remote areas that justify cell phone access, or the need for cell phone use by under-cover investigators. Again, these descriptions of duties entitling staff to a County cell phone should discriminate between positions being given a phone because access at all times is necessary, even if the phone is never used, and positions being given a phone to increase efficiency. In the former case, employees should be required to carry the phone at all times. In the latter case, phone use should be reviewed annually, and should be terminated if the actual use does not justify the monthly cost of service access. All departments should provide some access to pooled phones for staff whose need is occasional, and also should provide the ability to use a personal phone for County business, with reimbursement. The Public Health Department s policies have emphasized this, including the ability of staff that need phones primarily for access to get it via personal phones, along with a monthly subsidy of their costs that still provides savings over providing a completely separate County phone. A description of the circumstances where texting, access or data access may be added to an employee s County phone service. and data access should only be provided based on reasons that an employee cannot access these systems through non-mobile means. The Public Health Department s policy specifically states: Texting shall be considered an emergency resource and not a normal business practice. 22 Board of Supervisors Management Audit Division

31 Report on Cell Phone Usage in the County of Santa Clara Procedures for staff to reimburse the County for personal use on County phones, or to receive reimbursement for County use on personal phones. These procedures should include having employees review and annotate the relevant cell phone bills, have a supervisor sign off on the reimbursement, and have the department maintain this documentation for a reasonable period of time. The policy should also include periodic spot auditing of phone bills by managers. Also, both the Countywide and departmental policies should include suggestions and reminders to employees regarding the need to limit cell phone costs. For example, the Social Services Agency s policies reminds employees not to make any kind of operator assisted calls, because of the cost, and requests that directory assistance calls be kept to a minimum. During the exit conference process of this report, we met with representatives of the four departments with the largest percentage of total savings, as described above, in order to get their comments. These departments variously reported on specific aspects of their cell phone use, or steps they have previously taken to address use issues, as follows: The Social Services Agency acknowledged that this report had identified low use telephones and calling-plan issues that it had not previously identified through its own monitoring, and also agreed that improvements in Agency cell phone policies, to more specifically identify specific job titles or job duties that merited assignment of cell phones, would be a worthwhile addition to its internal monitoring. The Agency expressed concern about centralizing control over phone services, discussed in the next section of the report, because of a concern about service responsiveness, given the frequency of telephone contacts to SSA staff from Agency clients and related casework. Health and Hospital System staff noted that a substantial number of low-use phones identified in our analysis had been eliminated after the end of For example, 51 of 83 such phones assigned to the SCVHHS Facilities Department were cut. This is consistent with the recent audit of SCVHHS administration and support services, issued in April 2011, which included cell-phone management 23 Board of Supervisors Management Audit Division

32 Report on Cell Phone Usage in the County of Santa Clara as a specific finding, including consideration of reimbursing staff for use of personal phones for business use when it would save money over a Countyissued phone. SCVHHS agreed with the findings of that analysis. The Office of the Sheriff, after reviewing the analysis of low-use cell phone numbers, reported that many of the 238 low-use phone numbers identified were actually numbers attached to data cards used for wireless Internet access primarily by computers in patrol cars. The computers are used by patrol deputies to access criminal records databases and other relevant information while on patrol, and remain with the computer installed in each patrol car. The Probation Department reported that prior to receiving the Management Audit analysis, it had already begun identifying low-use phones, and developing alternative arrangements. These included shifting phones with less than 100 minutes of use per month to plans charged only for actual use, rather than a monthly fee, making greater use of pooled phones for probation officers to use when going into the field, and shifting the Department s primary cell phone provider from Verizon to Sprint, based on an analysis showing that savings would occur. Department administrative staff stated that the timetable for implementing these alternatives is now being discussed with Department management. Probation staff also indicated a concern with centralized control of cell phones within the County, stating that cell phones are considered by staff as part of their safety equipment, with the phones walkie-talkie feature often used by staff for internal communication instead of two-way radios, and therefore availability of working phones when needed is very important. More specific departmental policies, as described in this Section, would clarify which staff members are entitled to County-provided cell phones, on what basis, what the restrictions are for their use, and what the reimbursement requirements are when using a personal cell phone on County business. However, as evidenced by the current decentralized responsibility for and management of cell phones in the County, cost savings will only occur when and where departmental managers monitor and enforce these policies. 24 Board of Supervisors Management Audit Division

33 Report on Cell Phone Usage in the County of Santa Clara SECTION VI Establishing Managerial Oversight and Accountability for County-wide Telephone Services Centralizing control over the issuance of cell phones and management of cell phone costs in one County Department would permit additional expertise to be developed regarding who should receive phones and with what features in order to provide the necessary service at the lowest possible cost. Further, centralizing cell phone management would facilitate the competitive bidding of Countywide telephone services under a multi-year contract with a single vendor to maximize Countywide savings. Combining this oversight with the oversight of land-line phones could produce even greater efficiencies by assessing the combined needs of employees and eliminating excess equipment and services from our present 32,835 total phones costing at least $3.3 million annually. Substantial precedent exists in the County and in other jurisdictions to achieve cost savings and improve control by centralizing responsibility for telephones, vehicles and other equipment and services. As described earlier in this report, approval and ordering of cell phone service is carried out by individual County departments, ordering service from contracts that have been negotiated with the County s three cell-phone providers by the Procurement Department. This authority has been provided since at least October 1, 1996, when the former county executive issued a policy that included the following statement: Board of Supervisors Management Audit Division 25