The Public Eye

Reports from the Bee's investigative team

July 2, 2010
Sacramento County departments feud over bills

Sacramento County government is grumbling about high bills from, well, Sacramento County government.

The District Attorney's Office is claiming the county's IT department (formally known as the Office of Communications and Information Technology, or OCIT) is overbilling them almost $320,000 in the fiscal year starting July 1. The DA told the Board of Supervisors during budget hearings that the money is enough to pay for two attorneys.

As odd -- or perhaps absurd -- as it may sound, government charges itself for services. It's an accounting thing. So, for example, when an IT guy helps the District Attorney's Office with computer issues, the DA's office pays an hourly rate to the IT department.

The dispute stems from officials' decision to change the way they billed for services. In the past, IT department labor rates were higher. The rates included not just the labor costs but also helped cover the department's debt payments and other overhead costs.

Large departments like the DA's Office do much of their IT work in house and therefore were relatively unaffected by the high rates. Smaller departments that relied heavily on OCIT, however, paid more.

Last year, top county officials decided to lower the labor rate and break out the debt service and some overhead costs as a separate fee for all departments based on a per-employee basis. This means the labor costs went down for those departments that use OCIT regularly, while the cost went up for some, like the DA, that traditionally have not.

"It's important to recognize that OCIT does not show a "profit" through its rates. We're talking about one-sized pie, which can be sliced in different ways. There was no net increase in revenue for OCIT with the new cost methodology," the county's chief of e-government and business services, Rami Zakaria, wrote The Bee in an e-mail.

In response to the DA's concerns, county officials are reviewing how they charge departments for overhead, administration and other centralized costs.

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