Status of Recommendations

Recommendations Not Fully Implemented After One Year The Omnibus Audit Accountability Act of 2006 C O M M I T M E N T Y TIRGETNI January 2017 Report 2016-041 L E A D E R S H I P CALIFORNIA STATE AUDITOR 621 Capitol Mall, Suite 1200 | Sacramento | CA | 95814 916.445.0255 | TTY 916.445.0033 For complaints of state employee misconduct, contact us through the Whistleblower Hotline: 1.800.952.5665 Don’t want to miss any of our reports? Subscribe to our email list at auditor.ca.gov For questions regarding the contents of this report, please contact Margarita Fernández, Chief of Public Affairs, at 916.445.0255 This report is also available online at www.auditor.ca.gov | Alternate format reports available upon request | Permission is granted to reproduce reports Elaine M. Howle State Auditor Doug Cordiner Chief Deputy January 12, 2017 2016-041 Dear Governor and Legislative Leaders: Consistent with the Omnibus Audit Accountability Act of 2006 (Government Code sections 8548.7 and 8548.9), the California State Auditor (State Auditor) presents this special report to the Joint Legislative Audit Committee, Joint Legislative Budget Committee, and Department of Finance. This report notes that from November 2009 through October 2015, the State Auditor issued 232 reports on audits and investigations of state agencies. In those reports, we made 1,739 recommendations and state agencies had fully implemented 1,433, or 82 percent, as of October 2016. However, we identified that 306 recommendations are more than one year old and remain outstanding. Similarly, the State Auditor issued 42 reports to nonstate entities, such as counties or school districts. In those reports, we made 371 recommendations and, as of October 2016, the nonstate entities had implemented 330, or 89 percent, of them. Further, we determined that 41 recommendations are more than one year old and remain outstanding. In addition to identifying which recommendations have and have not been fully implemented, the State Auditor’s website contains written responses from each state agency explaining the status of each recommendation. For recommendations that have not been fully implemented, the website also provides agency responses regarding when or if these recommendations will be fully implemented. Our audit and investigative efforts bring the greatest returns when agencies act upon our findings and recommendations. For example, in September 2008 the State Auditor conducted an audit of Laboratory Field Services (Laboratory Services) within the California Department of Public Health. The State Auditor examined Laboratory Services’ effectiveness in overseeing clinical laboratories that analyze human specimens such as blood, tissue, and urine so that medical professionals can make diagnoses and prescribe treatment. The State Auditor reported that Laboratory Services’ lack of clinical laboratory oversight placed the public at risk, and we directed 11 recommendations to it. Because Laboratory Services had failed to implement nine of the 11 recommendations by October 2014—six years following the audit report—the State Auditor performed a follow-up audit in 2015. The follow-up audit revealed that Laboratory Services was still failing to oversee clinical laboratories and that it has inadequately managed the program. In fact, the audit found that Laboratory Services had made an unauthorized fee increase in January 2014, which has resulted in labs overpaying it more than $1 million in fees; and, since 2008, it has collected more than $12 million in lab fees that it has not spent. The State Auditor made 10 new recommendations and Laboratory Services has since taken steps to implement them. By October 2016 Laboratory Services had fully implemented five of the 10 recommendations we directed to it. Although this represents significant progress, Laboratory Services has yet to fully implement the recommendation to inspect every two years all in-state and out-of-state labs it has licensed, which is a core oversight responsibility. By implementing the State Auditor’s recommendations, Laboratory Services can provide more effective oversight of laboratories as state law requires resulting in better protection for the state’s residents. If you would like more information or assistance regarding any of the recommendations or background provided in this report, please contact Margarita Fernández, Chief of Public Affairs, at (916) 445 0255. Respectfully submitted, ELAINE M. HOWLE, CPA California State Auditor 621 Capitol Mall, Suite 1200 Sacramento, CA 95814 916.445.0255 916.327.0019 fax www.auditor.ca.gov Blank page inserted for reproduction purposes only. California State Auditor Report 2016-041 v January 2017 Contents Introduction 1 Table 1 Recommendations Made to State Entities That Are More Than Five Years Old and Are Still Not Fully Implemented 5 Table 2 Recommendations Made to State Entities That Are More Than One Year Old and Are Still Not Fully Implemented 9 Table 3 Recommendations Made to State Entities That Are More Than One Year Old and Were Fully Implemented or Resolved Since Last Year’s Report or the Entities’ One-Year Responses 45 Table 4 Recommendations Made to Nonstate Entities That Are More Than One Year Old and Are Still Not Fully Implemented 57 Table 5 Recommendations Made to Nonstate Entities That Are More Than One Year Old and Were Fully Implemented or Resolved Since Last Year’s Report or the Entities’ One-Year Responses 65 vi California State Auditor Report 2016-041 January 2017 Blank page inserted for reproduction purposes only. California State Auditor Report 2016-041 1 January 2017 INTRODUCTION As required by the Omnibus Audit Accountability Act of 2006 (Accountability Act), the California State Auditor (State Auditor) presents this report on the status of recommendations that are more than one year old and have not been fully implemented by the entities we audited. The Accountability Act requires state agencies audited or investigated by the State Auditor to provide updates on their implementation of audit recommendations. The State Auditor’s long standing practice, which is consistent with generally accepted government auditing standards, is to request audited entities to provide written updates on their implementation of audit recommendations 60 days, six months, and one year after the audit report’s public release date. For investigative reports, state law requires state agencies that are the subject of an investigation to provide updates on their implementation of recommendations within 60 days of receiving the report and monthly thereafter until the agency has taken final action. As the State Auditor implemented the Accountability Act, it retained these prescribed time frames as the intervals at which agencies must report back on their implementation of audit recommendations. The State Auditor first notified all state agencies of their responsibilities under the Accountability Act and the State Auditor’s plans for implementing these requirements in May 2007. Since that time, the State Auditor has annually provided a reminder to relevant state agencies regarding recommendations issued that were more than a year old and not fully implemented. RESULTS IN BRIEF State Entities From November 2009 through October 2015, the State Auditor issued 232 reports that related to audits or investigations of state agencies. These reports were requested through the Joint Legislative Audit Committee, legislation, or as a result of an investigation.1 The State Auditor made 1,739 recommendations to the audited state agencies in those reports, of which 1,433 have been fully implemented. Since our last report issued on January 14, 2016, state agencies implemented 123 long‑outstanding recommendations. However, the State Auditor identified 306 recommendations made to 52 state agencies that had been outstanding at least one year and remain not fully implemented as of October 2016. Nonstate Entities From January 2011 through October 2015, the State Auditor issued 42 reports to nonstate entities, and made 371 recommendations to these entities, of which 330 have been fully implemented. Since our last report issued on January 14, 2016, nonstate entities implemented 16 long‑outstanding recommendations. However, the State Auditor identified 41 recommendations made to 18 nonstate entities that had been outstanding at least one year and not fully implemented as of October 2016. 1 Excludes the statewide single audit (financial and federal compliance audits), which is mandated as a condition of California receiving federal funding. The recommendations made in those audits are followed up and reported each year in the State Auditor’s annual reports on California’s Internal Control and State and Federal Compliance. As of January 1, 2010, the State Auditor began reporting as required on the status of recommendations made in investigative reports. The State Auditor initiated the investigations in response to whistleblower complaints or other information suggesting improper governmental activities. 2 California State Auditor Report 2016-041 January 2017 Importance of Implementing Recommendations Our audit and investigative efforts bring the greatest returns when agencies act upon our findings and recommendations. For example, in September 2008 the State Auditor conducted an audit of Laboratory Field Services (Laboratory Services) within the Department of Public Health. The State Auditor examined Laboratory Services’ effectiveness in overseeing clinical laboratories that analyze human specimens such as blood, tissue, and urine so that medical professionals can make diagnoses and prescribe treatment. The State Auditor reported that Laboratory Services’ lack of clinical laboratory oversight placed the public at risk and directed 11 recommendations to it. Because Laboratory Services had failed to implement nine of the 11 recommendations by October 2014— six years following the audit report—the State Auditor performed a follow up audit in 2015. The follow up audit revealed that Laboratory Services was still failing to oversee clinical laboratories and that it has inadequately managed the program. In fact, the audit found that Laboratory Services had made an unauthorized fee increase in January 2014, which has resulted in labs overpaying it more than $1 million in fees, and since 2008 it has collected more than $12 million in lab fees that it has not spent. The State Auditor made 10 new recommendations and Laboratory Services has since taken steps to implement them. By October 2016 Laboratory Services had fully implemented five of the 10 recommendations we directed to it. Although this represents significant progress, Laboratory Services has yet to fully implement the recommendation to inspect every two years all in‑state and out‑of‑state labs it has licensed, which is a core oversight responsibility. By implementing the State Auditor’s recommendations Laboratory Services can provide more effective oversight of laboratories as state law requires resulting in better protection for the State’s residents. In October 2016 the State Auditor provided written notice to audited and investigated entities regarding recommendations that were more than a year old and not fully implemented related to reports issued from November 2009 through October 2015. The tables beginning on page 5 summarize and provide information on recommendations issued between November 2009 and October 2015. Table 1 shows recommendations more than five years old that were not fully implemented as of the agencies’ latest response. Because the recommendations shown in Table 1 are from audits issued between November 2009 and October 2010 and are more than five years old, they will not be reassessed by the State Auditor in subsequent reports. Table 2, beginning on page 9, summarizes recommendations made to state entities that have not been fully implemented for audits and investigations issued between November 2010 and October 2015. As indicated on Table 2, the State Auditor did not always agree with agency assertions that certain recommendations were fully implemented. Two columns in Table 2 provide the State Auditor’s reason for disagreement. Table 3, beginning on page 45, summarizes recommendations made to state entities that have been fully implemented since last year’s report or the agencies’ one‑year responses. Finally, tables 4 and 5, beginning on page 57 and 65, respectively, summarize all recommendations more than one year old made to nonstate entities and their current implementation status. The symbol appears in the tables next to the audit number whenever an audit has recommendations to more than one agency appearing in this report. Please refer to the index on page 3. California State Auditor Report 2016-041 3 January 2017 Index Reference for Reports Featuring Recommendations to Multiple Entities REPORT ENTITIES WITH RECOMMENDATIONS State Entities With Recommendations—Included in Tables 1, 2, and 3 A 2009-107.2 California Correctional Health Care Services, California Department of Corrections and Rehabilitation B 2010-116 Department of State Hospitals, California Department of Corrections and Rehabilitation C 2011-111 Employment Development Department, California Workforce Investment Board D 2011-120 California Department of Transportation, Department of General Services E 2012-107 California Department of Public Health, Department of Developmental Services F 2012-110 Department of Motor Vehicles, California Natural Resources Agency, California Governor’s Office of Emergency Services, Department of Parks and Recreation G 2012-117 California State Athletic Commission, Department of Consumer Affairs H 2012-122 Department of Health Care Services, Mental Health Services Oversight and Accountability Commission I 2012-603 California Department of Human Resources, State Controller’s Office, California Science Center J 2013-109 California Public Utilities Commission, Office of Ratepayer Advocates K 2013-124 University of California; University of California, Berkeley; University of California, Los Angeles; California State University, Chico; California State University, San Diego; The California State University L 2014-107 Administrative Office of the Courts, Judicial Council of California M 2014-108 State Board of Equalization, Department of General Services N 2014-116 Board of Registered Nursing, Department of Consumer Affairs, California Department of Technology O 2014-124 Department of Motor Vehicles, California Public Utilities Commission P 2014-131 Franchise Tax Board, California Health Benefit Exchange, California Department of Technology Q 2015-032 Chancellor of the California Community Colleges, The California State University, University of California R 2015-508 California Workforce Investment Board, Employment Development Department S 2015-608 California Department of Social Services, California Department of Human Resources T I2015-1 California Correctional Health Care Services, California Department of Corrections and Rehabilitation, California Department of Transportation Nonstate Entities With Recommendations— Included in Tables 4 and 5 U 2010-036 County of Humboldt, County of Riverside, County of San Diego, County of Santa Barbara, Shasta County V 2013-036 County of Butte, County of Riverside, County of San Diego W 2013-116 County of Los Angeles, Los Angeles Emergency Medical Services Agency X 2014-132 Golden State Water Company, Hesperia Water District, Victorville Water District State and Nonstate Entities with Recommendations— Included in Tables 2, 3, 4, and 5 Y 2012-108 California Department of Education, Sacramento City Unified School District Additional information on each recommendation is available at the State Auditor’s website. The website includes each agency’s response to the current status of outstanding recommendations. The website also includes the audit or investigative report and summary, the text of the recommendation, and the State Auditor’s assessment of whether the agency has fully implemented the recommendation, based on the agency’s response, supporting documentation, and inquiries. 4 California State Auditor Report 2016-041 January 2017 Blank page inserted for reproduction purposes only. California State Auditor Report 2016-041 5 January 2017 Table 1 Recommendations Made to State Entities That Are More Than Five Years Old and Are Still Not Fully Implemented (Reports Issued From November 2009 Through October 2010) NUMBER OF YEARS RECOMMENDATION HAS APPEARED IN ESTIMATED DATE REPORT TITLE, NUMBER, AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION HEALTH AND HUMAN SERVICES California Department of Public Health Department of Public Health: It Reported 2. To increase revenue for the penalty accounts, Public Health should 6 Will Not Inaccurate Financial Information and Can Likely seek legislation authorizing it to revise periodically the penalty Implement Increase Revenues for the State and Federal amounts to reflect an inflation indicator, such as the CPI. Health Facilities Citation Penalties Accounts 2010-108 (June 2010) 3. To increase revenue for the penalty accounts, Public Health should 6 December 2017 ensure that it conducts all state surveys of facilities every two years, as required by state law. 4. To ensure that it complies with current state law and increases 6 December 2016 transparency, Public Health should adopt regulations for the administration of temporary management companies. 5. To increase revenue for the state account, Public Health should seek 6 Will Not legislation authorizing it to require facilities that want to contest the Implement monetary penalty to pay the penalty upon its appeal which could then be deposited into an account within the special deposit fund. The original monetary penalty deposited, plus interest accrued in the account, should then be liquidated in accordance with the terms of the decision. 6. To ensure consistency with federal guidance related to federal 6 Will Not requirements, and that it is not creating incentives for facilities to Implement appeal citations issued for noncompliance with state requirements, Public Health should provide guidance to its staff that discourages settling appealed monetary penalties for a better term than had the facility not contested the citation and paid the penalty within the time frame specified in law to receive a 35 percent reduction. If Public Health believes instances occur when it is appropriate to reduce a monetary penalty by more than 35 percent, it should document which statutory or regulatory factors that formed the basis for concluding that the original class of citation and corresponding monetary penalty amount were no longer considered valid or relevant. 7. To increase revenue for the penalty accounts, Public Health should 6 Will Not seek legislation specifying a time frame within which facilities with Implement nonappealed citations that do not qualify for a 35 percent reduction must pay their monetary penalties and allowing Public Health to collect interest on late payments of monetary penalties. Department of Developmental Services Department of Developmental Services: A 1. To ensure that consumers receive high-quality, cost-effective services 6 Will Not More Uniform and Transparent Procurement that meet the goals of their individual development plans (IPPs) Implement and Rate-Setting Process Would Improve the consistent with state law, Developmental Services should require Cost-Effectiveness of Regional Centers the regional centers to document the basis of any IPP-related vendor 2009-118 (August 2010) selection and specify which comparable vendors (when available) were evaluated. 2. To ensure that consumers receive high-quality, cost-effective 6 Will Not services that meet the goals of their IPPs consistent with state law, Implement Developmental Services should review a representative sample of this documentation as part of its biennial waiver reviews or fiscal audits to ensure that regional centers are complying with state law—and particularly with the July 2009 amendment requiring selection of the least costly available provider of comparable service. continued on next page . . . 6 California State Auditor Report 2016-041 January 2017 NUMBER OF YEARS RECOMMENDATION HAS APPEARED IN ESTIMATED DATE REPORT TITLE, NUMBER, AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION Department of Health Care Services Department of Health Care Services: It Needs to 2. To ensure that Medi‑Cal recipients receive timely access to prescribed 6 Will Not Streamline Medi‑Cal Treatment Authorizations drugs, Health Care Services should abolish its policy of responding Implement and Respond to Authorization Requests Within to drug TARs by the end of the next business day and should instead Legal Time Limits ensure that prior‑authorization requests to dispense drugs are 2009‑112 (May 2010) processed within the legally mandated 24‑hour period. Alternatively, it should seek formal authorization from CMS to deviate from the 24‑hour requirement, and should seek a similar modification to state law. In addition, Health Care Services should begin recording the actual time it receives paper TARs so that it can begin to measure accurately its processing times. 3. To ensure that Medi‑Cal recipients are receiving timely medical 6 Will Not services from providers, Health Care Services should start tracking Implement prior‑authorization medical TARs separately and should ensure that such TARs are processed within an average of five working days. Although state law and regulations specifically require prior authorization for certain medical services, Health Care Services generally does not require prior authorizations in practice. Consequently, Health Care Services should seek legislation to update existing laws and amend its regulations to render them consistent with its TAR practices. Department of Public Health: It Faces 1. To the extent that Public Health continues to fund its various 6 Will Not Significant Fiscal Challenges and Lacks contracts, it should establish clearer expectations with its contractors Implement Transparency in Its Administration of the Every concerning how much money is to be spent directly on the different Woman Counts Program 2010‑103R (July 2010)† aspects of the EWC program and should monitor spending to confirm that these expectations are being met. 2. To ensure better public transparency and accountability for how the 6 June 2017 EWC program is administered, Public Health should comply with state law to develop regulations, based on input from the public and interested parties, that will direct how Public Health administers the EWC program. At a minimum, such regulations should define the eligibility criteria for women seeking access to EWC screening services. CORRECTIONS AND REHABILITATION California Correctional Health Care Services * California Department of Corrections and 5. To determine whether the additional expansion of telemedicine is 6 Fiscal Year Rehabilitation: Inmates Sentenced Under cost‑effective within the California correctional system, Prison Health 2017–18 A the Three Strikes Law and a Small Number Care Services should identify and collect the data it needs to estimate of Inmates Receiving Specialty Health Care Represent Significant Costs the savings of additional telemedicine through an analysis of the cost 2009‑107.2 (May 2010) of specialty care visits currently provided outside of the institution that could be replaced with telemedicine. TRANSPORTATION California High‑Speed Rail Authority High‑Speed Rail Authority: It Risks Delays 3. To avert possible legal challenges, the Authority should ensure that 6 Will Not or an Incomplete System Because of the review group adheres to the Meeting Act or seek a formal opinion Implement Inadequate Planning, Weak Oversight, and from the Office of the Attorney General regarding whether the review Lax Contract Management group is subject to this act. 2009‑106 (April 2010) California State Auditor Report 2016-041 7 January 2017 NUMBER OF YEARS RECOMMENDATION HAS APPEARED IN ESTIMATED DATE REPORT TITLE, NUMBER, AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION ENVIRONMENTAL PROTECTION California Department of Resources Recycling and Recovery Department of Resources Recycling 4. The department should weave benchmarks, coupled with metrics 6 December 2017 and Recovery: Deficiencies in Forecasting and to measure the quality of its activities, into the strategic plan for Ineffective Management Have Hindered the the beverage program to allow it to better measure progress in Beverage Container Recycling Program meeting goals. 2010‑101 (June 2010) 5. The department should ensure that the strategic plan incorporates all 6 December 2017 relevant activities of the beverage program. * As of July 5, 2011, Prison Health Care Services became California Correctional Health Care Services. † This audit concerns Every Woman Counts, a program that was transferred from the California Department of Public Health to the Department of Health Care Services effective July 1, 2012. 8 California State Auditor Report 2016-041 January 2017 Blank page inserted for reproduction purposes only. California State Auditor Report 2016-041 9 January 2017 Table 2 Recommendations Made to State Entities That Are More Than One Year Old and Are Still Not Fully Implemented (Reports Issued From November 2010 Through October 2015) STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION K–12 EDUCATION California Department of Education California Department of 2. To demonstrate its willingness to fairly evaluate 3 Will Not Education: Despite Some regional expenditures, Education should allow Implement Improvements, Oversight San Joaquin to reimburse its general fund for the of the Migrant Education vehicle purchase Education incorrectly disallowed. Program Remains Inadequate 13. To determine if the statewide migrant education 3 June 2017 2012-044 (February 2013)* program is effective, Education should finalize its current evaluation of the program and begin developing the capacity to produce a more robust annual evaluation of the program. 14. To address a lack of detailed migrant program service 3 June 2017 and outcome data, Education should either expand the capabilities of its existing statewide databases or implement additional systems that would allow regions to capture more detailed data about migrant students. School Safety and 19. To provide stronger leadership with respect to 3 Will Not Nondiscrimination Laws: Most school safety and nondiscrimination laws, Education, Implement Y Local Educational Agencies Do with direction from the superintendent of public Not Evaluate the Effectiveness instruction, should use data from the kids survey and of Their Programs, and reported suspensions and expulsions to evaluate the the State Should Exercise levels of discrimination, harassment, intimidation, Stronger Leadership and bullying students encounter and to determine 2012-108 (August 2013)* the effectiveness of its own and the LEAs’ efforts, and report the results to the Legislature by August 1, 2014. 21. To provide stronger leadership with respect to 3 †  school safety and nondiscrimination laws, Education, with direction from the superintendent of public instruction, should within the next six months and annually thereafter, update and replace the resources on its website to provide more relevant information on best practices, such as preventing and responding to incidents related to a protected characteristic or that occur through cyberbullying, the U.S. DOE report on state bullying legislation, and best practices in other states, such as the Massachusetts law on LEA staff training requirements. HIGHER EDUCATION Chancellor of the California Community Colleges California Community College 1. To ensure that colleges receive consistent and fair 2 Unknown Accreditation: Colleges treatment and are able to address deficiencies, the Are Treated Inconsistently chancellor’s office should work with the community and Opportunities Exist colleges and request clearer guidance from the for Improvement in the commission regarding what actions would allow Accreditation Process for the full two-year period in which to remediate 2013-123 (June 2014) concerns and what actions would constitute good cause for extending the time an institution has to address deficiencies beyond two years. In doing so, the chancellor’s office should also encourage the commission to specify in its policies those scenarios under which it would exercise the good cause exception so that institutions would have a better understanding of when they might reasonably expect additional time to address deficiencies. continued on next page . . . 10 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 2. To ensure that community colleges and the public are 2 Unknown fully informed regarding the accreditation process, the chancellor’s office should assist community colleges in communicating their concerns to the commission regarding its transparency and in developing proposals for improving the commission’s transparency policies and practices. The chancellor’s office should also encourage the commission to publish policies describing the role of its staff in the commission’s decision-making processes. 3. To make certain that institutions receive fair 2 Unknown treatment in appealing decisions that terminate their accreditation, the chancellor’s office should work with the community colleges to advocate that the commission change certain aspects of its appeal process. Specifically, in keeping with the spirit of accreditation, when institutions have taken steps to correct deficiencies that led to the decision to terminate accreditation, the institutions should be allowed to have information on those corrections heard as evidence in their appeal. Further, the commission president’s involvement in selecting the appeal panel’s counsel should be revisited. 4. To strengthen institutions’ understanding of 2 Unknown what they must do to comply with standards, and to provide them with the opportunity to address certain issues that could jeopardize their compliance, the chancellor’s office, in collaboration with the community colleges, should encourage the commission to develop formal opportunities for institutions to communicate with and receive feedback from the commission on institutional self- studies and other reports before a formal evaluation takes place. In doing so, the chancellor’s office should consider the practices of other regional accreditors and identify those that would best meet the needs of California’s community colleges. 5. Community colleges, as members of the commission, 2 Unknown should communicate their concerns about and ideas for improvement of training on the accreditation process to the commission. To provide assurance to colleges that they may suggest this information freely, the chancellor’s office should coordinate communication between the commission and the colleges. Further, in order to build collegial relationships, engage new people in the accreditation process, and extend additional training to those already involved in accreditation, the chancellor’s office should encourage the commission to develop an annual conference focused on accreditation and oversight. 7. To allow colleges flexibility in choosing an accreditor, 2 Unknown the chancellor’s office should identify other accreditors who are able to accredit California community colleges or who would be willing to change their scopes to do so. 8. To allow colleges flexibility in choosing an accreditor, 2 Unknown the chancellor’s office should assess the potential costs, risks, and feasibility of creating a new independent accreditor. California’s Postsecondary 20. To ensure that its respective institutions comply with 1 October 2016 Educational Institutions: the Clery Act, the Community Colleges Chancellor’s Q More Guidance Is Needed Office should develop written policies and procedures to Increase Compliance to provide guidance to its institutions on how to With Federal Crime report accurate Clery Act crime statistics and ensure Reporting Requirements that all required disclosures are included in its 2015-032 (July 2015) respective institutions’ annual security reports. The Community Colleges Chancellor’s Office should then annually revisit the written policies and procedures to ensure that they are up to date. California State Auditor Report 2016-041 11 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION The California State University California State University’s 4. Within six months of the date the Legislature clarifies 2 December Extended Education: It Is its intent regarding Education Code section 89708, 2016 Unclear Whether Supplanting the Chancellor’s Office should develop and issue Occurred, and Campuses Did final guidance to campuses regarding supplanting, Not Always Document Their including identifying appropriate oversight Adherence to Laws, Policies, mechanisms for ensuring campuses’ compliance with and Procedures this law. 2012-113 (December 2013) California’s Postsecondary 19. To ensure that its respective institutions comply 1 January 2018 Educational Institutions: with the Clery Act, the CSU Office of the Chancellor Q More Guidance Is Needed should develop written policies and procedures to to Increase Compliance provide guidance to its institutions on how to report With Federal Crime accurate Clery Act crime statistics and ensure that Reporting Requirements all required disclosures are included in its respective 2015-032 (July 2015) institutions’ annual security reports. The CSU Office of the Chancellor should then annually revisit the written policies and procedures to ensure that they are up to date. University of California University of California: 1. To address the variations in per student funding of 5 January 2017 Although the University its campuses, the university should complete its Maintains Extensive Financial reexamination of the base budgets to the campuses Records, It Should Provide and implement appropriate changes to its budget Additional Information to process. As part of its reexamination of the base Improve Public Understanding budget, it should: of Its Operations • Identify the amount of general funds and tuition 2010-105 (July 2011) budget revenues that each campus receives for specific types of students (such as undergraduate, graduate, and health sciences) and explain any differences in the amount provided per student among the campuses. • Consider factors such as specific research and public service programs at each campus, the higher level of funding provided to health sciences students, historical funding methods that favored graduate students, historical and anticipated future variations in enrollment growth funding, and any other factors applied consistently across campuses. • After accounting for the factors mentioned above, address any remaining variations in campus funding over a specified period of time. • Make the results of its reexamination and any related implementation plan available to stakeholders, including the general public. 8. To ensure that campuses do not inappropriately use 5 Will Not revenues generated from student fees imposed by Implement referenda, the university should ensure that it, the regents, and the campuses do not expand the uses for such revenues beyond those stated in the referenda. Investigations of Improper 23. To address the improper acts we identified, the 3 Unknown Activities by State Agencies university should collect $1,802 from the official for and Employees: Bribery, the wasteful expenses he claimed for lodging and Conspiracy to Commit Mail meals during his trip to England, the expenses he Fraud, Improper Overtime incurred within the vicinity of his headquarters, and Payments, Improper Use of the business meal expenses. Lease Proceeds, Improper Travel Expenses, and Other 27. The university should revise policies to establish 3 Unknown Violations of State Law defined maximum limits for the reimbursement of domestic lodging costs and establish controls that I2012-1 (October 2012) ‡ allow for exceptions to the limits under specific circumstances only. Sexual Harassment and Sexual 5. The Office of the President should direct all of the 2 †  Violence: California universities within the UC system to comply with K Universities Must Better the recommendations in this audit report. Also, to Protect Students by Doing ensure that its universities are complying with Title IX More to Prevent, Respond to, requirements, the Office of the President should and Resolve Incidents conduct routine Title IX reviews. When conducting 2013-124 (June 2014)* these compliance reviews, the Office of the President should determine whether universities have implemented this report’s recommendations. continued on next page . . . 12 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 49. The Office of the President should clarify in the 2 †  UC policies that a complainant must have and be informed about the right to end the early resolution process at any time and request that his or her complaint be handled under the university’s formal process. 51. The Office of the President should clarify in the UC 2 †  policies that if university officials approve an extension to an investigative timeline, the extension should be restricted to a single extension of no more than 30 days, except in limited circumstances that are beyond the university’s control. California’s Postsecondary 18. To ensure that its respective institutions comply with 1 February 2017 Educational Institutions: the Clery Act, UCOP should finalize and implement its Q More Guidance Is Needed draft policy that will provide additional guidance and to Increase Compliance oversight to its institutions. With Federal Crime Reporting Requirements 2015-032 (July 2015) University of California, Berkeley Sexual Harassment and Sexual 8. To help ensure that university faculty and staff do not 2 †  Violence: California mishandle student reports of incidents, all faculty K Universities Must Better and staff should receive training annually, consistent Protect Students by Doing with their role, on their obligations in responding to More to Prevent, Respond to, and reporting incidents of sexual harassment and and Resolve Incidents sexual violence. 2013-124 (June 2014)* 20. All universities should provide their education on 2 †  sexual harassment and sexual violence to incoming students as close as possible to when they arrive on campus but no later than the first few weeks of their first semester or quarter. Further, universities should provide periodic refresher educational programs, at least annually, to all students on campus to ensure that they are aware of how to handle and report incidents of sexual harassment and sexual violence. 58. All universities should ensure that the differences 2 †  between an informal or early resolution process and a formal investigation process are clearly explained to ensure that students know what to expect from each process. Further, they should explain that students whose cases are being handled under an informal or early resolution process have the right to move to a formal process at any time. University of California, Davis University of California, 4. UC Davis should collect all late fees that its 1 Will Not Davis: It Has Not Identified licensees owe. Implement Future Financing for the Strawberry Breeding 6. UC Davis should develop a risk-based audit plan to 1 June 2016 Program nor Collected All begin periodically reviewing the financial records of Available Revenues master licensees and licensed nurseries to ensure that they are accurately reporting all of their sales 2014-121 (June 2015) of licensed strawberry varieties and paying the university all the royalties it is entitled to. To encourage compliance, UC Davis should notify all master licensees and licensed nurseries that it will begin auditing the sales records of selected licensees. University of California, Los Angeles Sexual Harassment and Sexual 9. To help ensure that university faculty and staff do not 2 †  Violence: California mishandle student reports of incidents, all faculty K Universities Must Better and staff should receive training annually, consistent Protect Students by Doing with their role, on their obligations in responding to More to Prevent, Respond to, and reporting incidents of sexual harassment and and Resolve Incidents sexual violence. 2013-124 (June 2014)* 21. All universities should provide their education on 2 †   sexual harassment and sexual violence to incoming students as close as possible to when they arrive on campus but no later than the first few weeks of their first semester or quarter. Further, universities should provide periodic refresher educational programs, at least annually, to all students on campus to ensure that they are aware of how to handle and report incidents of sexual harassment and sexual violence. California State Auditor Report 2016-041 13 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 59. All universities should ensure that the differences 2 †  between an informal or early resolution process and a formal investigation process are clearly explained to ensure that students know what to expect from each process. Further, they should explain that students whose cases are being handled under an informal or early resolution process have the right to move to a formal process at any time. HEALTH AND HUMAN SERVICES California Department of Public Health Developmental Centers: 18. To improve its enforcement, each year Public Health 3 June 2018 Poor-Quality Investigations, should evaluate the effectiveness of its enforcement E Outdated Policies, Leadership system across all types of health facilities, including and Staffing Problems, and those in developmental centers, prepare the required Untimely Licensing Reviews annual report, and, if called for, recommend legislation Put Residents at Risk to improve the enforcement system and enhance the 2012-107 (July 2013)* quality of care. California Department 3. To protect the health, safety, and well-being of 2 †  of Public Health: It Has residents in long-term health care facilities, Public Not Effectively Managed Health should improve its oversight of complaint Investigations of Complaints processing. Specifically, by May 1, 2015, Public Health Related to Long-Term Health should establish a specific time frame for completing Care Facilities facility-related complaint investigations and ERI 2014-111 (October 2014)* investigations and inform staff of the expectation that they will meet the time frame. Public Health should also require district offices to provide adequate, documented justification whenever they fail to meet this time frame. 4. To protect the health, safety, and well-being of 2 †   residents in long-term health care facilities, Public Health should improve its oversight of complaint processing. Specifically, by May 1, 2015, Public Health should develop formal written policies and procedures for PCB to process complaints about certified individuals in a timely manner. These policies and procedures should include specific time frames for prioritizing and assigning complaints to investigators, for initiating investigations, and for completing the investigations. Public Health should also inform staff of the expectation that they will meet these time frames. It should require PCB to provide adequate, documented justification whenever PCB fails to meet the time frames. 7. To ensure that district offices address ERIs consistently 2 †  and to ensure that they investigate ERIs in the most efficient manner, Public Health should review periodically a sample of the priorities that district offices assign to ERIs to ensure compliance with best practices. 8. To protect the residents in long-term health care 2 June 2018 facilities from potential harm, Public Health should ensure that its district offices have adequate staffing levels for its licensing and certification responsibilities, including staffing levels that allow prompt investigations of complaints. Specifically, Public Health should continue working with CalHR to complete the reclassification of district offices’ investigator supervisor and manager positions and then quickly fill the vacant positions at district offices. 12. To ensure that its district offices properly investigate 2 January 2017 complaints and ERIs, Public Health should make certain that all district offices follow procedures requiring supervisory review and approval of complaint and ERI investigations. If the district offices do not have a sufficient number of supervisors to review investigations they did not conduct, Public Health should arrange to assist the districts until such time that they do have a sufficient number of supervisors. continued on next page . . . 14 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 13. To make certain that its district offices comply with 2 June 2017 federal requirements regarding corrective action plans, Public Health should establish a process for its headquarters or regional management to inspect district office records periodically to confirm that they are obtaining corrective action plans according to the required time frame and verifying that facilities have performed the corrective actions described in the plans when required. 14. To ensure that it has closed complaints and ERIs 2 †   appropriately, Public Health should take steps by April 2015 to verify that complaints that its field operations branch closed administratively were closed appropriately. For example, it could request the district offices to verify that the closures were appropriate. California Department of 2. To increase its efforts to prevent and control diabetes, 1 Will Not Public Health: Even With a Public Health should develop a process for identifying Implement Recent Increase in Federal and applying for federal funding opportunities, Funding, Its Efforts to Prevent including routinely and proactively searching for Diabetes Are Focused on a grants. In addition, Public Health should seek funding Limited Number of Counties for a grants specialist position to identify and apply for 2014-113 (January 2015) federal and other grants. Follow-Up—California 2. To ensure it can provide effective oversight of labs as 1 June 2017 Department of Public Health: state law requires, Laboratory Services should inspect Laboratory Field Services Is all in-state and out-of-state labs it has licensed every Unable to Oversee Clinical two years. Laboratories Effectively, but a Feasible Alternative Exists 6. To ensure it can provide effective oversight of labs 1 December as state law requires, Laboratory Services should 2016 2015-507 (September 2015) work with Public Health’s budget section and other appropriate parties in developing a process to assess the budget act annually and to adjust its fees accordingly. The process should include its management’s review and approval of fee adjustments before it posts those fees publicly. 8. To ensure it can provide effective oversight of labs as 1 July 2017 state law requires, Laboratory Services should address staffing issues by preparing and resubmitting to Public Health a recruitment and retention proposal, developing a succession plan, and taking necessary steps to implement its planned reorganization. 9. To ensure it can provide effective oversight of labs as 1 June 2018 state law requires, Laboratory Services should ensure that its information technology data systems have necessary safeguards, contain accurate and complete data, and support its program needs. 10. To ensure it can provide effective oversight of labs as 1 January 2019 state law requires, Laboratory Services should update and develop its regulations as necessary to ensure consistency with existing state law. California Department of Social Services Child Welfare Services: 2. To encourage more effective communication from 5 Will Not California Can and Must county CWS agencies regarding its licensees, Social Implement Provide Better Protection Services should specify in regulations what types of and Support for Abused and situations or allegations the agencies should forward Neglected Children to its licensing division. 2011-101.1 (October 2011) 3. To ensure that rates paid to foster family agencies are 5 July 2017 appropriate, Social Services should analyze the rates and provide reasonable support for each component, especially the 40 percent administrative fee it currently pays these agencies. 4. Social Services should create and monitor compliance 5 January 2017 with clear requirements specifying that children placed with foster family agencies must have elevated treatment needs that would require a group home placement if not for the existence of these agencies’ programs. Specifically, Social Services should revise its regulations so licensed foster homes have higher priority than foster family agencies for children that do not have identified treatment needs. California State Auditor Report 2016-041 15 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 5. Social Services should require county CWS agencies 5 Will Not to file in CWS/CMS a detailed justification for any child Implement placed with a foster family agency. 6. Social Services should create a mechanism by which 5 Will Not it can efficiently check for compliance with the Implement needs-justification requirement. 8. To determine whether the hold harmless provision has 5 Will Not been effective in reducing caseloads and whether it Implement should be revised or rescinded, Social Services should refine and use CWS/CMS to calculate and report county CWS caseloads. 9. To encourage county CWS agencies to conduct 5 Will Not formal internal death reviews, Social Services should Implement revise its annual report on child deaths resulting from abuse or neglect to provide information on whether county CWS agencies conducted such a review of child deaths with prior CWS history. To obtain this information, Social Services should revise its regulations to require all county CWS agencies to not only report child deaths resulting from abuse or neglect but to also require a subsequent report indicating whether an internal child death review was completed. 11. To provide more useful information in its annual 5 Will Not report, Social Services should provide child death Implement information broken out by county, not just statewide totals. Further, Social Services should provide more analysis, such as comparing child death information over multiple years and presenting each county’s child deaths as a percentage of its total child population. Child Welfare Services: 40. To promote continued improvement in the CWS 2 January 2017 The County Child Welfare system, Social Services should encourage each Services Agencies We county CWS agency to designate personnel to Reviewed Must Provide Better update regularly their policies and procedures, Protection for Abused and to include a detailed description of the need for Neglected Children ongoing supervisory reviews of key aspects of their 2013-110 (April 2014) respective service processes and incorporate that description into their policies and procedures, and to designate personnel to perform regular quality assurance reviews. 41. To promote continued improvement in the CWS 2 Will Not system, Social Services should ask each county Implement CWS agency to report to Social Services on the status of these efforts within 60 days, six months, and one year from the publication of this audit report. Follow-Up—California 4. To ensure that all counties consistently gauge the 1 March 2017 Department of Social cost-effectiveness of their early fraud detection Services: It Has Not Corrected activities and ongoing investigation efforts for the Previously Recognized CalWORKs and CalFresh programs, Social Services Deficiencies in Its Oversight should develop a formula to regularly perform a of Counties’ Antifraud Efforts cost-effectiveness analysis using information that the for the CalWORKs and counties currently submit. Specifically, this formula CalFresh Programs should measure the savings that a county achieves for 2015-503 (June 2015)* each dollar spent on antifraud efforts. 5. To make certain that counties receive the greatest 1 March 2017 benefit from the resources they spend on antifraud efforts related to CalWORKs and CalFresh cases, Social Services should, using the results from the recommended cost-effectiveness analysis, determine why some counties’ efforts to combat welfare fraud are more cost-effective than others. 6. To make certain that counties receive the greatest 1 March 2017 benefit from the resources they spend on antifraud efforts related to CalWORKs and CalFresh cases, Social Services should seek to replicate the most cost-effective practices among all counties. Social Services should work with its legal counsel to determine whether to withhold information about these practices from public disclosure. continued on next page . . . 16 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 7. Social Services should track counties’ prosecution 1 March 2017 thresholds for welfare fraud cases and determine whether they affect counties’ decisions to investigate potential fraud, with a focus on determining best practices and cost-effective thresholds. If Social Services’ analysis determines that varying prosecution thresholds do affect counties’ decisions, it should then work with counties to implement the consistent use of these cost-effective prosecution thresholds. 8. Social Services should continue its efforts to ensure 1 December that counties follow state regulations regarding the 2016 use of the administrative disqualification hearings process until all counties have adopted the process. 9. To make certain that counties receive the greatest 1 December benefit from the resources they spend on antifraud 2016 efforts related to CalWORKs and CalFresh cases, Social Services should address and promptly act on the four remaining recommendations that its steering committee provided in 2008. 11. To ensure that counties are consistently following 1 January 2017 up on all match lists, Social Services should remind counties of their responsibility under state regulations to follow up diligently on all match lists. Further, it should work with counties to determine why poor follow-up exists and address those reasons. 12. To make counties’ review of match lists more efficient, 1 April 2017 Social Services should revive its efforts to work with the state and federal agencies that prepare the match lists to address the counties’ concerns about match list formats, content, and criteria. 13. To ensure the accuracy of the overpayments that 1 January 2017 counties collect and report for the CalFresh program, Social Services should create a process to verify on a rotational basis the counties’ overpayment collection reports. 16. To ensure the accuracy and consistency of the 1 January 2017 information on welfare fraud activities that counties report and that Social Services subsequently reports to the federal government, the Legislature, and internal users, Social Services should incorporate the upcoming federal changes to the revision of its instructions for completing the counties’ investigation activity reports. In the interim, Social Services should issue clarifications for the most common errors Social Services observes counties make in reporting their investigation activities. Follow-Up—California 1. To ensure that all address matches of registered 1 †  Department of Social Services: sex offenders who potentially reside or work at a Although Making Progress, It licensed facility or foster home are reviewed, Social Could Do More to Ensure the Services should improve its current mechanism to Protection and Appropriate track and monitor the outcome of each address Placement of Foster Children match it identifies. This tracking mechanism should 2015-502 (July 2015)* allow Social Services to actively reconcile the number of address matches identified through its address comparison process with the number of completed reviews to ensure that it appropriately reviewed each match. Further, this mechanism should allow Social Services to actively monitor and report on any overdue investigations. 3. To ensure that counties’ use of foster family agency 1 July 2017 placements is justified, Social Services should take action to implement the recommendation we previously made in our 2011 audit. Specifically, Social Services should continue working to revise its rates paid to foster family agencies and to ensure that it has reasonable support to justify each rate component, especially the administrative fee it currently pays these agencies. California State Auditor Report 2016-041 17 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 4. To ensure that counties’ use of foster family agency 1 January 2017 placements is justified, Social Services should take action to implement the recommendation we previously made in our 2011 audit. Specifically, Social Services should require counties to give licensed foster homes a higher priority than foster family agencies for children that do not have identified treatment needs. 5. To ensure that counties’ use of foster family agency 1 Will Not placements is justified, Social Services should take Implement action to implement the recommendation we previously made in our 2011 audit. Specifically, Social Services should require counties to prepare a detailed justification for any child placed with a foster family agency. Department of Developmental Services Developmental Centers: 11. To minimize the need for overtime, the department 3 December Poor-Quality Investigations, should reassess its minimum staffing requirements, 2017 E Outdated Policies, Leadership hire a sufficient number of employees to cover and Staffing Problems, and these requirements, and examine its employee Untimely Licensing Reviews scheduling processes. Put Residents at Risk 2012-107 (July 2013)* California Department of 2. To ensure timelier fee assessments, Developmental 1 Will Not Developmental Services: Its Services should hold regional centers accountable for Implement Process for Assessing Fees providing the monthly placement reports and copies Paid by Parents of Children of information letters required by state regulations. Living in Residential Facilities To encourage compliance, Developmental Services Is Woefully Inefficient should specify in its regional center contracts that and Inconsistent noncompliant regional centers will pay financial 2014-118 (January 2015)* penalties equal to the amount of revenue lost because of their inaction. 8. Developmental Services should review and update 1 January 2017 its process for collecting on delinquent accounts. This update should include a revision to the policies and procedures manual, training for field agents, and regular management review to ensure consistent adherence to the policy. As part of the update, Developmental Services should clarify when to designate an account as uncollectible. Department of Health Care Services Intellectual Property: An 4. Caltrans, the Energy Commission, Food and 4 End of 2016 Effective Policy Would Educate Agriculture, and Health Care Services should put State Agencies and Take Into in writing those policies and procedures related to Account How Their Functions intellectual property that they believe are necessary and Property Differ and appropriate to enable their staff to identify, 2011-106 (November 2011) manage, and protect their intellectual property. Mental Health Services Act: 2. To ensure that it monitors counties to the fullest 3 June 2017 The State’s Oversight Has extent as the MHSA specifies and that it implements H Provided Little Assurance of best practices, Health Care Services should conduct the Act’s Effectiveness, and comprehensive on-site reviews of county MHSA Some Counties Can Improve programs, including verifying county compliance with Measurement of Their MHSA requirements. Program Performance 3. To ensure that counties have the needed guidance to 3 Middle of 2018 2012-122 (August 2013)* implement and evaluate their MHSA programs, Health Care Services should coordinate with the Accountability Commission and issue guidance or regulations, as appropriate, for Facilities programs and for other MHSA requirements, such as a prudent reserve. 5. To ensure that counties have the needed guidance 3 Ongoing to implement and evaluate their MHSA programs, Health Care Services should collaborate with the Accountability Commission to develop and issue guidance or regulations, as appropriate, to counties on how to effectively evaluate and report on the performance of their MHSA programs. continued on next page . . . 18 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 6. To ensure that Health Care Services and other state 3 End of Fiscal entities can evaluate MHSA programs and assist the Year 2016–17 Accountability Commission in its efforts, Health Care Services should collect complete and relevant MHSA data from the counties. 7. To ensure that Health Care Services and other state 3 End of entities can evaluate MHSA programs and assist the Calendar Year Accountability Commission in its efforts, Health Care 2017 Services should resolve all known technical issues with the partnership and client services systems and provide adequate and expert resources to manage the systems going forward. 18. Health Care Services should develop standardized data 3 December collection guidelines or regulations, as appropriate, 2016 that will address inconsistencies in the data that counties report to the State. In developing these guidelines or regulations, Health Care Services should consult with the Accountability Commission to ensure that data collected reasonably fulfill statewide evaluation purposes. 19. To help ensure county compliance with stakeholder 3 December regulations, Health Care Services should provide 2016 technical assistance to counties on the MHSA local planning review process and ensure that its guidance to counties is clear and consistent with state regulations. California Department 1. To ensure that the providers receive reimbursement 2 January 2017 of Health Care Services: for only valid services, Health Care Services should Its Failure to Properly immediately coordinate with the appropriate counties Administer the Drug Medi-Cal to recover inappropriate payments to ineligible Treatment Program Created providers and for services purportedly rendered to Opportunities for Fraud deceased beneficiaries. 2013-119 (August 2014)* 3. To ensure that the providers receive reimbursement 2 January 2017 for only valid services, Health Care Services should immediately direct its investigations division to determine whether it authorized any improper payments to program providers for deceased beneficiaries outside of our audit period. It should also determine whether it authorized such payments through its other Medi-Cal programs. Health Care Services should initiate efforts to recover such payments as appropriate. 10. To ensure that the providers receive reimbursement 2 December for only valid services, Health Care Services should 2016 immediately ensure that Los Angeles County strengthens its provider contract monitoring process, including fully implementing its RATE system to track and respond to provider deficiencies, and that it imposes appropriate responses when warranted, such as withholding payment or suspending or terminating a contract. 18. To prevent the certification of ineligible providers, 2 †  Health Care Services should immediately ensure that its enrollment division conducts LEIE and EPLS database searches of program providers at least monthly. 20. To prevent the certification of ineligible providers, 2 †  Health Care Services should immediately establish a mechanism to identify the number of program sites the provider applicants' medical directors work at, and ensure that the physician ratio does not exceed 1-to-3 in accordance with state law and the certification standards. California State Auditor Report 2016-041 19 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 21. To prevent the certification of ineligible providers, 2 January 2017 Health Care Services should immediately identify and perform an immediate recertification of providers that signed the Compliance Agreement to ensure that these providers are currently meeting all program requirements. 24. To prevent the certification of ineligible providers, 2 October 2017 Health Care Services should immediately develop a schedule for recertifying all program providers every five years. 25. To prevent the certification of ineligible providers, 2 October 2017 Health Care Services should immediately continue its implementation of an automated provider enrollment system. 26. To prevent the certification of ineligible providers, 2 January 2017 Health Care Services should immediately complete its program recertification on or before March 24, 2016, as federal regulations require. 27. To prevent the certification of ineligible providers, 2 †  Health Care Services should immediately establish a plan for eliminating its backlog of applications for new sites and services and changes to existing certifications. 33. To improve the coordination between its divisions, 2 July 2017 branches, and units and ensure that it addresses allegations of fraud in a timely manner, Health Care Services should fully implement the investigations division's recommendations shown in Appendix B. If it chooses not to implement a recommendation, it should document sufficiently the reasons for its decision. California Department 4. To ensure that child beneficiaries throughout 1 January 2017 of Health Care Services: California can reasonably access dental services under Weaknesses in Its Medi-Cal Medi-Cal and to increase child beneficiary utilization Dental Program Limit and provider participation, Health Care Services Children’s Access to should take the following steps for the fee-for-service Dental Care delivery system by May 2015: immediately take action 2013-125 (December 2014) to resolve any declining trends identified during its monitoring efforts. 5. To help increase the number of providers participating 1 January 2017 in the program’s fee-for-service delivery system, Health Care Services should improve its identification and implementation of changes that minimize or simplify administrative processes for providers. These changes should include revising its processes pertaining to dental procedures that require radiographs or photographs. 7. To ensure that the influx of beneficiaries resulting 1 January 2017 from recent changes to federal and state law is able to access Medi-Cal’s dental services, Health Care Services should immediately take action to resolve any declining trends identified during its monitoring efforts. 9. To make certain that access to dental services for child 1 January 2017 beneficiaries is comparable to the access available to the general population in the same geographic areas, Health Care Services should immediately adhere to its monitoring plan. 10. To make certain that access to dental services for child 1 January 2017 beneficiaries is comparable to the access available to the general population in the same geographic areas, Health Care Services should also compare its results for measuring the percentage of child beneficiaries who had at least one dental visit in the past 12 months with the results from the three surveys conducted by other entities, as its state plan requires. continued on next page . . . 20 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 19. To ensure that it reports in the CMS-416 an accurate 1 2018 number of child beneficiaries who received specific types of dental services from the centers and clinics, Health Care Services should continue working on a solution to capture the details necessary to identify the specific dental services rendered. 20. To make certain that it meets the requirements of the 1 Will Not new state law and that its performance measures are Implement accurate, Health Care Services should establish the provider-to-beneficiary ratio statewide and by county as performance measures designed to evaluate access and availability of dental services and include this measure in its October 2015 report to the Legislature. 23. To ensure that Health Care Services and its fiscal 1 December intermediaries reimburse providers only for services 2016 rendered to eligible beneficiaries, Health Care Services should obtain Social Security’s Death Master File and update monthly its beneficiary eligibility system with death information. 24. To ensure that Health Care Services and its fiscal 1 Ongoing intermediaries reimburse providers only for services rendered to eligible beneficiaries, Health Care Services should do the following: Coordinate with the appropriate fiscal intermediaries to recover inappropriate payments made for services purportedly rendered to deceased beneficiaries, if necessary. California Department 3. To ensure that Managed Health Care reaches accurate 1 December of Health Care Services: conclusions during its quarterly assessments of the 2016 Improved Monitoring of adequacy of provider networks, Health Care Services Medi-Cal Managed Care should establish by September 2015 a process to Health Plans Is Necessary to verify the accuracy of the provider network data it Better Ensure Access to Care receives from health plans and forwards to Managed 2014-134 (June 2015) Health Care. For example, Health Care Services could verify, for a sample of physicians claimed as part of the health plans’ provider networks, that health plans have current written agreements with the providers. 4. To improve the accuracy of provider directories, by 1 July 2017 December 2015 Health Care Services should revise its processes for monitoring health plans’ provider directories. Specifically, Health Care Services should review how each health plan updates and verifies the accuracy of the directory. In addition, Health Care Services should identify best practices and require the plans to adopt those practices. 6. If Health Care Services finds significant errors in a 1 July 2017 health plan’s provider directory, it should work with that health plan to identify reasons for the inaccuracies and require the health plan to develop processes to eliminate the inaccuracies. 7. To ensure that it can handle adequately the volume of 1 †  calls from Medi-Cal beneficiaries, Health Care Services should implement an effective plan to upgrade or replace its telephone system and database to make certain that its ombudsman office can handle the volume of calls and maintain complete data to make informed management decisions. 8. To further ensure that it can handle adequately the 1 †  volume of calls from Medi-Cal beneficiaries, after upgrading or replacing its systems, if Health Care Services believes that it does not have adequate staffing to address workload, it should justify its need and request additional staff. 9. To make certain that Health Care Services complies 1 Ongoing with state law requiring it to conduct annual medical audits, it should finish developing and begin adhering to its schedule for auditing all health plans in fiscal year 2015–16. 10. To ensure that Health Care Services complies with 1 Will Not state law, it should increase its oversight of Managed Implement Health Care to ensure that it completes the quarterly assessments required under the agreements. California State Auditor Report 2016-041 21 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION California Department of 1. To ensure that it provides claiming units with 1 Will Not Health Care Services: It Should reasonable opportunities to address concerns with Implement Improve Its Administration its decisions or actions, Health Care Services should, and Oversight of School-Based within three months, begin preparing regulations to Medi-Cal Programs establish and implement a formal appeals process that 2014-130 (August 2015)* allows claiming units to directly appeal Health Care Services’ decisions. 2. To ensure that it provides claiming units with 1 Will Not reasonable opportunities to address concerns with Implement its decisions or actions, Health Care Services should, within three months, inform all stakeholders, including claiming units, of the existence of this appeals process. 3. Until the Legislature implements our recommendation 1 October 2017 in Chapter 2, Health Care Services should immediately resolve weaknesses in its oversight of local educational consortia and local governmental agencies to ensure that these entities sufficiently meet their responsibilities under the administrative activities program and meet the terms of their contracts with Health Care Services. Health Care Services should update its site review and desk review procedures to include the following steps: • A risk-based approach to selecting entities for review. • Verification that local educational consortia and local governmental agencies are adequately meeting the oversight and administrative responsibilities described in their contracts with Health Care Services. • Verification that contracts between local educational consortia or local governmental agencies and their claiming units do not include provisions that could result in disallowed costs, such as allowing Health Care Services’ participation fee to be included in the claim calculations. • Examination of local educational consortia and local governmental agencies’ records to ensure that: - Costs they claim for federal reimbursement are necessary and reasonable. - The entities are not inappropriately earning a profit based on the fees they collect from claiming units. - The coding performed by local educational consortia that charge claiming units a percentage of their federal reimbursement is reasonably accurate. 4. Until the Legislature implements our recommendation 1 †   in Chapter 2, Health Care Services should immediately resolve weaknesses in its oversight of local educational consortia and local governmental agencies to ensure that these entities sufficiently meet their responsibilities under the administrative activities program and meet the terms of their contracts with Health Care Services. Health Care Services should complete the oversight reviews for at least three high-risk local educational consortia or local governmental agencies by December 31, 2015, and post the results to its website. 5. Until the Legislature implements our recommendation 1 October 2016 in Chapter 2, Health Care Services should immediately resolve weaknesses in its oversight of local educational consortia and local governmental agencies to ensure that these entities sufficiently meet their responsibilities under the administrative activities program and meet the terms of their contracts with Health Care Services. Health Care Services should complete the oversight reviews for any remaining high-risk local educational consortia or local governmental agencies by June 30, 2016, and post the results to its website. continued on next page . . . 22 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 8. To minimize the risk that claiming units could 1 †  include unallowable costs when calculating their reimbursement claims, Health Care Services should remind all local educational consortia and local governmental agencies that contracts with their claiming units should prohibit claiming units from seeking federal reimbursement of Health Care Services’ participation fee. 10. To streamline the organizational structure of its 1 Will Not administrative activities program and to improve the Implement program’s cost-effectiveness, Heath Care Services should implement a single statewide quarterly random moment time survey and develop and implement a plan to take over responsibility for conducting quarterly time surveys and performing related activities as soon as reasonably possible. 11. To streamline the organizational structure of its 1 Will Not administrative activities program and to improve the Implement program's cost-effectiveness, Heath Care Services should implement a single statewide quarterly random moment time survey and develop and issue a request for proposals to identify a responsible vendor to assist in implementing a statewide quarterly random moment time survey. 12. To streamline the organizational structure of its 1 June 2017 administrative activities program and to improve the program’s cost-effectiveness, Heath Care Services should implement a single statewide quarterly random moment time survey and draft revisions to regulations as appropriate and to applicable documents, including the manual, oversight strategies and plans, and policy and procedure letters. 13. To the extent that local educational consortia and local 1 Will Not governmental agencies are no longer involved in the Implement administrative activities program, Health Care Services should develop and issue a standard contract for claiming units to sign to participate in the program. 17. To better maximize federal reimbursements for the 1 †  administrative activities program, Health Care Services should, within six months, develop and implement a method to oversee and track the outreach efforts that local educational consortia and local governmental agencies use for ensuring that nonparticipating claiming units understand the benefits and consider participating in the administrative activities program. 18. To better maximize federal reimbursements for the 1 Awaiting CMS administrative activities program, Health Care Services Approval should, within six months, revise reimbursement rates to authorize claiming units to claim the 75 percent reimbursement rate for translation activities as federal law allows. 19. To better maximize federal reimbursements for the 1 Awaiting CMS administrative activities program, Health Care Services Approval should, within six months, determine the extent to which claiming units can claim the unreimbursed difference between the 50 percent and 75 percent reimbursement rates for translation activities for past years and inform claiming units of the findings. 20. Should the Legislature implement our 1 Unknown recommendation in Chapter 2 to allow claiming units to submit reimbursement claims directly to it, Health Care Services should develop and implement its own outreach functions to ensure that claiming units that do not currently participate understand the benefits and consider participating in the administrative activities program. California State Auditor Report 2016-041 23 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 21. To provide the public with the ability to participate 1 June 2017 fully in developing the rules governing the administrative activities program, Health Care Services should, in accordance with California's Administrative Procedure Act (APA), immediately develop and adopt the regulations cited in the four subdivisions of Section 14132.47 of the California Welfare and Institutions Code. 23. To ensure that it provides stakeholders with timely 1 December access to information regarding the billing option 2016 program, Health Care Services should issue the required annual report covering April 2013 to May 2015 by December 2015 as promised. 24. To ensure that it provides stakeholders with timely 1 Ongoing access to information regarding the billing option program, Health Care Services should issue all future annual reports in a timely manner. Department of State Hospitals § Sex Offender Commitment 6. To reduce costs for unnecessary evaluations, Mental 5 Will Not Program: Streamlining Health should either issue a regulation or seek a Implement B the Process for Identifying statutory amendment to clarify that when resolving Potential Sexually a difference of opinion between the two initial Violent Predators Would evaluators of an offender, Mental Health must Reduce Unnecessary or seek the opinion of a fourth evaluator only when a Duplicative Work third evaluator concludes that the offender meets 2010-116 (July 2011)* SVP criteria. California Department of State 3. To promote consistency and ensure that it provides 1 December Hospitals: It Could Increase the sufficient guidance to evaluators, State Hospitals 2018 Consistency of Its Evaluations should update its assessment protocol by March 2016 of Sex Offenders by Improving to include more specific instructions on how to Its Assessment Protocol conduct evaluations, such as what assessment and Training instruments evaluators may use and what 2014-125 (March 2015) documents they should consider. State Hospitals should also develop a timeline for periodically reviewing and making any necessary updates to the assessment protocol. 4. To comply with state law, State Hospitals should 1 December ensure that it follows the Administrative Procedures 2019 Act for future changes to its standardized assessment protocol. 14. State Hospitals should explore options for tracking the 1 February 2017 time evaluators spend on each evaluation activity to increase the accuracy of the workload equivalencies it includes in its workload matrix and should implement such options by September 2015. Mental Health Services Oversight and Accountability Commission Mental Health Services Act: 11. To fulfill its charge to evaluate MHSA programs, he 3 Fiscal year The State’s Oversight Has Accountability Commission should undertake 2017–18 H Provided Little Assurance of the evaluations specified in its implementation plan. the Act’s Effectiveness, and Some Counties Can Improve Measurement of Their Program Performance 2012-122 (August 2013)* CORRECTIONS AND REHABILITATION Board of State and Community Corrections Juvenile Justice Realignment: 3. To maximize the usefulness of the information it 4 †  Limited Information Prevents makes available to stakeholders and to increase a Meaningful Assessment of accountability, the board should create policies Realignment’s Effectiveness and procedures that include clear, comprehensive 2011-129 (September 2012)* guidance to counties about all aspects of performance outcome and expenditure reporting. At a minimum, such guidance should include specifying how counties should define when a juvenile has received a service and whether certain services, such as training, should qualify as serving juveniles. continued on next page . . . 24 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 5. To maximize the usefulness of the information it 4 Will Not makes available to stakeholders and to increase Implement accountability, the board should consider verifying the counties' data by conducting regular site visits on a rotating basis or by employing other procedures to verify data that counties submit. 12. To ensure that counties do not maintain excessive 4 Will Not balances of unexpended block grant funds, the board Implement should develop procedures to monitor counties' unspent funds and follow up with them if the balances become unreasonable. California Correctional Health Care Services Sterilization of Female 5. To ensure that it can better monitor how its 2 Will Not Inmates: Some Inmates medical staff and contractors adhere to the Implement Were Sterilized Unlawfully, informed consent requirements of Title 22, and Safeguards Designed sections 70707.1 through 70707.7, the Receiver's to Limit Occurrences of the Office should develop a plan by August 2014 to Procedure Failed implement a process by December 2014 that would 2013-120 (June 2014) include working with Corrections to establish a process whereby inmates can have witnesses of their choice when consenting to sterilization, as required by Title 22, or working to revise such requirements so that there is an appropriate balance between the need for secure custody and the inmate's ability to have a witness of her choice. 11. To ensure that inmates receive only medical 2 Unknown services that are authorized through its utilization management process, the Receiver's Office should ensure that the computer system it procures includes functionality to electronically link medical scheduling with authorization through the utilization management process to prevent all unauthorized procedures, regardless of whether they may result in sterilization, from being scheduled. Investigations of Improper 18. Corrections and Correctional Health Care should 1 Unknown Activities by State Agencies run a query of exempt positions related to the T and Employees chief psychologist classification, such as clinical I2015-1 (July 2015)‡ psychologists and senior psychologists, to determine whether any other exempt employees were improperly credited or paid for on-call or call-back assignments prior to December 2014, and seek recovery through reducing those employees' accumulated leave balances. California Department of Corrections and Rehabilitation Investigations of Improper 1. Corrections should take appropriate disciplinary 5 Unknown Activities by State Employees: actions against the employee and pursue collection Delay in Reassigning an efforts for the compensation she did not earn. Incompetent Psychiatrist, Misuse of State Resources, Failure to Protect the Security of Confidential Documents, Theft of Registration Fees, and Other Violations of State Law I2010-2 (January 2011) ‡ Sex Offender Commitment 3. To eliminate duplicative effort and increase efficiency, 5 Will Not Program: Streamlining Corrections should not make unnecessary referrals Implement B the Process for Identifying to Mental Health. For example, Corrections should Potential Sexually better leverage the time and work it already conducts Violent Predators Would by including in its referral process (1) determining Reduce Unnecessary or whether the offender committed a predatory offense, Duplicative Work (2) reviewing results from any previous screenings 2010-116 (July 2011)* and evaluations that Mental Health completed and considering whether the most recent parole violation or offense might alter the previous decision, and (3) using STATIC-99R to assess the risk that an offender will reoffend. California State Auditor Report 2016-041 25 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 4. To eliminate duplicative effort and increase efficiency, 5 Will Not Corrections should not make unnecessary referrals to Implement Mental Health. Corrections and Mental Health should jointly revise the structured screening instrument so that the referral process adheres more closely to the law's intent. Department of Corrections and 1. To ensure that the State does not spend additional 5 June 2017 Rehabilitation: The Benefits resources on COMPAS while its usefulness is uncertain, of Its Correctional Offender Corrections should suspend its use of the COMPAS Management Profiling for core and reentry assessments until it has issued Alternative Sanctions Program regulations and updated its operations manual to Are Uncertain define how Corrections' use of COMPAS will affect 2010-124 (September 2011)* decision making regarding inmates, such as clarifying how COMPAS results will be considered when sending inmates to different prison facilities, enrolling them in rehabilitative programs to address their criminal risk factors, and developing expectations for those on parole. California Department of 4. Adjust current employees' leave balances in the leave 3 March 2017 Corrections and Rehabilitation accounting system to correct any improper charging and California Correctional of leave identified by the audit. Health Care Services: Both Agencies Wasted State 6. In instances where the audit has determined that 3 May 2017 Resources by Improperly an employee's leave balance was mischarged but Accounting for Leave Taken by the employee subsequently departed state service, Their Employees take appropriate measures to remedy any resulting I2010-1045 (May 2013) ‡ incorrect compensation of the employee for unused leave upon his or her departure, including by seeking repayment of any amount overpaid to the employee. Investigations of Improper 11. To recoup the payment and leave accumulations to 1 December Activities by State Agencies which its employees were not entitled, Corrections 2016 T and Employees and Correctional Health Care should reduce the I2015-1 (August 2015)‡ accumulated leave balances of Employee A by 886 hours. If his accumulated leave balances are not sufficient, offset any remaining hours against future accumulations of leave. 13. To recoup the payment and leave accumulations to 1 December which its employees were not entitled, Corrections 2016 and Correctional Health Care should work with the California Public Employees' Retirement System and attempt to recoup the $22,766 in CTO leave hours Employee B—who retired in April 2015—cashed out but to which he was not entitled. 19. Corrections and Correctional Health Care should 1 Unknown run a query of exempt positions related to the chief psychologist classification, such as clinical psychologists and senior psychologists, to determine whether any other exempt employees were improperly credited or paid for on-call or call-back assignments prior to December 2014, and seek recovery through reducing those employees' accumulated leave balances. TRANSPORTATION California Department of Transportation California Department of 1. To ensure that it collects fair market rents for the 4 Unknown Transportation: Its Poor SR 710 properties on the State's behalf, Caltrans D Management of State should, using the fair market rent determinations Route 710 Extension Project for all SR 710 properties it recently prepared and Properties Costs the State excluding those in its affordable rent program, adjust Millions of Dollars Annually, the tenants' rents to fair market after providing them Yet State Law Limits the with proper notice. Potential Income From Selling the Properties 2. To ensure that it collects fair market rents for the 4 Unknown SR 710 properties on the State's behalf, Caltrans 2011-120 (August 2012)* should make only limited exceptions to charging fair market rent and document the specific public purpose that is served in any case that it does not charge fair market rent. continued on next page . . . 26 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION Investigations of Improper 4. To remedy the effects of the improper governmental 1 Unknown Activities by State Agencies activity substantiated in this report and to prevent T and Employees it from recurring, Caltrans should continue its I2015-1 (August 2015)‡ efforts to recover the undercharged rent from the telecommunications companies. California High‑Speed Rail Authority High-Speed Rail Authority 3. To avert possible legal challenges, the Authority 4 Will Not Follow-Up: Although the should ensure that the independent peer review panel Implement Authority Addressed Some adheres to the Bagley-Keene Open Meeting Act or of Our Prior Concerns, Its seek a formal opinion from the Office of the Attorney Funding Situation Has General (attorney general) regarding whether the Become Increasingly Risky panel is subject to this act. and the Authority's Weak Oversight Persists 2011-504 (January 2012)* Department of Motor Vehicles California's Alternative Energy 5. To ensure that the decal fee is sufficient to reimburse 1 July 2016 and Efficiency Initiatives: program costs, Motor Vehicles should periodically O Two Programs Are Meeting perform a full cost analysis of the decal program and Some Goals, but Several update the fee accordingly Improvements Are Needed 2014-124 (February 2015) Special Interest License Plate 1. To ensure that programs supported by special plates 3 Will Not Funds: The State Has Foregone receive appropriate amounts of revenues due to them, Implement F Certain Revenues Related to Motor Vehicles should annually collect all fees for Special Interest License Plates special plates that are no longer on a vehicle but are and Some Expenditures Were retained by the plate owner. Unallowable or Unsupported 3. Motor Vehicles should assess the extent to which 3 †  2012-110 (April 2013)* it has charged fees for special plates that are not consistent with those prescribed in statutes and take appropriate action. NATURAL RESOURCES California Natural Resources Agency Special Interest License Plate 15. To make certain that money from the special plate 3 Will Not Funds: The State Has Foregone funds pay only for allowable and supportable Implement F Certain Revenues Related to activities, Resources should use all appropriate Special Interest License Plates funding sources to pay for any expenses that benefit and Some Expenditures Were multiple programs in proportion to the benefits these Unallowable or Unsupported programs actually receive. Further, it should ensure 2012-110 (April 2013)* that its allocation of such expenses to different funds is equitable and supported. Salton Sea Restoration Fund: 7. To ensure that the Legislature has the information 2 †  The State Has Not Fully necessary to meet the State's restoration goals and Funded a Restoration Plan and to plan for the State's future financial obligations the State's Future Mitigation related to mitigation, the Resources Agency should Costs Are Uncertain work with Fish and Wildlife and Water Resources 2013-101 (November 2013) to meet with the Legislature regularly to provide updates on the status of its restoration efforts and the feasibility study to ensure that the Legislature has the information necessary to make funding and other informed decisions. 8. To ensure that the Legislature has the information 2 †  necessary to meet the State's restoration goals and to plan for the State's future financial obligations related to mitigation, the Resources Agency should work with Fish and Wildlife and Water Resources to develop an estimate of the costs, adjusted for inflation, that the State may incur for fulfilling its financial obligations related to mitigation under the QSA. The Resources Agency should include this information in the feasibility study so the Legislature is fully aware of the estimated costs and timing of the State's future financial obligations. California State Auditor Report 2016-041 27 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION California Science Center High Risk Update: State 12. By February 2015 the Science Center should provide 2 October 2017 Agencies Credited Their training to all of its personnel specialists on the I Employees With Millions number of leave hours employees earn for working of Dollars Worth of on holidays. Unearned Leave 2012-603 (August 2014) California State Lands Commission State Lands Commission: 1. When the commission determines that it will pursue 5 Will Not Because It Has Not Managed delinquent lessees itself, it should use a collection Implement Public Lands Effectively, the agency or a program such as the Franchise Tax Board's State Has Lost Millions in Interagency Intercept Collections Program. Revenue for the General Fund 2. To ensure that it receives rent from the lessee that 5 Will Not 2010-125 (August 2011)* reflects the approximate value for the State's property Implement at those times when a lessee disputes a modification to the rental amount after the commission exercises its right to perform a rent review or because the lease expired, the commission should include in its lease agreements a provision that requires lessees to pay the commission's proposed increased rental amount, which would be deposited into an account within the Special Deposit Fund. The increased rental amounts deposited, plus the corresponding interest accrued in the account, should then be liquidated in accordance with the amount agreed to in the final lease agreement. 21. To ensure that it manages delinquent leases in 5 January 2017 an effective and timely manner and collects all the amounts owed to it, the commission should develop and adhere to policies and procedures that incorporate the administrative manual’s guidance, including the steps staff should take when a lessee is delinquent, time standards for performing those steps, and a process for consistently tracking the status of delinquent leases between divisions. Department of Parks and Recreation Department of Parks and 4. To ensure that it can comply with state law in the 3 August 2017 Recreation: Flaws in Its Budget event that it must close parks or reduce park services Allocation Processes Hinder Its in the future, the department should improve its Ability to Effectively Manage methodology for developing individual park unit the Park System budgets and determining and tracking park-level 2012-121.2 (September 2013)* costs. Specifically, the department should develop specific time frames and deliverables for the completion of phases two and three of its plan. These time frames should include specific completion dates for each key component of the phases. 6. To ensure that it can comply with state law in the 3 August 2017 event that it must close parks or reduce park services in the future, the department should improve its methodology for developing individual park unit budgets and determining and tracking park-level costs. Specifically, the department should determine how it will define service levels and measure whether those levels are being met so it can provide budgets for each park unit, as phase three of its process requires. 8. To prevent unauthorized leave buyback transactions, 3 May 2017 the department should provide training by December 2013 to all department managers and personnel staff who might be involved in leave buyback transactions to ensure that they understand the State's requirements regarding leave buybacks. 11. To prevent unauthorized leave buyback transactions, 3 †  the department should limit access for keying transactions to the payroll system only to authorized personnel staff. 15. To improve the effectiveness of the EPRC, the 3 August 2017 department should establish a process by March 2014 through which the director's office provides formal direction to the EPRC regarding staffing priorities. continued on next page . . . 28 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION Department of Water Resources General Obligation 4. To provide the public with accurate and complete 5 Will Not Bonds: The Departments information on the bond-funded projects it Implement of Water Resources and administers, Water Resources should develop and Finance Should Do More to consistently use a formalized, documented review Improve Their Oversight of process that will provide greater assurance that Bond Expenditures project information posted to the Bond Accountability 2010-117 (May 2011) website is regularly updated and contains accurate information. ENVIRONMENTAL PROTECTION California Department of Resources Recycling and Recovery California Department of 2. To ensure it can demonstrate that its fraud prevention 1 None Resources Recycling and efforts are maximizing financial recoveries for the Recovery: The Beverage beverage program, CalRecycle should both modify Container Recycling Program and annually update its fraud management plan to Continues to Face Deficits and include the following: Requires Changes to Become • By December 31, 2014, formally establish a Financially Sustainable systematic process for analyzing, monitoring, and 2014-110 (November 2014)* responding to the risk of fraudulent recycling of out-of-state beverage containers. • Develop fraud estimates—by type of fraudulent activity—that quantify the potential financial losses to the beverage program and the methodology CalRecycle used to develop these estimates. • Identify the amount of actual fraud in the prior year by type of fraudulent activity, such as the financial losses resulting from the redemption of out-of-state beverage containers or the falsification of reports used to substantiate program payments. • Identify the amount actually recovered for the beverage program in the form of cash for restitution and penalties resulting from fraud. 3. To allow for public input and to prevent any legal 1 December challenges claiming that its policies and procedures 2017 regarding prepayment holds constitute unenforceable underground regulations, CalRecycle should adopt these policies and procedures as regulations in accordance with the Administrative Procedure Act. 5. To ensure it effectively uses resources, CalRecycle 1 Will Not should renegotiate its agreement with the California Implement Department of Justice (Justice) to pay based on the cases CalRecycle refers, limiting costs to investigations over a predefined period of time. CalRecycle could agree to increase the budget for a particular investigation if Justice demonstrates that it has developed promising leads. State Water Resources Control Board State Water Resources Control 6. When regional water boards include staff enforcement 3 December Board: It Should Ensure a More costs in the penalty actions they issue, the state 2016 Consistent Administration water board should require that they use a systematic of the Water Quality method for tracking the hours staff spend on Certification Program enforcement activities related to penalty actions 2012-120 (June 2013) and maintain documentary support for these staff enforcement cost calculations. 7. If regional water boards continue to include staff 3 December enforcement costs in the penalty actions they issue, 2016 the state water board should revise its staff cost rate to reflect actual staff salaries and overhead cost for the certification program. BUSINESS, CONSUMER SERVICES, HOUSING Board of Registered Nursing California Department of 30. To ensure that BRN has adequate data to effectively 1 July 2017 Consumer Affairs' BreEZe use its resources and manage its workload, it should N System: Inadequate formally track and monitor the timeliness of its Planning and Oversight Led processing of applications by type and the cause of to Implementation at Far any delays. Fewer Regulatory Entities at a Significantly Higher Cost 2014-116 (February 2015)* California State Auditor Report 2016-041 29 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 32. To ensure that BRN has adequate data to effectively 1 †  use its resources and manage its workload, it should conduct an analysis no later than June 30, 2015, of its application processing since implementing BreEZe in order to identify the workload capability of each of its units, such as the licensing support unit; to the extent it determines additional resources are necessary, BRN should submit a request for these resources that is appropriately justified. 33. To ensure that BRN continues to process applications 1 Ongoing within regulatory time frames, it should continue its efforts to refine its business processes to increase efficiency and reduce the amount of time applications are pending its review. California State Athletic Commission State Athletic Commission: 7. To ensure that it adequately tracks critical information 3 Unknown Its Ongoing Administrative related to its basic functions and mission, the G Struggles Call Its Future commission should work with Consumer Affairs to Into Question ensure that the new online program will meet its 2012-117 (March 2013)* needs and requirements. Once the program is in place, the commission should use it as its central means for tracking its operations. 9. To ensure that it accurately collects revenue, the 3 †  commission should calculate the pension assessment by counting all the complimentary tickets issued, except for working complimentary tickets, not merely the complimentary tickets that are redeemed. If the commission does not agree that it should calculate the pension assessment by counting all the complimentary tickets issued, it should seek a change in its regulations to calculate the fee based only on the number of complimentary tickets redeemed. 22. The commission needs to establish regulations 3 February 2017 that describe its process for determining its ticket assessment for the neurological account so that it avoids the use of underground regulations. 28. To comply with state law governing the pension plan, 3 Unknown the commission needs to, after it has an accurate and complete listing of all licensed athletes and box office information by event type, conduct the analysis to determine the feasibility of expanding the pension plan to cover all athletes and report the results to the Legislature. Department of Consumer Affairs California Department of 17. To the extent that Consumer Affairs chooses to 1 Unknown Consumer Affairs' BreEZe implement BreEZe at the phase 3 regulatory entities, it N System: Inadequate should first complete a formal cost-benefit analysis to Planning and Oversight Led ensure that BreEZe is a cost-effective solution to meet to Implementation at Far these regulatory entities' business needs. To make Fewer Regulatory Entities at a certain this analysis is complete, it should include an Significantly Higher Cost assessment of the potential changes these regulatory 2014-116 (February 2015)* entities may require to be made of the BreEZe system and the associated costs. Consumer Affairs should complete the cost-benefit analysis before investing any more resources into the implementation of BreEZe at the phase 3 regulatory entities, and it should update this analysis periodically as significant assumptions change. 35. To ensure that future training for BreEZe system 1 Unknown rollouts is timely and effective, Consumer Affairs should provide training on the BreEZe system as close to the rollout date as possible to ensure that staff retain the information for using the system as it is implemented. 36. To ensure that future training for BreEZe system 1 Unknown rollouts is timely and effective, Consumer Affairs should work with the regulatory entities to develop training that is specific to each entity's business processes. continued on next page . . . 30 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION Bureau for Private Postsecondary Education Bureau for Private 10. To comply with state law and to ensure that it 2 December Postsecondary Education: effectively manages its inspections of institutions, 2016 It Has Consistently Failed the bureau should prioritize its announced and to Meet Its Responsibility to unannounced inspections to focus on those Protect the Public's Interests institutions that have a higher risk of noncompliance. 2013-045 (March 2014) Physical Therapy Board of California Physical Therapy Board 1. The physical therapy board should explore the 4 Will Not of California: Although It feasibility of establishing a state position to perform Implement Can Make Improvements, the duties of its current in-house consultant at a It Generally Processes reduced cost. Complaints and Monitors Conflict-of-Interest Requirements Appropriately 2011-119 (June 2012) LABOR AND WORKFORCE DEVELOPMENT California Workforce Investment Board Follow-Up—Federal 3. To ensure that the state board assesses the merits 1 December Workforce Investment of pursing federal funding for workforce investment 2016 R Grants: The Employment programs in California, it should establish procedures Development Department by December 31, 2015, that include, at a minimum, Established Procedures for the following: Seeking Discretionary Grants, • The methods it will use to identify federal but Needs to Strengthen Them grant opportunities. 2015-508 (September 2015) • The factors it will consider in its decisions to pursue or forgo applying for these grants. • The process by which it will document its analyses of grants and its final decisions to either pursue or forgo grant opportunities. • A method for ensuring that the process is consistently implemented. 4. To ensure that the State maximizes federal funding 1 December opportunities related to workforce investment, 2016 EDD and the state board should formalize their collaborative grant-seeking procedures by December 31, 2015, to clearly define their respective roles and responsibilities in the grant-seeking process. Employment Development Department Employment Development 4. As part of an overall strategy to limit the number 5 †  Department: Its of calls it receives while still providing timely and Unemployment Program Has effective customer service, the department should use Struggled to Effectively Serve existing data and additional data from the new phone California's Unemployed in the system to gain a better understanding of why people Face of Significant Workload request to speak to an agent. Using this information, and Fiscal Challenges the department should further develop strategies and 2010-112 (March 2011) measurable goals related to achieving a reduction in call volumes. For example, to ensure that virtually all calls are able to gain access to the voice response portion of its new phone system, the department should monitor the volume of blocked call attempts and work with its phone system vendor if necessary to increase the system's capacity. 5. To evaluate the effectiveness of its other efforts to 5 †  provide services to claimants in ways that do not require them to speak to agents, such as Web-Cert and Tele-Cert, the department should periodically summarize and assess the more robust management information available under its new phone system. Federal Workforce Investment 4. To assist the state board and other workforce 4 June 2017 Act: More Effective State investment partners in the development and C Planning and Oversight Is implementation of state-specific performance Necessary to Better Help measures, EDD should ensure that it works California's Job Seekers with the state board to develop procedures for Find Employment approving the addition of data elements to its 2011-111 (March 2012)* Web-based system and for the exchange of data between EDD and the state board. California State Auditor Report 2016-041 31 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION Employment Development 5. To identify ways to better serve veterans in California, 3 October 2017 Department: It Needs the department should assess the success or struggles to Address Data Issues to of veterans within demographic categories in finding Better Evaluate and Improve employment, such as age, race, or educational the Performance of Its attainment, by comparing veterans' performance Employment Programs to that of nonveterans in the same demographic for Veterans categories and across demographic categories and 2013-102 (October 2013)* use this analysis to determine whether specific populations of veterans could be better served through more targeted efforts and to identify best practices for improving employment outcomes for these specific populations. Further, the department should provide the results of this analysis annually, beginning in 2014, to stakeholders, including local workforce agencies, the state workforce board, the interagency council, the Legislature, and the public. Employment Development 8. To identify and correct any policies, procedures, or 2 April 2017 Department: It Should practices that may be contributing to avoidable Improve Its Efforts to Minimize appeals filed by claimants and employers and thereby Avoidable Appeals of Its provide eligible claimants with unemployment Eligibility Determinations benefits in a timelier manner, EDD should do the for Unemployment following: Using the appeals board's data from Insurance Benefits fiscal year 2013-14, EDD should identify the legal 2014-101 (August 2014)* isssues where its determinations are most frequently overturned, and use these data to establish initial performance benchmarks. In addition, similar to the review that EDD's audit and evaluation division performed in 2012, EDD should then review samples of its overturned determinations and the appeals board's decisions on these legal issues to identify trends in the reasons the appeals board cites for overturning EDD's determinations. With this information, EDD should review its policies, practices, and training related to these areas and identify and correct any weaknesses that may be contributing to the overturning of determinations. By April 1, 2015, EDD should report to the Legislature on the results of this review and any changes it plans to make to its determination process. 9. To identify and correct any policies, procedures, or 2 August 2017 practices that may be contributing to avoidable appeals filed by claimants and employers and thereby provide eligible claimants with unemployment benefits in a timelier manner, EDD should do the following: EDD should use the semiannual data that the appeals board provides to determine whether changes it makes to its process result in reductions in the percentage of its determinations that are overturned on appeal. EDD should also review these data to determine whether it needs to conduct additional reviews of its determinations and the appeals board's decisions to identify additional opportunities for improvement. EDD should report these results to the Legislature annually. Follow-Up—Federal 1. To ensure that its grant-seeking process is effective in 1 December Workforce Investment considering grant opportunities related to workforce 2016 R Grants: The Employment investment, EDD should update its grant identification Development Department and analysis procedures by December 31, 2015, to Established Procedures for include the following: Seeking Discretionary Grants, • Identification of the appropriate level of but Needs to Strengthen Them management or staff to analyze and document 2015-508 (September 2015) the factors considered in pursuing or forgoing grant opportunities. • Documentation of grant analyses, including factors considered in pursuing or forgoing grant opportunities. • Documentation of decisions related to pursuing or forgoing grants. • A method for ensuring that the process is consistently implemented. • Training of appropriate management or staff about EDD’s grant-seeking process. continued on next page . . . 32 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 2. To ensure that the State maximizes federal funding 1 December opportunities related to workforce investment, 2016 EDD and the state board should formalize their collaborative grant-seeking procedures by December 31, 2015, to clearly define their respective roles and responsibilities in the grant-seeking process. GOVERNMENT OPERATIONS California Department of Human Resources High Risk Update: State 2. To correct the erroneous leave hours we identified in 2 †  Agencies Credited Their our analysis of the leave accounting system, CalHR I Employees With Millions should work with the state controller and all state of Dollars Worth of agencies under its authority to review and take Unearned Leave the appropriate action to correct the errors by 2012-603 (August 2014)* January 2015. 7. To ensure that state agencies accurately account 2 August 2017 for their employees' leave benefits, CalHR should consolidate guidance by January 2015 regarding the appropriate amount of leave that employees should earn each month and provide these criteria to the state controller to use when developing the leave accounting system's monthly exception reports. For example, CalHR should identify the number of holiday credit hours that employees covered by each collective bargaining agreement should receive for working on a holiday. 9. To ensure that state agencies accurately account for 2 August 2017 their employees' leave benefits, CalHR should establish general parameters and issue guidance to state agencies by January 2015 on how to account for the leave hours for employees who work alternate work week schedules. 10. To ensure that state agencies accurately account for 2 †  their employees' leave benefits, CalHR should provide additional guidance to state agencies by January 2015 on interpreting the provisions of the collective bargaining agreements related to the amount of leave employees earn. For example, CalHR could provide scenarios to illustrate the number of hours employees should earn under common circumstances. California Department of Technology California Department of 11. To ensure that IT projects have the oversight needed to 1 December Consumer Affairs' BreEZe better position them for success, Technology should 2016 N System: Inadequate require state departments to follow its IT policies, Planning and Oversight Led including developing all necessary plans and receiving to Implementation at Far all required training. Fewer Regulatory Entities at a Significantly Higher Cost 12. To ensure that IT projects have the oversight needed to 1 December better position them for success, Technology should 2016 2014-116 (February 2015)* ensure that departments obtain IPO and IV&V services as soon as an IT project is approved. Additionally, Technology should document key discussions with any department in which the IV&V consultant and the IPO specialist raise significant concerns about a project, and ensure that the respective department responds promptly to, and adequately addresses, the concerns that the IPO specialist and the IV&V consultant raise. 13. To ensure that IT projects have the oversight 1 December needed to better position them for success, 2016 Technology should require state departments to appropriately address deficiencies identified in Technology's approval of any SPRs as conditions that must be met, and to do so according to specified timelines. If the deficiencies are not adequately addressed within the specified timelines, Technology should take action to suspend the project until the department has either resolved the identified deficiencies or adequately documented its justification for not addressing the deficiencies. California State Auditor Report 2016-041 33 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 14. To ensure that IT projects have the oversight needed to 1 December better position them for success, Technology should 2016 develop thresholds relating to IT project cost increases and schedule delays to inform and better justify its decision to allow an IT project to continue. If a department's IT project reaches or exceeds these thresholds, Technology should require the department to conduct a cost-benefit analysis for the project and include this analysis in an SPR. Technology should consider the results of this analysis in its decision to approve or deny the SPR and, if warranted, take action to suspend or terminate the project so that it does not allow projects with significant problems to continue without correction. 28. To ensure that contracting departments comply with 1 December requirements, Technology should periodically monitor 2016 the status of contracts and enforce adherence to procurement requirements. For example, Technology should ensure that contracting departments forward all change requests to it and that it conducts reviews of all change requests to determine whether the changes exceed the scope of the respective contract. High Risk Update—California 1. By December 2015, Technology should develop 1 December Department of Technology: and adopt criteria to guide the type and degree 2016 Lack of Guidance, Potentially of intervention it will take to prevent IT projects Conflicting Roles, and Staffing with significant problems from continuing without Issues Continue to Make correction, including when and how IPO analysts Oversight of State Information should recommend corrective action and escalate Technology Projects High Risk issues to Technology's management. 2014-602 (March 2015)* 2. By December 2015, Technology should develop 1 December and adopt criteria to guide the type and degree 2016 of intervention it will take to prevent IT projects with significant problems from continuing without correction, including when and what Technology should require that sponsoring agencies perform as remedial actions, and what sanctions Technology will impose for noncompliance with these remedial actions. 3. By December 2015, Technology should develop 1 December and adopt criteria to guide the type and degree 2016 of intervention it will take to prevent IT projects with significant problems from continuing without correction, including what conditions could trigger Technology to consider suspending or terminating an IT project. 4. To clarify and reinforce its oversight authority 1 December with sponsoring agencies, by December 2015 2016 Technology should develop a method to formally document and communicate its expectations with the sponsoring agencies whose projects are under Technology's oversight. 6. To help ensure the independence and objectivity of 1 †  IPO analysts working in the oversight and consulting division, Technology should provide regular training regarding maintaining independence while conducting project oversight. 9. To ensure that the sponsoring agencies' project status 1 April 2017 reports provide a reliable and consistent assessment of an IT project's progress, Technology should develop and adopt specific standards that describe how to calculate and report the project's current status. 10. To attract and retain employees with appropriate 1 June 2017 experience and qualifications to perform IT project oversight, Technology should continue its efforts to gain approval to modify and use the project manager classification for the IPO analyst role. 13. To improve its oversight training, by June 2015 1 June 2017 Technology should continue to implement a consistent and repeatable training plan for IPO analysts, which includes contract management, project assessment, IT systems engineering, and maintaining independence. continued on next page . . . 34 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION High Risk Update— 3. To assist reporting entities in reaching full compliance 1 December Information Security: Many with the security standards, the technology 2016 State Entities' Information department should ensure the consistency and Assets Are Potentially accuracy of its self certification process by developing Vulnerable to Attack a self assessment tool by December 2015 that or Disruption reporting entities can use to determine their level 2015-611 (August 2015) of compliance with the security standards. The technology department should require reporting entities to submit completed self assessments along with their self certifications. 4. To assist reporting entities in reaching full compliance 1 January 2017 with the security standards, the technology department should provide more extensive guidance and training to reporting entities regarding the self certification process, including training on how they should use the new self assessment tool. 8. The technology department should revise its 1 December certification form to require reporting entities to 2016 submit detailed information about their compliance with the security standards. It should use this information to track and identify trends in the State's overall information security. 9. The technology department should develop policies 1 December and procedures to define the process and criteria it 2016 will use to incentivize entities' compliance with the security standards. 10. To improve the clarity of the security standards, the 1 December technology department should take the following 2016 actions: Perform regular outreach to all reporting entities to gain their perspectives, identify any unclear or inconsistent security standards, and revise them as appropriate. 11. To improve the clarity of the security standards, the 1 December technology department should develop and regularly 2016 provide detailed training on the requirements of the security standards and on best practices for achieving compliance. It should provide these trainings in a variety of locations and formats, including webinars. Department of General Services Department of General 1. To ensure public safety and provide public 4 †  Services: The Division of assurance that school districts construct projects in the State Architect Lacks accordance with approved plans, the department, Enforcement Authority in conjunction with the division, should pursue and Has Weak Oversight legislative changes to the Field Act that would prohibit Procedures, Increasing the occupancy in cases in which the division has identified Risk That School Construction significant safety concerns. Projects May Be Unsafe 2011-116.1 (December 2011) California Department of 37. To ensure that the construction unit complies with 4 January 2017 Transportation: Its Poor the State's procurement laws and policies, General D Management of State Services should continue its efforts to implement Route 710 Extension Project regulations that govern the small business certification Properties Costs the State process related to defining and enforcing violations of Millions of Dollars Annually, commercially useful function requirements. Yet State Law Limits the Potential Income From Selling the Properties 2011-120 (August 2012)* Franchise Tax Board California State Government 9. No later than December 1, 2015, Franchise Tax Board 1 †  Websites: Departments Must should develop a plan to determine whether the P Improve Website Accessibility accessibility violations we identified exist on other So That Persons With portions of its online presence that we did not include Disabilities Have Comparable in the scope of our review. Once this plan is executed, Access to State Services Online it should correct violations wherever it finds them and 2014-131 (June 2015)* do so no later than June 1, 2016. California State Auditor Report 2016-041 35 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION GENERAL GOVERNMENT California Department of Veterans Affairs California Department of 5. To better utilize unused space at the veterans homes, 3 December Veterans Affairs: It Has and to serve more veterans within legal restrictions, 2017 Initiated Plans to Serve CalVet should use the information in the Yountville Veterans Better and More veterans home master plan to develop a plan for Cost-Efficiently, but Further using unused space at that home to generate revenue Improvements Are Needed and/or serve more veterans. 2012-119 (May 2013)* 11. To ensure it is maximizing its ability to serve veterans 3 March 2017 in the State's veterans homes, CalVet should follow through with its plan to assess the bed capacity of the homes for veterans' needs after the homes in Fresno and Redding are licensed, to determine the most appropriate number of beds for the different levels of care offered at each home. 15. To allow for public input and to prevent any legal 3 October 2017 challenges that its policy of capping members' fees, its $165 monthly income-retention policy for members, and its age and admission policy are unenforceable underground regulations, CalVet should adopt these policies as regulations in accordance with the Administrative Procedure Act. 17. To more effectively and efficiently meet state 3 December purchasing and procurement requirements, CalVet 2017 should continue implementing quality assurance policies to strengthen its oversight of its purchasing practices, including conducting on-site reviews of the purchasing practices of the veterans homes. Follow-Up—California 1. CalVet should fully implement the recommendations 1 October 2016 Department of Veterans from our 2009 report. Affairs: Better Collection and Use of Data Would Improve Its 2. Veterans Services should develop and implement a 1 December Outreach Efforts, and It Needs plan by December 31, 2015, to routinely analyze and 2016 to Strengthen Its Oversight use myCalVet data to identify trends in the services of County Veterans Service veterans and their families indicate they are most Officer Programs interested in and incorporate the results of such analyses into its outreach efforts. 2015-505 (July 2015) California Military Department Investigations of Improper 3. Establish a routine of completing a monthly inventory 1 Unknown Activities by State Agencies of expendable state property after the barcode system and Employees is implemented. I2014-1 (December 2014) ‡ California Public Utilities Commission California Public Utilities 2. The commission should determine the cause of 3 †  Commission: Despite its lack of compliance with state law requiring it to Administrative Weaknesses, issue award decisions within 75 days of the date It Has Generally Awarded an intervenor submits a compensation claim, and Compensation to Intervenors it should determine what actions to take to rectify in Accordance With State Law the problem. The commission should ensure that it 2012-118 (July 2013) has sufficient information, such as detailed tracking information regarding claims, to identify where in the process delays are occurring. If the commission determines that the current 75-day statutory period is unreasonable, it should seek a change in state law. 5. To comply fully with state law, the commission should 3 December conduct a comprehensive market rate study and 2017 update it periodically. continued on next page . . . 36 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION California Public Utilities 14. The commission should follow the requirement in 2 June 2017 Commission: Improved state law to inspect and audit the accounting records J Monitoring of Balancing of utilities it regulates within required time frames. Accounts Would Better Ensure If the commission chooses to continue to meet this That Utility Rates Are Fair requirement through the general rate case process, it and Reasonable should ensure that all utilities file a general rate case 2013-109 (March 2014)* on a regular schedule so as to comply with the state law's audit requirement. However, the commission should follow alternate methods to comply with the audit requirement when a utility will not be filing for its general rate case in time to be audited within three or five years, depending on the timing of the required audit for that utility. California Public Utilities 2. To ensure that it resolves complaints against passenger 2 †   Commission: It Fails to carriers in a timely manner, the commission should Adequately Ensure Consumers' establish a method for prioritizing complaints and it Transportation Safety and should implement a policy specifying the maximum Does Not Appropriately amount of time between the receipt of a complaint Collect and Spend Fees From and the completion of the subsequent investigation. Passenger Carriers Further, the commission should require branch 2013-130 (June 2014)* management to monitor and report regularly on its performance in meeting that policy. 6. To ensure that the branch conducts thorough 2 †   investigations of passenger carriers, the commission should implement a formal training program to ensure that all investigators have adequate knowledge and skills related to regulating passenger carriers. 9. To ensure that passenger carriers submit accurate fee 2 December payments, the commission should require its fiscal 2016 staff to implement a process to verify passenger carrier fee payments and associated revenue. 10. To ensure that it complies with state law and uses 2 †  passenger carrier fees appropriately, the commission should implement a process to ensure that passenger carrier fee revenues more closely match related enforcement costs. 12. To detect and deter carriers from operating illegally 2 November at airports, the branch should use as intended the 2016 five positions added for passenger carrier enforcement at airports. If the branch chooses not to designate five positions solely for this purpose, then it must be prepared to demonstrate regularly that an equivalent number of full-time positions are working on this activity. 13. To strengthen its leadership and ensure passenger 2 †   carrier and public safety, the branch should produce a draft strategic plan by December 31, 2014, with a final strategic plan completed as the commission specifies. The strategic plan should include goals for the program; strategies for achieving those goals, including strategies for staff development and training; and performance measures to assess goal achievement. California Public Utilities 3. To ensure that policy makers, enforcement officials, 1 January 2018 Commission: It Needs to and the general public have access to accurate Improve the Quality of Its consumer complaint data in CIMS, the branch should Consumer Complaint Data continue to implement its quality management and the Controls Over Its team program component focused on reviewing Information Systems the categorization of complaints and correcting 2014-120 (April 2015)* identified errors. 4. To ensure that policy makers, enforcement officials, 1 December and the general public have access to accurate 2016 consumer complaint data in CIMS, the branch should develop and implement tools by September 30, 2015, to measure the quality management team program's effectiveness. 11. The commission should ensure that it complies with 1 December all policy requirements in SAM Chapter 5300 no later 2018 than April 2016. California State Auditor Report 2016-041 37 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 12. As part of developing, implementing, and maintaining 1 December an entitywide information security program, the 2018 commission should complete and maintain inventory of all its information assets, specifically categorizing the level of required security of the information assets based on the potential impact that a loss of confidentiality, integrity, or availability of such information would have on its operations and assets. 13. As part of developing, implementing, and maintaining 1 December an entitywide information security program, the 2018 commission should develop a risk management and privacy plan and conduct an assessment of risks facing its information assets. 14. As part of developing, implementing, and maintaining 1 December an entitywide information security program, the 2018 commission should develop, implement, and maintain an information security plan as part of its entitywide information security program. 15. The commission should develop, disseminate, and 1 January 2018 maintain an incident response plan. 16. The commission should revise its existing recovery 1 December plan to include a list of applications supporting critical 2018 business functions, their maximum acceptable outage time frames, and detailed recovery strategies for each application. 17. The commission should revise its existing recovery 1 December plan to include detailed procedures for rebuilding 2018 its technology infrastructure at an alternate processing site. 18. The commission should conduct regular tests and 1 December exercises to assess the sufficiency of the revised 2018 recovery plan and refine the plan when necessary. California's Alternative Energy 1. To make certain that the research program 1 December and Efficiency Initiatives: contributes to the goals of the solar initiative, the 2016 O Two Programs Are Meeting commission should conduct a program evaluation Some Goals, but Several before the remaining grant projects are completed. Improvements Are Needed 2014-124 (February 2015) 3. To show how air pollution emissions reductions 1 July 2018 related to the solar initiative benefit the State, the commission should include in future reports the measurable benefits of those reductions. Department of Finance General Obligation 1. To enhance the value of the Bond Accountability 5 Will Not Bonds: The Departments Web site, Finance should require administering Implement of Water Resources and agencies to provide information about the actual Finance Should Do More to amounts of bond funds spent on posted projects at Improve Their Oversight of least semiannually. Bond Expenditures 2010-117 (May 2011) 2. To enhance the value of the Bond Accountability 5 Will Not website, Finance should develop a tracking and review Implement process to periodically assess the completeness of the project information posted to the website. Such a process should include a review of whether state agencies are describing, in terms the public can easily understand, the expected or realized benefits of bond-funded projects. Office of Ratepayer Advocates California Public Utilities 7. To further its mission to obtain the lowest possible 2 Will Not Commission: Improved rates for reliable and safe utility service for ratepayers Implement J Monitoring of Balancing through its reviews of balancing accounts, Accounts Would Better Ensure Ratepayer Advocates should use the commission's That Utility Rates Are Fair list of balancing accounts to guide its selection of and Reasonable the number, size, and type of balancing accounts to 2013-109 (March 2014)* review so that its review coverage is more proportional across all utilities. continued on next page . . . 38 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION LEGISLATIVE, JUDICIAL, AND EXECUTIVE Administrative Office of the Courts Judicial Branch Procurement: 2. To improve the usefulness of the Judicial Council's 2 †  Semiannual Reports to the semiannual reports until a statutory requirement Legislature Are of Limited is enacted, the AOC should work with the Judicial Usefulness, Information Council to pursue a cost-effective method to provide Systems Have Weak Controls, the semiannual reports in an electronic format that and Certain Improvements can be read by common database and spreadsheet in Procurement Practices software products that allow users to readily sort and Are Needed filter the data, beginning with the semiannual report 2013-302 and 2013-303 covering the July 1, 2013 through December 31, 2013, (December 2013)* reporting period. 3. To improve the usefulness of the Judicial Council’s 2 Will Not semiannual reports until a statutory requirement Implement is enacted, the AOC should work with the Judicial Council to pursue a cost-effective method to do the following: • Include new contracts and the complete history of contracts amended during the reporting period in the semiannual reports, including the date of the original contract; the original contract amount and duration; all subsequent contract amendments; and the date, amount, and duration of each such amendment. The AOC should present this information beginning with the semiannual report covering the July 1, 2014, through December 31, 2014, reporting period. 4. To improve the usefulness of the Judicial Council’s 2 Will Not semiannual reports until a statutory requirement Implement is enacted, the AOC should work with the Judicial Council to pursue a cost-effective method to do the following: • Begin tracking additional information in its data systems for inclusion in the semiannual reports. This information should include whether a contract was competitively bid, the justification if it was not competitively bid, and whether the contract was with a Disabled Veteran Business Enterprise. For information technology contracts, the AOC should identify whether the contract was with a small business. The AOC should present this information beginning with the semiannual report covering the July 1, 2014, through December 31, 2014, reporting period. 5. The AOC should implement all of the best practices 2 Unknown related to general and business process application controls as outlined in the U.S. Government Accountability Office’s Federal Information System Controls Audit Manual no later than December 31, 2014, thereby strengthening and continuously monitoring the effectiveness of the controls over its information systems. In addition, the AOC should immediately begin implementing improvements to its controls over access to its information systems and place these improvements into effect by February 2014. Finally, the AOC should provide guidance and routinely follow up with the superior courts—requiring updates every six months until all identified issues are corrected—to ensure that they make the necessary improvements to their general and business process application controls. 6. The AOC, the Supreme Court, and the first, second, 2 Will Not and fourth districts should implement procedures to Implement ensure that they follow a competitive process for their procurements when required. 13. The AOC should revise the judicial contracting manual 2 Will Not to require judicial entities to maintain documentation Implement on their determinations of fair and reasonable pricing for purchases under $5,000. California State Auditor Report 2016-041 39 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 17. The AOC should revise the judicial contracting 2 Will Not manual to require that judicial entities maintain Implement documentation for their evaluation and selection process used for competitive procurements. The AOC should also strengthen its procedures to ensure that bid evaluations are conducted properly and calculated correctly. 20. The AOC, HCRC, Supreme Court, and fourth and 2 Will Not fifth districts should implement procedures to ensure Implement that required noncompetitive procurement processes, such as preparing justifications and obtaining approval for sole-source procurements, are properly documented. Additionally, the AOC should ensure that it prepares the appropriate documentation when it amends a contract that it has competitively solicited and the amendment includes a change that was not evaluated in the original competitive process. 25. The AOC should implement procedures to ensure that 2 Will Not its internal controls over payments are followed and Implement that procurements are approved before ordering and receiving goods and services. Judicial Branch of California: 3. To ensure that its compensation structure is 1 Will Not Because of Questionable reasonable, the AOC should mirror the executive Implement L Fiscal and Operational branch's practices for offering leave buyback programs Decisions, the Judicial Council in terms of frequency and amount. and the Administrative Office of the Courts Have 4. To increase its efficiency and decrease its travel 1 Will Not Not Maximized the Funds expenses, the AOC should require its directors and Implement Available for the Courts managers to work in the same locations as the majority of their staff unless business needs clearly 2014-107 (January 2015)* require the staff to work in different locations than their managers. 11. To reduce its expenses, the AOC should cease 1 Will Not its excessive reimbursements for meals by Implement adopting the executive branch's meal and travel reimbursement policies. 14. To ensure that it spends funds appropriately, the AOC 1 December should develop and implement controls to govern 2017 how its staff can spend judicial branch funds. These controls should include specific definitions of local assistance and support expenditures, written fiscal policies and procedures as the rules of court require, and a review process. 19. The AOC should conduct a comprehensive survey 1 †  of the courts on a regular schedule—at least every five years—to ensure that the services it provides align with their responses. The AOC should re-evaluate any services that the courts identify as being of limited value or need. 20. To justify its budget and staffing levels, the AOC should 1 Unknown conduct the steps in CalHR's workforce planning model in the appropriate order. It should begin by establishing its mission and creating a strategic plan based on the needs of the courts. It should then determine the services it should provide to achieve the goals of that plan. The AOC should base its future staffing changes on the foundation CalHR's workforce planning model provides. Finally, the AOC should develop and use performance measures to evaluate the effectiveness of this effort. California Department of Justice Armed Persons With Mental 23. To reduce the risk that it may not identify an armed 3 Unknown Illness: Insufficient Outreach prohibited person, Justice should revise its electronic From the Department of matching process to use all personal identifying Justice and Poor Reporting numbers available in its databases. From Superior Courts Limit the Identification of Armed Persons With Mental Illness 2013-103 (October 2013)* continued on next page . . . 40 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 24. To ensure that timely information is available for its 3 †   efforts to identify armed prohibited persons and confiscate their firearms, Justice should manage staff priorities to meet both its statutory deadline for firearms background checks and its internal deadline for initially reviewing potential prohibited persons. Justice should report annually to the Legislature about the backlog of unreviewed potential prohibited persons and what factors have prohibited it from efficiently reviewing these persons. 34. To ensure that it fully supports its decision to apply 3 December federal prohibition terms to individuals, Justice 2016 should review all applicable federal and state laws and continue to seek clarification from the ATF and any other appropriate federal agencies to determine whether California's firearms restoration process meets federal criteria and, if not, why it does not. Justice should issue a report to the Legislature, within one year, detailing the results of its review and, if applicable, communicate why California's restoration process does not meet federal criteria and the impact that it has on prohibited persons who live in California. Sexual Assault Evidence Kits: 4. To report to the Legislature about the effectiveness of 2 †  Although Testing All Kits its RADS program and to better inform decisions about Could Benefit Sexual Assault expanding the number of analyzed sexual assault Investigations, the Extent of evidence kits, Justice should amend its agreements the Benefits Is Unknown with the counties participating in the RADS program 2014-109 (October 2014) to require those counties to report case outcome information, such as arrests and convictions for the sexual assault evidence kits Justice has analyzed under the program. Justice should then report annually to the Legislature about those case outcomes. California Governor's Office of Emergency Services ll California's Mutual Aid 1. To make certain that emergency response agencies 4 October 2017 System: The California receive reimbursements on time, Cal EMA should Emergency Management establish procedures to ensure that paying entities do Agency Should Administer not delay reimbursements. the Reimbursement Process More Effectively 7. If FEMA determines that the calculations and claims 4 December identified in the Office of Inspector General's audit 2016 2011-103 (January 2012)* report were erroneous, Cal EMA should modify the time sheets to track the actual hours that the responding agency works as well as the dates and times that the agency committed to the incident and returned from the incident. 8. If FEMA determines that the calculations and claims 4 December identified in the Office of Inspector General's audit 2016 report were erroneous, Cal EMA should ensure that the replacement for its current invoicing system can calculate the maximum number of reimbursable personnel hours under both FEMA's policy and the CFAA. Special Interest License Plate 11. To make certain that money from the special plate 3 Will Not Funds: The State Has Foregone funds pay only for allowable and supportable Implement F Certain Revenues Related to activities, Cal EMA should maintain documentation Special Interest License Plates to support its charges to the antiterrorism fund. For and Some Expenditures Were example, it should ensure that employees submit Unallowable or Unsupported signed time reports to support the time they spend on 2012-110 (April 2013)* antiterrorism-related activities. California Health Facilities Financing Authority Children's Hospital Program: 1. The authority should amend its regulations to bring 1 Will Not The California Health Facilities them into accord with the 2004 act, thus allowing any Implement Financing Authority Has eligible hospital to apply for the 2004 act's funds that Generally Complied With Laws remained as of June 30, 2014. and Regulations and Resolved Its Issue Related to High Fund Balances 2015-042 (September 2015) California State Auditor Report 2016-041 41 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION Judicial Council of California Judicial Branch of California: 1. To ensure that the compensation the AOC provides 1 Will Not Because of Questionable is reasonable, the Judicial Council should adopt Implement L Fiscal and Operational procedures that require a regular and thorough review Decisions, the Judicial Council of the AOC's compensation practices including an and the Administrative analysis of the job duties of each position to ensure Office of the Courts Have that the compensation aligns with the requirements Not Maximized the Funds of the position. This review should include comparable Available for the Courts executive branch salaries, along with a justification 2014-107 (January 2015)* when an AOC position is compensated at a higher level than a comparable executive branch position. 15. The Judicial Council should develop rules of court that 1 †  create a separate advisory body, or amend the current advisory committee's responsibilities and composition, that reports directly to the Judicial Council to review the AOC's state operations and local assistance expenditures in detail to ensure they are justified and prudent. This advisory body should be composed of subject matter experts with experience in public and judicial branch finance. 21. To ensure that it provides services to the trial courts 1 Unknown as efficiently as possible, the Judicial Council should explore implementing a fee-for-service model for selected services. These services could include those that are little used or of lesser value to the trial courts, as identified in our survey that we discuss in Chapter 3. 22. To justify the budget and staff level of the AOC, 1 Unknown the Judicial Council should implement some or all of the best practices we identified to improve the transparency of AOC spending activities. Secretary of State’s Office Office of the Secretary of 4. To enhance the value of the HAVA spending plan 3 Will Not State: It Must Do More to as a transparency and accountability tool for the Implement Ensure Funds Provided Under Legislature, the Office should make the following the Federal Help America Vote modifications to its annual HAVA spending plan: Act Are Spent Effectively • Clearly state the methodology used to report prior 2012-112 (August 2013) HAVA expenditures in the HAVA spending plan. Such a methodology should use the financial information contained in its accounting system. • Reconcile the prior HAVA expenditures with the year-end financial reports the Office provides to the California State Controller's Office. • Present prior HAVA expenditures by activity and by specific appropriation. 5. To ensure the State complies with the NVRA, the Office 3 Will Not should take all necessary steps, including seeking any Implement necessary legislative changes, and work with the DMV to modify the driver's license application so that it may simultaneously serve as a form for voter registration. State Bar of California State Bar of California: It Has 7. To ensure that the audit and review unit's random 1 December Not Consistently Protected the audits of closed case files provide an effective 2016 Public Through Its Attorney oversight mechanism, the State Bar should follow its Discipline Process and policy to conduct and record meetings and trainings Lacks Accountability related to the audit report's recommendations. 2015-030 (June 2015)* State Board of Equalization State Board of Equalization 4. To ensure that it can accurately estimate any shifts in 2 October 2017 Building: Despite Ongoing worker productivity and state revenue, BOE should M Health and Safety strengthen its current methodology by analyzing the Concerns, the State Has productivity and revenue collection of its employees Not Thoroughly Analyzed and by monitoring those metrics at least semiannually. the Costs and Benefits of Additionally, BOE should support its methodology Relocating Employees with documentation. 2014-108 (September 2014)* continued on next page . . . 42 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION State Controller's Office High Risk Update: State 4. To improve the accuracy of information in the leave 2 Summer 2017 Agencies Credited Their accounting system and to ensure that agencies do not I Employees With Millions improperly credit employees with leave in the future, of Dollars Worth of the state controller should implement additional Unearned Leave controls by June 2015 to prevent the leave accounting 2012-603 (August 2014)* system from processing the types of inappropriate transactions we identified in our statewide electronic analysis. For example, it could develop cost-effective controls in the leave accounting system that would prevent employees from receiving annual leave and sick leave during the same pay period. Superior Court of California, County of Sacramento Sacramento and Marin 6. To make certain that the FCS evaluators are qualified, 5 Will Not Superior Courts: Both Courts the Sacramento family court should develop processes Implement Need to Ensure That Family to ensure that it signs all FCS evaluator declarations of Court Appointees Have qualifications annually. Necessary Qualifications, Improve Administrative 7. To make certain that the FCS evaluators are qualified, 5 Will Not Policies and Procedures, and the Sacramento family court should ensure that its Implement Comply With Laws and Rules unlicensed FCS evaluators complete the licensing portion of the annual declarations of qualifications. 2009-109 (January 2011) 8. To make certain that the FCS evaluators are qualified, 5 Will Not the Sacramento family court should identify the Implement training each of the FCS evaluators need to satisfy the court rules' requirements and ensure that they attend the trainings. 10. To make certain that the FCS evaluators are qualified, 5 Will Not the Sacramento family court should develop processes Implement to ensure that evaluator declarations of qualifications include all relevant information, such as the evaluator's experience. 12. To make certain that the FCS evaluators are qualified, 5 Will Not the Sacramento family court should take all Implement reasonable steps to ensure its FCS evaluators meet the minimum qualifications and training requirements before assigning them to any future Family Code Section 3111 evaluations. If necessary, and as soon as reasonably possible, the court should require the FCS evaluators to take additional education or training courses to compensate for the minimum qualifications and training requirements that were not met. 16. To verify that its private mediator and evaluator 5 Will Not panel members meet the minimum qualifications Implement and training requirements before appointment, the Sacramento family court should obtain any missing applications and training records for private mediators and evaluators on its current panel list before appointing them to future cases. 20. To verify that its private mediator and evaluator 5 Will Not panel members meet the minimum qualifications Implement and training requirements before appointment, the Sacramento family court should reinstate its local rules for private mediators and evaluators to provide a minimum of three references, and for private evaluators to provide a statement that they have read the court's evaluator guidelines. 23. To make sure that the minor's counsel it appoints 5 Will Not meet the additional standards required by the superior Implement court's local rules, the Sacramento family court should obtain any missing applications for minor's counsel before appointing them to any future cases. California State Auditor Report 2016-041 43 January 2017 STATE AUDITOR’S ASSESMENT AUDITEE DID NOT NUMBER OF YEARS SUBSTANTIATE AUDITEE DID NOT RECOMMENDATION ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 42. To strengthen its accounting process for California 5 Will Not Family Code Section 3111 evaluations, the Sacramento Implement Superior Court should update its accounting procedures related to billing FCS evaluation costs to include steps for verifying the mathematical accuracy of the FCS summary and the proper allocation of costs between the parties. * Other recommendations pertaining to this audit, which have been fully implemented, can be found in Table 3. † Contrary to the California State Auditor’s (State Auditor) determination, the auditee believes it has fully implemented the recommendation. ‡ Before publishing a report of an investigation, the State Auditor provides the head of each department or agency involved with a copy of the investigative report, including any recommendations. Therefore, in calculating how long a recommendation has been outstanding, the State Auditor uses the date the investigative report was provided to the department or agency, not the date the report was published. The investigative reports for the cases published in I2010-1045 were provided to the involved departments and agencies in May 2013. The investigative reports for the cases published in I2010-2 were provided to the involved departments and agencies in January 2011. The investigative reports for the cases published in I2012-1 were provided to the involved departments and agencies in October 2012. The investigative reports for the cases published in I2014-1 were provided to the involved departments and agencies in December 2014. The investigative reports for the cases published in I2015-1 were provided to the involved departments and agencies in August 2015. § As of July 2012, the California Department of Mental Health became the Department of State Hospitals. II As of July 1, 2013, the California Emergency Management Agency became the California Governor’s Office of Emergency Services. continued on next page . . . 44 California State Auditor Report 2016-041 January 2017 Blank page inserted for reproduction purposes only. California State Auditor Report 2016-041 45 January 2017 Table 3 Recommendations Made to State Entities That Are More Than One Year Old and Were Fully Implemented or Resolved Since Last Year’s Report or the Entities’ One-Year Responses (Reports Issued From November 2009 Through October 2015) NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT K–12 EDUCATION California Department of Education California Department of Education: 3. To improve its understanding of regional expenditures, Education should increase Fully 3 Despite Some Improvements, the level of detail required in its quarterly expenditure reports. The level of detail Implemented Oversight of the Migrant Education should allow Education to select expenditures for review. Program Remains Inadequate 4. For regions that have not recently received a federal monitoring review, Education Fully 3 2012-044 (February 2013)* should use the detailed expenditure reports to select a sample of expenditures, Implemented request supporting documentation from the regions, and then review the expenditures to determine if they meet applicable federal and state criteria. 5. As part of the reviews based on quarterly reports, Education should verify that Fully 3 regions are using the appropriate accounting codes to classify their expenditures. Implemented 11. Once it has addressed the underlying issues with regional accounting, provided Fully 3 direction to regions about which expenditures it will consider administrative, and Implemented obtained accurate expenditure data, Education should review its administrative cost goal to ensure that this goal is reasonable given the requirements of the migrant program. 12. To address past federal findings that are not yet resolved, Education should respond Fully 3 as recommended in Appendix B of the report. Implemented School Safety and Nondiscrimination 17. To provide stronger leadership with respect to school safety and nondiscrimination Fully 3 Laws: Most Local Educational Agencies laws, Education, with direction from the superintendent of public instruction, Implemented Y Do Not Evaluate the Effectiveness of should prioritize the review of parent, student, guardian, or interested party appeals Their Programs, and the State Should to ensure that the EO office follows state regulations by processing appeals more Exercise Stronger Leadership promptly, notifying LEAs of when appeals are filed, and obtaining the investigation 2012-108 (August 2013)* files and other documents when reviewing complaint appeals. Commission On Teacher Credentialing Commission on Teacher 1. To make its strategic plan a more useful mechanism for accomplishing its mission, Fully 2 Credentialing—Follow-Up Review the Commission on Teacher Credentialing (commission) should ensure that, Implemented 2014-502 (July 2014) to the extent possible, its goals have timelines and are measureable. Further, the commission should periodically evaluate and track its progress towards meeting its goals. HIGHER EDUCATION California State University, Chico Sexual Harassment and Sexual 18. All universities should provide their education on sexual harassment and sexual Fully 2 Violence: California Universities Must violence to incoming students as close as possible to when they arrive on campus Implemented K Better Protect Students by Doing but no later than the first few weeks of their first semester or quarter. Further, More to Prevent, Respond to, and universities should provide periodic refresher educational programs, at least Resolve Incidents annually, to all students on campus to ensure that they are aware of how to handle 2013-124 (June 2014)* and report incidents of sexual harassment and sexual violence. 68. To identify ways to better serve their students, all universities should create a Fully 2 summary of student incidents of sexual harassment and sexual violence reported to Implemented the various departments on campus. Each university should evaluate its summary data to identify trends specific to the demographics, as well as the timing, location, and frequency of incidents, to better inform its strategies to protect students and direct its outreach efforts. California State University, San Diego Sexual Harassment and Sexual 7. To help ensure that university faculty and staff do not mishandle student reports Fully 2 Violence: California Universities Must of incidents, all faculty and staff should receive training annually, consistent with Implemented K Better Protect Students by Doing their role, on their obligations in responding to and reporting incidents of sexual More to Prevent, Respond to, and harassment and sexual violence. Resolve Incidents 19. All universities should provide their education on sexual harassment and sexual Fully 2 2013-124 (June 2014)* violence to incoming students as close as possible to when they arrive on campus Implemented but no later than the first few weeks of their first semester or quarter. Further, universities should provide periodic refresher educational programs, at least annually, to all students on campus to ensure that they are aware of how to handle and report incidents of sexual harassment and sexual violence. continued on next page . . . 46 California State Auditor Report 2016-041 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT 69. To identify ways to better serve their students, all universities should create a Fully 2 summary of student incidents of sexual harassment and sexual violence reported to Implemented the various departments on campus. Each university should evaluate its summary data to identify trends specific to the demographics, as well as the timing, location, and frequency of incidents, to better inform its strategies to protect students and direct its outreach efforts. The California State University Sexual Harassment and Sexual 4. The Office of the Chancellor should direct all of the universities within the CSU Fully 2 Violence: California Universities Must system to comply with the recommendations in this audit report. Also, to ensure Implemented K Better Protect Students by Doing that its universities are complying with Title IX requirements, the Office of the More to Prevent, Respond to, and Chancellor should conduct routine Title IX reviews. When conducting these Resolve Incidents compliance reviews, the Office of the Chancellor should determine whether 2013-124 (June 2014)* universities have implemented this report’s recommendations. University of California, Berkeley Sexual Harassment and Sexual 24. All universities should provide supplemental training on sexual harassment and Fully 2 Violence: California Universities Must sexual violence, including sexual assault, for all student athletes on an annual Implemented K Better Protect Students by Doing basis. Further, the universities should provide supplemental training on sexual More to Prevent, Respond to, and harassment and sexual violence, including rape awareness, to all student members Resolve Incidents of fraternities and sororities on an annual basis. The universities should also 2013-124 (June 2014)* determine which student organizations participate in activities that may place students at risk and ensure that they receive annual, supplemental training on sexual harassment and sexual violence, including rape awareness. Each of the trainings should be focused on situations the members of the respective student groups may encounter. 70. To identify ways to better serve their students, all universities should create a Fully 2 summary of student incidents of sexual harassment and sexual violence reported to Implemented the various departments on campus. Each university should evaluate its summary data to identify trends specific to the demographics, as well as the timing, location, and frequency of incidents, to better inform its strategies to protect students and direct its outreach efforts. University of California, Los Angeles Sexual Harassment and Sexual 25. All universities should provide supplemental training on sexual harassment and Fully 2 Violence: California Universities Must sexual violence, including sexual assault, for all student athletes on an annual Implemented K Better Protect Students by Doing basis. Further, the universities should provide supplemental training on sexual More to Prevent, Respond to, and harassment and sexual violence, including rape awareness, to all student members Resolve Incidents of fraternities and sororities on an annual basis. The universities should also 2013-124 (June 2014)* determine which student organizations participate in activities that may place students at risk and ensure that they receive annual, supplemental training on sexual harassment and sexual violence, including rape awareness. Each of the trainings should be focused on situations the members of the respective student groups may encounter. 71. To identify ways to better serve their students, all universities should create a Fully 2 summary of student incidents of sexual harassment and sexual violence reported to Implemented the various departments on campus. Each university should evaluate its summary data to identify trends specific to the demographics, as well as the timing, location, and frequency of incidents, to better inform its strategies to protect students and direct its outreach efforts. HEALTH AND HUMAN SERVICES California Department of Public Health Department of Public Health: It 1. To ensure that citation review conferences are completed expeditiously, Public Fully 6 Reported Inaccurate Financial Health should continue to take steps to eliminate its backlog of appeals awaiting a Implemented Information and Can Likely citation review conference. Increase Revenues for the State and Federal Health Facilities Citation Penalties Accounts 2010-108 (June 2010) Developmental Centers: Poor-Quality 15. To conduct licensing surveys at required intervals while minimizing additional Resolved 3 Investigations, Outdated Policies, workload, Public Health should explore further opportunities to coordinate the E Leadership and Staffing Problems, licensing and certification surveys. If Public Health questions the value of these and Untimely Licensing Reviews Put surveys, it should seek legislation to modify the surveying requirements. Residents at Risk 17. To ensure that investigations are conducted on a timely basis across priority levels, Fully 3 2012-107 (July 2013)* Public Health should develop and implement target time frames for the priority Implemented levels that lack them. Public Health should ensure that the timelines are being met and, if not, explore new ways to increase efficiency and manage its workload, thereby facilitating timely investigations. California Department of Public 2. To protect the health, safety, and well-being of residents in long-term health care Fully 2 Health: It Has Not Effectively Managed facilities, Public Health should improve its oversight of complaint processing. Implemented Investigations of Complaints Related to Specifically, by January 1, 2015, Public Health should improve the accuracy of Long-Term Health Care Facilities information in the spreadsheet that PCB uses to track the status of complaints 2014-111 (October 2014)* against individuals and review the reports of open complaints to ensure that all complaints are addressed promptly. California State Auditor Report 2016-041 47 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT 6. To ensure that district offices address ERIs consistently and to ensure that Fully 2 they investigate ERIs in the most efficient manner, Public Health should use Implemented the information from its assessment to provide guidance to district offices by October 1, 2015, on best practices for consistent and efficient processing of ERIs. 11. Public Health should take steps to ensure that PCB has the resources necessary Fully 2 on an ongoing basis to complete investigations of complaints against individuals. Implemented Specifically, Public Health should assess whether the temporary resources it has received are adequate to reduce the number of open complaints to a manageable level. This assessment should also determine whether permanent resources assigned to PCB are adequate to address future complaints. Public Health should use this assessment to request additional resources, if necessary. California Department of Social Services High Risk: State Departments Need 11. Social Services should develop a process by December 2015 to measure and Fully 1 to Improve Their Workforce and evaluate its workforce and succession planning activities at least annually, and Implemented S Succession Planning Efforts to Mitigate update its plans as necessary, to ensure that its activities are effective. This the Risks of Increasing Retirements process should include evaluating the trends in retirements for leadership and 2015-608 (May 2015) technical positions. 13. Social Services should identify a key resource, such as a unit, by June 30, 2015, Fully 1 to track the results of workforce and succession planning activities across the Implemented department to ensure that the workforce and succession planning activities it implements are monitored on a departmentwide level. 15. Social Services should update its existing workforce and succession plan by Fully 1 December 2015 to ensure that the department is adequately prepared for the Implemented retirement of a significant number of its highly experienced employees. The plan should include current best practices that meet its organizational needs. Follow-Up—California Department 1. To ensure that staff monitor both counties’ processing of match lists and counties’ Fully 1 of Social Services: It Has Not Corrected reporting of investigation activity in a consistent and effective manner, Social Implemented Previously Recognized Deficiencies Services should develop and document formal procedures for the IEVS and SIU in Its Oversight of Counties’ Antifraud review processes. Efforts for the CalWORKs and CalFresh Programs 10. To ensure that counties are consistently following up on all match lists, Social Fully 1 Services should better enforce the counties’ implementation of its recommendations Implemented 2015-503 (June 2015)* from the IEVS reviews and verify implementation of the corrective action plans that counties submit. 14. To ensure the accuracy and consistency of the information on welfare fraud activities Fully 1 that counties report and that Social Services subsequently reports to the federal Implemented government, the Legislature, and internal users, Social Services should perform more diligent reviews of the counties’ investigation activity reports to verify the accuracy of the information submitted. 15. To ensure the accuracy and consistency of the information on welfare fraud activities Fully 1 that counties report and that Social Services subsequently reports to the federal Implemented government, the Legislature, and internal users, Social Services should provide counties with feedback on how to correct and prevent errors that it detects while reviewing counties’ investigation activity reports. Follow-Up—California Department 2. To improve its review process, preserve institutional knowledge, and ensure that Fully 1 of Social Services: Although Making staff consistently implement registered sex offender reviews in the future, Social Implemented Progress, It Could Do More to Ensure Services should better document its review procedures. For example, Social Services the Protection and Appropriate should better document its screening process by identifying criteria for determining Placement of Foster Children when it is acceptable to exclude certain address matches from investigation and by 2015-502 (July 2015)* providing an explanation to staff for why it is safe to remove address matches that meet those particular criteria. California Health Benefit Exchange New High Risk Entity: Covered 2. To comply with federal requirements, Covered California should develop a plan Fully 3 California Appears Ready to Operate and procedures for monitoring, recertification, and decertification of qualified Implemented California’s First Statewide Health health plans. Insurance Exchange, but Critical Work and Some Concerns Remain 3. To ensure the success of its outreach effort, Covered California should track the Fully 3 effect on enrollment figures of its planned outreach and marketing activities and of Implemented 2013-602 (July 2013) its assister program. California State Government Websites: 8. No later than December 1, 2015, Covered California should develop a plan to Fully 1 Departments Must Improve Website determine whether the accessibility violations we identified exist on other portions Implemented P Accessibility So That Persons With of its online presence that we did not include in the scope of our review. Once this Disabilities Have Comparable Access to plan is executed, it should correct violations wherever it finds them and do so no State Services Online later than June 1, 2016. 2014-131 (June 2015)* continued on next page . . . 48 California State Auditor Report 2016-041 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Department of Developmental Services Developmental Centers: Poor-Quality 3. To ensure adequate guidance to OPS personnel, once the department has amended Fully 3 Investigations, Outdated Policies, OPS’s policies and procedures to reflect the recommendations we have included Implemented E Leadership and Staffing Problems, here, the department and OPS should place a high priority on completing and and Untimely Licensing Reviews Put implementing its planned updates to the OPS policy and procedure manual. Residents at Risk 13. The department should create specific measurable goals for OPS that include Fully 3 2012-107 (July 2013)* existing and new measures associated with each one, such as staffing, overtime, and Implemented the timely completion of investigations. In addition, the department should perform a regular review of the quality of OPS’s activities and investigations to achieve those goals. The department should track progress in quality measures over time and adjust its training plans to increase OPS law enforcement personnel’s skill and compliance with established policies and procedures. California Department of 10. To efficiently locate records pertinent to the Parental Fee Program, Developmental Fully 1 Developmental Services: Its Process Services should update its retention policy and centralize all the files and records Implemented for Assessing Fees Paid by Parents of supporting the program. Children Living in Residential Facilities Is Woefully Inefficient and Inconsistent 2014-118 (January 2015)* Department of Health Care Services Medi-Cal Managed Care Program: 6. Health Care Services should ensure that it performs annual medical audits of local Fully 4 The Departments of Managed Health initiatives as required by law. Implemented Care and Health Care Services Could Improve Their Oversight of Local Initiatives Participating in the Medi-Cal Two-Plan Model 2011-104 (December 2011) California Department of Health 2. To ensure that the providers receive reimbursement for only valid services, Health Fully 2 Care Services: Its Failure to Properly Care Services should immediately develop and implement new procedures for Implemented Administer the Drug Medi-Cal routinely identifying and initiating recovery efforts for payments that it authorizes Treatment Program Created between the effective date of a provider’s decertification and the date it became Opportunities for Fraud aware of the decertification, in addition to the payments it authorizes between a 2013-119 (August 2014)* beneficiary’s death date and its receipt of the death record. 4. To ensure that the providers receive reimbursement for only valid services, Health Fully 2 Care Services should immediately direct its investigations division to determine Implemented whether it should recover any overpayments for the high-risk payments we identified in Table 7 on page 28 and Appendix A beginning on page 63. It should also take the appropriate disciplinary action against the affected providers, such as suspension or termination. 6. To ensure that the providers receive reimbursement for only valid services, Health Fully 2 Care Services should immediately direct its fiscal management and accountability Implemented branch to work with Fresno, Los Angeles, and Sacramento counties to recover the specific overpayments we identified during our visits. California Department of Health 15. To better ensure that some claiming units do not unfairly disadvantage other Fully 1 Care Services: It Should Improve Its claiming units in the receipt of interim payments, Health Care Services should Implemented Administration and Oversight of explore opportunities to expedite consistent, timely, and fair interim payments to School-Based Medi-Cal Programs those claiming units with no overpayments. Health Care Services should involve 2014-130 (August 2015)* representatives of local educational consortia, local governmental agencies, and claiming units in these efforts and communicate the results to interested stakeholders. Department of State Hospitals ll Sex Offender Commitment Program: 2. To eliminate duplicative effort and increase efficiency, Corrections should not make Resolved 5 Streamlining the Process for unnecessary referrals to Mental Health. Corrections and Mental Health should jointly B Identifying Potential Sexually Violent revise the structured screening instrument so that the referral process adheres more Predators Would Reduce Unnecessary closely to the law’s intent. or Duplicative Work 2010-116 (July 2011)* Mental Health Services Oversight and Accountability Commission Mental Health Services Act: The State’s 9. To ensure that counties have needed guidance to implement and evaluate MHSA Fully 3 Oversight Has Provided Little Assurance programs, the Accountability Commission should issue regulations, as appropriate, Implemented H of the Act’s Effectiveness, and Some for Prevention and Innovation programs. Counties Can Improve Measurement of Their Program Performance 2012-122 (August 2013)* CORRECTIONS AND REHABILITATION Board of State and Community Corrections Juvenile Justice Realignment: 1. To improve the usefulness of its reports so that they can be used to assess the Fully 4 Limited Information Prevents outcomes of realignment, the board should work with counties and relevant Implemented a Meaningful Assessment stakeholders, such as the committee that established performance outcome of Realignment’s measures for the block grant, to determine the data that counties should report. 2011-129 (September 2012)* To minimize the potential for creating a state mandate, the board should take into consideration the information that counties already collect to satisfy requirements for other grants. California State Auditor Report 2016-041 49 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT 2. To improve the usefulness of its reports so that they can be used to assess the Fully 4 outcomes of realignment, if the Legislature chooses not to change the law as Implemented suggested, or if the counties are unable to report countywide statistics, the board should discontinue comparing outcomes for juveniles who receive block grant services to those who do not in its reports. 4. To maximize the usefulness of the information it makes available to stakeholders Resolved 4 and to increase accountability, the board should publish performance outcome and expenditure data for each county on its website and in its annual reports. 6. To increase the amount of juvenile justice data the counties make available to the Fully 4 public, the board should work with counties on how best to report these data. Implemented California Correctional Health Care Services† California Department of Corrections 6. To determine whether the additional expansion of telemedicine is cost-effective Resolved 6 and Rehabilitation: Inmates Sentenced within the California correctional system, Prison Health Care Services should further A Under the Three Strikes Law and a analyze the cost-effectiveness of telemedicine through a more robust estimate Small Number of Inmates Receiving of savings, including considering factors such as the percent of telemedicine Specialty Health Care Represent consultations that required subsequent in-person visits because the issue could not Significant Costs be addressed through telemedicine. 2009-107.2 (May 2010) California Department of Corrections and Rehabilitation California Department of Corrections 1. To address the erroneous sentencing information and inappropriately assigned Fully 6 and Rehabilitation: Inmates Sentenced convictions in its data system, Corrections should complete its cleanup of data that Implemented A Under the Three Strikes Law and a will be transferred into the new system, ensuring that this review includes a detailed Small Number of Inmates Receiving evaluation of convictions that have been assigned outdated sentencing information Specialty Health Care Represent as well as deleting erroneous sentencing information, before it begins using its new Significant Costs data system. 2009-107.2 (May 2010) 10. To better communicate to policy makers the annual cost of incarceration, and Fully 6 to provide a more accurate estimate of expenditures associated with changes in Implemented the large leave balances of custody staff—many of whom require relief coverage when they are absent—Corrections should provide a calculation of the annual increase or decrease in its liability for the leave balances of custody staff to better explain the cause of changes in expenditures to the relevant legislative policy and fiscal committees. 11. To better communicate to policy makers the annual cost of incarceration, and to Fully 6 provide a more accurate estimate of expenditures associated with changes in the Implemented large leave balances of custody staff—many of whom require relief coverage when they are absent—Corrections should provide an estimate of the annual cost of leave balances likely to be paid for retiring custody staff to the relevant legislative policy and fiscal committees. California Prison Industry Authority: 6. As Corrections prepares to move CalParole data into the Strategic Offender Fully 5 It Can More Effectively Meet Its Goals Management System (SOMS), it should modify existing employment-related fields Implemented of Maximizing Inmate Employment, and add to SOMS new fields that are currently not available in CalParole so that Reducing Recidivism, and Remaining Corrections can minimize the opportunity for erroneous data entries and make Self-Sufficient employment data more reliable. 2010-118 (May 2011) Department of Corrections and 2. To ensure that the State does not spend additional resources on COMPAS while Fully 5 Rehabilitation: The Benefits of Its its usefulness is uncertain, Corrections should suspend its use of the COMPAS core Implemented Correctional Offender Management and reentry assessments until it has demonstrated to the Legislature that it has a Profiling for Alternative Sanctions plan to measure and report COMPAS's effect on reducing recidivism. Such a plan Program Are Uncertain could consider whether inmates enrolled in a rehabilitative program based on a 2010-124 (September 2011)* COMPAS assessment had lower recidivism rates than those provided rehabilitative programming as a result of non-COMPAS factors. 4. Once Corrections resumes its use of COMPAS core and reentry assessments, it Fully 5 should develop practices or procedures to periodically determine whether its staff Implemented are using COMPAS core or reentry assessments as intended. Such a process might include performing periodic site visits to corroborate that COMPAS is being used as required. 5. Once Corrections resumes its use of COMPAS core and reentry assessments, it Fully 5 should develop practices or procedures to periodically compare the demand for Implemented certain rehabilitative programs, as suggested by a COMPAS core assessment, to the existing capacity to treat such needs. TRANSPORTATION California Department of Transportation California Department of 39. To comply with the 2007 court ruling and the APA until such time as the Legislature Fully 4 Transportation: Its Poor Management may choose to act, Caltrans should establish regulations to govern the sales process Implemented D of State Route 710 Extension Project for the SR 710 properties affected by the Roberti Bill. Properties Costs the State Millions of Dollars Annually, Yet State Law Limits the Potential Income From Selling the Properties 2011-120 (August 2012)* continued on next page . . . 50 California State Auditor Report 2016-041 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT 40. To pursue alternatives to its management of the SR 710 properties, Caltrans should Fully 4 prepare a cost-benefit analysis to determine if the State would save money by hiring Implemented a private vendor to manage the properties. If such savings would occur, Caltrans should seek an exemption under Government Code section 19130 (a), to hire a private vendor. California High‑Speed Rail Authority High-Speed Rail Authority: It 1. To ensure that it can respond adequately to funding levels that may vary from Resolved 6 Risks Delays or an Incomplete its business plan, the Authority should develop and publish alternative funding System Because of Inadequate scenarios that reflect the possibility of reduced or delayed funding from the planned Planning, Weak Oversight, and sources. These scenarios should detail the implications of variations in the level or Lax Contract Management timing of funding on the program and its schedule. 2009-106 (April 2010) High-Speed Rail Authority Follow-Up: 1. To ensure that it can respond adequately to funding levels that may vary from Resolved 4 Although the Authority Addressed its business plan, the Authority should develop and publish alternative funding Some of Our Prior Concerns, Its scenarios that reflect the possibility of reduced or delayed funding from the planned Funding Situation Has Become sources. These scenarios should detail the implications of variations in the level or Increasingly Risky and the Authority's timing of funding on the program and its schedule. Weak Oversight Persists 2011-504 (January 2012)* 7. To add clarification to the first recommendation we made in our prior report that Resolved 4 stated, “To ensure that it can respond adequately to funding levels that may vary from its business plan, the Authority should develop and publish alternative funding scenarios that reflect the possibility of reduced or delayed funding from the planned sources. These scenarios should detail the implications of variations in the level or timing of funding on the program and its schedule,” the Authority should also present viable alternative funding scenarios for phase one in its entirety that do not assume an increase in the federal funding levels already identified in the 2012 draft business plan. If the Authority does not believe that such alternatives exist, it should publicly disclose this in its 2012 final business plan. 9. To ensure that the public and the Legislature are aware of the full cost of the Fully 4 program, the Authority should clearly disclose that the 2012 draft business plan Implemented assumes that the State will only be receiving profits for the first two years of operation in 2022 and 2023, and potentially not again until 2060 in exchange for the almost $11 billion the Authority assumes it will receive from the private sector over a four-year period. Department of Motor Vehicles Special Interest License Plate Funds: 2. Motor Vehicles should ensure that the fees it lists in its application for special plates, Fully 3 The State Has Foregone Certain as well as any other publications, are supported by the appropriate statutes. Implemented F Revenues Related to Special Interest License Plates and Some Expenditures Were Unallowable or Unsupported 2012-110 (April 2013)* Follow-Up—California Department of 1. To ensure it charges fees for special plates that are consistent with state law, Motor Fully 1 Motor Vehicles: It Still Has Not Ensured Vehicles should begin charging the correct fees for transferring an Olympic Training Implemented It Charges and Advertises Fees for Center plate and to convert a personalized plate to a personalized Collegiate plate Some Special Interest License Plates by March 31, 2016. Consistent With State Law 2015-506 (July 2015) NATURAL RESOURCES California Natural Resources Agency Special Interest License Plate Funds: 16. To ensure that the governor and Legislature have sufficient and appropriate Fully 3 The State Has Foregone Certain information with which to make decisions on the most effective use of Implemented F Revenues Related to Special Interest environmental fund money, Resources should submit to the governor and License Plates and Some Expenditures Legislature the annual and triennial reports containing the information that state Were Unallowable or Unsupported law requires. 2012-110 (April 2013)* California State Lands Commission State Lands Commission: Because 24. To ensure that as few leases as possible go into holdover, the commission should Resolved 5 It Has Not Managed Public Lands consistently assess the 25 percent penalty on expired leases. Effectively, the State Has Lost Millions in Revenue for the General Fund 2010-125 (August 2011)* Department of Parks and Recreation Special Interest License Plate Funds: 14. To make certain that money from the special plate funds pay only for allowable Resolved 3 The State Has Foregone Certain and supportable activities, Parks and Recreation should ensure that environmental F Revenues Related to Special Interest fund money budgeted to its offices is supported by the proportion of the offices' License Plates and Some Expenditures activities that state law allows. Were Unallowable or Unsupported 2012-110 (April 2013)* California State Auditor Report 2016-041 51 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Department of Parks and Recreation: 2. To reduce duplicate expenditure tracking and increase the effectiveness of its Fully 3 Flaws in Its Budget Allocation budget process, the department should develop procedures requiring the districts Implemented Processes Hinder Its Ability to to prepare and submit spending plans and to periodically submit their total Effectively Manage the Park System expenditures after reconciling them with the FTS. The procedures should specify 2012-121.2 (September 2013)* how often districts should provide this information to the department to ensure that the budget office and park management can appropriately oversee the districts' budgets and spending. ENVIRONMENTAL PROTECTION California Department of Resources Recycling and Recovery Department of Resources Recycling 19. To improve oversight of grants and ensure that the intended value is received from Fully 6 and Recovery: Deficiencies in the grant funds it awards, the department should implement policies to ensure that Implemented Forecasting and Ineffective cities and counties spend grant funds for recycling purposes by requiring periodic Management Have Hindered the reporting of expenses or reporting of how funds were used after the grant ends. Beverage Container Recycling Program 2010-101 (June 2010) California Department of Resources 4. To ensure that all appropriate redemption payments are identified and made to the Fully 1 Recycling and Recovery: The Beverage beverage program, CalRecycle should do the following: Implemented Container Recycling Program Continues • Contract with the California Board of Equalization (Equalization) to determine the to Face Deficits and Requires Changes feasibility and cost of transferring its revenue collections duties and audit reviews to Become Financially Sustainable to Equalization. 2014-110 (November 2014)* • Should CalRecycle find that it is feasible and cost effective, it should pursue legislative changes that enable Equalization to collect revenues for the beverage program at the point-of-sale and remit the money to the beverage program. Department of Toxic Substances Control California Department of Toxic 5. To ensure that it maximizes the recovery of its costs from responsible parties, by Fully 2 Substances Control: Its Lack of October 2014, the department should do the following: Implemented Diligence in Cost Recovery Has • Continue its plan to update policies and procedures for using liens whenever Contributed to Millions in Unbilled and appropriate. Uncollected Costs 8. To ensure it loads only accurate billing data into FI$Cal, the department should Fully 2 2013-122 (August 2014) continue evaluating projects with outstanding costs in its billing system to meet the Implemented July 2015 implementation date. 11. The department should continue to resolve its questions about its authority to write Fully 2 off outstanding costs under $5,000. To the extent that it determines it cannot Implemented write off outstanding costs, it should pursue collecting the costs. BUSINESS, CONSUMER SERVICES, HOUSING Board of Registered Nursing California Department of Consumer 31. To ensure that BRN has adequate data to effectively use its resources and manage its Fully 1 Affairs' BreEZe System: Inadequate workload, it should formally track and monitor its pending workload of applications Implemented N Planning and Oversight Led to by type and original receipt date. Implementation at Far Fewer Regulatory Entities at a Significantly Higher Cost 2014-116 (February 2015)* California State Athletic Commission State Athletic Commission: Its Ongoing 2. To ensure its future financial stability, the commission should work with Consumer Fully 3 Administrative Struggles Call Its Future Affairs to establish a long-term financial plan that contains the following: Implemented G Into Question • A reasonable annual budget with an accurate forecast of planned expenditures. 2012-117 (March 2013)* The commission should determine this budget based in part on its ability or inability to meet the expenditure limitations stipulated in the solvency plan. • The number of inspectors necessary to regulate each type of event. In establishing this number, the commission should take into account the varying size and complexity of the events. It should also determine the cost for each inspector to regulate an event. • An estimate of its costs to regulate different types of events. To arrive at a reasonable estimate, the commission will need to track at least six months of actual expenditures. • The number of staff necessary to perform all of the commission’s necessary functions. The commission will need to conduct a workload analysis as soon as possible to determine how many staff it requires and adjust its planned expenditures accordingly. • Funds for athletic inspectors’ training that are sufficient to meet the requirement that inspectors receive training within six months of an event that they are scheduled to work. • Strategies to increase revenue. The commission may need to conduct analyses to determine whether the opportunities it is currently considering are legally permissible and fiscally prudent. If so, the commission should take steps to implement those strategies, including seeking any necessary legislative changes. continued on next page . . . 52 California State Auditor Report 2016-041 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT 25. To operate the pension plan effectively and maximize boxers' benefits, the Fully 3 commission should create policies and procedures for its administration to ensure Implemented that it transfers funds on a regular basis from the pension fund's state account into its investment account. Department of Consumer Affairs State Athletic Commission: Its Ongoing 16. To ensure that all designated parties complete statements of economic interests as Fully 3 Administrative Struggles Call Its Future the law requires, Consumer Affairs should improve its policies and procedures to Implemented G Into Question ensure that it identifies any incomplete statements and promptly notifies the Fair 2012-117 (March 2013)* Political Practices Commission when necessary. California Department of Consumer 19. If Consumer Affairs determines that a new IT project is warranted in the future, it Fully 1 Affairs' BreEZe System: Inadequate should develop a process to ensure the success of that project that includes, at a Implemented N Planning and Oversight Led to minimum, a project team that is qualified and experienced. Implementation at Far Fewer Regulatory Entities at a Significantly Higher Cost 2014-116 (February 2015)* 22. If Consumer Affairs determines that a new IT project is warranted in the future, it Fully 1 should develop a process to ensure the success of that project that includes, at Implemented a minimum, timely response to concerns that the IV&V consultant and the IPO specialist raise. 23. If Consumer Affairs determines that a new IT project is warranted in the future, it Fully 1 should develop a process to ensure the success of that project that includes, at a Implemented minimum, sufficient staffing. Department of Housing and Community Development California Department of Housing 3. To meet the intent of the law, HCD should approve and fund for the Catalyst Fully 2 and Community Development: Program only those projects that more directly create or preserve housing Implemented Inconsistent Oversight Has Resulted in opportunities. the Questionable Use of Some Housing Bond Funds 2014-037 (September 2014) LABOR AND WORKFORCE DEVELOPMENT California Workforce Development Board‡ Federal Workforce Investment Act: 2. To assist the governor in the development, oversight, and continuous improvement Fully 4 More Effective State Planning and of California's workforce investment system, the state board should collaborate Implemented C Oversight Is Necessary to Better with state and local workforce investment partners to promptly develop and Help California's Job Seekers implement a strategic workforce plan as state law requires. The strategic plan should Find Employment include, at a minimum, the following elements: clear roles and responsibilities 2011-111 (March 2012)* pertaining to the state board, EDD, and other state and local workforce partners; clear definitions for terminology used in the strategic plan, such as quality services; performance measures that are specific to California for evaluating the efficiency and effectiveness of WIA-funded programs and activities; and procedures for approving the addition of data elements to EDD's Web-based system and for the exchange of data between EDD and the state board to facilitate the development and implementation of performance measures that are specific to California. Employment Development Department Employment Development 7. To better optimize its leadership role in the interagency council's employment Resolved 3 Department: It Needs to Address Data workgroup, the department should ensure that the employment workgroup Issues to Better Evaluate and Improve develops a timeline for completing its action items and develops a process for the Performance of Its Employment measuring its success in improving employment outcomes for veterans. Specifically, Programs for Veterans the department should take the lead for establishing a time frame for evaluating 2013-102 (October 2013)* tools to help assess and translate military skills into finding civilian jobs and establishing a transition assistance program for veterans. Employment Development 1. To reduce the number of its determinations that are overturned on appeal, the Fully 2 Department: It Should Improve Its Employment Development Department (EDD) should change its practices to Implemented Efforts to Minimize Avoidable Appeals ensure that its staff have demonstrated that all of the necessary elements of a of Its Eligibility Determinations for false statement are adequately supported before disqualifying a claimant for Unemployment Insurance Benefits unemployment benefits or assessing the associated 30 percent penalty on that 2014-101 (August 2014)* basis. To do this, EDD should update its training to further emphasize that false statement disqualifications, especially those resulting from wage reporting, cannot be assessed unless all of the elements are present. California State Auditor Report 2016-041 53 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT 2. To reduce the number of its determinations that are overturned on appeal, EDD Fully 2 should revise its website and the materials that accompany the continued claim Implemented form to provide specific instructions to claimants on how to avoid common errors that claimants make when reporting wages, such as the error of applying some wages to the incorrect week. 3. To reduce the number of its determinations that are overturned on appeal, EDD Fully 2 should ensure that determinations are supported by sufficient fact-finding and Implemented relevant evidence by increasing the required number of attempts to reach claimants by telephone or e-mail before making a determination. 4. To reduce the number of its determinations that are overturned on appeal, EDD Fully 2 should allow additional time for its staff to process misconduct and voluntary quit Implemented cases, especially those that involve complex issues. 5. To reduce the number of its determinations that are overturned on appeal, Fully 2 EDD should improve its due diligence during the pre-appeal review process Implemented by considering appellants' reasons for appealing and by contacting claimants, employers, and third parties when necessary to obtain clarifying information that could result in a redetermination, which could eliminate or reduce the need for some appeals board hearings. 6. To reduce the number of its determinations that are overturned on appeal, EDD Fully 2 should identify those types of appeals that could be most influenced by EDD staff Implemented attendance at the appeal hearing, and analyze the feasibility and cost-effectiveness of participating in those hearings by telephone. GOVERNMENT OPERATIONS California Department of Human Resources High Risk: State Departments Need 5. To help ensure that state departments are prepared to address the loss of highly Fully 1 to Improve Their Workforce and experienced employees, CalHR should obtain annually workforce and succession Implemented S Succession Planning Efforts to Mitigate plans from all departments by June 30, starting in 2016, as well as any updates to the Risks of Increasing Retirements and implementation status of the plans. 2015-608 (May 2015) California Department of Technology California Department of Consumer 8. Continue implementing the STAR project for state departments and ensure that Fully 1 Affairs' BreEZe System: Inadequate its framework requires departments undertake detailed business process analyses Implemented N Planning and Oversight Led to before submitting FSRs to Technology for approval. Implementation at Far Fewer Regulatory Entities at a Significantly 9. Continue implementing the STAR project for state departments and ensure Fully 1 Higher Cost that its framework requires departments use detailed business process analyses Implemented to justify the type of IT solution they are proposing, such as a COTS or a fully 2014-116 (February 2015)* customized system. 10. Continue implementing the STAR project for state departments and ensure Fully 1 that its framework requires departments use detailed business process analyses Implemented to inform the resulting RFPs and that they ensure that the RFPs contain adequate requirements. 24. To ensure that future IT project procurements do not jeopardize the State's financial Fully 1 interests, Technology's procurement division should document its reasons for Implemented approving any deviations from standard contract language. High Risk Update—California 5. To help ensure the independence and objectivity of IPO analysts working in the Fully 1 Department of Technology: Lack of oversight and consulting division, Technology should develop a policy outlining Implemented Guidance, Potentially Conflicting expectations for independence and objectivity while performing oversight of Roles, and Staffing Issues Continue to IT projects. Make Oversight of State Information Technology Projects High Risk 7. To better track its oversight actions and sponsoring agencies' responses to these Fully 1 actions, Technology should retain the briefing documents created for the State CIO's Implemented 2014-602 (March 2015)* portfolio meetings and the project status reports that sponsoring agencies submit while project oversight is ongoing. 14. By June 2015 Technology should put in place a system to track IPO analysts' training Fully 1 hours to ensure that all IPO analysts have completed the necessary California Project Implemented Management Methodology training curriculum. California State Government Websites: 26. To standardize California's approach to web accessibility testing, Technology should Fully 1 Departments Must Improve Website issue a policy that specifies the method by which state departments should conduct Implemented P Accessibility So That Persons With web accessibility testing. This policy should include information about a minimum Disabilities Have Comparable Access to combination of operating systems, browsers, and assistive technologies that should State Services Online be used during testing. 2014-131 (June 2015)* continued on next page . . . 54 California State Auditor Report 2016-041 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Department of General Services State Board of Equalization Building: 5. To ensure that resources are spent wisely, General Services should seek the funding Fully 2 Despite Ongoing Health and Safety and approval needed to analyze whether keeping or selling the BOE building would Implemented M Concerns, the State Has Not Thoroughly be in the State's best financial interest. As part of that analysis, General Services Analyzed the Costs and Benefits of should conduct, or contract for, appraisals to assess the value of the building with Relocating Employees and without the repairs to determine whether making the repairs is in the best 2014-108 (September 2014)* interest of the State. If continued ownership of the building appears to be prudent, General Services should evaluate potential productive uses for the building should BOE move to a new facility. General Services should report the results of its analysis to the Legislature no later than September 2015. Franchise Tax Board California State Government Websites: 5. To ensure that it addresses barriers to the accessibility of its website for persons with Fully 1 Departments Must Improve Website disabilities, Franchise Tax Board should, no later than December 1, 2015, correct the Implemented P Accessibility So That Persons With accessibility violations we found during our review. Disabilities Have Comparable Access to State Services Online 2014-131 (June 2015)* GENERAL GOVERNMENT California Department of Veterans Affairs California Department of Veterans 2. To ensure that it maximizes its ability to generate revenue at all the veterans homes Fully 3 Affairs: It Has Initiated Plans to and better cover the costs of providing care to its members, CalVet should analyze Implemented Serve Veterans Better and More its cost-recovery model, including an evaluation of the state laws that limit the Cost-Efficiently, but Further amount of revenue that CalVet can collect for the care it provides to its members at Improvements Are Needed the veterans homes. 2012-119 (May 2013)* 14. To ensure that it is providing the highest quality of services to veterans, CalVet Fully 3 should improve its tracking system policy by developing oversight controls so that Implemented the system is used consistently by all of the veterans homes. 16. To more effectively and efficiently meet state purchasing and procurement Fully 3 requirements, CalVet should analyze its current purchasing model to ensure that it Implemented is the most efficient and cost-effective to use when purchasing non-IT goods and services for the veterans homes. California Public Utilities Commission California Public Utilities Commission: 7. To better ensure passenger carrier and public safety, the commission should create Fully 2 It Fails to Adequately Ensure a system to determine when a carrier merits a penalty and what the magnitude of Implemented Consumers' Transportation Safety and the penalty should be. In addition, to be an effective deterrent, the amount of such Does Not Appropriately Collect and penalties should be more consistent with what state law permits. Spend Fees From Passenger Carriers 2013-130 (June 2014)* 8. The commission should require staff to examine and formally report on the Fully 2 feasibility of impounding the vehicles of passenger carriers that refuse to comply Implemented with commission orders or that refuse to pay citation penalties and also on the feasibility of making use of the Tax Board's program for intercepting income tax refunds, lottery winnings, and unclaimed property payments to collect unpaid citation penalties. California Public Utilities Commission: 6. To ensure that policy makers, enforcement officials, and the general public have Fully 1 It Needs to Improve the Quality of Its access to more complete and meaningful consumer complaints data in CIMS, Implemented Consumer Complaint Data and the the branch should, to the fullest extent possible, include the attributes of each Controls Over Its Information Systems complaint in the data it records in CIMS. 2014-120 (April 2015)* Office of Ratepayer Advocates California Public Utilities Commission: 8. To further its mission to obtain the lowest possible rates for reliable and safe Fully 2 Improved Monitoring of Balancing utility service for ratepayers through its reviews of balancing accounts, Ratepayer Implemented J Accounts Would Better Ensure That Advocates should document the method used for its selection of balancing Utility Rates Are Fair and Reasonable accounts to review. 2013-109 (March 2014)* LEGISLATIVE, JUDICIAL, AND EXECUTIVE Administrative Office of the Courts Judicial Branch Procurement: 12. The AOC should provide additional training to its staff and the judicial entities on Fully 2 Semiannual Reports to the Legislature how to conduct procurements in compliance with the judicial contracting manual. Implemented Are of Limited Usefulness, Information Systems Have Weak Controls, and Certain Improvements in Procurement Practices Are Needed 2013-302 and 2013-303 (December 2013)* California State Auditor Report 2016-041 55 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Judicial Branch of California: Because 7. To reduce its expenses, the AOC should implement a policy that requires it to Fully 1 of Questionable Fiscal and Operational conduct a cost-benefit analysis for using temporary workers, contractors, or Implemented L Decisions, the Judicial Council and consultants instead of state employees before employing temporary workers, the Administrative Office of the contractors, or consultants to do the work of AOC employees. Courts Have Not Maximized the Funds Available for the Courts 8. To reduce its expenses, the AOC should follow its policies and procedures limiting Fully 1 the period of time it can employ temporary workers, and develop a similar policy Implemented 2014-107 (January 2015)* to limit the use of contractors to a reasonable period of time but no more than one year. California Department of Justice Armed Persons With Mental Illness: 28. To ensure that it meets its goal of eliminating the historical backlog of reviewing Fully 3 Insufficient Outreach From the firearms owners by the end of 2016, Justice should manage its staff resources to Implemented Department of Justice and Poor continually address the backlog, and should notify the Legislature if it believes that Reporting From Superior Courts Limit it will not be able to fully process this backlog by its goal date. To help guide this the Identification of Armed Persons effort, Justice should establish benchmarks that will indicate whether it is on track With Mental Illness to meet its goal. 2013-103 (October 2013)* 33. Justice should update and maintain its system documentation for the mental Fully 3 health and APPS databases to ensure that it can efficiently and effectively address Implemented modifications and questions about these databases. California Governor's Office of Emergency Services § California's Mutual Aid System: 4. To make certain that local agencies calculate correctly their average actual hourly Fully 4 The California Emergency rates, Cal EMA should audit a sample of invoices each year and include in the Implemented Management Agency Should review an analysis of the accuracy of the local agencies' average actual hourly rates Administer the Reimbursement Process reported in the agencies' salary surveys. More Effectively 5. To make certain that local agencies calculate correctly their average actual hourly Fully 4 2011-103 (January 2012)* rates, if Cal EMA determines that the local agencies' rates are incorrect, it should Implemented advise the agencies to recalculate the rates reported in their salary survey. Local agencies that fail to submit accurate average actual hourly rates should be subject to the base rates. Judicial Council of California Judicial Branch of California: Because 18. To make the AOC's budget more understandable, the Judicial Council should require Fully 1 of Questionable Fiscal and Operational the AOC to report its budget in a more understandable and transparent manner, Implemented L Decisions, the Judicial Council and and in a manner that readily allows stakeholders and the public to know the full the Administrative Office of the amount of the AOC's spending. Further, the Judicial Council should require the Courts Have Not Maximized the Funds AOC to prepare and make public a high-level summary of how the judicial branch's Available for the Courts budget relates to the appropriations from the State's budget. 2014-107 (January 2015)* State Bar of California State Bar of California: It Has Not 10. To provide independent oversight of the Office of the Chief Trial Counsel and Fully 1 Consistently Protected the Public assurance that it properly closes its case files, the audit and review unit should Implemented Through Its Attorney Discipline Process report to an individual or body that is separate from the chief trial counsel, such as and Lacks Accountability the executive director or the board. 2015-030 (June 2015)* 13. To justify any future special assessment that the State Bar wants to add to the annual Fully 1 membership fee, the State Bar should first present the Legislature with the planned Implemented uses for those funds and cost estimates for the project for which the State Bar intends to use the special assessment. State Board of Equalization State Board of Equalization Building: 1. To more clearly demonstrate its case for a new facility, BOE should ensure that it has Fully 2 Despite Ongoing Health and Safety a supportable rationale for the assumptions underlying its analysis of the costs and Implemented M Concerns, the State Has Not Thoroughly benefits of moving to a new consolidated facility. Analyzed the Costs and Benefits of Relocating Employees 2. To more clearly demonstrate its case for a new facility, BOE should continue its plans Fully 2 to conduct a study to identify inefficiencies in its current spatial configuration and Implemented 2014-108 (September 2014)* how its operations could improve with a new consolidated facility. 3. To more clearly demonstrate its case for a new facility, BOE should incorporate Fully 2 staffing growth into its analysis of costs and benefits, using projections based on Implemented long-term historical data. State Controller's Office High Risk Update: State Agencies 6. To improve the accuracy of information in the leave accounting system and to Fully 2 Credited Their Employees With Millions ensure that agencies do not improperly credit employees with leave in the future, Implemented I of Dollars Worth of Unearned Leave the state controller should, using criteria provided by CalHR, develop monthly 2012-603 (August 2014)* exception reports that identify transactions in the leave accounting system that are inconsistent with the guidelines established in state law and collective bargaining agreements, such as instances in which state employees receive too many personal holidays or too much holiday credit. By June 2015 begin providing each state agency's human resources management with the transactions identified in the exception reports for review and correction as necessary. continued on next page . . . 56 California State Auditor Report 2016-041 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Superior Court of California, County of Alameda Judicial Branch Procurement: 5. To improve its payment practices and comply with the judicial contracting manual, Fully 1 Five Superior Courts Did Not the Alameda court should ensure that it adheres to the $1,500 single transaction Implemented Consistently Follow Judicial Branch limit for all Cal-Card purchases. Contracting Practices 6. To improve its procurement practices and comply with the judicial contracting Fully 1 2014-301 (November 2014) manual, the Alameda court should ensure that it either anticipates contracts Implemented expiring and competitively rebids them timely or establishes proper noncompetitive amendments to the contracts as the judicial contracting manual specifies. * Other recommendations pertaining to this audit, which have not been fully implemented, can be found in Table 2. † As of July 5, 2011, Prison Health Care Services became California Correctional Health Care Services. ‡ As of July 14, 2015, the California Workforce Investment Board became the California Workforce Development Board. . § As of July 1, 2013, the California Emergency Management Agency became the California Governor’s Office of Emergency Services. ll As of July 2012, the California Department of Mental Health became the Department of State Hospitals. California State Auditor Report 2016-041 57 January 2017 Table 4 Recommendations Made to Nonstate Entities That Are More Than One Year Old and Are Still Not Fully Implemented (Reports Issued From January 2011 Through October 2015) STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE AUDITEE DID NOT HAS APPEARED ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER IN THIS DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION ANNUAL REPORT COMPLETION IMPLEMENTATION RECOMMMENDATION NONSTATE ENTITIES California Statewide Communities Development Authority Conduit Bond Issuers: 2. To be better informed about the 4 Will Not Issuers Complied With Key compensation of their consultants, Implement Bond Requirements, but including any potential conflicts of interest, Two Joint Powers Authorities’ California Communities and Municipal Compensation Models Raise Finance should require the consulting Conflict-of-Interest Concerns firms that staff their organizations to 2011-118 and 2011-613 disclose the amount and structure of (August 2012) compensation provided to individual consultants, including disclosing whether any of this compensation is tied to the volume of bond sales. City of Indio City of Indio: Although the 1. The city of Indio should shift a share of the 1 Not Currently City Complied With the water facilities cost borne by Area 1 to Area Feasible Mello-Roos Act in Forming 2 residents in proportion to the benefits and Managing Community Area 2 residents receive from the facilities. Facilities District No. 2004-3, To do so, it should impose through its It Should Do More to Indio Water Authority a water fee on Area Address Inequities 2 residents and use the related revenues to 2014-119 (December 2014) reduce the bond debt of Area 1. City of Vernon City of Vernon: Although 28. The city should clearly present the general 4 May/June 2017 Reform Is Ongoing, Past Poor fund structural deficit to the city council Decision Making Threatens Its and the public in a budget that includes Financial Stability narrative and summary information to 2011-131 (June 2012)* help users understand the city’s budget process and its priorities and challenges, and that incorporates the elements for improved budgeting practices recommended by the Government Finance Officers Association (GFOA). County of Butte Indian Gaming Special 7. To ensure that grant recipients comply 2 †  Distribution Fund: Counties’ with state law concerning interest earned V Benefit Committees Did on mitigation grant funds, by June 2014, Not Always Comply With the Butte County benefit committee State Laws for Distribution should establish policies and procedures Fund Grants to verify that grant recipients have placed 2013-036 (March 2014)* grant awards in interest-bearing accounts, and that the interest is spent only on activities that mitigate the effect of tribal gaming on local jurisdictions. County of Humboldt Indian Gaming Special 2. To help ensure that they meet the grant 5 Will Not Distribution Fund: Local requirements established in the Government Implement U Governments Continue to Code, counties should require that the Have Difficulty Justifying county auditor review each grant application Distribution Fund Grants to ensure a rigorous analysis of a casino’s 2010-036 (February 2011)* impact and of the proportion of funding for the project provided by the grant. Benefit committees should consider a grant application only when the county auditor certifies that the applicant has quantified the impact of the casino and verifies that the grant funds requested will be proportional to the casino’s impact. continued on next page . . . 58 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE AUDITEE DID NOT HAS APPEARED ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER IN THIS DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION ANNUAL REPORT COMPLETION IMPLEMENTATION RECOMMMENDATION County of Riverside Indian Gaming Special 3. To comply with state law, benefit 2 ‡ Distribution Fund: Counties’ committees should ensure that they V Benefit Committees Did obtain sufficient documentation from Not Always Comply With grant applicants to demonstrate that State Laws for Distribution proposed projects mitigate casino impacts. Fund Grants If applicable, that documentation should 2013-036 (March 2014)* demonstrate that the requested funding represents a correct proportionate share of the costs attributable to casino impacts. County of San Diego Indian Gaming Special 4. To help ensure that they meet the grant 5 Will Not Distribution Fund: Local requirements established in the Government Implement U Governments Continue to Code, counties should require that the Have Difficulty Justifying county auditor review each grant application Distribution Fund Grants to ensure a rigorous analysis of a casino’s 2010-036 (February 2011)* impact and of the proportion of funding for the project provided by the grant. Benefit committees should consider a grant application only when the county auditor certifies that the applicant has quantified the impact of the casino and verifies that the grant funds requested will be proportional to the casino’s impact. Indian Gaming Special 10. If San Diego County’s benefit committee 2 Will Not Distribution Fund: Counties’ believes that its processes for distributing Implement V Benefit Committees Did grant funds are vital to its effective Not Always Comply With management of distribution fund grants, it State Laws for Distribution should seek legislative authority to change Fund Grants its process. Otherwise, San Diego County’s 2013-036 (March 2014)* benefit committee should refrain from placing limits on the time available for grant recipients to spend the grant funds. County of Santa Barbara Indian Gaming Special 5. To help ensure that they meet the grant 5 Will Not Distribution Fund: Local requirements established in the Government Implement U Governments Continue to Code, counties should require that the Have Difficulty Justifying county auditor review each grant application Distribution Fund Grants to ensure a rigorous analysis of a casino’s 2010-036 (February 2011)* impact and of the proportion of funding for the project provided by the grant. Benefit committees should consider a grant application only when the county auditor certifies that the applicant has quantified the impact of the casino and verifies that the grant funds requested will be proportional to the casino’s impact. Golden State Water Company Apple Valley Area Water 4. To demonstrate to water customers 1 3rd Quarter Rates: Differences in Costs how they are working to keep rates 2016 X Affect Water Utilities’ Rates, reasonable, the four water utilities should and One Utility May Have document their cost-saving efforts and Spent Millions of Ratepayer quantify, to the extent possible, any Funds Inappropriately specific cost savings achieved from their 2014-132 (April 2015) respective efforts. Hesperia Water District Apple Valley Area Water 1. To assist low-income water customers, 1 Will Not Rates: Differences in Costs Hesperia should work with its governing Implement X Affect Water Utilities’ Rates, body to consider the feasibility of and One Utility May Have using revenues from sources other Spent Millions of Ratepayer than water rates to implement a rate Funds Inappropriately assistance program. 2014-132 (April 2015) California State Auditor Report 2016-041 59 January 2017 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE AUDITEE DID NOT HAS APPEARED ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER IN THIS DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION ANNUAL REPORT COMPLETION IMPLEMENTATION RECOMMMENDATION Los Angeles County Los Angeles County: Lacking 1 To determine whether its trauma system 2 Will Not a Comprehensive Assessment is appropriately designed and serving Implement W of Its Trauma System, It the needs of residents in underserved Cannot Demonstrate That areas and the needs of the most at-risk It Has Used Measure B Funds populations, the board should use to Address the Most Pressing Measure B funds to engage the College Trauma Needs of Surgeons by July 2014 to perform a 2013-116 (February 2014)* comprehensive assessment of the trauma system and then make the results available to the public. To the extent the assessment identifies weaknesses in the trauma system, the board should develop strategies to address those weaknesses where feasible. Specifically, the board should ask the College of Surgeons to do the following: assist the board in better defining and identifying underserved areas in Los Angeles. 2 To determine whether its trauma system 2 Will Not is appropriately designed and serving Implement the needs of residents in underserved areas and the needs of the most at-risk populations, the board should use Measure B funds to engage the College of Surgeons by July 2014 to perform a comprehensive assessment of the trauma system and then make the results available to the public. To the extent the assessment identifies weaknesses in the trauma system, the board should develop strategies to address those weaknesses where feasible. Specifically, the board should ask the College of Surgeons to do the following: review Measure B allocations to ensure that they are addressing the most pressing needs of at-risk populations in Los Angeles. 3 To determine whether its trauma system 2 Will Not is appropriately designed and serving Implement the needs of residents in underserved areas and the needs of the most at-risk populations, the board should use Measure B funds to engage the College of Surgeons by July 2014 to perform a comprehensive assessment of the trauma system and then make the results available to the public. To the extent the assessment identifies weaknesses in the trauma system, the board should develop strategies to address those weaknesses where feasible. Specifically, the board should ask the College of Surgeons to do the following: assess the adequacy of helicopter services it provides in underserved areas. 4 To determine whether its trauma system 2 Will Not is appropriately designed and serving Implement the needs of residents in underserved areas and the needs of the most at-risk populations, the board should use Measure B funds to engage the College of Surgeons by July 2014 to perform a comprehensive assessment of the trauma system and then make the results available to the public. To the extent the assessment identifies weaknesses in the trauma system, the board should develop strategies to address those weaknesses where feasible. Specifically, the board should ask the College of Surgeons to do the following: analyze how EMS might better use the data it collects to evaluate, improve, and report continuously on its trauma system. continued on next page . . . 60 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE AUDITEE DID NOT HAS APPEARED ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER IN THIS DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION ANNUAL REPORT COMPLETION IMPLEMENTATION RECOMMMENDATION 5 To ensure that it allocates Measure B 2 Will Not funds to address the most significant needs Implement of residents within its trauma system, the board should reinstate a Measure B oversight committee, with participation from departments with trauma, EMS, and bioterrorism preparedness expertise, as well as representatives of the public. The oversight committee should review trauma system and other county needs annually and advise the board on Measure B expenditures. As part of its responsibilities, the oversight committee should reevaluate the Measure B allocation approach, taking into consideration the results of Los Angeles’s comprehensive assessment and the effects of the Act, and issue a report on its findings no later than December 2015. Los Angeles County Department of Children and Family Services Los Angeles County 2. To ensure that child abuse and neglect 4 Fall 2015 Department of Children allegations receive timely resolution, the and Family Services: department should assess whether it needs Management Instability to permanently allocate more resources Hampered Efforts to Better to investigate allegations of child abuse Protect Children and neglect. 2011‑101.2 (March 2012) 4. To ensure that it is placing children only 4 Will Not in safe homes, the department should Implement measure its performance and adjust its practices to adhere to state law, which requires that all homes be assessed prior to the placement of the child. 5. To improve its process for placing children 4 Will Not with a relative, the department should Implement analyze the best practices used by other county child welfare services agencies for such placements. The department should then implement changes in its practices so that relatives and their homes are approved prior to placement, as required by state law. Los Angeles Department of Water and Power Los Angeles Department 1. To ensure that the Los Angeles Board of 1 2020 of Water and Power— Water and Power Commissioners (board) Consequences Linked to can more effectively exercise oversight for Its Premature Launch of Its the department’s significant information Customer Information technology projects, the board should System May Push Total Costs establish a standing committee comprised Beyond $200 Million of board members to oversee and critically evaluate the status of the department’s 2014‑105 (March 2015) various information technology projects. Given the limited tenure of board members and the potential for multiyear and high‑cost information technology projects, the board president should consider appointing as many committee members as practicable in order to promote continuity of oversight. 2. To ensure that the board can more 1 2020 effectively exercise oversight for the department’s significant information technology projects, the board should develop reporting standards for the department’s management to follow when discussing the status of information technology projects with the standing committee or the board. Such reporting standards should, at a minimum, specify the frequency with which the department’s management makes such reports and require the following disclosures about each information technology project: • The amount of project growth, in terms of both budget and scope of work, from initial project estimates through current projections. • The results from system testing and a listing of the critical defects that exist and must be fixed prior to system use. • The concerns the quality assurance contractor has raised and how the department is addressing them. California State Auditor Report 2016-041 61 January 2017 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE AUDITEE DID NOT HAS APPEARED ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER IN THIS DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION ANNUAL REPORT COMPLETION IMPLEMENTATION RECOMMMENDATION 3. To ensure that the board can more 1 2020 effectively exercise oversight for the department’s significant information technology projects, the board should develop a process for the board to designate certain information technology projects as having a potentially significant effect on business operations or customer relations, and require that department managers first obtain the board’s approval before launching such critical new systems. Quartz Hill Water District Antelope Valley Water Rates: 5. To ensure that water customers are aware 2 †  Various Factors Contribute of pass‑through rate increases, Quartz Hill to Differences Among Water District should adopt a schedule Water Utilities of fees showing how these increases will 2013‑126 (July 2014)* affect its tiered usage charges before the new rates take effect. 13. To assist low‑income water customers, 2 Will Not Quartz Hill water District should work Implement with its governing body to consider the feasibility of using revenues from sources other than water rates to implement rate assistance programs for low‑income water customers. Ross Valley Sanitary District Ross Valley Sanitary 1. The board should ensure that 1 Fiscal Year District: The Board and management continues to develop and 2016‑17 Management Have Only strengthen its controls over the district's Recently Begun to Address financial and administrative functions. Significant Weaknesses in For example, district management the District's Financial and should fully implement all of the external Administrative Functions auditor's remaining recommendations by 2014‑122 (April 2015) June 30, 2015. Management should also ensure that its staff follow these policies and should create and implement a plan for monitoring its system of controls. The board should also consider periodically contracting with qualified professionals to conduct a review of the effectiveness of the district's system of internal controls. 2. The district should strengthen its financial 1 Fiscal Year and administrative policies to make it clear 2016‑17 that the activities of approving invoices, recording invoices, preparing checks, and reconciling bank statements to the district's records should be performed by separate individuals. 3. The district should strengthen its financial 1 Fiscal Year and administrative policies to make it 2016‑17 clear who is responsible for reviewing and approving monthly bank reconciliations. 4. The district should strengthen its financial 1 Fiscal Year and administrative policies to limit 2016‑17 California lodging costs to the rate set by the State for its employees, and limit any out‑of‑state lodging costs to rates set by the federal government for its employees. In addition, the district should remove from its travel policy the reimbursement for exercise equipment use. 7. The district should strengthen its financial 1 Fiscal Year and administrative policies to establish 2016‑17 an appropriate system for tracking and valuing inventory. 8. The district should strengthen its financial 1 Fiscal Year and administrative policies to require 2016‑17 employees to obtain their supervisor's approval before working paid overtime. continued on next page . . . 62 California State Auditor Report 2016-041 January 2017 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE AUDITEE DID NOT HAS APPEARED ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER IN THIS DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION ANNUAL REPORT COMPLETION IMPLEMENTATION RECOMMMENDATION 12. To clarify the roles and responsibilities of 1 Fiscal Year board members, the district should create 2016-17 a more comprehensive board member manual that describes all of the board's roles and fiduciary responsibilities. This manual should address the best practices contained in the California Special Districts Association's Special District Board Member/Trustee Handbook. The district should also provide for additional training for board members in the following areas over which they exercise important responsibilities: financial management, contracting, emergency procurement, and human resources. 14. To ensure that employee compensation 1 Fiscal Year remains appropriate after making the 2016-17 changes described in the previous recommendation, the board should develop robust policies that outline how it will establish future compensation for all district positions. This policy should require the district to conduct a salary survey of comparable sanitation agencies to determine what compensation levels are appropriate for the job duties of district positions and to present the results to the board. 18. The district should implement the 1 December 2016 remaining recommendations contained in its human resources consultants' work plan by the targeted dates shown in Table 3 on page 18 of our report, and improve its performance management system to ensure that staff receive required annual performance evaluations. 19. The district should implement the 1 December 2016 remaining recommendations contained in its human resources consultants' work plan by the targeted dates shown in Table 3 on page 18 of our report, and develop and document a policy that requires board members and supervisors to attend harassment prevention training biannually and a process for monitoring their attendance. Sacramento City Unified School District School Safety and 15. To ensure that it is effectively preventing 3 †  Nondiscrimination Laws: and addressing incidents of discrimination, Y Most Local Educational harassment, intimidation, and bullying Agencies Do Not Evaluate in its schools, Sacramento City Unified the Effectiveness of should ensure that school sites follow Their Programs, and the the complaint procedures established in State Should Exercise its policies. Stronger Leadership 2012-108 (August 2013)* Shasta County Indian Gaming Special 6. To help ensure that they meet the grant 5 Next Funding Distribution Fund: Local requirements established in the Government Cycle U Governments Continue to Code, counties should require that the Have Difficulty Justifying county auditor review each grant application Distribution Fund Grants to ensure a rigorous analysis of a casino's 2010-036 (February 2011)* impact and of the proportion of funding for the project provided by the grant. Benefit committees should consider a grant application only when the county auditor certifies that the applicant has quantified the impact of the casino and verifies that the grant funds requested will be proportional to the casino's impact. California State Auditor Report 2016-041 63 January 2017 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE AUDITEE DID NOT HAS APPEARED ESTIMATED ITS CLAIM ADDRESS ALL REPORT TITLE, NUMBER IN THIS DATE OF OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION ANNUAL REPORT COMPLETION IMPLEMENTATION RECOMMMENDATION 30. To help ensure that they meet the 5 Next Funding grant requirements established in the Cycle Government Code, counties should ensure that benefit committees' conflict-of-interest codes comply with the political reform act by reviewing the act and their codes, and changing the codes as necessary to meet the act's requirements. Victorville Water District Apple Valley Area Water 2. To assist low-income water customers, 1 Will Not Rates: Differences in Costs Victorville should work with its governing Implement X Affect Water Utilities' Rates, body to consider the feasibility of and One Utility May Have using revenues from sources other Spent Millions of Ratepayer than water rates to implement a rate Funds Inappropriately assistance program. 2014-132 (April 2015) 6. To demonstrate to water customers 1 Will Not how they are working to keep rates Implement reasonable, the four water utilities should document their cost-saving efforts and quantify, to the extent possible, any specific cost savings achieved from their respective efforts. 7. To ensure that it does not use revenues 1 Will Not from ratepayers for inappropriate Implement purposes, by October 2015, Victorville should revise its policies to prohibit transfers or loans of water fee revenue for nonwater district purposes. Victorville should also revise its investment policy that specifies the circumstances under which it can invest water revenues— setting prudent limits on its investment in assets that the Victorville city council manages. 8. To address the excess interest expense 1 Will Not resulting from loans to the city of Implement Victorville and the building of the wastewater plant, Victorville should seek reimbursement from the city for its unrecovered costs. Victorville should work with the city to prepare and submit to the water district board and the Victorville city council by October 2015 a formal repayment plan including specific dates and payments to be made to ensure that the water district and its ratepayers are made whole. When the water district board approves such a plan, it should take steps to ensure compliance with the repayment plan. * Other recommendations pertaining to this audit, which have been fully implemented, can be found in Table 5. † Contrary to the California State Auditor’s determination, the auditee believes it has fully implemented the recommendation. ‡ We are reviewing documentation related to this recommendation as part of an ongoing audit that is scheduled to be issued in Spring 2017. 64 California State Auditor Report 2016-041 January 2017 Blank page inserted for reproduction purposes only. California State Auditor Report 2016-041 65 January 2017 Table 5 Recommendations Made to Nonstate Entities That Are More Than One Year Old and Were Fully Implemented or Resolved Since Last Year’s Report or the Entities’ One-Year Responses (Reports Issued From January 2011 Through October 2015) NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT NONSTATE ENTITIES City of Vernon City of Vernon: Although Reform 4. To increase accountability and transparency in its governance, the city should Fully 4 Is Ongoing, Past Poor Decision develop a formal policy that describes the circumstances under which revenues can Implemented Making Threatens Its Financial Stability be transferred from its power department, and the limits and permissible uses of 2011-131 (June 2012)* transferred revenue. 9. To ensure that it develops complete and appropriate personnel policies and Fully 4 procedures, the new human resources director should ensure that the city’s policies Implemented and procedures include, at a minimum, an improved methodology for and analysis of future salary surveys, ensuring that they are performed by staff or a consultant with experience and expertise in the area of salary surveys. 16. To better control contract expenditures and ensure that it receives the best value Fully 4 for the services it purchases, the city should require that all contracts contain a Implemented well-defined scope of work and deliverables that a sufficiently detailed invoice can be measured against. 20. To the extent that the city implements policies that affect contracts, the city should Fully 4 also ensure that it reviews all current contracts and amends them, if necessary, to Implemented comply with newly established policies. 27. To address the structural deficit in its general fund, the city should seek long-term Fully 4 solutions to balance the general fund’s expenditures and revenues and lessen its Implemented reliance on transfers from other city funds. These solutions could include revenue increases, such as the proposed increased and new parcel tax, as well as looking for ways to reduce expenditures. 34. To ensure that it can demonstrate sufficient analysis and provide justification for Fully 4 its decisions on significant energy-related transactions, the city should develop an Implemented integrated energy strategy that examines all elements of its energy needs, sources, and objectives. 35. To ensure that it can demonstrate sufficient analysis and provide justification for Fully 4 its decisions on significant energy-related transactions, the city should create a Implemented formal process and guidelines that include the following: identifying the benefits and risks of proposed transactions, quantifying the benefits and risks of proposed transactions, evaluating and comparing proposed transactions against alternative proposals, quantifying the impact of proposed transactions on short-term and long-term rates paid by the city’s energy customers, seeking an independent validation of the fair market value of proposed transactions, and documenting and communicating the findings of the evaluation process to the city council. 38. To ensure that any future decisions to enter into interest rate swaps are carefully Fully 4 considered, the city should develop and follow a process that thoroughly analyzes Implemented the risks and benefits of the potential swap transaction. 39. To ensure that any future decisions to enter into interest rate swaps are carefully Fully 4 considered, the city should specifically disallow the use of derivatives for speculative Implemented purposes and should require the retention of the documents and analyses that support the decision to enter into the swap. County of Butte Indian Gaming Special Distribution 19. To ensure that the benefit committee members and other designated individuals Fully 2 Fund: Counties’ Benefit Committees Did comply with reform act requirements for filing statements of economic interests, Implemented V Not Always Comply With State Laws for after Butte County’s benefit committee has appointed a filing officer, the filing Distribution Fund Grants officer should attend FPPC training and notify designated individuals of their 2013-036 (March 2014)* responsibility to submit statements of economic interests and follow up with those who fail to file. County of Riverside Indian Gaming Special Distribution 3. To help ensure that they meet the grant requirements established in the Resolved 5 Fund: Local Governments Continue to Government Code, counties should require that the county auditor review each U Have Difficulty Justifying Distribution grant application to ensure a rigorous analysis of a casino’s impact and of the Fund Grants proportion of funding for the project provided by the grant. Benefit committees 2010-036 (February 2011)* should consider a grant application only when the county auditor certifies that the applicant has quantified the impact of the casino and verifies that the grant funds requested will be proportional to the casino’s impact. continued on next page . . . 66 California State Auditor Report 2016-041 January 2017 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Los Angeles Emergency Medical Services Agency Los Angeles County: Lacking a 9. To determine the adequacy and effectiveness of the helicopter services it provides Fully 2 Comprehensive Assessment of Its to residents of underserved areas who suffer a trauma injury, EMS should collect, Implemented W Trauma System, It Cannot Demonstrate assess, and report accurate and complete data on the number of cancelled flights That It Has Used Measure B Funds in each of these underserved areas, including the method of transportation used to Address the Most Pressing instead of helicopters and the transport times and trauma patient outcomes. Trauma Needs 2013-116 (February 2014)* Quartz Hill Water District Antelope Valley Water Rates: Various 1. To ensure that water customers are able to have an understanding of how rate Fully 2 Factors Contribute to Differences increases are determined, Quartz Hill Water District should include information Implemented Among Water Utilities in its public notices providing reasonably sufficient details of the basis of its 2013-126 (July 2014)* fee methodology. 6. To ensure that its water customers have access to Quartz Hill Water District’s rate Fully 2 methodology and other factors that help it determine rate increases, the utility Implemented should keep all documentation it uses to calculate or otherwise explain the need for rate increases for as long as the rate increases are in effect. Sacramento City Unified School District School Safety and Nondiscrimination 10. To ensure that it is effectively preventing and addressing incidents of discrimination, Fully 3 Laws: Most Local Educational Agencies harassment, intimidation, and bullying in its schools, Sacramento City Unified should Implemented Y Do Not Evaluate the Effectiveness of measure the effectiveness of its school safety programs at both the district and Their Programs, and the State Should school site levels. Exercise Stronger Leadership 2012-108 (August 2013)* Salinas Valley Memorial Healthcare System Salinas Valley Memorial Healthcare 5. To help reduce its operating costs and improve its overall financial situation, the Fully 4 System: Increased Transparency and Health Care System should continue to try to modify its employee benefits, such as Implemented Stronger Controls Are Necessary paid time off, so they are aligned with industry practice. as It Focuses on Improving Its Financial Situation 2011-113 (March 2012) * Other recommendations pertaining to this audit, which have not been fully implemented, can be found in Table 4.