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 2018 Report 2017‑041 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 January 11, 2018 2017‑041 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 2010 through October 2016, the State Auditor issued 232 reports on audits and investigations of state agencies. Those reports included 1,730 recommendations and state agencies had fully implemented 1,437 or 83 percent, as of October 2017. However, we identified that 293 recommendations more than one year old remain outstanding. Similarly, the State Auditor issued 60 reports to nonstate entities, such as counties or school districts. Those reports included 565 recommendations and as of October 2017, the nonstate entities had implemented 498, or 88 percent of them. 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. The State Auditor’s audit and investigative efforts bring the greatest return when agencies act upon its findings and recommendations. For example, in August 2014 the State Auditor released an audit concerning the California Department of Health Care Services’ (Health Care Services) administration of the Drug Medi‑Cal Treatment Program (program). Health Care Services is currently responsible for administering the program, but prior to July 2012, Health Care Services had an agreement with the California Department of Alcohol and Drug Programs (ADP) to administer the program. The State Auditor found that Health Care Services’ and ADP’s failure to properly administer the program created opportunities for fraud. Specifically, an analysis of four years of statewide program claims billing data identified $93.7 million in payments that Health Care Services and ADP authorized for more than 2.6 million outpatient drug‑free services that are potentially indicative of fraudulent activity. Furthermore, neither Health Care Services nor ADP consistently followed its own certification processes. Consequently, our review of the files of 30 program provider applicants found serious deficiencies in each. As a result of our concerns, the State Auditor directed 35 recommendations to Health Care Services. As of December 2017, Health Care Services had fully implemented 27 recommendations. Although eight recommendations remain outstanding, we believe that Health Care Services has made significant progress. For example, it has implemented our recommendation to train staff regularly on the program requirements to prevent certification of ineligible providers and to coordinate with appropriate counties to recover inappropriate payments for services purportedly rendered to deceased beneficiaries, among others. We believe that by implementing all of the State Auditor’s recommendations, Health Care Services can further strengthen the program and ensure it is using funds appropriately. 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 2017-041 v January 2018 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 53 Table 4 Recommendations Made to Nonstate Entities That Are More Than One Year Old and Are Still Not Fully Implemented 65 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 79 vi California State Auditor Report 2017-041 January 2018 Blank page inserted for reproduction purposes only. California State Auditor Report 2017-041 1 January 2018 INTRODUCTION As required by the Omnibus Audit Accountability Act of 2006 (Accountability Act), the California State Auditor (State Auditor) presents its report on the status of recommendations that are more than one year old and have not been fully implemented by the audited entities. 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 investigate 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 reports 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 2010 through October 2016, 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 the result of an investigation.1 The State Auditor made 1,730 recommendations to the audited state agencies in those reports, of which 1,437 have been fully implemented. Since the last report issued on January 12, 2017, state agencies implemented 94 long‑outstanding recommendations. However, the State Auditor identified 293 recommendations made to 47 agencies that had been outstanding at least one year and remained not fully implemented as of October 2017.2 Nonstate Entities From January 2012 through October 2016, the State Auditor issued 60 reports that included nonstate entities and made 565 recommendations to these entities. Since the last report issued on January 12, 2017, eight entities implemented a total of 21 recommendations. As of October 2017, the State Auditor identified 67 recommendations issued to 26 nonstate entities that are more than one year old and not fully implemented. 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 report 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 investigate reports. The State Auditor initiated the investigations in response to whistleblower complaints or other information suggesting improper governmental activities. 2 Excludes recommendations for legislative changes. We report on those recommendations to the Legislature in a separate report. 2 California State Auditor Report 2017-041 January 2018 Importance of Implementing Recommendations The State Auditor’s audit and investigative efforts bring the greatest return when agencies act upon its findings and recommendations. For example, in August 2014 the State Auditor released an audit concerning the California Department of Health Care Services’ (Health Care Services) administration of the Drug Medi‑Cal Treatment Program (program). Health Care Services is currently responsible for administering the program, but prior to July 2012, Health Care Services had an agreement with the California Department of Alcohol and Drug Programs (ADP) to administer the program. The State Auditor found that Health Care Services’ and ADP’s failure to properly administer the program created opportunities for fraud. Specifically, an analysis of four years of statewide program claims billing data identified $93.7 million in payments that Health Care Services and ADP authorized for more than 2.6 million outpatient drug‑free services that are potentially indicative of fraudulent activity. A review of providers’ documentation for 338 of these services found that 10 of the 16 providers visited could not locate the patient records or provide adequate documentation to support 74 of the services they purportedly rendered. Moreover, neither Health Care Services nor ADP consistently followed its own certification processes. Consequently, our review of the files of 30 program provider applicants found serious deficiencies in each. The State Auditor directed 35 recommendations to Health Care Services. As of December 2017, Health Care Services has fully implemented 27 recommendations. Although eight recommendations remain outstanding, Health Care Services has made significant progress. For example, it has implemented recommendations to train staff regularly on the program requirements to prevent certification of ineligible providers and to coordinate with appropriate counties to recover inappropriate payments for services purportedly rendered to deceased beneficiaries, among others. By implementing all of the State Auditor’s recommendations, Health Care Services can further strengthen the program and ensure it is using its funds appropriately. In October 2017, the State Auditor mailed notices to audited and investigated entities regarding recommendations more than a year old and not fully implemented, corresponding to reports issued from November 2010 through October 2016. The tables beginning on page 5 summarize and provide information on recommendations issued between November 2010 and October 2016. Table 1 shows recommendations more than five years old, issued between November 2010 and October 2011, which have not been fully implemented as of the agencies’ latest responses. Because the recommendations shown in Table 1 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 that have not been fully implemented for audits and investigations pertaining to state entities, issued between November 2011 and October 2016. 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 47, 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 59 and 73 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 2017-041 3 January 2018 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 2010‑116 California Department of Corrections and Rehabilitation, Department of State Hospitals B 2010‑117 Department of Finance, Department of Water Resources C 2011‑120 California Department of Transportation, Department of General Services D 2012‑107 California Department of Public Health, Department of Developmental Services E 2012‑110 California Governor's Office of Emergency Services, California Natural Resources Agency, Department of Motor Vehicles F 2012‑122 Department of Health Care Services, Mental Health Services Oversight and Accountability Commission G 2012‑603 California Department of Human Resources, State Controller's Office, California Science Center H 2013‑109 California Public Utilities Commission, Office of Ratepayer Advocates I 2013‑124 University of California; University of California, Berkeley; University of California, Los Angeles J 2014‑116 Department of Consumer Affairs, California Department of Technology, Board of Registered Nursing K 2014‑124 California Public Utilities Commission, Department of Motor Vehicles L 2015‑032 Chancellor of the California Community Colleges, The California State University, University of California M 2015‑508 California Workforce Investment Board, Employment Development Department N I2016‑1 Department of Developmental Services, Department of Water Resources Nonstate Entities With Recommendations—Included in Tables 4 and 5 O 2013‑036 Butte County, County of San Diego, County of Riverside P 2014‑132 Golden State Water Company, Hesperia Water District, Victorville Water District Q 2015‑115 County of Alameda, County of Santa Clara R 2015‑132 County of Fresno, County of Los Angeles S 2015‑134 City of Novato, City of Pasadena, City of San Rafael State and Nonstate Entities With Recommendations—Included in Tables 2, 3, 4, and 5 T 2012‑108 California Department of Education, Sacramento City Unified School District U 2015‑112 California Department of Education, East Side Union High School District, Long Beach Unified School District, Riverside County Special Education Local Plan Area V 2015‑130 California Department of Justice, Los Angeles Police Department, Santa Ana Police Department, Santa Clara County Sheriff's Office W 2015‑131 Medical Board of California, California Department of Social Services, Department of Health Care Services, County of Sonoma 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 2017-041 January 2018 Blank page inserted for reproduction purposes only. California State Auditor Report 2017-041 5 January 2018 Table 1 Recommendations Made to State Entities That Are More Than Five Years Old and Are Still Not Fully Implemented (Reports Issued From November 2010 Through October 2011) NUMBER OF YEARS RECOMMENDATION HAS APPEARED IN ESTIMATED DATE REPORT TITLE, NUMBER, AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION CORRECTIONS AND REHABILITATION California Department of Corrections and Rehabilitation Department of Corrections and Rehabilitation: 1. To ensure that the State does not spend additional resources on 6 June 2018 The Benefits of Its Correctional Offender COMPAS while its usefulness is uncertain, Corrections should suspend Management Profiling for Alternative its use of the COMPAS core and reentry assessments until it has Sanctions Program Are Uncertain issued regulations and updated its operations manual to define how 2010‑124 (September 2011) Corrections’ use of COMPAS will affect 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. Sex Offender Commitment Program: 3. To eliminate duplicative effort and increase efficiency, Corrections 6 Will Not A Streamlining the Process for Identifying should not make unnecessary referrals to Mental Health. For example, Implement Potential Sexually Violent Predators Would Corrections should better leverage the time and work it already Reduce Unnecessary or Duplicative Work conducts by including in its referral process (1) determining whether 2010‑116 (July 2011) the offender committed a predatory offense, (2) reviewing results from any previous screenings 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. 4. To eliminate duplicative effort and increase efficiency, Corrections 6 Will Not should not make unnecessary referrals to Mental Health. Corrections Implement and Mental Health should jointly revise the structured screening instrument so that the referral process adheres more closely to the law’s intent. GENERAL GOVERNMENT Department of Finance General Obligation Bonds: The Departments 1. To enhance the value of the Bond Accountability Web site, Finance 6 Will Not B of Water Resources and Finance Should should require administering agencies to provide information about Implement Do More to Improve Their Oversight of the actual amounts of bond funds spent on posted projects at Bond Expenditures least semiannually. 2010‑117 (May 2011) 2. To enhance the value of the Bond Accountability Web site, Finance 6 Will Not should develop a tracking and review process to periodically assess Implement the completeness of the project information posted to the Web site. 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. HEALTH AND HUMAN SERVICES California Department of Social Services Child Welfare Services: California Can and Must 2. To encourage more effective communication from county CWS 6 Will Not Provide Better Protection and Support for agencies regarding its licensees, Social Services should specify in Implement Abused and Neglected Children regulations what types of situations or allegations the agencies should 2011‑101.1 (October 2011) forward to its licensing division. 3. To ensure that rates paid to foster family agencies are appropriate, 6 February 2018 Social Services should analyze the rates and provide reasonable support for each component, especially the 40 percent administrative fee it currently pays these agencies. continued on next page . . . 6 California State Auditor Report 2017-041 January 2018 NUMBER OF YEARS RECOMMENDATION HAS APPEARED IN ESTIMATED DATE REPORT TITLE, NUMBER, AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION 4. Social Services should create and monitor compliance with clear 6 June 2017 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. 5. Social Services should require county CWS agencies to file in CWS/CMS 6 Will Not a detailed justification for any child placed with a foster family agency. Implement 6. Social Services should create a mechanism by which it can efficiently 6 Will Not check for compliance with the needs‑justification requirement. Implement 8. To determine whether the hold harmless provision has been effective 6 Will Not in reducing caseloads and whether it should be revised or rescinded, Implement Social Services should refine and use CWS/CMS to calculate and report county CWS caseloads. 9. To encourage county CWS agencies to conduct formal internal death 6 Will Not reviews, Social Services should revise its annual report on child deaths Implement 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 report, Social Services 6 Will Not should provide child death information broken out by county, not just Implement 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. Department of State Hospitals* Sex Offender Commitment Program: 6. To reduce costs for unnecessary evaluations, Mental Health should 6 Will Not Streamlining the Process for Identifying either issue a regulation or seek a statutory amendment to clarify Implement A Potential Sexually Violent Predators Would that when resolving a difference of opinion between the two initial Reduce Unnecessary or Duplicative Work evaluators of an offender, Mental Health must seek the opinion of 2010‑116 (July 2011) a fourth evaluator only when a third evaluator concludes that the offender meets SVP criteria. HIGHER EDUCATION University of California University of California: Although the University 8. To ensure that campuses do not inappropriately use revenues 6 Will Not Maintains Extensive Financial Records, It generated from student fees imposed by referenda, the university Implement Should Provide Additional Information to should ensure that it, the regents, and the campuses do not expand Improve Public Understanding of Its Operations the uses for such revenues beyond those stated in the referenda. 2010‑105 (July 2011) NATURAL RESOURCES California State Lands Commission State Lands Commission: Because It Has Not 1. When the commission determines that it will pursue delinquent 6 Will Not Managed Public Lands Effectively, the State Has lessees itself, it should use a collection agency or a program such as Implement Lost Millions in Revenue for the General Fund the Franchise Tax Board’s Interagency Intercept Collections Program. 2010‑125 (August 2011) 2. To ensure that it receives rent from the lessee that reflects the 6 Will Not approximate value for the State’s property at those times when Implement 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. California State Auditor Report 2017-041 7 January 2018 NUMBER OF YEARS RECOMMENDATION HAS APPEARED IN ESTIMATED DATE REPORT TITLE, NUMBER, AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION Department of Water Resources General Obligation Bonds: The Departments 4. To provide the public with accurate and complete information on the 6 Will Not of Water Resources and Finance Should bond‑funded projects it administers, Water Resources should develop Implement B Do More to Improve Their Oversight of and consistently use a formalized, documented review process that Bond Expenditures will provide greater assurance that project information posted to 2010‑117 (May 2011) the Bond Accountability Web site is regularly updated and contains accurate information. * As of July 2012, the California Department of Mental Health became the Department of State Hospitals. 8 California State Auditor Report 2017-041 January 2018 Blank page inserted for reproduction purposes only. California State Auditor Report 2017-041 9 January 2018 Table 2 Recommendations Made to State Entities That Are More Than One Year Old and Are Still Not Fully Implemented (Reports Issued From November 2011 Through October 2016) STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION BUSINESS, CONSUMER SERVICES, HOUSING California State Athletic Commission State Athletic Commission: 7. To ensure that it adequately tracks critical 4 Unknown Its Ongoing Administrative information related to its basic functions and Struggles Call Its Future mission, the commission should work with Into Question Consumer Affairs to ensure that the new online 2012‑117 (March 2013) program will meet its 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, 4 Will Not the commission should calculate the pension Implement 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 4 July 2018 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 4 July 2018 plan, 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 2 TBD J Consumer Affairs’ BreEZe to implement BreEZe at the phase 3 regulatory System: Inadequate entities, it should first complete a formal Planning and Oversight Led cost‑benefit analysis to ensure that BreEZe to Implementation at Far is a cost‑effective solution to meet these Fewer Regulatory Entities at regulatory entities’ business needs. To make a Significantly Higher Cost certain this analysis is complete, it should 2014‑116 (February 2015) include an assessment of the potential changes these regulatory 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. continued on next page . . . 10 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 35. To ensure that future training for BreEZe system 2 TBD 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 2 TBD 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. Medical Board of California California’s Foster Care System: 35. Following the completion of the analysis 1 January 2018 W The State and Counties (described in Recommendation 34), the Medical Have Failed to Adequately Board should take the appropriate follow‑up Oversee the Prescription of actions that it deems necessary, including the Psychotropic Medications to investigation of physicians identified in its analysis. Children in Foster Care 2015‑131 (August 2016) Physical Therapy Board of California Physical Therapy Board 1. The physical therapy board should explore the 5 Will Not of California: Although It feasibility of establishing a state position to Implement Can Make Improvements, perform the duties of its current in‑house It Generally Processes consultant at a reduced cost. Complaints and Monitors Conflict‑of‑Interest Requirements Appropriately 2011‑119 (June 2012) CORRECTIONS AND REHABILITATION Board of State and Community Corrections Juvenile Justice Realignment: 3. To maximize the usefulness of the information it 5 †  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. 5. To maximize the usefulness of the information it 5 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 5 Will Not balances of unexpended block grant funds, the Implement board should develop procedures to monitor counties’ unspent funds and follow up with them if the balances become unreasonable. California State Auditor Report 2017-041 11 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION California Correctional Health Care Services Sterilization of Female 5. To ensure that it can better monitor how its 3 Inmates: Some Inmates medical staff and contractors adhere to the 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 2013‑120 (June 2014) would 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 3 Fiscal Year services that are authorized through its utilization 2018–19 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. California Department of Corrections and Rehabilitation California Department of 4. Adjust current employees’ leave balances in the 4 October 2018 Corrections and Rehabilitation leave accounting system to correct any improper and California Correctional charging of leave identified by the audit. Health Care Services: Both Agencies Wasted State 6. In instances where the audit has determined that 4 October 2018 Resources by Improperly an employee’s leave balance was mischarged Accounting for Leave Taken by but the employee subsequently departed state Their Employees service, take appropriate measures to remedy any I2010‑1045 (June 2013)‡ resulting 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 19. Corrections and Correctional Health Care should 2 Unknown Activities by State Agencies run a query of exempt positions related to the and Employees chief psychologist classification, such as clinical I2015‑1 (August 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. continued on next page . . . 12 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION ENVIRONMENTAL PROTECTION California Department of Resources Recycling and Recovery California Department of 2. To ensure it can demonstrate that its fraud 2 December 2020 Resources Recycling and prevention efforts are maximizing financial Recovery: The Beverage recoveries for the beverage program, CalRecycle Container Recycling Program should both modify and annually update its fraud Continues to Face Deficits and management plan to include the following: Requires Changes to Become Financially Sustainable • By December 31, 2014, formally establish a 2014‑110 (November 2014) systematic process for analyzing, monitoring, and 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 2 December 2018 legal challenges claiming that its policies and procedures 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 2 Will Not should renegotiate its agreement with the Implement California 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 Investigations of Improper 1. Take appropriate corrective action against the 1 Unknown Activities by State Agencies district engineer and the supervisors for their and Employees: Conflict participation in or failure to address the conflict of Interest, Violation of of interest. Post‑Employment Ethics Restrictions, Waste of 3. Provide training to those responsible for reviewing 1 February 2018 State Funds, Misuse of State Resources, and statements of economic interests regarding how Incompatible Activities to identify conflicts of interests and when to I2016‑2 (August 2016)‡ consult with legal counsel. State Water Resources Control 7. If regional water boards continue to include staff 4 December 2016 Board: It Should Ensure a More enforcement costs in the penalty actions they Consistent Administration issue, the state water board should revise its of the Water Quality staff cost rate to reflect actual staff salaries and Certification Program overhead cost for the certification program. 2012‑120 (June 2013)* California State Auditor Report 2017-041 13 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION GENERAL GOVERNMENT California Department of Veterans Affairs California Department of 5. To better utilize unused space at the veterans 4 December 2017 Veterans Affairs: It Has homes, and to serve more veterans within legal Initiated Plans to Serve restrictions, CalVet should use the information Veterans Better and More in the Yountville veterans home master plan Cost‑Efficiently, but Further to develop a plan for using unused space at Improvements Are Needed that home to generate revenue and/or serve 2012‑119 (May 2013)* more veterans. 11. To ensure it is maximizing its ability to serve 4 July 2019 veterans 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 4 January 2019 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 4 December 2017 purchasing and procurement requirements, CalVet 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. California Military Department Investigations of Improper 3. Establish a routine of completing a monthly 2 June 2018 Activities by State Agencies inventory of expendable state property after the and Employees barcode system is implemented. I2014‑1 (December 2014)‡ California Public Utilities Commission California Public Utilities 2. The commission should determine the cause of 4 June 2018 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 2012‑118 (July 2013) that it 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 4 June 2018 should conduct a comprehensive market rate study and update it periodically. continued on next page . . . 14 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION California Public Utilities 14. The commission should follow the requirement 3 †   H Commission: Improved in state law to inspect and audit the accounting Monitoring of Balancing records of utilities it regulates within required time Accounts Would Better Ensure frames. If the commission chooses to continue to That Utility Rates Are Fair meet this requirement through the general rate and Reasonable case process, it should ensure that all utilities file 2013‑109 (March 2014) a general rate case 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 3 June 2018 Commission: It Fails to passenger carriers in a timely manner, the Adequately Ensure Consumers’ commission should establish a method for Transportation Safety and prioritizing complaints and it should implement Does Not Appropriately a policy specifying the maximum amount of Collect and Spend Fees From time between the receipt of a complaint and Passenger Carriers the completion of the subsequent investigation. 2013‑130 (June 2014) Further, the commission should require branch management to monitor and report regularly on its performance in meeting that policy. 6. To ensure that the branch conducts thorough 3 June 2020 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 3 June 2018 accurate fee payments, the commission should require its fiscal staff to implement a process to verify passenger carrier fee payments and associated revenue. 10. To ensure that it complies with state law and 3 August 2017 uses 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 3 December 2017 illegally at airports, the branch should use as intended the 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 3 December 2018 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 State Auditor Report 2017-041 15 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION California Public Utilities 3. To ensure that policy makers, enforcement 2 June 2018 Commission: It Needs to officials, and the general public have access to Improve the Quality of Its accurate consumer complaint data in CIMS, the Consumer Complaint Data branch should continue to implement its quality and the Controls Over Its management team program component focused Information Systems on reviewing the categorization of complaints and 2014‑120 (April 2015) correcting identified errors. 4. To ensure that policy makers, enforcement 2 June 2018 officials, and the general public have access to accurate 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 2 June 2020 with all policy requirements in SAM Chapter 5300 no later than April 2016. 12. As part of developing, implementing, and 2 June 2018 maintaining an entitywide information security program, the 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 2 June 2018 maintaining an entitywide information security program, the 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 2 June 2018 maintaining an entitywide information security program, the commission should develop, implement, and maintain an information security plan as part of its entitywide information security program. 16. The commission should revise its existing recovery 2 December 2017 plan to include a list of applications supporting critical business functions, their maximum acceptable outage time frames, and detailed recovery strategies for each application. 17. The commission should revise its existing recovery 2 June 2018 plan to include detailed procedures for rebuilding its technology infrastructure at an alternate processing site. 18. The commission should conduct regular tests and 2 †  exercises to assess the sufficiency of the revised recovery plan and refine the plan when necessary. continued on next page . . . 16 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION California Public Utilities 2. To ensure that the choice of a vendor is sufficiently 1 December 2107 Commission: It Should justified and that the vendor represents the best Reform Its Rules to value, the CPUC should explain in its final decision Increase Transparency and how the vendor was the most qualified in all cases Accountability, and Its when the CPUC does not competitively select the Contracting Practices Do Not vendor it directs utilities to contract with. Align With Requirements or Best Practices 4. To avoid the appearance of inappropriate 1 †  2016‑104 (September 2016) relationships, the CPUC should adopt a policy to prohibit commissioners from accepting gifts from regulated utilities and energy companies and free travel from organizations with significant ties to regulated utilities and other parties with financial interests in CPUC proceedings. 6. To ensure that its contracting practices align 1 December 2017 with state requirements and best practices, the CPUC should update, distribute, and follow its contracting procedures manual. The manual should identify specific responsibilities for both contracts office staff and project managers, and it should provide specific guidance about the processes the CPUC will employ to do the following: • Fully justify civil service exemptions. • Conduct market research for exempt contracts. • Fully support the need for additional funding. • Ensure that it does not change the scope of work too significantly from the original. • Monitor contractor performance against criteria included in its contracts. • Avoid sole‑source contracts when it is able to solicit competitive bids for services. 7. To ensure that its contracting practices align with 1 †   state requirements and best practices, the CPUC should provide immediate refresher training to its contract analysts and contracts office manager, and establish a regular schedule of annual training for them to attend. 8. To ensure that its contracting practices align with 1 June 2018 state requirements and best practices, the CPUC should designate a limited number of project managers for each division at the CPUC, and provide those individuals with training on the CPUC’s processes related to contracting, including how to monitor progress of a contractor’s work. 10. The CPUC should update its general policy on 1 December 2017 responding to California Public Records Act requests so that the policy aligns with state law. 11. The CPUC should develop and follow procedures 1 †  to regularly track and review California Public Records Act requests it has not fully responded to and determine whether it can provide information. California State Auditor Report 2017-041 17 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 13. The CPUC should update its regulations to require 1 June 2018 parties joining a proceeding by filing a protest or response to an application or petition, or by filing comments in response to a rulemaking proceeding to fully disclose their interests in the proceeding. 14. The CPUC should ensure that it has accurate 1 December 2017 information about who is required to file statements of economic interests and then verify that all such persons file those statements when required. 15. The CPUC should update and follow its retention 1 June 2018 policy for economic interest disclosures so that it is aligned with state law. California’s Alternative Energy 3. To show how air pollution emissions reductions 2 June 2018 K and Efficiency Initiatives: related to the solar initiative benefit the State, Two Programs Are Meeting the commission should include in future reports Some Goals, but Several the measurable benefits of those reductions. Improvements Are Needed 2014‑124 (February 2015)* Office of Ratepayer Advocates California Public Utilities 7. To further its mission to obtain the lowest 3 Will Not H Commission: Improved possible rates for reliable and safe utility service Implement Monitoring of Balancing for ratepayers through its reviews of balancing Accounts Would Better Ensure accounts, Ratepayer Advocates should use the That Utility Rates Are Fair commission’s list of balancing accounts to guide and Reasonable its selection of the number, size, and type of 2013‑109 (March 2014) balancing accounts to review so that its review coverage is more proportional across all utilities. GOVERNMENT OPERATIONS California Department of Human Resources High Risk Update: State 2. To correct the erroneous leave hours we identified 3 †  G Agencies Credited Their in our analysis of the leave accounting system, Employees With Millions CalHR should work with the state controller and of Dollars Worth of all state agencies under its authority to review and Unearned Leave take the appropriate action to correct the errors by 2012‑603 (August 2014)* January 2015. 7. To ensure that state agencies accurately account 3 August 2018 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. 10. To ensure that state agencies accurately account 3 August 2018 for 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. continued on next page . . . 18 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION California Department of Technology California Department of 14. To ensure that IT projects have the oversight 2 January 2018 J Consumer Affairs’ BreEZe needed to better position them for success, System: Inadequate CalTech should develop thresholds relating to Planning and Oversight Led IT project cost increases and schedule delays to to Implementation at Far inform and better justify its decision to allow an Fewer Regulatory Entities at a IT project to continue. If a department’s IT project Significantly Higher Cost reaches or exceeds these thresholds, CalTech 2014‑116 (February 2015)* should require the department to conduct a cost‑benefit analysis for the project and include this analysis in an SPR. CalTech 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 2 †  with requirements, CalTech should periodically monitor the status of contracts and enforce adherence to procurement requirements. For example, CalTech 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. California Department of 14. Although the Technology Department indicated 1 †   Veterans Affairs: The State that its intent is not to outsource its statutory Paid Nearly $28 Million for responsibility for IPO, in any instances where its a Flawed System That Fails staff conduct a portfolio review of a project’s to Meet the Needs of Its IPO, the Technology Department should, by Veterans Homes December 2016, establish a process for its review 2015‑121 (June 2016) of documents created by the agency’s IPO contractor that includes verifying whether these reports include critical analysis of project progress and vendor performance so it can intervene when necessary. High Risk Update—California 6. To help ensure the independence and objectivity 2 March 2018 Department of Technology: of IPO analysts working in the oversight and Lack of Guidance, Potentially consulting division, CalTech should provide regular Conflicting Roles, and Staffing training regarding maintaining independence Issues Continue to Make while conducting project oversight. Oversight of State Information Technology Projects High Risk 9. To ensure that the sponsoring agencies’ project 2 December 2017 2014‑602 (March 2015)* status reports provide a reliable and consistent assessment of an IT project’s progress, CalTech 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 2 January 2019 experience and qualifications to perform IT project oversight, CalTech 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 2 June 2018 2015 CalTech 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. California State Auditor Report 2017-041 19 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION High Risk Update— 3. To assist reporting entities in reaching full 2 May 2018 Information Security: Many compliance with the security standards, the State Entities’ Information technology department should ensure the Assets Are Potentially consistency and accuracy of its self certification Vulnerable to Attack process by developing a self assessment tool by or Disruption December 2015 that reporting entities can use to 2015‑611 (August 2015) determine their level 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 2 May 2018 compliance 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 2 May 2018 certification form to require reporting entities to 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 2 June 2018 policies and procedures to define the process and criteria it will use to incentivize entities’ compliance with the security standards. 10. To improve the clarity of the security standards, 2 July 2018 the technology department should perform regular outreach to all reporting entities to gain their perspectives, identify any unclear or inconsistent security standards, and revise them as appropriate. Department of General Services California Department of 2. To ensure long‑term efficient and effective 1 June 2018 General Services’ Real Estate delivery of projects, the division, in its planned Services Division: To Better implementation of its new project management Serve Its Client Agencies, It system in July 2017, should ensure that the project Needs to Track and Analyze management system can centrally track and extract Project Data and Improve Its all data regarding project status, including time Management Practices delays, cost overages, and the reasons for each. 2015‑117 (March 2016) 3. To ensure long‑term efficient and effective 1 June 2018 delivery of projects, the division, in its planned implementation of its new project management system in July 2017, should track the reasons that projects are pending to identify its true backlog of projects. In doing so, it should develop a process to follow up on those projects that are pending to ensure that they are not on hold unnecessarily and are appropriately moving forward. 4. To ensure long‑term efficient and effective 1 June 2018 delivery of projects, the division, in its planned implementation of its new project management system in July 2017, should, at least annually, use the centrally tracked data to identify common themes in the causes for project delays and cost overages and develop solutions to address these issues. Further, it should report the results of its review to General Services’ executive management. continued on next page . . . 20 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 5. Until the division implements its planned 1 Will Not project management system, it should, by Implement September 2016, develop a process to, at a minimum, identify project status and reasons for project delays as well as cost overages. Using these data, the division should modify its project management processes to ensure the efficient and effective delivery of projects. 6. The division should develop and implement a 1 June 2018 process for preparing reasonable time frames and cost estimates for its projects within the building management branch. To better inform the development of this process, the division should evaluate the branch’s structure, which should include a staffing analysis, to determine whether it is effectively organized and whether it should add cost estimator positions. 7. To ensure that client agencies are paying equitable 1 †  rates, by December 2016 General Services should develop and implement a strategy for allocating its administrative costs equally among all the projects it completes for client agencies, including those portions outsourced to private firms. 8. To ensure that the project management branch 1 July 2017 charges its client agencies a competitive hourly rate, by December 2016 and every two years thereafter, the division should conduct a rate analysis that fully accounts for differences between the project management branch’s rate and private firms’ rates. If it finds that the rates are not competitive, the division should identify and implement strategies to ensure that the project management branch’s rates are as competitive as they can be with those of its private firm counterparts. Further, the division should explore and implement any other reasonable methods to ensure that it is delivering projects as cost effectively as possible. 9. To improve its communication with client 1 January 2018 agencies, the division should ensure that project managers are using consistent procedures by providing specific expectations related to communicating and documenting time delays, cost changes, and change orders, at a minimum. 10. To improve its communication with client 1 June 2018 agencies, the division should develop a process for providing periodic detailed bills and invoices to client agencies clearly describing the work for which it is charging. 11. To effectively evaluate the performance of its 1 July 2017 branches in delivering projects, the division should develop meaningful goals and objectives and a method of measuring its success in achieving them as part of its strategic plan that is focused on ensuring that projects are delivered on time and within budgeted cost estimates. California State Auditor Report 2017-041 21 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 12. To ensure that its project management staff are 1 †  adequately trained and have the information necessary to deliver projects as efficiently and effectively as possible, the division should conduct a comprehensive survey every other year of all of its client agencies to inform necessary improvements to its processes and training program and, in the interest of transparency, make the survey results public. 13. To ensure that its project management staff are 1 July 2018 adequately trained and have the information necessary to deliver projects as efficiently and effectively as possible, the division should develop and implement by December 2016 a periodic training program for staff within its project management and building management branches. This training program should include updated information that reflects any processes it revises based on its review of critical project status data and its progress toward meeting its goals. Department of General 1. To ensure public safety and provide public 5 †  Services: The Division of assurance that school districts construct the State Architect Lacks projects in accordance with approved plans, the Enforcement Authority department, in conjunction with the division, and Has Weak Oversight should pursue legislative changes to the Field Procedures, Increasing the Act that would prohibit occupancy in cases Risk That School Construction Projects May Be Unsafe in which the division has identified significant safety concerns. 2011‑116.1 (December 2011) HEALTH AND HUMAN RESOURCES California Department of Public Health California Department of 2. To increase its efforts to prevent and control 2 Will Not Public Health: Even With a diabetes, Public Health should develop a process Implement Recent Increase in Federal for identifying and applying for federal funding Funding, Its Efforts to Prevent opportunities, including routinely and proactively Diabetes Are Focused on a searching for grants. In addition, Public Health Limited Number of Counties should seek funding for a grants specialist position 2014‑113 (January 2015) to identify and apply for federal and other grants. California Department 3. To protect the health, safety, and well‑being 3 †  of Public Health: It Has of residents in long‑term health care facilities, Not Effectively Managed Public Health should improve its oversight of Investigations of Complaints complaint processing. Specifically, by May 1, 2015, Related to Long‑Term Health Public Health should establish a specific time Care Facilities frame for completing facility‑related complaint 2014‑111 (October 2014) investigations and ERI 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. continued on next page . . . 22 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 4. To protect the health, safety, and well‑being 3 †   of 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 3 †  consistently 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 3 †  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 3 †  investigate 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. 13. To make certain that its district offices comply 3 March 2018 with 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 3 †   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 State Auditor Report 2017-041 23 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION Developmental Centers: 18. To improve its enforcement, each year Public 4 June 2019 D Poor‑Quality Investigations, Health should evaluate the effectiveness of its Outdated Policies, Leadership enforcement system across all types of health and Staffing Problems, and facilities, including those in developmental centers, Untimely Licensing Reviews prepare the required annual report, and, if called for, Put Residents at Risk recommend legislation to improve the enforcement 2012‑107 (July 2013) system and enhance the quality of care. Follow‑Up—California 8. To ensure it can provide effective oversight of 2 June 2018 Department of Public Health: labs as state law requires, Laboratory Services Laboratory Field Services Is should address staffing issues by preparing and Unable to Oversee Clinical resubmitting to Public Health a recruitment and Laboratories Effectively, but a retention proposal, developing a succession plan, Feasible Alternative Exists and taking necessary steps to implement its 2015‑507 (September 2015) planned reorganization. 9. To ensure it can provide effective oversight of 2 July 2018 labs as 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 2 June 2019 as state law requires, Laboratory Services should update and develop its regulations as necessary to ensure consistency with existing state law. California’s Foster Care System: 30. To improve the oversight of psychotropic 1 Spring 2018 W The State and Counties medications prescribed to foster children, Social Have Failed to Adequately Services should collaborate with the counties Oversee the Prescription of and other relevant stakeholders—including Psychotropic Medications to Health Care Services, as necessary—to develop Children in Foster Care and implement a reasonable oversight structure 2015‑131 (August 2016) that ensures the coordination of the State’s and counties’ various oversight mechanisms as well as the accuracy and completeness of the information in Social Services’ data system. This structure should include at least the following items: • Identification of the specific oversight responsibilities to be performed by the various state and local government agencies. • An agreement on how county staff such as social workers, probation officers, and public health nurses will use printed Health and Education Passports to obtain foster children’s necessary mental health information— including psychotropic medications and psychosocial services—for inclusion in Social Services’ data system. • A plan to ensure that counties have sufficient staff available to enter foster children’s mental health information into Social Services’ data system and the resources to pay for those staff. • An agreement on the specific information related to psychotropic medication—including but not limited to the medication name, maximum daily dosage, and court authorization date—and psychosocial services and medication follow‑up appointment information that county staff must enter into Social Services’ data system for inclusion in foster children’s Health and Education Passports. • Specific directions from Social Services regarding the correct medication start dates and court authorization dates counties should include in its data system and foster children’s Health and Education Passports. continued on next page . . . 24 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION • An agreement on the training or guidance Social Services should provide to county staff members working with Social Services’ data system to ensure that they know how to completely and accurately update foster children’s Health and Education Passports. • An agreement on how the counties will use information on the new authorization forms that the Judicial Council approved to better oversee the prescription of psychotropic medications to foster children. • An agreement regarding how counties will implement, use, or disseminate the educational and informational materials the Quality Improvement Project has produced, including the “California Guidelines for the Use of Psychotropic Medication with Children and Youth in Foster Care”, “Questions to Ask About Medications”, and the “Foster Youth Mental Health Bill of Rights”. • An agreement on the specific measures and the best available sources of data the State and counties will use to oversee foster children prescribed psychotropic medications, including psychosocial services and medication follow‑up appointments. • An agreement on how the State and counties will oversee psychotropic medications prescribed to foster children by fee‑for‑service providers who are not affiliated with county Medi‑Cal mental health plans. • An agreement on the extent of information related to psychotropic medications prescribed to foster children that counties will include in the self‑assessments, system improvement plans, and annual progress reports they develop as part of Social Services’ California Child and Family Services Reviews. • An agreement on the extent of the information related to psychotropic medications prescribed to foster children that counties will include in their responses to Health Care Services’ reviews, including its county Medi‑Cal mental health plan compliance. Child Welfare Services: 40. To promote continued improvement in the CWS 3 March 2018 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 2013‑110 (April 2014) their 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 3 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. California State Auditor Report 2017-041 25 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION Follow‑Up—California 1. To ensure that all address matches of registered 2 †  Department of Social Services: sex offenders who potentially reside or work at Although Making Progress, It a licensed facility or foster home are reviewed, Could Do More to Ensure the Social Services should improve its current Protection and Appropriate mechanism to track and monitor the outcome Placement of Foster Children of each address match it identifies. This tracking 2015‑502 (July 2015) mechanism should 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 2 December 2017 agency 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. 4. To ensure that counties’ use of foster family 2 February 2018 agency 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 2 Will Not agency placements is justified, Social Implement Services should take 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. Follow‑Up—California 4. To ensure that all counties consistently gauge the 2 June 2019 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 for the CalWORKs and CalFresh Programs the counties currently submit. Specifically, this 2015‑503 (June 2015)* formula should measure the savings that a county achieves for each dollar spent on antifraud efforts. 5. To make certain that counties receive the 2 June 2019 greatest 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. continued on next page . . . 26 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 6. To make certain that counties receive the greatest 2 June 2019 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. 7. Social Services should track counties’ prosecution 2 Will Not thresholds for welfare fraud cases and determine Implement 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 2 December 2017 ensure that counties follow state regulations regarding the use of the administrative disqualification hearings process until all counties have adopted the process. 9. To make certain that counties receive the greatest 2 June 2019 benefit from the resources they spend on antifraud 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. 12. To make counties’ review of match lists more 2 June 2019 efficient, 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 2 December 2017 that 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 2 December 2017 the 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. California Health Benefit Exchange New High Risk Entity: Covered 4. To ensure financial sustainability, Covered 4 March 2015 California Appears Ready California should conduct regular reviews of to Operate California’s First enrollment, costs, and revenue and make prompt Statewide Health Insurance adjustments to its financial sustainability plan Exchange, but Critical Work as necessary. and Some Concerns Remain 2013‑602 (July 2013) California State Auditor Report 2017-041 27 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION Department of Developmental Services California Department of 2. To ensure timelier fee assessments, 2 Will Not Developmental Services: Its Developmental Services should hold regional Implement Process for Assessing Fees centers accountable for providing the monthly Paid by Parents of Children placement reports and copies of information Living in Residential Facilities letters required by state regulations. To encourage Is Woefully Inefficient and compliance, Developmental Services should Inconsistent specify in its regional center contracts that 2014‑118 (January 2015)* noncompliant regional centers will pay financial penalties equal to the amount of revenue lost because of their inaction. Department of Developmental 4. To ensure that regional centers are aware of 1 January 2018 Services: It Cannot Verify the benefits, including cost savings to the State That Vendor Rates for that can be realized by using FMS vendors, DDS In‑Home Respite Services Are should formally communicate to regional centers Appropriate and That Regional regarding the model. Centers and Vendors Meet Applicable Requirements 5. To ensure that in‑home respite vendors are 1 Will Not 2016‑108 (October 2016) providing quality services and that vendors are Implement adhering to state requirements, DDS should issue regulations requiring regional centers to conduct periodic and ongoing reviews of vendors’ programs, employees, and consumer records. 6. To ensure that in‑home respite vendors comply 1 January 2018 with vendor requirements on an ongoing basis, DDS should require the regional centers to develop a process to conduct biennial reviews of the vendor files the regional centers maintain and document the outcome of the review in the files. DDS should require the regional centers to take appropriate action to ensure that vendors comply, up to and including terminating the vendorization, if necessary. 7. To ensure that it is providing oversight 1 December 2018 in accordance with state law and federal requirements, DDS should ensure that it performs audits of each regional center every two years as required. In conducting these audits, DDS should consistently include a review of in‑home respite services. Developmental Centers: 11. To minimize the need for overtime, the 4 †  D Poor‑Quality Investigations, department should reassess its minimum Outdated Policies, Leadership staffing requirements, hire a sufficient number and Staffing Problems, and of employees to cover these requirements, and Untimely Licensing Reviews examine its employee scheduling processes. Put Residents at Risk 2012‑107 (July 2013) Department of Health Care Services California Department 3. To ensure that Managed Health Care reaches 2 December 2016 of Health Care Services: accurate conclusions during its quarterly Improved Monitoring of assessments of the adequacy of provider Medi‑Cal Managed Care networks, Health Care Services should establish by Health Plans Is Necessary to September 2015 a process to verify the accuracy of Better Ensure Access to Care the provider network data it receives from health 2014‑134 (June 2015) plans and forwards to Managed 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. continued on next page . . . 28 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 4. To improve the accuracy of provider directories, by 2 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 2 July 2017 in a 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 2 †  volume of 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 2 †  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 2 On‑going audits complies 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 2 Will Not with state law, it should increase its oversight Implement of Managed Health Care to ensure that it completes the quarterly assessments required under the agreements. California Department of 1. To ensure that it provides claiming units with 2 Will Not Health Care Services: It Should reasonable opportunities to address concerns Implement Improve Its Administration with its decisions or actions, Health Care Services and Oversight of School‑Based should, within three months, begin preparing Medi‑Cal Programs regulations to establish and implement a formal 2014‑130 (August 2015) appeals process that allows claiming units to directly appeal Health Care Services’ decisions. 2. To ensure that it provides claiming units with 2 Will Not reasonable opportunities to address concerns Implement with its decisions or actions, Health Care Services should, within three months, inform all stakeholders, including claiming units, of the existence of this appeals process. California State Auditor Report 2017-041 29 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 3. Until the Legislature implements our 2 January 2018 recommendation 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 2 †  recommendation 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. continued on next page . . . 30 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 5. Until the Legislature implements our 2 January 2018 recommendation 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. 8. To minimize the risk that claiming units could 2 †  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 2 Will Not administrative activities program and to improve Implement the 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 2 Will Not administrative activities program and to improve Implement the 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 2 January 2018 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 2 Will Not and local governmental agencies are no longer Implement involved in the administrative activities program, Health Care Services should develop and issue a standard contract for claiming units to sign to participate in the program. California State Auditor Report 2017-041 31 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 17. To better maximize federal reimbursements for 2 †  the 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. 19. To better maximize federal reimbursements for 2 †  the administrative activities program, Health Care Services 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. 21. To provide the public with the ability to 2 January 2018 participate 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. 24. To ensure that it provides stakeholders with timely 2 October 2017 access to information regarding the billing option program, Health Care Services should issue all future annual reports in a timely manner. California Department 3. To ensure that the providers receive 3 July 2017 of Health Care Services: reimbursement for only valid services, Health Its Failure to Properly Care Services should immediately direct its Administer the Drug Medi‑Cal investigations division to determine whether it Treatment Program Created authorized any improper payments to program Opportunities for Fraud providers for deceased beneficiaries outside of 2013‑119 (August 2014) 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. 18. To prevent the certification of ineligible providers, 3 †  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, 3 Unknown 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. 21. To prevent the certification of ineligible providers, 3 †  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. continued on next page . . . 32 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 24. To prevent the certification of ineligible providers, 3 January 2018 Health Care Services should immediately develop a schedule for recertifying all program providers every five years. 25. To prevent the certification of ineligible providers, 3 January 2018 Health Care Services should immediately continue its implementation of an automated provider enrollment system. 26. To prevent the certification of ineligible providers, 3 †  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, 3 †  Health Care Services should immediately establish a plan for eliminating its backlog of applications for new sites and services and changes to existing certifications. California Department 4. To ensure that child beneficiaries throughout 2 †  of Health Care Services: California can reasonably access dental services Weaknesses in Its Medi‑Cal under Medi‑Cal and to increase child beneficiary Dental Program Limit utilization and provider participation, Health Children’s Access to Care Services should take the following steps for Dental Care the fee‑for‑service delivery system by May 2015: 2013‑125 (December 2014) immediately take action to resolve any declining trends identified during its monitoring efforts. 5. To help increase the number of providers 2 August 2017 participating 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 2 August 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. 19. To ensure that it reports in the CMS‑416 an 2 December 2018 accurate 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 2 Will Not of the new state law and that its performance Implement measures are 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. California State Auditor Report 2017-041 33 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 23. To ensure that Health Care Services and its fiscal 2 †   intermediaries reimburse providers only for services 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 2 †  fiscal intermediaries reimburse providers only for services rendered to eligible beneficiaries, Health Care Services should coordinate with the appropriate fiscal intermediaries to recover inappropriate payments made for services purportedly rendered to deceased beneficiaries, if necessary. California’s Foster Care System: 33. To increase the State’s assurance that foster 1 †   W The State and Counties children do not receive medically inappropriate Have Failed to Adequately or unnecessary psychotropic medications, Health Oversee the Prescription of Care Services should devise and implement Psychotropic Medications to within six months methods to better enforce its Children in Foster Care prior authorization requirement for the off‑label 2015‑131 (August 2016) use of psychotropic medications. For example, Health Care Services should revise its claims system to automatically prompt pharmacists to submit treatment authorization requests when filling prescriptions for Medi‑Cal beneficiaries under age 18 when the prescribed psychotropic medications have no FDA‑approved pediatric uses. Furthermore, as part of its collaboration with Social Services and the counties to develop and implement a reasonable oversight structure, Health Care Services should determine whether information from the Judicial Council’s revised court authorization forms would help it better enforce its prior authorization requirements. Intellectual Property: An 4. Caltrans, the Energy Commission, Food and 5 DHCS has not yet Effective Policy Would Educate Agriculture, and Health Care Services should put determined the State Agencies and Take Into in writing those policies and procedures related to implementation Account How Their Functions intellectual property that they believe are necessary date 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 4 Fall 2017 F The State’s Oversight Has fullest extent as the MHSA specifies and that it Provided Little Assurance of implements best practices, Health Care Services the Act’s Effectiveness, and should conduct comprehensive on‑site reviews Some Counties Can Improve of county MHSA programs, including verifying Measurement of Their county compliance with MHSA requirements. Program Performance 2012‑122 (August 2013) 3. To ensure that counties have the needed guidance 4 Summer 2018 to 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 4 Next 12‑18 to implement and evaluate their MHSA programs, months 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 . . . 34 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 6. To ensure that Health Care Services and other 4 Fall 2018 state entities can evaluate MHSA programs and assist the 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 4 End of CY 2017 state entities can evaluate MHSA programs and assist the Accountability Commission in its efforts, Health Care 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 4 December 2016 data collection guidelines or regulations, as appropriate, 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 4 December 2016 stakeholder regulations, Health Care Services should provide 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. Department of State Hospitals§ California Department of State 3. To promote consistency and ensure that it 2 December 2018 Hospitals: It Could Increase the provides sufficient guidance to evaluators, Consistency of Its Evaluations State Hospitals should update its assessment of Sex Offenders by Improving protocol by March 2016 to include more specific Its Assessment Protocol instructions on how to conduct evaluations, such and Training as what assessment instruments evaluators may 2014‑125 (March 2015)§ use and what 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 2 December 2019 should ensure that it follows the Administrative Procedures Act for future changes to its standardized assessment protocol. HIGHER EDUCATION Chancellor of the California Community Colleges California Community College 1. To ensure that colleges receive consistent and fair 3 TBD Accreditation: Colleges treatment and are able to address deficiencies, Are Treated Inconsistently the chancellor’s office should work with the and Opportunities Exist community colleges and request clearer guidance for Improvement in the from the commission regarding what actions Accreditation Process would allow for the full two‑year period in which 2013‑123 (June 2014) to remediate 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. California State Auditor Report 2017-041 35 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 2. To ensure that community colleges and the public 3 TBD are 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 3 TBD 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 3 TBD 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 3 TBD commission, 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 3 TBD accreditor, 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. continued on next page . . . 36 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 8. To allow colleges flexibility in choosing an 3 TBD accreditor, 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 2 October 2016 L Educational Institutions: with the Clery Act, the Community Colleges More Guidance Is Needed to Chancellor’s Office should develop written Increase Compliance With policies and procedures to provide guidance Federal Crime Reporting to its institutions on how to report accurate Requirements Clery Act crime statistics and ensure that all 2015‑032 (July 2015) required disclosures are included in its 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. The California State University California State University’s 4. Within six months of the date the Legislature 3 December 2017 Extended Education: It Is clarifies its intent regarding California Education Unclear Whether Supplanting Code, Section 89708, the Chancellor’s Office Occurred, and Campuses Did should develop and issue final guidance to Not Always Document Their campuses regarding supplanting, including Adherence to Laws, Policies, identifying appropriate oversight mechanisms for and Procedures ensuring campuses’ compliance with this law. 2012‑113 (December 2013) California’s Postsecondary 19. To ensure that its respective institutions comply 2 March 2018 Educational Institutions: with the Clery Act, the CSU Office of the More Guidance Is Needed Chancellor should develop written policies and to Increase Compliance procedures to provide guidance to its institutions With Federal Crime on how to report accurate Clery Act crime Reporting Requirements statistics and ensure that all required disclosures 2015‑032 (July 2015) are included in its respective 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 California’s Postsecondary 18. To ensure that its respective institutions 2 January 2018 L Educational Institutions: comply with the Clery Act, UCOP should More Guidance Is Needed finalize and implement its draft policy that will to Increase Compliance provide additional guidance and oversight to With Federal Crime its institutions. Reporting Requirements 2015‑032 (July 2015) Investigations of Improper 23. To address the improper acts we identified, the 4 Unknown Activities by State Agencies university should collect $1,802 from the official and Employees: Bribery, for the wasteful expenses he claimed for lodging Conspiracy to Commit Mail and meals during his trip to England, the expenses Fraud, Improper Overtime he incurred within the vicinity of his headquarters, Payments, Improper Use of and the business meal expenses. Lease Proceeds, Improper Travel Expenses, and Other Violations of State Law I2012‑1 (December 2012)‡ California State Auditor Report 2017-041 37 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION Sexual Harassment and Sexual 49. The Office of the President should clarify in the 3 †  I Violence: California UC policies that a complainant must have and Universities Must Better be informed about the right to end the early Protect Students by Doing resolution process at any time and request that his More to Prevent, Respond to, or her complaint be handled under the university’s and Resolve Incidents formal process. 2013‑124 (June 2014)* 51. The Office of the President should clarify in the 3 †  UC 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. The University of California: 1. To meet its commitment to California residents, 1 †  Its Admissions and Financial the university should replace its “compare Decisions Have Disadvantaged favorably” policy with a new admission standard California Resident Students for nonresident applicants that reflects the intent 2015‑107 (March 2016)* of the Master Plan. The admission standard should require campuses to admit only nonresidents with admissions credentials that place them in the upper half of the residents it admits. 2. To meet its commitment to California residents, 1 Full the university should amend its referral process by implementation taking steps to increase the likelihood that referred in 2020 with residents ultimately enroll. completion of UC Merced 2020 Project 3. To ensure that campuses’ interpretations of 1 †  admission standards do not adversely impact residents, the university should implement a thorough process to annually evaluate the qualifications of students who apply and students who are admitted. These evaluations should highlight instances when campuses admit nonresidents who are less qualified than residents and should include corrective action steps. Moreover, this evaluation should include resident and nonresident undergraduate enrollment in majors at each campus. The university should make the results of this evaluation—including details of the academic qualifications of students who applied and who were admitted— publicly available. 7. To improve its internal operations and promote 1 Ongoing cost savings related to the nearly $13 billion it spent on employee salaries in fiscal year 2014–15, the university should conduct a systemwide assessment to identify ways to streamline and reduce its employee costs. 8. To ensure the reasonableness of the compensation 1 †  the university pays its executives, it should include—to the extent possible— all items of compensation when setting or adjusting salaries and benefits, when conducting surveys and studies, and when comparing the compensation packages of its executives to those in similar positions outside the university. continued on next page . . . 38 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 9. To ensure that its process for establishing 1 †  and revising salaries for its top executives is documented, thorough, and consistently applied, the university should implement the five outstanding recommendations from its 2013 internal review report by August 2016. 10. To improve the transparency and timeliness of its 1 Will Not annual compensation report, the university should Implement streamline the process it uses to prepare the report so it can be issued by April of each year. 12. To maximize the savings and new revenue 1 Ongoing from the Working Smarter initiative and ensure that the university uses them for its academic and research missions, the Office of the President should immediately require that the campuses fully participate in all projects unless they can provide compelling evidence demonstrating a harmful effect. 13. To maximize the savings and new revenue from 1 †  the Working Smarter initiative and ensure that the university uses them for its academic and research missions, the Office of the President should, by June 30, 2016, to the extent possible, implement a process to centrally direct these funds to ensure that campuses use them to support the core academic and research missions of the university. 14. To maximize the savings and new revenue from 1 July 2018 the Working Smarter initiative and ensure that the university uses them for its academic and research missions, the Office of the President should ensure that it substantiates that projects are actually generating savings and new revenue and that it can demonstrate how the university uses these funds. 15. To ensure that its recruiting efforts benefit 1 †  residents, the university should prioritize recruiting residents over nonresidents. In particular, the university should focus its recruiting efforts broadly to ensure that it effectively recruits resident underrepresented minorities. For example, the university could establish a limit on the amount of funds it dedicates to nonresident recruiting. Further, it should develop a process to better track its nonresident and resident recruiting expenditures. 16. To determine if the campuses are using funds to 1 April 2018 further the goals of the University of California system and the Legislature, the Office of the President should begin regularly monitoring and analyzing how campuses are using both state funds and nonresident supplemental tuition. If, after the close of the fiscal year, the Office of the President determines that campuses are not using state funds and/or nonresident supplemental tuition in accordance with those goals, the Office of the President should take steps to correct the campuses’ spending decisions as soon as possible. California State Auditor Report 2017-041 39 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 17. To ensure that it spends state funds prudently for 1 April 2018 programs that do not directly relate to educating students, the university should track spending from state funds for programs that do not relate to educating students. 18. To ensure that it spends state funds prudently for 1 April 2018 programs that do not directly relate to educating students, the university should reevaluate these programs each year to determine whether they continue to be necessary to fulfill the university’s mission. 19. To ensure that it spends state funds prudently for 1 December 2017 programs that do not directly relate to educating students, the university should explore whether the programs could be supported with alternate revenue sources. 22. To ensure that its rebenching efforts lead to 1 September 2020 equalized per‑student funding among the campuses, the university should adopt a methodology that it can use, at least every three to five years, to update its weighting system to ensure the weight factors take into account campuses’ actual costs of instruction, using the cost study that we recommend in Chapter 1 and other revenue sources if necessary. 23. To ensure that its rebenching efforts lead to 1 Will Not equalized per‑student funding among the campuses, Implement the university should exclude from its rebenching calculation all state funding it uses for programs that do not directly relate to educating students. The university should exclude these programs only after it has evaluated them in accordance with the recommendation we made previously. University of California, Berkeley Sexual Harassment and 8. To help ensure that university faculty and staff 3 †  I Sexual Violence: California do not mishandle student reports of incidents, all Universities Must Better faculty and staff should receive training annually, Protect Students by Doing consistent with their role, on their obligations in More to Prevent, Respond to, responding to and reporting incidents of sexual and Resolve Incidents harassment and sexual violence. 2013‑124 (June 2014) 20. All universities should provide their education 3 †  on 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 3 †  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. continued on next page . . . 40 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION University of California, Davis University of California, 4. UC Davis should collect all late fees that its 2 June 2016 Davis: It Has Not Identified licensees owe. Future Financing for the Strawberry Breeding Program nor Collected All Available Revenues 2014‑121 (June 2015) University of California, Los Angeles Sexual Harassment and Sexual 9. To help ensure that university faculty and staff 3 †  I Violence: California do not mishandle student reports of incidents, all Universities Must Better faculty and staff should receive training annually, Protect Students by Doing consistent with their role, on their obligations in More to Prevent, Respond to, responding to and reporting incidents of sexual and Resolve Incidents harassment and sexual violence. 2013‑124 (June 2014) 21. All universities should provide their education 3 †  on 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. 59. All universities should ensure that the differences 3 †  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. K THRU 12 EDUCATION California Department of Education California Department of 2. To demonstrate its willingness to fairly evaluate 4 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 2012‑044 (February 2013)* 14. To address a lack of detailed migrant program 4 †  service 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. Inglewood Unified 2. To assist the district with establishing priorities, 1 June 2018 School District: The State and to ensure that the public is aware of those Superintendent of Public priorities, the state superintendent should Instruction Needs to Better direct his state administrator to develop annual Communicate His Approach performance objectives and an action plan to for Reforming the District address FCMAT’s findings and recommendations. 2015‑101 (November 2015) Such an action plan should describe for the public why certain findings were prioritized and what steps the state administrator plans to take to improve the district’s FCMAT scores. California State Auditor Report 2017-041 41 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 4. To provide the public an opportunity to 1 June 2018 fully understand the requirements for and the progress made toward restoring local control to the district’s governing board, the state superintendent should direct his state administrator to establish regular advisory board agenda items to answer the public’s questions concerning the efforts made toward achieving the exit criteria. School Safety and 19. To provide stronger leadership with respect 4 Will Not T Nondiscrimination Laws: Most to school safety and nondiscrimination laws, Implement Local Educational Agencies Do Education, with direction from the superintendent Not Evaluate the Effectiveness of public instruction, should use data from of Their Programs, and the kids survey and reported suspensions and the State Should Exercise expulsions to evaluate the levels of discrimination, Stronger Leadership harassment, intimidation, and bullying students 2012‑108 (August 2013)* encounter and to determine 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 4 †  to 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 Web site 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. Student Mental Health 3. To ensure that all LEAs comply with federal 1 Will Not U Services: Some Students’ special education requirements, Education should Implement Services Were Affected by require them to include directly in a student’s IEP a New State Law, and the document reasons for any changes to student State Needs to Analyze placement or services. Student Outcomes and Track Service Costs 8. To enable it to review additional areas of its 1 Will Not 2015‑112 (January 2016)* special education program for quality assurance, Implement Education should collect information about the frequency of the provision of each service contained in all students’ IEPs. Education should then use this information to annually review the frequency of mental health services and follow up with SELPAs when it observes a significant reduction in the frequency of services. 9. To ensure that LEAs comply with federal and 1 Will Not state requirements, Education should require all Implement LEAs to use the IEP document to communicate the rationale for residential treatment and any potential harmful effects of such placement. 18. Education should analyze and report to the 1 Will Not Legislature, by May 30, 2016, on the outcomes Implement for students receiving mental health services statewide, including outcomes across the six performance indicators we identified, in order to demonstrate whether those services are effective. Once it has reported this statewide information, Education should provide each LEA throughout the State a report regarding the outcomes for the students the LEA served. continued on next page . . . 42 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 20. To ensure that the State knows the amount LEAs 1 Will Not spend to provide mental health services for Implement student IEPs, before the start of the 2017–18 fiscal year, Education should develop, and require all LEAs to follow, an accounting methodology to track and report expenditures related to special education mental health services. 28. Education should require all LEAs and SELPAs that 1 June 2018 hold contracts for mental health services to annually obtain and retain copies of contractor personnel lists and the credentials or licenses for contractor personnel who provide mental health services to students in their respective LEA or SELPA. 29. To ensure that the State provides special education 1 Will Not and related services to all eligible students, Implement Education should investigate the difference between the estimated number of school aged children statewide who have a severe emotional disturbance and the number receiving mental health services through an IEP and determine the reason for such a discrepancy. Education should then take any steps necessary to assist LEAs in identifying and providing services to children who are severely emotionally disturbed. LEGISLATIVE, JUDICIAL, AND EXECUTIVE California Department of Justice Armed Persons With Mental 23. To reduce the risk that it may not identify an 4 July 2019 Illness: Insufficient Outreach armed prohibited person, Justice should revise its From the Department of electronic matching process to use all personal Justice and Poor Reporting identifying numbers available in its databases. From Superior Courts Limit the Identification of Armed 34. To ensure that it fully supports its decision to 4 Unknown Persons With Mental Illness apply federal prohibition terms to individuals, 2013‑103 (October 2013) Justice 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 3 †   Although Testing All Kits effectiveness of its RADS program and to Could Benefit Sexual Assault better inform decisions about expanding the Investigations, the Extent of number of analyzed sexual assault evidence kits, the Benefits Is Unknown Justice should amend its agreements with the 2014‑109 (October 2014) counties participating in the RADS program 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 State Auditor Report 2017-041 43 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION The CalGang Criminal 10. As the Legislature considers creating a public 1 Dependent V Intelligence System: As the program for shared gang database oversight and on enactment Result of Its Weak Oversight accountability, Justice should guide the board of legislation Structure, It Contains and the committee to identify and address the which would Questionable Information grant Justice shortcomings that exist in CalGang’s current That May Violate Individuals’ the authority Privacy Rights operations and oversight. The guidance Justice to execute and 2015‑130 (August 2016) provides to the board and the committee should enforce the address, but not be limited to, developing best recommendations. practices based on the requirements stated in the federal regulations, the state guidelines and state law, and advising user agencies on the implementation of those practices. The best practices should include, but not be limited to reviewing criminal intelligence, appropriately disseminating information, performing robust audit practices, establishing plans to recover from disasters, and meeting all of the State’s juvenile notification law requirements. Justice should guide the board and the committee to develop these best practices by June 30, 2017. 11. As the Legislature considers creating a public 1 June 2018 program for shared gang database oversight and accountability, Justice should guide the board and the committee to identify and address the shortcomings that exist in CalGang’s current operations and oversight. The guidance Justice provides to the board and the committee should address, but not be limited to, instructing user agencies that use CalGang to complete a comprehensive review of all the gangs documented in CalGang to determine if they meet the necessary requirements for inclusion and to purge from CalGang any groups that do not meet the requirements. Justice should guide the board and the committee to ensure that user agencies complete this review in phases, with the final phase to be completed by June 30, 2018. 12. As the Legislature considers creating a public 1 Unknown program for shared gang database oversight and accountability, Justice should guide the board and the committee to identify and address the shortcomings that exist in CalGang’s current operations and oversight. The guidance Justice provides to the board and the committee should address, but not be limited to, instructing all user agencies to complete a comprehensive review of the records in CalGang to determine if the user agencies have adequate support for the criteria associated with all the individuals they have entered as gang members. If the user agencies do not have adequate support, they should immediately purge the criteria—and, if necessary, the individuals—from CalGang. In addition, the user agencies should ensure that all the fields in each CalGang record are accurate. Justice should guide the board and the committee to ensure that user agencies complete this review in phases, with the final phase to be completed by September 30, 2019. continued on next page . . . 44 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 13. As the Legislature considers creating a public 1 Dependent program for shared gang database oversight and on enactment accountability, Justice should guide the board of legislation and the committee to identify and address the which would grant Justice shortcomings that exist in CalGang’s current the authority operations and oversight. The guidance Justice to execute and provides to the board and the committee should enforce the address, but not be limited to, instructing all user recommendations. agencies to report to Justice every six months, beginning in January 2017, on their progress toward completing their gang and gang member reviews. 14. As the Legislature considers creating a public 1 TBD program for shared gang database oversight and accountability, Justice should guide the board and the committee to identify and address the shortcomings that exist in CalGang’s current operations and oversight. The guidance Justice provides to the board and the committee should address, but not be limited to, developing standardized periodic training content for all CalGang users and training instructors. Justice should guide the board and the committee to develop such standardized training content by June 30, 2017. 15. As the Legislature considers creating a public 1 October 2017 program for shared gang database oversight and accountability, Justice should guide the board and the committee to identify and address the shortcomings that exist in CalGang’s current operations and oversight. The guidance Justice provides to the board and the committee should address, but not be limited to, establishing a plan to recertify all CalGang users and training instructors on the new training content. Justice should guide the board and the committee to complete the draft plan by June 30, 2017, and the recertification training by June 30, 2018. 16. As the Legislature considers creating a public 1 September 2017 program for shared gang database oversight and accountability, Justice should guide the board and the committee to identify and address the shortcomings that exist in CalGang’s current operations and oversight. The guidance Justice provides to the board and the committee should address, but not be limited to, developing policies and procedures requiring the disabling of user accounts for all individuals who no longer have a need to or right to access CalGang because they have separated from their employment with user agencies or for other reasons. Justice should guide the board and the committee to identify and disable all such accounts by September 30, 2016. California State Auditor Report 2017-041 45 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 18. To promote transparency and hold the board, 1 Unknown the committee, and user agencies accountable for implementing and adhering to criminal intelligence safeguards, Justice should post quarterly reports on its website, beginning June 30, 2017, that summarize how it has guided the board and the committee to implement and adhere to criminal intelligence safeguards; the progress the board, the committee, and the user agencies have made in implementing and adhering to these safeguards; the steps these entities still must take to implement these safeguards; and any barriers to the board’s and the committee’s success in achieving these goals. 19. To promote transparency and encourage public 1 Unknown participation in CalGang’s meetings, Justice should post summary results from the committee’s audits of CalGang records to its website unless doing so would compromise criminal intelligence information or other information that must be shielded from public release. California Department of Tax and Fee Administrationll State Board of Equalization 4. To ensure that it can accurately estimate any shifts 3 June 2020 Building: Despite Ongoing in worker productivity and state revenue, BOE Health and Safety should strengthen its current methodology by Concerns, the State Has analyzing the productivity and revenue collection Not Thoroughly Analyzed of its employees and by monitoring those metrics the Costs and Benefits of at least semiannually. Additionally, BOE should Relocating Employees support its methodology with documentation. 2014‑108 (September 2014)* State Board of Equalization: 2. Unless the Legislature directs the board to 1 July 2019 Its Tobacco Tax Enforcement eliminate the compliance fund’s excess fund Efforts Are Effective and balance within a time frame of more than a Properly Funded, but Other year, the board should eliminate the excess fund Funding Options and Cost balance by June 30, 2017 by using it to offset the Savings Are Possible licensing program’s annual funding shortfall. The 2015‑119 (February 2016)* board should also limit the fund’s future balance to no more than two months’ worth of licensing program expenditures. California Governor’s Office of Emergency Services# California’s Mutual Aid 1. To make certain that emergency response 5 December 2018 System: The California agencies receive reimbursements on time, Cal Emergency Management EMA should establish procedures to ensure that Agency Should Administer paying entities do not delay reimbursements. the Reimbursement Process More Effectively 2011‑103 (January 2012)* Special Interest License Plate 11. To make certain that money from the special 4 Will Not E Funds: The State Has Foregone plate funds pay only for allowable and Implement Certain Revenues Related to supportable activities, Cal EMA should maintain Special Interest License Plates documentation to support its charges to the and Some Expenditures Were antiterrorism fund. For example, it should Unallowable or Unsupported ensure that employees submit signed time 2012‑110 (April 2013) reports to support the time they spend on antiterrorism‑related activities. continued on next page . . . 46 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION California Health Facilities Financing Authority Children’s Hospital Program: 1. The authority should amend its regulations to 2 Will Not The California Health Facilities bring them into accord with the 2004 act, thus Implement Financing Authority Has allowing any eligible hospital to apply for the 2004 Generally Complied With Laws act’s funds that remained as of June 30, 2014. and Regulations and Resolved Its Issue Related to High Fund Balances 2015‑042 (September 2015) Judicial Council of California** Judicial Branch of California: 1. To ensure that the compensation the AOC 2 Will Not Because of Questionable provides is reasonable, the Judicial Council Implement Fiscal and Operational should adopt procedures that require a regular Decisions, the Judicial Council and thorough review of the AOC’s compensation and the Administrative practices including an analysis of the job duties Office of the Courts Have of each position to ensure that the compensation Not Maximized the Funds Available for the Courts aligns with the requirements of the position. This review should include comparable executive 2014‑107 (January 2015)* branch salaries, along with a justification when an AOC position is compensated at a higher level than a comparable executive branch position. 3. To ensure that its compensation structure is 2 Will Not reasonable, the AOC should mirror the executive Implement branch’s practices for offering leave buyback programs in terms of frequency and amount. 4. To increase its efficiency and decrease its travel 2 Will Not expenses, the AOC should require its directors and Implement managers to work in the same locations as the majority of their staff unless business needs clearly require the staff to work in different locations than their managers. 11. To reduce its expenses, the AOC should cease 2 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 2 Mid 2018 AOC should develop and implement controls to govern 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 2 †  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 2 Unknown should 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 State Auditor Report 2017-041 47 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 21. To ensure that it provides services to the trial 2 Unknown courts 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, 2 Unknown the Judicial Council should implement some or all of the best practices we identified to improve the transparency of AOC spending activities. Judicial Branch Procurement: 2. The Judicial Council should develop a corrective 1 January 2018 Although the Judicial Council action plan by February 29, 2016 to address the Needs to Strengthen Controls recommendation from our December 2013 audit Over Its Information Systems, report related to the controls over its information Its Procurement Practices systems. The corrective action plan should Generally Comply With include prioritizing the tasks, resources, primary Applicable Requirements and alternative funding sources, and milestones 2015‑302 (December 2015) for all of the actions required to fully implement its framework of information system controls by June 2016. Further, the Judicial Council should continue to provide guidance and routinely follow up with the superior courts to assist with their effort to make the necessary improvements to their information system controls. Judicial Branch Procurement: 3. To improve the usefulness of the Judicial Council’s 3 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 do Systems Have Weak Controls, the following: and Certain Improvements in Procurement Practices Include new contracts and the complete history of Are Needed contracts amended during the reporting period in 2013‑302 and 2013‑303 the semiannual reports, including the date of the (December 2013)* 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 3 semiannual reports until a statutory requirement 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. continued on next page . . . 48 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 5. The AOC should implement all of the best 3 Unknown practices 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, 3 Will Not and fourth districts should implement procedures Implement to ensure that they follow a competitive process for their procurements when required. 13. The AOC should revise the judicial contracting 3 Will Not manual to require judicial entities to maintain Implement documentation on their determinations of fair and reasonable pricing for purchases under $5,000. 17. The AOC should revise the judicial contracting 3 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 3 Will Not fifth districts should implement procedures to Implement ensure 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 3 Will Not that its internal controls over payments are Implement followed and that procurements are approved before ordering and receiving goods and services. California State Auditor Report 2017-041 49 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION Secretary of State’s Office Office of the Secretary of 4. To enhance the value of the HAVA spending plan 4 State: It Must Do More to as a transparency and accountability tool for the 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 4 Will Not Office should take all necessary steps, including Implement seeking any 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 7. To ensure that the audit and review unit’s 2 June 2018 State Bar of California: It Has Not Consistently Protected the random audits of closed case files provide an Public Through Its Attorney effective oversight mechanism, the State Bar Discipline Process and should follow its policy to conduct and record Lacks Accountability meetings and trainings related to the audit 2015‑030 (June 2015) report’s recommendations. The State Bar of California: 1. To reduce the length of time that victims of 1 March 2018 Its Lack of Transparency dishonest lawyers must wait for reimbursement Has Undermined Its from the Client Security Fund, the State Bar should Communications continue to explore fund transfers, member fee With Decision Makers increases, and operating efficiencies that would and Stakeholders increase resources available for payouts. 2015‑047 (May 2016) 2. To ensure that it maximizes its cost‑recovery 1 February 2017 efforts related to the Client Security Fund, the State Bar should adopt a policy to file for money judgments against disciplined attorneys for all eligible amounts as soon as possible after courts settle the discipline cases. 3. To ensure that it maximizes its cost‑recovery 1 End of 2017 efforts related to the Client Security Fund, the State Bar should adopt a policy to evaluate annually the effectiveness of the various collection methods it uses to recover funds from disciplined attorneys. 9. To ensure that it accounts appropriately for 1 February 2018 information technology project costs and their related funding sources, the State Bar should develop a reasonable method for allocating information technology project costs. 10. To ensure that it accounts appropriately for 1 February 2018 information technology project costs and their related funding sources, the State Bar should apply its new cost‑allocation method to the costs of its Technology Improvement Fund. continued on next page . . . 50 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION 17. To ensure that it retains appropriate supervision 1 March 2018 and control over the State Bar’s financial affairs, the board should establish a policy that includes a description of the parameters for the creation of nonprofit organizations limiting such organizations to the purposes consistent with the law and the State Bar’s mission. 18. To ensure that it retains appropriate supervision 1 March 2018 and control over the State Bar’s financial affairs, the board should establish a policy that includes a description of the board’s oversight role in relation to the State Bar’s nonprofit organizations. 19. To ensure that it retains appropriate supervision 1 March 2018 and control over the State Bar’s financial affairs, the board should establish a policy that includes requirements to make sure that the board reviews and approves all documents the State Bar uses in the creation and use of a nonprofit organization, including original and amended bylaws as well as agreements between the State Bar and the organization. 20. To ensure that it retains appropriate supervision 1 March 2018 and control over the State Bar’s financial affairs, the board should establish a policy that includes requirements ensuring that the board reviews, approves, and monitors regularly the budgets and other financial reports of any nonprofit organizations. 21. To ensure that it retains appropriate supervision 1 March 2018 and control over the State Bar’s financial affairs, the board should establish a policy that includes requirements that the State Bar develop policies and procedures to prevent the mingling of its funds and any nonprofit organization’s funds. State Controller’s Office High Risk Update: State 4. To improve the accuracy of information in the 3 Summer 2018 G Agencies Credited Their leave accounting system and to ensure that Employees With Millions agencies do not improperly credit employees of Dollars Worth of with leave in the future, the state controller Unearned Leave should implement additional controls by June 2012‑603 (August 2014) 2015 to prevent the leave accounting 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. California State Auditor Report 2017-041 51 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION NATURAL RESOURCES California Natural Resources Agency Salton Sea Restoration Fund: 7. To ensure that the Legislature has the information 3 †  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 Costs Are Uncertain should work with Fish and Wildlife and Water 2013‑101 (November 2013) Resources 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 3 †  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. Special Interest License Plate 15. To make certain that money from the special plate 4 Will Not E Funds: The State Has Foregone funds pay only for allowable and supportable Implement Certain Revenues Related to activities, Resources should use all appropriate Special Interest License Plates funding sources to pay for any expenses that and Some Expenditures Were benefit multiple programs in proportion to Unallowable or Unsupported the benefits these programs actually receive. 2012‑110 (April 2013) Further, it should ensure that its allocation of such expenses to different funds is equitable and supported. Department of Parks and Recreation 8. To prevent unauthorized leave buyback 4 January 2018 Department of Parks and transactions, the department should provide Recreation: Flaws in Its Budget Allocation Processes Hinder Its training by December 2013 to all department Ability to Effectively Manage managers and personnel staff who might be the Park System involved in leave buyback transactions to ensure 2012‑121.2 that they understand the State’s requirements (September 2013)* regarding leave buybacks. TRANSPORTATION California High‑Speed Rail Authority High‑Speed Rail Authority 3. To avert possible legal challenges, the Authority 5 Will Not Follow‑Up: Although the should ensure that the independent peer review Implement Authority Addressed Some panel adheres to the Bagley‑Keene Open Meeting of Our Prior Concerns, Its Act or seek a formal opinion from the Office of Funding Situation Has the Attorney General (attorney general) regarding Become Increasingly Risky whether the panel is subject to this act. and the Authority’s Weak Oversight Persists 2011‑504 (January 2012) continued on next page . . . 52 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER, HAS APPEARED IN ESTIMATED DATE CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT OF COMPLETION IMPLEMENTATION RECOMMENDATION Department of Motor Vehicles Special Interest License Plate 1. To ensure that programs supported by special 4 Will Not E Funds: The State Has Foregone plates receive appropriate amounts of revenues Implement Certain Revenues Related to due to them, Motor Vehicles should annually Special Interest License Plates collect all fees for special plates that are no longer and Some Expenditures Were on a vehicle but are retained by the plate owner. Unallowable or Unsupported 2012‑110 (April 2013) 3. Motor Vehicles should assess the extent to which 4 †  it has charged fees for special plates that are not consistent with those prescribed in statutes and take appropriate action. * 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 I2012‑1 were provided to the involved departments and agencies in October 2012. 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 I2014‑1 were provided to the involved departments and agencies in November 2014. The investigative reports for the cases published in I2015‑1 were provided to the involved departments and agencies in July 2015. The investigative reports for the cases published in I2016‑1 were provided to the Department of Developmental Services in November 2015, while reports pertaining to the Department of State Hospitals and Department of Water Resources were provided in December 2015. Lastly, investigative reports for the cases published in I2016‑2 were provided to the involved departments and agencies in June 2016. § As of July 2012, the California Department of Mental Health became the Department of State Hospitals. ll In July 2017, the State Board of Equalization was restructured and transferred duties to the California Department of Tax and Fee Administration. # As of July 2013, the California Emergency Management Agency became the California Governor’s Office of Emergency Services. ** In July 2014, the Judicial Council of California retired the use of Administrative Office of the Courts to refer to the Judicial Council’s staff. California State Auditor Report 2017-041 53 January 2018 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 2010 Through October 2016) NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT BUSINESS, CONSUMER SERVICES, HOUSING Board of Registered Nursing California Department of Consumer 30. To ensure that BRN has adequate data to effectively use its resources and Fully 2 J Affairs’ BreEZe System: Inadequate manage its workload, it should formally track and monitor the timeliness of its Implemented Planning and Oversight Led to processing of applications by type and the cause of any delays. Implementation at Far Fewer Regulatory Entities at a Significantly 32. To ensure that BRN has adequate data to effectively use its resources Fully 2 Higher Cost and manage its workload, it should conduct an analysis no later than Implemented 2014‑116 (February 2015) 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 within regulatory Fully 2 time frames, it should continue its efforts to refine its business processes to Implemented increase efficiency and reduce the amount of time applications are pending its review. Bureau for Private Postsecondary Education Bureau for Private Postsecondary 10. To comply with state law and to ensure that it effectively manages its Fully 3 Education: It Has Consistently Failed to inspections of institutions, the bureau should prioritize its announced and Implemented Meet Its Responsibility to Protect the unannounced inspections to focus on those institutions that have a higher Public’s Interests risk of noncompliance. 2013‑045 (March 2014) CORRECTIONS AND REHABILITATION California Department of Corrections and Rehabilitation Investigations of Improper Activities by 11. To recoup the payment and leave accumulations to which its employees were Fully 2 State Agencies and Employees not entitled, Corrections and Correctional Health Care should reduce the Implemented 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 which its employees were Fully 2 not entitled, Corrections and Correctional Health Care should work with the Implemented 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. ENVIRONMENTAL PROTECTION State Water Resources Control Board State Water Resources Control Board: 6. When regional water boards include staff enforcement costs in the penalty Fully 4 It Should Ensure a More Consistent actions they issue, the state water board should require that they use a Implemented Administration of the Water Quality systematic method for tracking the hours staff spend on enforcement Certification Program activities related to penalty actions and maintain documentary support for 2012‑120 (June 2013)* these staff enforcement cost calculations. 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 Fully 4 Affairs: It Has Initiated Plans to homes and better cover the costs of providing care to its members, CalVet Implemented Serve Veterans Better and More should analyze its cost‑recovery model, including an evaluation of the state Cost‑Efficiently, but Further laws that limit the amount of revenue that CalVet can collect for the care it Improvements Are Needed provides to its members at the veterans homes. 2012‑119 (May 2013)* continued on next page . . . 54 California State Auditor Report 2017-041 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Follow‑Up—California Department 1. CalVet should fully implement the recommendations from our 2009 report. Fully 2 of Veterans Affairs: Better Collection Implemented and Use of Data Would Improve Its Outreach Efforts, and It Needs to 2. Veterans Services should develop and implement a plan by Fully 2 Strengthen Its Oversight of County December 31, 2015, to routinely analyze and use myCalVet data to Implemented Veterans Service Officer Programs identify trends in the services veterans and their families indicate they are 2015‑505 (July 2015) most interested in and incorporate the results of such analyses into its outreach efforts. California Public Utilities Commission California Public Utilities Commission: 15. The commission should develop, disseminate, and maintain an incident Fully 2 It Needs to Improve the Quality of Its response plan. Implemented Consumer Complaint Data and the Controls Over Its Information Systems 2014‑120 (April 2015)* California’s Alternative Energy and 1. To make certain that the research program contributes to the goals of the Fully 2 K Efficiency Initiatives: Two Programs solar initiative, the commission should conduct a program evaluation before Implemented Are Meeting Some Goals, but Several the remaining grant projects are completed. Improvements Are Needed 2014‑124 (February 2015)* GOVERNMENT OPERATIONS California Department of Human Resources High Risk Update: State Agencies 9. To ensure that state agencies accurately account for their employees’ leave Fully 3 G Credited Their Employees With Millions benefits, CalHR should establish general parameters and issue guidance to Implemented of Dollars Worth of Unearned Leave state agencies by January 2015 on how to account for the leave hours for 2012‑603 (August 2014)* employees who work alternate work week schedules. California Department of Technology California Department of Consumer 11. To ensure that IT projects have the oversight needed to better position them Fully 2 J Affairs’ BreEZe System: Inadequate for success, CalTech should require state departments to follow its IT policies, Implemented Planning and Oversight Led to including developing all necessary plans and receiving all required training. Implementation at Far Fewer Regulatory Entities at a Significantly 12. To ensure that IT projects have the oversight needed to better position Fully 2 Higher Cost them for success, CalTech should ensure that departments obtain IPO Implemented 2014‑116 (February 2015)* and IV&V services as soon as an IT project is approved. Additionally, CalTech 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 needed to better position Fully 2 them for success, CalTech should require state departments to appropriately Implemented address deficiencies identified in CalTech’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, CalTech 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. High Risk Update—California 1. By December 2015 CalTech should develop and adopt criteria to guide Fully 2 Department of Technology: Lack of the type and degree of intervention it will take to prevent IT projects with Implemented Guidance, Potentially Conflicting significant problems from continuing without correction, including when and Roles, and Staffing Issues Continue to how IPO analysts should recommend corrective action and escalate issues to Make Oversight of State Information CalTech’s management. Technology Projects High Risk 2014‑602 (March 2015)* 2. By December 2015 CalTech should develop and adopt criteria to guide Fully 2 the type and degree of intervention it will take to prevent IT projects with Implemented significant problems from continuing without correction, including when and what CalTech should require that sponsoring agencies perform as remedial actions, and what sanctions CalTech will impose for noncompliance with these remedial actions. California State Auditor Report 2017-041 55 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT 3. By December 2015 CalTech should develop and adopt criteria to guide Fully 2 the type and degree of intervention it will take to prevent IT projects with Implemented significant problems from continuing without correction, including what conditions could trigger CalTech to consider suspending or terminating an IT project. 4. To clarify and reinforce its oversight authority with sponsoring agencies, by Fully 2 December 2015 CalTech should develop a method to formally document and Implemented communicate its expectations with the sponsoring agencies whose projects are under CalTech’s oversight. High Risk Update—Information 11. To improve the clarity of the security standards, the technology department Fully 2 Security: Many State Entities’ should develop and regularly provide detailed training on the requirements Implemented Information Assets Are Potentially of the security standards and on best practices for achieving compliance. Vulnerable to Attack or Disruption It should provide these trainings in a variety of locations and formats, 2015‑611 (August 2015)* including webinars. Department of General Services California Department of 37. To ensure that the construction unit complies with the State’s procurement Fully 5 C Transportation: Its Poor Management laws and policies, General Services should continue its efforts to Implemented of State Route 710 Extension Project implement regulations that govern the small business certification Properties Costs the State Millions process related to defining and enforcing violations of commercially useful of Dollars Annually, Yet State Law function requirements. Limits the Potential Income From Selling the Properties 2011‑120 (August 2012) Franchise Tax Board California State Government Websites: 9. No later than December 1, 2015, Franchise Tax Board should develop a plan Fully 2 Departments Must Improve Website to determine whether the accessibility violations we identified exist on other Implemented Accessibility So That Persons With portions of its online presence that we did not include in the scope of our Disabilities Have Comparable Access to review. Once this plan is executed, it should correct violations wherever it State Services Online finds them and do so no later than June 1, 2016. 2014‑131 (June 2015) HEALTH AND HUMAN SERVICES California Department of Public Health Follow‑Up—California Department 2. To ensure it can provide effective oversight of labs as state law requires, Fully 2 of Public Health: Laboratory Field Laboratory Services should inspect all in‑state and out‑of‑state labs it has Implemented Services Is Unable to Oversee Clinical licensed every two years. Laboratories Effectively, but a Feasible Alternative Exists 6. To ensure it can provide effective oversight of labs as state law requires, Fully 2 2015‑507 (September 2015) Laboratory Services should work with Public Health’s budget section and Implemented 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. California Department of Social Services Follow‑Up—California Department 11. To ensure that counties are consistently following up on all match lists, Social Fully 2 of Social Services: It Has Not Corrected Services should remind counties of their responsibility under state regulations Implemented Previously Recognized Deficiencies in to follow up diligently on all match lists. Further, it should work with counties Its Oversight of Counties' Antifraud to determine why poor follow‑up exists and address those reasons. Efforts for the CalWORKs and CalFresh Programs 2015‑503 (June 2015)* California Department of Developmental Services California Department of 8. Developmental Services should review and update its process for collecting Fully 2 Developmental Services: Its Process on delinquent accounts. This update should include a revision to the policies Implemented for Assessing Fees Paid by Parents of and procedures manual, training for field agents, and regular management Children Living in Residential Facilities review to ensure consistent adherence to the policy. As part of the update, Is Woefully Inefficient and Inconsistent Developmental Services should clarify when to designate an account 2014‑118 (January 2015)* as uncollectible. continued on next page . . . 56 California State Auditor Report 2017-041 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Department of Health Care Services Investigations of Improper Activities by 21. Developmental Services should immediately conduct an audit of the leave Resolved 1 N State Agencies and Employees: Misuse accounting system from July 2015 through December 2015 to identify of State Resources, Forgery, False instances in which Porterville charged exempt represented employees Time Reporting, Financial Interests working alternative schedules the incorrect number of leave hours for missed Disclosure Violations, and Waste of days of work. State Funds I2016‑1 (February 2016)‡ 22. Developmental Services should adjust current employees’ leave balances Resolved 1 in the leave accounting system to correct any leave not properly charged as identified by this report and by the audit it conducts. 23. By March 1, 2016, Developmental Services should take steps to work with unit Fully 1 19 to change Developmental Services’ current practice and require exempt Implemented represented employees to charge leave in accordance with the number of hours they are regularly scheduled to work. 24. Revise its established timekeeping audit procedures to ensure that exempt Fully 1 represented employees correctly charge leave according to the number of Implemented hours they are regularly scheduled to work. 25. Developmental Services should train its personnel staff at headquarters Fully 1 and all developmental centers regarding the new policy and Implemented accompanying procedures. California Department of Health 18. To better maximize federal reimbursements for the administrative Fully 2 Care Services: It Should Improve Its activities program, Health Care Services should, within six months, Implemented Administration and Oversight of revise reimbursement rates to authorize claiming units to claim the 75 percent School‑Based Medi‑Cal Programs reimbursement rate for translation activities as federal law allows. 2014‑130 (August 2015)* 20. Should the Legislature implement our recommendation in Chapter 2 to allow Fully 2 claiming units to submit reimbursement claims directly to it, Health Care Implemented 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. 23. To ensure that it provides stakeholders with timely access to information Fully 2 regarding the billing option program, Health Care Services should issue the Implemented required annual report covering April 2013 to May 2015 by December 2015 as promised. California Department of Health 1. To ensure that the providers receive reimbursement for only valid services, Fully 3 Care Services: Its Failure to Properly Health Care Services should immediately coordinate with the appropriate Implemented Administer the Drug Medi‑Cal counties to recover inappropriate payments to ineligible providers and for Treatment Program Created services purportedly rendered to deceased beneficiaries. Opportunities for Fraud 2013‑119 (August 2014)* 10. To ensure that the providers receive reimbursement for only valid services, Fully 3 Health Care Services should immediately ensure that Los Angeles County Implemented 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. 33. To improve the coordination between its divisions, branches, and units Fully 3 and ensure that it addresses allegations of fraud in a timely manner, Implemented 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 of Health Care 9. To make certain that access to dental services for child beneficiaries is Resolved 2 Services: Weaknesses in Its Medi‑Cal comparable to the access available to the general population in the same Dental Program Limit Children’s Access geographic areas, Health Care Services should immediately adhere to its to Dental Care monitoring plan. 2013‑125 (December 2014) 10. To make certain that access to dental services for child beneficiaries is Resolved 2 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. California State Auditor Report 2017-041 57 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Department of State Hospitals‡ California Department of State 14. State Hospitals should explore options for tracking the time evaluators Fully 2 Hospitals: It Could Increase the spend on each evaluation activity to increase the accuracy of the workload Implemented Consistency of Its Evaluations of equivalencies it includes in its workload matrix and should implement such Sex Offenders by Improving Its options by September 2015. Assessment Protocol and Training 2014‑125 (March 2015)* Mental Health Services Oversight and Accountability Commission Mental Health Services Act: The State’s 11. To fulfill its charge to evaluate MHSA programs, the Accountability Fully 4 F Oversight Has Provided Little Assurance Commission should undertake the evaluations specified in its Implemented of the Act’s Effectiveness, and Some implementation plan. Counties Can Improve Measurement of Their Program Performance 2012‑122 (August 2013) HIGHER EDUCATION University of California Sexual Harassment and Sexual 5. The Office of the President should direct all of the universities within the UC Fully 3 Violence: California Universities Must system to comply with the recommendations in this audit report. Also, to Implemented Better Protect Students by Doing ensure that its universities are complying with Title IX requirements, the Office More to Prevent, Respond to, and of the President should conduct routine Title IX reviews. When conducting Resolve Incidents these compliance reviews, the Office of the President should determine 2013‑124 (June 2014)* whether universities have implemented this report’s recommendations. The University of California: Its 20. To increase its transparency and help ensure that it can justify its spending Fully 1 Admissions and Financial Decisions decisions, the university should make publicly available the amounts of state Implemented Have Disadvantaged California funding it allocates toward per‑student funding, as well as the amounts it Resident Students or campuses spend for programs that are not directly related to educating 2015‑107 (March 2016)* students. The university should publicly present the ranges of per‑student funding based upon the amount of funding excluded from the formula. 21. To ensure that its rebenching efforts lead to equalized per‑student funding Fully 1 among the campuses, the university should include actual enrollment Implemented numbers in its rebenching formula. 24. To ensure that its rebenching efforts lead to equalized per‑student funding Fully 1 among the campuses, the university should include stakeholders such as Implemented students, legislative and executive branch staff, and student groups in future discussions of rebenching to ensure that it considers their viewpoints and to increase transparency regarding its funding decisions. University of California: Although 1. To address the variations in per student funding of its campuses, the Fully 6 the University Maintains Extensive university should complete its reexamination of the base budgets to Implemented Financial Records, It Should Provide the campuses and implement appropriate changes to its budget process. Additional Information to Improve As part of its reexamination of the base budget, it should: Public Understanding of Its Operations • Identify the amount of general funds and tuition budget revenues 2010‑105 (July 2011) 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. continued on next page . . . 58 California State Auditor Report 2017-041 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT University of California, Davis University of California, Davis: It Has 6. UC Davis should develop a risk‑based audit plan to begin periodically Fully 2 Not Identified Future Financing for reviewing the financial records of master licensees and licensed nurseries Implemented the Strawberry Breeding Program nor to ensure that they are accurately reporting all of their sales of licensed Collected All Available Revenues strawberry varieties and paying the university all the royalties it is entitled 2014‑121 (June 2015)* 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. K THRU 12 EDUCATION California Department of Education California Department of Education: 3. To improve its understanding of regional expenditures, Education should Fully 4 Despite Some Improvements, increase the level of detail required in its quarterly expenditure reports. The Implemented Oversight of the Migrant Education level of detail should allow Education to select expenditures for review. Program Remains Inadequate 2012‑044 (February 2013)* 4. For regions that have not recently received a federal monitoring review, Fully 4 Education should use the detailed expenditure reports to select a sample of Implemented expenditures, 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 Fully 4 verify that regions are using the appropriate accounting codes to classify Implemented their expenditures. 11. Once it has addressed the underlying issues with regional accounting, Fully 4 provided direction to regions about which expenditures it will consider Implemented administrative, and 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 Fully 4 respond as recommended in Appendix B of this report. Implemented 13. To determine if the statewide migrant education program is effective, Fully 4 Education should finalize its current evaluation of the program and begin Implemented developing the capacity to produce a more robust annual evaluation of the program. School Safety and Nondiscrimination 17. To provide stronger leadership with respect to school safety and Fully 4 T Laws: Most Local Educational Agencies nondiscrimination laws, Education, with direction from the superintendent of Implemented Do Not Evaluate the Effectiveness of public instruction, should prioritize the review of parent, student, guardian, or Their Programs, and the State Should interested party appeals to ensure that the EO office follows state regulations Exercise Stronger Leadership by processing appeals more promptly, notifying LEAs of when appeals 2012‑108 (August 2013)* are filed, and obtaining the investigation files and other documents when reviewing complaint appeals. Student Mental Health Services: 21. To ensure that LEAs provide mental health services as required, Education Resolved 1 U Some Students’ Services Were should, on an annual basis, identify LEAs with accumulated balances of Affected by a New State Law, and mental health funding and analyze whether the LEA has had a corresponding the State Needs to Analyze Student drop in mental health service levels. For all LEAs that Education determines Outcomes and Track Service Costs have both an accumulated balance and a corresponding drop in services, 2015‑112 (January 2016)* Education should follow up with the LEA to determine whether the LEA is meeting its obligations to provide mental health services to students as part of the special education program. LABOR AND WORKFORCE DEVELOPMENT California Workforce Investment Board Follow‑Up—Federal Workforce 3. To ensure that the state board assesses the merits of pursing federal Fully 2 M Investment Grants: The Employment funding for workforce investment programs in California, it should establish Implemented Development Department Established procedures by December 31, 2015, that include, at a minimum, the following: Procedures for Seeking Discretionary • The methods it will use to identify federal grant opportunities. Grants, but Needs to Strengthen Them 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. California State Auditor Report 2017-041 59 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT 4. To ensure that the State maximizes federal funding opportunities related Fully 2 to workforce investment, EDD and the state board should formalize their Implemented 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 5. To identify ways to better serve veterans in California, the department should Fully 4 Department: It Needs to Address Data assess the success or struggles of veterans within demographic categories Implemented Issues to Better Evaluate and Improve in finding employment, such as age, race, or educational attainment, by the Performance of Its Employment comparing veterans’ performance to that of nonveterans in the same Programs for Veterans demographic categories and across demographic categories and use this 2013‑102 (October 2013) 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 practices that may Fully 3 Department: It Should Improve Its be contributing to avoidable appeals filed by claimants and employers Implemented Efforts to Minimize Avoidable Appeals and thereby provide eligible claimants with unemployment benefits in a of Its Eligibility Determinations for timelier manner, EDD should do the following: Using the appeals board’s Unemployment Insurance Benefits data from fiscal year 2013–14, EDD should identify the legal isssues where 2014‑101 (August 2014) 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 practices that may be Fully 3 contributing to avoidable appeals filed by claimants and employers and Implemented 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. Employment Development 4. As part of an overall strategy to limit the number of calls it receives while Fully 6 Department: Its Unemployment still providing timely and effective customer service, the department should Implemented Program Has Struggled to Effectively use existing data and additional data from the new phone system to gain Serve California’s Unemployed in a better understanding of why people request to speak to an agent. Using the Face of Significant Workload and this information, the department should further develop strategies and Fiscal Challenges measurable goals related to achieving a reduction in call volumes. For 2010‑112 (March 2011) 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 provide services to Fully 6 claimants in ways that do not require them to speak to agents, such as Implemented 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 investment partners in the Resolved 5 Act: More Effective State Planning development and implementation of state‑specific performance measures, and Oversight Is Necessary to EDD should ensure that it works with the state board to develop procedures Better Help California’s Job Seekers for approving the addition of data elements to its Web‑based system and for Find Employment the exchange of data between EDD and the state board. 2011‑111 (March 2012) continued on next page . . . 60 California State Auditor Report 2017-041 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Follow‑Up—Federal Workforce 1. To ensure that its grant‑seeking process is effective in considering grant Fully 2 M Investment Grants: The Employment opportunities related to workforce investment, EDD should update its grant Implemented Development Department Established identification and analysis procedures by December 31, 2015, to include Procedures for Seeking Discretionary the following: Grants, but Needs to Strengthen Them • Identification of the appropriate level of management or staff to 2015‑508 (September 2015) analyze and document 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. 2. To ensure that the State maximizes federal funding opportunities related Fully 2 to workforce investment, EDD and the state board should formalize their Implemented collaborative grant‑seeking procedures by December 31, 2015, to clearly define their respective roles and responsibilities in the grant‑seeking process. LEGISLATIVE, JUDICIAL, AND EXECUTIVE California Department of Justice Armed Persons With Mental Illness: 24. To ensure that timely information is available for its efforts to identify armed Fully 4 Insufficient Outreach From the prohibited persons and confiscate their firearms, Justice should manage Implemented Department of Justice and Poor staff priorities to meet both its statutory deadline for firearms background Reporting From Superior Courts Limit checks and its internal deadline for initially reviewing potential prohibited the Identification of Armed Persons persons. Justice should report annually to the Legislature about the backlog With Mental Illness of unreviewed potential prohibited persons and what factors have prohibited 2013‑103 (October 2013)* it from efficiently reviewing these persons. California Department of Tax and Fee Administration§ State Board of Equalization Building: 2. To more clearly demonstrate its case for a new facility, BOE should Fully 3 Despite Ongoing Health and Safety continue its plans to conduct a study to identify inefficiencies in its current Implemented Concerns, the State Has Not Thoroughly spatial configuration and how its operations could improve with a new Analyzed the Costs and Benefits of consolidated facility. Relocating Employees 2014‑108 (September 2014) State Board of Equalization: Its Tobacco 5. To reduce the licensing program’s enforcement cost without compromising Resolved 1 Tax Enforcement Efforts Are Effective the level of increased compliance with the cigarette and tobacco products and Properly Funded, but Other tax law that the inspection program has produced, the board should reduce Funding Options and Cost Savings the number of annual inspections and reinspections of retailers, distributors, Are Possible and wholesalers that it conducts each year to reflect changes in the number 2015‑119 (February 2016) of licensees that sell cigarette and tobacco products in California. This adjustment should align with the same frequency of inspections that the board followed when it implemented the inspection program, which is 26 percent—or approximately one inspection every four years—of these licensed locations. California Governor’s Office of Emergency Servicesll California’s Mutual Aid System: The 7. If FEMA determines that the calculations and claims identified in the Office Resolved 5 California Emergency Management of Inspector General’s audit report were erroneous, Cal EMA should modify Agency Should Administer the time sheets to track the actual hours that the responding agency works the Reimbursement Process as well as the dates and times that the agency committed to the incident and More Effectively returned from the incident. 2011‑103 (January 2012)* 8. If FEMA determines that the calculations and claims identified in the Office of Resolved 5 Inspector General’s audit 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. California State Auditor Report 2017-041 61 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Judicial Council of California# Judicial Branch of California: Because 7. To reduce its expenses, the AOC should implement a policy that requires it to Fully 2 of Questionable Fiscal and Operational conduct a cost‑benefit analysis for using temporary workers, contractors, or Implemented 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 Fully 2 2014‑107 (January 2015)* limiting the period of time it can employ temporary workers, and develop a Implemented similar policy to limit the use of contractors to a reasonable period of time but no more than one year. 15. The Judicial Council should develop rules of court that create a separate Fully 2 advisory body, or amend the current advisory committee’s responsibilities Implemented 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. 18. To make the AOC’s budget more understandable, the Judicial Council Fully 2 should require the AOC to report its budget in a more understandable and Implemented transparent manner, and in a manner that readily allows stakeholders and the public to know the full amount of the AOC’s spending. Further, the Judicial Council should require the AOC to prepare and make public a high‑level summary of how the judicial branch’s budget relates to the appropriations from the State’s budget. Judicial Branch Procurement: 2. To improve the usefulness of the Judicial Council’s semiannual reports until Fully 3 Semiannual Reports to the Legislature a statutory requirement is enacted, the AOC should work with the Judicial Implemented Are of Limited Usefulness, Information Council to pursue a cost‑effective method to provide the semiannual Systems Have Weak Controls, and reports in an electronic format that can be read by common database and Certain Improvements in Procurement spreadsheet software products that allow users to readily sort and filter the Practices Are Needed data, beginning with the semiannual report covering the July 1, 2013 through 2013‑302 and 2013‑303 December 31, 2013, reporting period. (December 2013)* 12. The AOC should provide additional training to its staff and the Fully 3 judicial entities on how to conduct procurements in compliance with Implemented the judicial contracting manual. NATURAL RESOURCES California Science Center High Risk Update: State Agencies 12. By February 2015 the Science Center should provide training to all of its Fully 3 G Credited Their Employees With Millions personnel specialists on the number of leave hours employees earn for Implemented of Dollars Worth of Unearned Leave working on holidays. 2012‑603 (August 2014) California State Lands Commission State Lands Commission: Because 21. To ensure that it manages delinquent leases in an effective and timely Resolved 6 It Has Not Managed Public Lands manner and collects all the amounts owed to it, the commission should Effectively, the State Has Lost Millions develop and adhere to policies and procedures that incorporate the in Revenue for the General Fund administrative manual’s guidance, including the steps staff should take 2010‑125 (August 2011) 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 Recreation: 4. To ensure that it can comply with state law in the event that it must close Resolved 4 Flaws in Its Budget Allocation parks or reduce park services in the future, the department should improve its Processes Hinder Its Ability to methodology for developing individual park unit budgets and determining Effectively Manage the Park System and tracking park‑level costs. Specifically, the department should develop 2012‑121.2 (September 2013)* 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. continued on next page . . . 62 California State Auditor Report 2017-041 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT 6. To ensure that it can comply with state law in the event that it must close Fully 4 parks or reduce park services in the future, the department should improve its Implemented 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. 11. To prevent unauthorized leave buyback transactions, the department should Fully 4 limit access for keying transactions to the payroll system only to authorized Implemented personnel staff. 15. To improve the effectiveness of the EPRC, the department should establish Resolved 4 a process by March 2014 through which the director’s office provides formal direction to the EPRC regarding staffing priorities. Department of Water Resources Investigations of Improper Activities by 11. Water Resources should require the last official who approves an employee's Fully 1 N State Agencies and Employees: Misuse expense claim for job‑required and job‑related training to forward that claim Implemented of State Resources, Forgery, False to the training division, the division of fiscal services, or both, for a separate Time Reporting, Financial Interests review of the employee's training forms and supporting documents before Disclosure Violations, and Waste of Water Resources reimburses the employee. State Funds I2016‑1 (February 2016)‡ TRANSPORTATION California Department of Transportation California Department of 2. To better align the maintenance division’s allocations with districts’ Fully 1 Transportation: Its Maintenance maintenance needs, the Legislature should include language in the Implemented Division’s Allocations and Spending Budget Act that requires the maintenance division to develop and implement for Field Maintenance Do Not Match a budget model for field maintenance by June 30, 2017, that takes into Key Indicators of Need account key indicators of maintenance need, such as traffic volume, climate, 2015‑120 (March 2016) service scores, and any other factors the maintenance division deems necessary to ensure that the model adequately considers field maintenance need. Once the model is developed, Caltrans should use it to inform appropriate allocations to the districts. 3. Caltrans should revise the language in its future five‑year maintenance plans Fully 1 to accurately describe the method it uses to allocate field maintenance Implemented funding to its districts. 4. To ensure that it performs field maintenance work consistently on highways Fully 1 with similar needs, the maintenance division should assess whether districts Implemented are using funds in a manner commensurate with indicators of need included in its new budget model. 5. To ensure that it performs field maintenance work consistently on highways Fully 1 with similar needs, the maintenance division should implement the Implemented zone‑level evaluation of service scores contemplated in the earlier budget model that it abandoned. 6. To ensure that it performs field maintenance work consistently on highways Fully 1 with similar needs, the maintenance division should establish zone‑specific Implemented service score goals for all of the field maintenance activities it deems critical to ensuring a safe and usable state highway system and require districts to meet those goals for all the zones within their borders. 7. To ensure that it performs field maintenance work consistently on Fully 1 highways with similar needs, the maintenance division should implement Implemented the requirements for strategically planning field maintenance work that it previously included in its maintenance manual or develop similar requirements that it believes are feasible and ensure that supervisors plan and schedule field maintenance work based on service scores. Caltrans should require superintendents and regional managers to approve those plans. Caltrans should also require supervisors and superintendents to monitor progress toward improving service scores. California State Auditor Report 2017-041 63 January 2018 NUMBER OF YEARS RECOMMENDATIONS REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT California Department of 1. To ensure that it collects fair market rents for the SR 710 properties on the Fully 5 C Transportation: Its Poor Management State’s behalf, Caltrans should, using the fair market rent determinations for Implemented of State Route 710 Extension Project all SR 710 properties it recently prepared and excluding those in its affordable Properties Costs the State Millions rent program, adjust the tenants’ rents to fair market after providing them of Dollars Annually, Yet State Law with proper notice. Limits the Potential Income From Selling the Properties 2. To ensure that it collects fair market rents for the SR 710 properties on the Fully 5 2011‑120 (August 2012) State’s behalf, Caltrans should make only limited exceptions to charging fair Implemented market rent and document the specific public purpose that is served in any case that it does not charge fair market rent. 40. To pursue alternatives to its management of the SR 710 properties, Caltrans Fully 5 should prepare a cost‑benefit analysis to determine if the State would save Implemented money by hiring 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. Department of Motor Vehicles California’s Alternative Energy and 5. To ensure that the decal fee is sufficient to reimburse program costs, Fully 2 Efficiency Initiatives: Two Programs Motor Vehicles should periodically perform a full cost analysis of the decal Implemented Are Meeting Some Goals, but Several program and update the fee accordingly. Improvements Are Needed 2014‑124 (February 2015) * Other recommendations pertaining to this audit, which have not been fully implemented, can be found in Table 2. † 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 I2012‑1 were provided to the involved departments and agencies in October 2012. 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 I2014‑1 were provided to the involved departments and agencies in November 2014. The investigative reports for the cases published in I2015‑1 were provided to the involved departments and agencies in July 2015. The investigative reports for the cases published in I2016‑1 were provided to the Department of Developmental Services in November 2015, while reports pertaining to the Department of State Hospitals and Department of Water Resources were provided in December 2015. Lastly, investigative reports for the cases published in I2016‑2 were provided to the involved departments and agencies in June 2016. ‡ As of July 2012, the California Department of Mental Health became the Department of State Hospitals. § In July 2017, the State Board of Equalization was restructured and transferred duties to the California Department of Tax and Fee Administration. ll As of July 2013, the California Emergency Management Agency became the California Governor’s Office of Emergency Services. # In July 2014, the Judicial Council of California retired the use of Administrative Office of the Courts to refer to the Judicial Council’s staff. 64 California State Auditor Report 2017-041 January 2018 Blank page inserted for reproduction purposes only. California State Auditor Report 2017-041 65 January 2018 Table 4 Recommendations Made to Nonstate Entities That Are More Than One Year Old and Are Still Not Fully Implemented Reports Issued From January 2012 Through October 2016) STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION NONSTATE ENTITIES Butte County Indian Gaming Special 7. To ensure that grant recipients comply 3 †  O Distribution Fund: Counties’ with state law concerning interest Benefit Committees Did earned on mitigation grant funds, by Not Always Comply With June 2014, the Butte County benefit State Laws for Distribution committee should establish policies Fund Grants and procedures to verify that grant 2013‑036 (March 2014) recipients have placed 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. California Statewide Communities Development Authority Conduit Bond Issuers: Issuers 2. To be better informed about the 5 Will Not Complied With Key Bond compensation of their consultants, Implement Requirements, but Two including any potential conflicts of Joint Powers Authorities’ interest, California Communities and Compensation Models Raise Municipal Finance should require Conflict‑of‑Interest Concerns the consulting firms that staff their 2011‑118 and 2011‑613 organizations to disclose the amount (August 2012) and structure of compensation provided to individual consultants, including disclosing whether any of this compensation is tied to the volume of bond sales. Central Basin Municipal Water District Central Basin Municipal 23. To ensure it is efficiently using its 1 TBD Water District: Its Board resources, the district should eliminate of Directors Has Failed to its board members’ automobile or Provide the Leadership transportation allowances and instead Necessary for It to Effectively reimburse them based on their Fulfill Its Responsibilities business mileage or transit use. 2015‑102 (December 2015) City of Indio City of Indio: Although the 1. The city of Indio should shift a share of 2 2024 City Complied With the the water facilities cost borne by Area 1 Mello‑Roos Act in Forming to Area 2 residents in proportion to the and Managing Community benefits Area 2 residents receive from Facilities District No. 2004‑3, the facilities. To do so, it should impose It Should Do More to through its Indio Water Authority a Address Inequities water fee on Area 2 residents and use 2014‑119 (December 2014) the related revenues to reduce the bond debt of Area 1. City of Irvine City of Irvine: Poor 2. To improve fiscal accountability and to 1 Will Not Governance of the ensure that audits are performed Implement $1.7 Million Review of the to appropriate standards, Irvine should Orange County Great Park adopt an internal audit function by Needlessly Compromised the December 2017. Review’s Credibility 2015‑116 (August 2016) continued on next page . . . 66 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 6. To make certain that Irvine complies 1 Will Not with the intent of competitive bidding Implement for professional services, beginning immediately it should not include provisions in its RFPs for potential future services that are above and beyond the desired scope of work. 9. To maintain appropriate, transparent 1 Will Not fiscal accountability, Irvine should Implement amend city contracting and purchasing policies by December 2016 to make certain that all of its contracts and contract amendments with a proposed cost exceeding the threshold requiring city council or other approval receive the appropriate approvals, including approval for sole‑source contracts. Further, city policies should require appropriate approvals when increases in spending authority are accomplished through a purchase order or other means. 10. To provide the public with adequate 1 Will Not information regarding the city council’s Implement spending decisions, Irvine’s city council should, by December 2016, include in its policies a requirement that motions by the council to appropriate revenue to fund a specific contract should name the recipients and proposed use of the funds. 11. To foster public confidence in its 1 Will Not processes and findings, Irvine should Implement conduct self‑initiated investigations, reviews, or audits in an open and transparent manner that ensures independence. Specifically, Irvine should not establish advisory bodies exempt from open meeting laws to oversee these investigations, reviews, or audits. Instead, any required reports from contractors conducting such investigations, reviews, or audits should go to the city council or a standing committee of the city council to be discussed in either open or closed session, as appropriate. City of Novato Residential Building Records: 2. To ensure that it is aware of the degree 1 Will Not S The Cities of San Rafael, of property owners’ compliance with Implement Novato, and Pasadena its resale record ordinance, Novato Need to Strengthen the should implement procedures that can Implementation of Their help it monitor the sale or exchange Resale Record Programs of properties that require resale record 2015‑134 (March 2016) inspections. The city should work with applicable stakeholders, such as realtors, to aid in this effort. 5. To verify that new property owners are 1 Will Not aware of the health and safety concerns Implement at their properties and any corrections they need to make, Novato should develop a process to ensure that it receives homeowners’ cards. California State Auditor Report 2017-041 67 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 34. To ensure that the resale record fees 1 Will Not it charges is appropriate, Novato Implement should establish a time frame to periodically determine whether the fees are commensurate with the cost of administering the resale record program. The city should ensure that it retains any documentation used to support its analyses and any subsequent adjustments to fees. City of Pasadena Residential Building Records: 3. To ensure that it is aware of the degree 1 January 2018 S The Cities of San Rafael, of property owners’ compliance with Novato, and Pasadena its resale record ordinance, Pasadena Need to Strengthen the should implement procedures that can Implementation of Their help it monitor the sale or exchange Resale Record Programs of properties that require resale record 2015‑134 (March 2016) inspections. The city should work with applicable stakeholders, such as realtors, to aid in this effort. 6. To verify that new property owners are 1 January 2018 aware of the health and safety concerns at their properties and any corrections they need to make, Pasadena should develop a process to ensure that staff sign the inspection certificates and add them to the city’s database. 9. To ensure that it can monitor the 1 January 2018 satisfaction individuals have with the resale record program and that it has a uniform approach for resolving complaints, Pasadena should develop a formal process for tracking the complaints it receives. In addition, Pasadena should develop a formal policy that describes how staff should evaluate complaints, and it should document its activities associated with resolving complaints, such as the resolution and the rationale for the resolution. The city should also establish a designated location in its database to record this information. 12. Pasadena should develop formal 1 January 2018 written procedures for staff to follow up on property owners’ correction of violations. These procedures should identify the method in which staff document in the database the violations identified during inspections and their actions to bring the property into compliance. In addition, the procedures should identify where within the database these documents should be kept as well as identify the protocol for ensuring that repeat violations are corrected in a timely manner. continued on next page . . . 68 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 16. To ensure that property owners 1 January 2018 correct violations in a timely manner, Pasadena should develop a work plan by July 2016 to identify and address its enforcement backlog by April 2017, so that the city is up to date with its enforcement actions, such as issuing notice letters and monitoring property owners’ actions to resolve violations. Pasadena’s work plan should also include updating the completion status of the violations so unresolved violations can be identified and monitored for subsequent correction. 19. To ensure that property owners 1 January 2018 correct violations in a timely manner, Pasadena should follow through with its enforcement policies, such as issuing notice letters. 22. To ensure that property owners correct 1 January 2018 violations in a timely manner, Pasadena should establish a written process for staff to monitor and ensure that property owners correct violations, including accurately identifying the properties that have not obtained necessary permits or have not had required reinspections performed. 25. To ensure that it conducts its resale 1 January 2018 record inspections and completes the reports in a timely manner, Pasadena should establish a process to monitor its ability to meet its established time goals from application date to report issuance, such as developing a reminder report or using an automated feature of its database. Pasadena should also document the date the report is issued on the resale record report and in its database. 27. To ensure that it conducts its resale 1 January 2018 record inspections and completes the reports in a timely manner, Pasadena should review its time goals by July 2016 for the resale record program and modify them if necessary, factoring in property owners’ expectations and staff resources to complete the resale record reports. If applicable, Pasadena should update its policies and procedures to reflect the revised time goals. 30. To ensure that it conducts its resale 1 January 2018 record inspections and completes the reports in a timely manner, Pasadena should establish a method to identify those inspections that have inspection dates requested by property owners. 32. To ensure that the resale record fees 1 January 2018 it charges is appropriate, Pasadena should finalize its formal fee study by April 2016. California State Auditor Report 2017-041 69 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 35. To ensure that the resale record fees 1 January 2018 it charges is appropriate, Pasadena should establish a time frame to periodically determine whether the fees are commensurate with the cost of administering the resale record program. The city should ensure that it retains any documentation used to support its analyses and any subsequent adjustments to fees. 38. To ensure that it can demonstrate 1 January 2018 that its resale record inspectors are qualified, Pasadena should develop a process to maintain continuing education attendance records. The city should ensure that staff receive periodic continuing education through internal and external sources to keep them current on code requirements, especially when the requirements are updated. 40. If Pasadena subsequently requires 1 January 2018 its resale record inspectors to have International Code Council certifications, it should ensure that those staff maintain them in good standing to perform their necessary job functions. County of Alameda Dually Involved Youth: The 9. Alameda County probation department 1 December Q State Cannot Determine the should update its existing procedures 2017 Effectiveness of Efforts to to ensure that its staff are accurately Serve Youth Who Are Involved recording family reunification service in Both the Child Welfare and components within the statewide case Juvenile Justice Systems management system. 2015‑115 (February 2016) 11. To identify their population of dually 1 TBD by CDSS involved youth, Alameda County’s CWS and probation agencies should designate the data system they will use for tracking the dates and results of joint assessment hearings. 17. To identify their population of dually 1 TBD by CDSS involved youth, Alameda County’s CWS and probation agencies should provide guidance or training to staff on recording joint assessment hearing information consistently within the designated system. County of Fresno County Pay Practices: 6. To ensure that they consistently 1 December R Although the Counties We demonstrate that candidates are hired 2017 Visited Have Rules in Place to for permanent civil service positions Ensure Fairness, Data Show based on valid and job‑related criteria, That a Gender Wage Gap regardless of their sex, each county Still Exists should develop policies requiring 2015‑132 (May 2016) hiring managers to document the reasons why they chose the selected candidate over others from the certified eligibility list. continued on next page . . . 70 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION County of Los Angeles County Pay Practices: 7. To ensure that they consistently 1 Will Not R Although the Counties We demonstrate that candidates are hired Implement Visited Have Rules in Place to for permanent civil service positions Ensure Fairness, Data Show based on valid and job‑related criteria, That a Gender Wage Gap regardless of their sex, each county Still Exists should develop policies requiring 2015‑132 (May 2016) hiring managers to document the reasons why they chose the selected candidate over others from the certified eligibility list. Los Angeles County: Lacking 1. To determine whether its trauma 3 Will Not a Comprehensive Assessment system is appropriately designed Implement of Its Trauma System, It and serving the needs of residents in Cannot Demonstrate That It underserved areas and the needs of Has Used Measure B Funds the most at‑risk populations, the board to Address the Most Pressing should use Measure B funds to engage Trauma Needs the College of Surgeons by July 2014 to 2013‑116 (February 2014) 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: assist the board in better defining and identifying underserved areas in Los Angeles. 2. To determine whether its trauma 3 Will Not system is appropriately designed Implement and serving 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. California State Auditor Report 2017-041 71 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 3. To determine whether its trauma 3 Will Not system is appropriately designed Implement and serving 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 3 Will Not system is appropriately designed Implement and serving 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. 5. To ensure that it allocates Measure B 3 Will Not funds to address the most significant Implement needs 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. continued on next page . . . 72 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION County of San Diego Indian Gaming Special 10. If San Diego County’s benefit 3 Will Not O Distribution Fund: Counties’ committee believes that its processes Implement Benefit Committees Did for distributing grant funds are vital Not Always Comply With to its effective management of State Laws for Distribution distribution fund grants, it should Fund Grants seek legislative authority to change 2013‑036 (March 2014) its process. Otherwise, San Diego County’s benefit committee should refrain from placing limits on the time available for grant recipients to spend the grant funds. County of Santa Clara Dually Involved Youth: The 16. To identify their population of dually 1 Will Not Q State Cannot Determine the involved youth, Santa Clara County’s Implement Effectiveness of Efforts to CWS and probation agencies should Serve Youth Who Are Involved designate the data system they will in Both the Child Welfare and use for tracking the dates and results of Juvenile Justice Systems joint assessment hearings. 2015‑115 (February 2016) 22. To identify their population of dually 1 Will Not involved youth, Santa Clara County’s Implement CWS and probation agencies should provide guidance or training to staff on recording joint assessment hearing information consistently within the designated system. County of Sonoma California’s Foster Care 19. To better ensure that foster children 1 April 2018 W System: The State and only receive psychotropic medications Counties Have Failed to that are appropriate and medically Adequately Oversee the necessary, counties should ensure Prescription of Psychotropic that all foster children are scheduled Medications to Children in to receive a follow‑up appointment Foster Care within 30 days of starting a new 2015‑131 (August 2016) psychotropic medication. 20. To better ensure that foster children 1 May 2018 only receive psychotropic medications that are appropriate and medically necessary, counties should implement processes to ensure that foster children receive any needed mental health, psychosocial, behavioral health, or substance abuse services before and concurrently with receiving psychotropic medications. 21. To better ensure that foster 1 May 2018 children only receive psychotropic medications that are appropriate and medically necessary, counties should implement a systemic process for ensuring that court authorizations or parental consents are obtained and documented before foster children receive psychotropic medications and that court authorizations for psychotropic medications are renewed within 180 days as state law requires. The process should also ensure that the counties better document the court authorizations and parental consents in the foster children’s case files. California State Auditor Report 2017-041 73 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 23. To improve its oversight of foster 1 May 2018 children prescribed psychotropic medications, Sonoma County should immediately adopt the state guidelines for its physicians’ use when prescribing psychotropic medications and the county’s use when reviewing court authorization requests. 24. To improve its oversight of foster 1 May 2018 children prescribed psychotropic medications, Sonoma County should within six months, implement a process to review psychotropic medications that receive parental consent rather than court authorization. East Side Union High School District Student Mental 17. To better understand the effectiveness 1 June 2018 U Health Services: Some of the mental health services in its Students’ Services Were special education program, East Side Affected by a New State should use the six performance Law, and the State Needs to indicators we identified to perform Analyze Student Outcomes analysis annually on the subset and Track Service Costs of students receiving mental 2015‑112 (January 2016) health services. Golden State Water Company Apple Valley Area Water 4. To demonstrate to water customers 2 3rd quarter P Rates: Differences in Costs how they are working to keep rates 2016 Affect Water Utilities’ Rates, reasonable, the four water utilities and One Utility May Have should document their cost‑saving Spent Millions of Ratepayer efforts and quantify, to the extent Funds Inappropriately possible, any specific cost savings 2014‑132 (April 2015) achieved from their respective efforts. Hesperia Water District Apple Valley Area Water 1. To assist low‑income water customers, 2 Will Not P Rates: Differences in Costs Hesperia should work with its Implement Affect Water Utilities’ Rates, governing body to consider the and One Utility May Have feasibility of using revenues from Spent Millions of Ratepayer sources other than water rates to Funds Inappropriately implement a rate assistance program. 2014‑132 (April 2015) King City King City Police Department: 14. To ensure that it is appropriately 1 December Strengthening Management maintaining custody of evidence 2017 Practices Would Help Its items and complying with POST Efforts to Prevent Officer recommendations, the Department Misconduct and to Regain should conduct a comprehensive the Public’s Trust inventory to develop an accurate list of 2015‑129 (July 2016) evidence and property. 18. To ensure that it is appropriately 1 March 2018 maintaining custody of evidence items and complying with POST recommendations, the Department should perform annual audits that are thorough and well documented. continued on next page . . . 74 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION Long Beach Unified School District Student Mental 4. To better communicate with parents 1 †  U Health Services: Some and future IEP teams about reasons Students’ Services Were for any changes to student services, Affected by a New State including changes to mental health Law, and the State Needs to services and student placements, Analyze Student Outcomes Long Beach should develop a process and Track Service Costs to ensure that IEP teams record these 2015‑112 (January 2016) reasons in student IEP documents. 10. To ensure that it complies with federal 1 †  and state requirements, Long Beach should develop a process to ensure that IEP teams record, in student IEP documents, the rationale for residential treatment and any potential harmful effects of such placement. 14. To better understand the effectiveness 1 †  of the mental health services in its special education program, Long Beach should use the six performance indicators we identified to perform analysis annually on the subset of students receiving mental health services. Los Angeles County Department of Children and Family Services Los Angeles County 4. To ensure that it is placing children only 5 January 2017 Department of Children in safe homes, the department should and Family Services: measure its performance and adjust its Management Instability practices to adhere to state law, which Hampered Efforts to Better requires that all homes be assessed Protect Children prior to the placement of the child. 2011‑101.2 (March 2012) Los Angeles Department of Water & Power Los Angeles Department 1. To ensure that the Los Angeles Board 2 2020 of Water and Power ‑ of Water and Power Commissioners Consequences Linked to (board) can more effectively exercise Its Premature Launch of oversight for the department’s Its Customer Information significant information technology System May Push Total Costs projects, the board should establish Beyond $200 Million a standing committee comprised 2014‑105 (March 2015) of board members to oversee and critically evaluate the status of the department’s 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. California State Auditor Report 2017-041 75 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 2. To ensure that the board can more 2 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: 3. To ensure that the board can more 2 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. Los Angeles Police Department The CalGang Criminal 23. Until the Los Angeles Police 1 June 2019 V Intelligence System: As the Department receives further direction Result of Its Weak Oversight from the board, the committee, or Structure, It Contains Justice, it should address the specific Questionable Information deficiencies we found by reviewing That May Violate Individuals’ the gangs it has entered into CalGang Privacy Rights to ensure the gangs meet reasonable 2015‑130 (August 2016) suspicion requirements. It should also begin reviewing the gang members it has entered into CalGang to ensure the existence of proper support for each criterion. It should purge from CalGang any records for gangs or gang members that do not meet the criteria for entry. Individuals who are independent from the ongoing administration and use of CalGang should lead this review. The agency should complete the gang and gang member reviews in phases, with the final phase for gangs to be completed by June 30, 2018, and the final phase for gang members to be completed by June 30, 2019. continued on next page . . . 76 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 24. Until Los Angeles Police Department 1 September receives further direction from the 2017 board, the committee, or Justice, it should address the specific deficiencies we found by developing or modifying as necessary all its policies and procedures related to CalGang to ensure they align with state law, CalGang policy, the federal regulations, and the state guidelines. In particular, the agency should implement appropriate policies and procedures for entering gangs; performing supervisory reviews of gang and gang member entries; performing periodic CalGang record reviews; sharing CalGang information; and complying with juvenile notification requirements. The agency should complete this recommendation by March 31, 2017. Quartz Hill Water District Quartz Hill Water District 13. To assist low‑income water customers, 3 Will Not Antelope Valley Water Rates: Quartz Hill water District should work Implement Various Factors Contribute with its governing body to consider to Differences Among the feasibility of using revenues from Water Utilities sources other than water rates to 2013‑126 (July 2014)* implement rate assistance programs for low‑income water customers. Sacramento City Unified School District School Safety and 15. To ensure that it is effectively 4 †  T Nondiscrimination Laws: preventing and addressing incidents Most Local Educational of discrimination, harassment, Agencies Do Not Evaluate intimidation, and bullying in its schools, the Effectiveness of Sacramento City Unified should ensure Their Programs, and the that school sites follow the complaint State Should Exercise Stronger Leadership procedures established in its policies. 2012‑108 (August 2013)* Santa Ana Police Department The CalGang Criminal 25. Until Santa Ana Police Department 1 August 2017 V Intelligence System: As the receives further direction from the Result of Its Weak Oversight board, the committee, or Justice, it Structure, It Contains should address the specific deficiencies Questionable Information we found by reviewing the gangs it That May Violate Individuals’ has entered into CalGang to ensure Privacy Rights the gangs meet reasonable suspicion 2015‑130 (August 2016) requirements. It should also begin reviewing the gang members it has entered into CalGang to ensure the existence of proper support for each criterion. It should purge from CalGang any records for gangs or gang members that do not meet the criteria for entry. Individuals who are independent from the ongoing administration and use of CalGang should lead this review. The agency should complete the gang and gang member reviews in phases, with the final phase for gangs to be completed by June 30, 2018, and the final phase for gang members to be completed by June 30, 2019. California State Auditor Report 2017-041 77 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION Santa Clara County Sheriff’s Office The CalGang Criminal 27. Until Santa Clara County Sheriff’s Office 1 Spring 2018 V Intelligence System: As the receives further direction from the Result of Its Weak Oversight board, the committee, or Justice, it Structure, It Contains should address the specific deficiencies Questionable Information we found by reviewing the gangs it That May Violate Individuals’ has entered into CalGang to ensure Privacy Rights the gangs meet reasonable suspicion 2015‑130 (August 2016) requirements. It should also begin reviewing the gang members it has entered into CalGang to ensure the existence of proper support for each criterion. It should purge from CalGang any records for gangs or gang members that do not meet the criteria for entry. Individuals who are independent from the ongoing administration and use of CalGang should lead this review. The agency should complete the gang and gang member reviews in phases, with the final phase for gangs to be completed by June 30, 2018, and the final phase for gang members to be completed by June 30, 2019. 28. Until Santa Clara County Sheriff’s 1 December Office receives further direction 2017 from the board, the committee, or Justice, it should address the specific deficiencies we found by developing or modifying as necessary all its policies and procedures related to CalGang to ensure they align with state law, CalGang policy, the federal regulations, and the state guidelines. In particular, the agency should implement appropriate policies and procedures for entering gangs; performing supervisory reviews of gang and gang member entries; performing periodic CalGang record reviews; sharing CalGang information; and complying with juvenile notification requirements. The agency should complete this recommendation by March 31, 2017. Victorville Water District Apple Valley Area Water 2. To assist low‑income water customers, 2 Will Not Rates: Differences in Costs Victorville should work with its Implement Affect Water Utilities’ Rates, governing body to consider the and One Utility May Have feasibility of using revenues from Spent Millions of Ratepayer sources other than water rates to Funds Inappropriately implement a rate assistance program. 2014‑132 (April 2015) 6. To demonstrate to water customers 2 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. continued on next page . . . 78 California State Auditor Report 2017-041 January 2018 STATE AUDITOR’S ASSESSMENT NUMBER OF YEARS AUDITEE DID NOT AUDITEE DID NOT RECOMMENDATION ESTIMATED SUBSTANTIATE ITS ADDRESS ALL REPORT TITLE, NUMBER HAS APPEARED IN DATE OF CLAIM OF FULL ASPECTS OF THE AND ISSUE DATE RECOMMENDATION THIS REPORT COMPLETION IMPLEMENTATION RECOMMENDATION 7. To ensure that it does not use revenues 2 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 2 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. California State Auditor Report 2017-041 79 January 2018 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 2012 Through October 2016) NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT NONSTATE ENTITIES City of San Rafael Residential Building Records: The 14. To ensure that property owners correct violations in a timely manner, San Fully 1 S Cities of San Rafael, Novato, and Rafael should develop a work plan by July 2016 to identify and address its Implemented Pasadena Need to Strengthen the enforcement backlog by April 2017, so that the city is up to date with its Implementation of Their Resale enforcement actions, such as issuing notice letters and monitoring property Record Programs owners’ actions to resolve violations. San Rafael’s work plan should also 2015‑134 (March 2016) include updating the completion status of the violations so unresolved violations can be identified and monitored for subsequent correction. 17. To ensure that property owners correct violations in a timely manner, San Fully 1 Rafael should follow through with its enforcement policies, such as issuing Implemented notice letters. 23. To ensure that it conducts its resale record inspections and completes the Fully 1 reports in a timely manner, San Rafael should establish a process to monitor Implemented its ability to meet its established time goals from application date to report issuance, such as developing a reminder report or using an automated feature of its database. 26. To ensure that it conducts its resale record inspections and completes the Fully 1 reports in a timely manner, San Rafael should review its time goals by July Implemented 2016 for the resale record program and modify them if necessary, factoring in property owners’ expectations and staff resources to complete the resale record reports. If applicable, San Rafael should update its policies and procedures to reflect the revised time goals. City of Vernon City of Vernon: Although Reform Is 28. The city should clearly present the general fund structural deficit to the city Fully 5 Ongoing, Past Poor Decision Making council and the public in a budget that includes narrative and summary Implemented Threatens Its Financial Stability information to help users understand the city’s budget process and its 2011‑131 (June 2012) priorities and challenges, and that incorporates the elements for improved budgeting practices recommended by the Government Finance Officers Association (GFOA). County of Riverside Indian Gaming Special Distribution 3. To comply with state law, benefit committees should ensure that they Fully 3 O Fund: Counties’ Benefit Committees Did obtain sufficient documentation from grant applicants to demonstrate that Implemented Not Always Comply With State Laws for proposed projects mitigate casino impacts. If applicable, that documentation Distribution Fund Grants should demonstrate that the requested funding represents a correct 2013‑036 (March 2014) proportionate share of the costs attributable to casino impacts. Los Angeles County Department of Children and Family Services Los Angeles County Department 2. To ensure that child abuse and neglect allegations receive timely resolution, Fully 5 of Children and Family Services: the department should assess whether it needs to permanently allocate more Implemented Management Instability Hampered resources to investigate allegations of child abuse and neglect. Efforts to Better Protect Children 2011‑101.2 (March 2012) 5. To improve its process for placing children with a relative, the department Resolved 5 should 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. Quartz Hill Water District Antelope Valley Water Rates: Various 5. To ensure that water customers are aware of pass‑through rate increases, Fully 3 Factors Contribute to Differences Quartz Hill Water District should adopt a schedule of fees showing how these Implemented Among Water Utilities increases will affect its tiered usage charges before the new rates take effect. 2013‑126 (July 2014)* continued on next page . . . 80 California State Auditor Report 2017-041 January 2018 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Riverside County Special Education Local Plan Area Student Mental Health Services: Some 6. To better communicate with parents and future IEP teams about reasons for Fully 1 U Students’ Services Were Affected by a any changes to student services, including changes to mental health services Implemented New State Law, and the State Needs to and student placements, Riverside should develop a process to ensure that Analyze Student Outcomes and Track IEP teams record these reasons in student IEP documents. Service Costs 2015‑112 (January 2016) Ross Valley Sanitary District Ross Valley Sanitary District: The 1. The board should ensure that management continues to develop and Fully 2 Board and Management Have Only strengthen its controls over the district’s financial and administrative Implemented Recently Begun to Address Significant functions. For example, district management should fully implement all Weaknesses in the District’s Financial of the external auditor’s remaining recommendations by June 30, 2015. and Administrative Functions Management should also ensure that its staff follow these policies and 2014‑122 (April 2015) 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 and administrative policies to make Fully 2 it clear that the activities of approving invoices, recording invoices, preparing Implemented checks, and reconciling bank statements to the district’s records should be performed by separate individuals. 3. The district should strengthen its financial and administrative policies to Fully 2 make it clear who is responsible for reviewing and approving monthly Implemented bank reconciliations. 4. The district should strengthen its financial and administrative policies to limit Fully 2 California lodging costs to the rate set by the State for its employees, and limit Implemented 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 and administrative policies to Fully 2 establish an appropriate system for tracking and valuing inventory. Implemented 8. The district should strengthen its financial and administrative policies to Fully 2 require employees to obtain their supervisor’s approval before working Implemented paid overtime. 12. To clarify the roles and responsibilities of board members, the district should Fully 2 create a more comprehensive board member manual that describes all of Implemented 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 remains appropriate after making Fully 2 the changes described in the previous recommendation, the board should Implemented 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 remaining recommendations contained in Fully 2 its human resources consultants’ work plan by the targeted dates shown in Implemented 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 remaining recommendations contained Fully 2 in its human resources consultants’ work plan by the targeted dates shown Implemented 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. California State Auditor Report 2017-041 81 January 2018 NUMBER OF YEARS RECOMMENDATION REPORT TITLE, NUMBER, HAS APPEARED IN AND ISSUE DATE RECOMMENDATION STATUS THIS REPORT Sacramento City Unified School District School Safety and Nondiscrimination 10. To ensure that it is effectively preventing and addressing incidents of Fully 4 T Laws: Most Local Educational Agencies discrimination, harassment, intimidation, and bullying in its schools, Implemented Do Not Evaluate the Effectiveness of Sacramento City Unified should measure the effectiveness of its school safety Their Programs, and the State Should programs at both the district and school site levels. Exercise Stronger Leadership 2012‑108 (August 2013)* * Other recommendations pertaining to this audit, which have not been fully implemented, can be found in Table 4.