Recommendations

In-Home Supportive Services Program It Is Not Providing Needed Services to All Californians Approved for the Program, Is Unprepared for Future Challenges, and Offers Low Pay to Caregivers February 2021 REPORT 2020‑109 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 | Alternative format reports available upon request | Permission is granted to reproduce reports Elaine M. Howle State Auditor February 25, 2021 2020-109 The Governor of California President pro Tempore of the Senate Speaker of the Assembly State Capitol Sacramento, California 95814 Dear Governor and Legislative Leaders: As directed by the Joint Legislative Audit Committee, my office conducted an audit of the In-Home Supportive Services (IHSS) program. Our assessment focused on the California Department of Social Services (Social Services) and four counties: Butte, Kern, San Diego, and Stanislaus. The following report details the audit’s findings and our conclusion that the State and these counties must take action to ensure that all Californians who are elderly and of low income or who are disabled (recipients) receive authorized IHSS services. Our review found that the IHSS program serves more than 591,000 recipients, helping them live independently in their own homes and avoiding long-term care arrangements that would be much more costly to the State. However, a growing number of recipients—tens of thousands each month—do not receive the services for which they qualify because the State and counties alike have failed to complete mandatory annual planning activities intended to ensure care for all recipients. We further found that the counties generally do not process IHSS applications in a timely manner, nor do they ensure the timely provision of care for all recipients. Unless the State and counties address these deficiencies, the number of recipients who lack care will likely increase as the need for IHSS services grows. Additionally, we found that caregivers throughout the State receive pay that is at or near minimum wage, and caregivers earn significantly less than a living wage in each county. In fact, many caregivers who work full time would qualify for public assistance. Moreover, the IHSS program’s funding structure is inequitable and discourages counties from significantly raising wages. These low wages could make recruiting a sufficient number of caregivers challenging both currently and in the future, especially when 32 of the 51 counties that responded to our survey indicate that they already lack enough caregivers to provide each qualified recipient with all approved services. 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 iv California State Auditor Report 2020-109 February 2021 Selected Abbreviations Used in This Report CMIPS II Case Management Information and Payrolling System IHSS In-Home Supportive Services program Social Services California Department of Social Services California State Auditor Report 2020-109 v February 2021 Contents Summary 1 Introduction 5 Chapter 1 Lack of Preparation for Future IHSS Needs and Low Caregiver Wages Could Result in More Recipients Not Receiving Services 11 Recommendations 25 Chapter 2 Changes to the IHSS Funding Structure at Both the State and County Levels Could Address Funding Disparities Among Counties 27 Recommendation 34 Appendix A Survey of Counties Regarding IHSS 35 Appendix B County IHSS Populations and Performance Metrics 39 Appendix C Comparison of Living Wage to Actual Caregiver Wages in California Counties 51 Appendix D Effect of Reducing the Inflation Factor on Certain Counties 53 Appendix E Scope and Methodology 55 Responses to the Audit California Department of Social Services 59 California State Auditor’s Comments on the Response From the California Department of Social Services 69 Butte County Employment and Social Services 75 Kern County Aging and Adult Services 77 County of San Diego Health and Human Services Agency 79 Stanislaus County Counsel 81 vi California State Auditor Report 2020-109 February 2021 Blank page inserted for reproduction purposes only. California State Auditor Report 2020-109 1 February 2021 Summary Results in Brief Audit Highlights . . . The In-Home Supportive Services (IHSS) program of the California Our audit of the Department of Social Department of Social Services (Social Services) provides care to Services’ IHSS program highlighted more than 591,000 lower-income elderly or disabled Californians the following: (recipients), helping them to live independently in their homes.1 This assistance saves the State a significant amount of money, as without » While the IHSS program helps more than IHSS many recipients would require more expensive out of home 591,000 lower-income elderly or disabled care. Even so, some recipients are not able to get the care they need. Californians, some recipients are not able In 2019 for example, more than 40,000 recipients on average did not to get the care they need. receive needed in-home care each month, and that number is likely to grow. California’s population of those age 65 and older (seniors) • From January 2015 through will grow by several million in the coming decade, which will likely December 2019, the number of increase the demand for IHSS assistance. The gap between the recipients statewide who lacked care number of recipients and the number of caregivers is widening and grew on average from 33,000 to more will likely increase the number of recipients who go without services. than 40,000 each month. In addition, caregivers in IHSS are largely paid minimum or near- minimum wage. The low wages caregivers earn—far below a living • The number of seniors is expected to wage—will make recruiting additional workers difficult. grow by over two million in this decade and will likely increase the demand for State law requires counties to ensure that services are provided both IHSS assistance and caregivers. to all IHSS recipients each month; however, that is not always happening. From January 2015 through December 2019, the » None of the four counties we reviewed number of recipients statewide who lacked care grew from 33,000 created the required annual county plans to more than 40,000 on average each month. Over the five-year for providing services to all IHSS recipients period, this equates to more than 130 million hours of services each month—in fact, no county has done IHSS recipients needed but did not receive. County administrators so for 20 years. provided several reasons why a recipient would not receive services, including extended hospitalizations, the inability to hire a provider, » IHSS caregivers earn minimum or and recipients moving to a new location and requiring a new near-minimum wage and no county in the provider. These gaps in care can represent periods of increased State pays IHSS caregivers a living wage, risk of injury or other hardships for IHSS’s elderly and disabled making it difficult to recruit caregivers. beneficiaries. However, none of the counties we reviewed—Butte, Kern, San Diego, and Stanislaus—created the required annual » Although caregiver wages and benefits county plans that would describe to Social Services how the are bargained for locally, the program’s counties would ensure services to all those eligible for the IHSS funding structure discourages increasing program. According to Social Services, it has not required—and caregiver wages. counties have not created—such plans for at least 20 years. Expected rapid growth in the number of recipients will likely place more strain on the IHSS program. According to the Department of Finance, the number of California seniors will increase from 6 million in 2019 to 8.5 million by 2030. Because seniors currently 1 Throughout the report we refer to the approved beneficiaries of IHSS care as recipients even in instances where they have not received care in a particular month. 2 California State Auditor Report 2020-109 February 2021 make up the majority of recipients, we expect demand for IHSS services to increase significantly. Counties are already not providing timely IHSS approval to all eligible applicants and timely initial services to many recipients, and they will face increasing strain to do so as the number of applicants increases. Further, although most IHSS recipients come to the program with a caregiver—usually a family member—and are therefore receiving assistance before entering the program, about 58,000 did not during the period we reviewed. Those recipients who only begin receiving services after they enter the program usually hire a nonfamily caregiver. The Public Policy Institute of California has noted that in the future seniors will be less likely to have family support because they have never married or had children. Thus, counties will need to work harder to ensure the availability of nonfamily caregivers. Recruiting a sufficient number of caregivers will be difficult because the job pays minimum or near-minimum wage, below a living wage in even the State’s most affordable counties.2 Living-wage calculations represent the wages necessary for a full-time worker to afford basic necessities without public assistance. For example, a living wage in Modoc County, a rural county in the northeastern part of the State, is about $18 per hour. However, IHSS workers in that county earn the state minimum wage of $12 per hour.3 No county in the State pays IHSS caregivers a living wage. In fact, wages in many counties are so low that caregivers without other sources of income would be eligible for public assistance, such as CalFresh, California’s food assistance program. In addition, caregivers in the city of San Diego actually earned less than the local minimum wage because the city exempted IHSS caregivers from receiving its minimum wage increase. Although caregiver wages and benefits are bargained for locally in each county in accordance with state law, we found the program’s funding structure discourages raising IHSS worker wages. IHSS is funded through a combination of federal, state, and county funds. State law contains requirements for establishing a county’s share of the cost of providing IHSS services. In 2012 state law established this share based on the actual cost of the program in fiscal year 2011–12, with future adjustments to be updated periodically, based on an inflation factor specified in the law. In addition, a county that chooses to increase caregiver wages has its share permanently increased. Further, a county must pay an even greater share of the increase if the raises it provides collectively equate to more than a 10 percent raise over three years, which we refer to 2 The State’s minimum wage ranged from $9 per hour in 2015 to $12 per hour in 2019. 3 For purposes of our report, we reference the minimum wage required for employers who employ 26 or more people. California State Auditor Report 2020-109 3 February 2021 as the limit. For example, between 2018 and 2019, San Francisco increased IHSS caregiver wages by a total of $2 per hour. These raises increased San Francisco’s contribution to the program by a total of $21 million because the total wage increases exceeded the 10 percent limit. These increased costs remain a component of a county’s share of its IHSS expenses indefinitely, even in cases where the state minimum wage surpasses the locally negotiated wage. Unless state law is updated, this means that counties that raise caregiver wages may pay millions more than they would have if they had kept caregivers at the state minimum wage. As a result, counties must balance the impact wage increases have on their finances against the benefit they offer caregivers in light of these increased costs. Given this funding structure, it is not surprising that the number of counties paying caregivers above the minimum wage has shrunk. In 2014, 52 counties paid more than the minimum wage; in 2019 only 20 counties did so. Although low wages act to control costs associated with the IHSS program, they also make recruiting caregivers more difficult. Selected Recommendations To help ensure that all recipients throughout the State receive the services they need, Social Services should enforce its requirement that counties submit annual plans. These plans should include, at a minimum, a description of how each county will ensure that all recipients receive the services for which they have been approved. To limit the disincentive for counties to provide wage increases, the Legislature should modify the State’s cost-sharing system to eliminate the ongoing costs that counties pay for local wage increases that are surpassed by increases to the State’s minimum wage. Agency Comments Butte, Kern, San Diego, and Stanislaus counties generally agreed with our recommendations. Social Services disagreed with a number of our conclusions, including those related to recipient care, county contributions to the IHSS program, and the effect of state law on caregiver wages. Social Services also raised concerns with our analysis of its data and indicated that it would not implement our recommendations. We address Social Services’ response beginning on page 69. 4 California State Auditor Report 2020-109 February 2021 Blank page inserted for reproduction purposes only. California State Auditor Report 2020-109 5 February 2021 Introduction Background The In-Home Supportive Services (IHSS) program of the California Department of Social Services (Social Services) provides assistance to eligible California residents who are 65 years of age or older (seniors), blind, or disabled (collectively referred to as recipients) to enable them to live safely in their own homes.4 As of December 2019, IHSS provided in-home care to more than 591,000 Californians. This in-home care serves as an alternative to more intensive and costly out-of-home care, such as assisted living or skilled nursing facilities (long-term care). IHSS provides services based upon the needs of each recipient, which may include bathing, bowel and bladder care, feeding, and accompaniment to health- related appointments. According to Social Services, nearly all IHSS recipients are also beneficiaries of the California Medical Assistance Program (Medi-Cal)—California’s implementation of the federal Medicaid program—which the State provides to Californians who have minimal assets and an annual income of less than $23,500 for a family of two or who meet certain requirements. IHSS recipients receive an average of about 100 hours of services per month. State law allows up to 195 hours per month of care, or 283 hours of services each month for severely impaired individuals. As of December 2019, more than 520,000 individuals provided supportive services (caregivers) through the IHSS program. The majority of these caregivers—74 percent—provide services to a family member. However, recipients retain the right to hire a caregiver or caregivers of their choice, as long as the caregiver meets certain basic requirements, such as securing a criminal background check clearance. Importance of the IHSS Program The IHSS program allows hundreds of thousands of low-income Californians to remain safely in their homes, saving the State millions of dollars compared to the expense of providing care in long-term care facilities. More than 45 percent of recipients enter the IHSS program because they qualify for a nursing home level of care.5 Long-term care expenses average from about $39,000 4 Throughout the report we refer to the approved beneficiaries of IHSS care as recipients even in instances where they have not received care in a particular month. 5 Social Services defines recipients as requiring nursing home levels of care when they need help with specific activities, such as routine bodily functions; when they have significant memory impairments; or when they require more than 195 hours of care per month. Recipients’ doctors train and certify IHSS caregivers to provide any necessary paramedical services those recipients need, such as administering medication or giving injections, blood testing, and wound care. 6 California State Auditor Report 2020-109 February 2021 to $170,000 annually, depending on the level of care needed, compared to average IHSS expenses of about $17,000 per year. As a result, the IHSS program saves the State between $22,000 and $153,000 annually for every recipient who would otherwise have transitioned to long-term care provided through Medi-Cal. Demand for IHSS services will increase further in the next 10 years as the number of eligible California seniors grows. The Department of Finance (Finance) projects that California’s senior population will grow from 6 million in 2019 to nearly 8.5 million by 2030—an increase of more than 40 percent. Because the majority of IHSS recipients—55 percent as of 2019—are seniors, this will result in a growing number of people needing IHSS care. Anticipating this impending shift in California’s population, in June 2019, the Governor issued an executive order indicating that the State is committed to helping all Californians age with dignity and independence, and that all older adults should be able to choose to remain in their communities as they age. As the goal of the IHSS program is to provide recipients the assistance necessary to remain safely in their homes, ensuring an effective program is critical to meeting the State’s commitment to its seniors. Further, a 2013 study by the National Institutes of Health found that many low-income disabled seniors who rely on IHSS have few or no other options for their care. The study also found that disabled older adults often have changing needs for assistance, which the IHSS program’s design supports. IHSS Program Administration and Oversight Counties and the State share responsibility for administering the IHSS program. Under state law each county is obligated to ensure that services are provided to all recipients during each month of the year. As indicated in Figure 1, after a person submits an application for the program, county social workers determine whether the person is eligible and generally determine the need for services following a face-to-face meeting. Counties identify the number of hours of services needed and the services that the IHSS program will pay for based on regulations issued by Social Services that govern authorized services. For example, a county can approve hours for assisting a recipient with personal care, such as showering or toileting, but it is not able to approve other services, such as caring for pets. Counties also accept caregiver applications to provide services and provide training for prospective caregivers. Most counties have established public authorities—entities separate from the counties—to perform various functions related to caregivers, such as investigating the qualifications of potential personnel. Figure 1 details the caregiver enrollment process. Social Services administers the IHSS program at the state level and is California State Auditor Report 2020-109 7 February 2021 generally responsible for its oversight. It issues guidance to counties and develops training materials for caregivers. It also generally has the authority to adopt regulations regarding the IHSS program. Figure 1 State Regulations Specify the Amount of Time Counties Have to Enroll IHSS Recipients and Caregivers IHSS RECIPIENTS* IHSS CAREGIVERS* application processed by application processed by County Welfare Department County IHSS Public Authority or County IHSS Office The individual seeking care submits an IHSS application. If the individual has A prospective caregiver submits an application. not yet received Medi-Cal approval, he or she generally must apply for it separately. The county reviews the application and schedules an in-person visit to the applicant's home. The prospective caregiver submits to fingerprinting and criminal background check by the California Department of Justice. A county social worker interviews Generally caregivers have the applicant at home and 90 days to complete this process. determines eligibility and service needs. Counties have 30 days to complete this process. The prospective caregiver attends Exceptions may be an orientation given by the county. made when a The applicant must provide a medical certification medical certification from a has not been received. licensed health care professional within 45 days of the county requesting it indicating that he or she needs IHSS care to remain safely in the home. The county determines the prospective caregiver's eligibility based on the background check. The county authorizes service hours and notifies the applicant of approval. The caregiver signs an The applicant selects a caregiver. IHSS program provider enrollment agreement. Counties have 15 days to provide or ensure the provision of IHSS service. The caregiver provides services to the recipient, submits twice-monthly timesheets, and is paid by the State. Source: Social Services IHSS regulations and documents. * The steps shown here do not need to be completed in this specific order although all must be completed within the set time frame. 8 California State Auditor Report 2020-109 February 2021 IHSS Program Funding The IHSS program operates using a mix of federal, state, and county funds. In fiscal year 2019–20, California budgeted $4.5 billion for its share of the program, counties contributed $1.6 billion, and the federal government provided $7.2 billion, for a total of $13.3 billion. County funds for IHSS come primarily from revenue from vehicle licensing fees and a sales tax allocated to the counties to fund various programs, including IHSS. Counties use general-purpose funds to cover any remaining funding needs. Figure 2 illustrates the sources of funds for IHSS. Figure 2 The State Pays For IHSS Caregiver Wages Using Federal, State, and County Funds IHSS Services Funding COUNTIES STATE FEDERAL Counties pay the State a flat-rate The State pays for caregiver wages The federal government pays the amount set annually by the State using federal, county, and state funding State a percentage of caregiver wages (Statewide average 16% of wages) (Statewide average 30% of wages) (Statewide average 54% of wages) IHSS CAREGIVERS Source: State law, Social Services IHSS program documents. Beginning July 1, 2012, changes in state law outlined new requirements regarding the counties’ share of IHSS costs. Rather than paying a set percentage of the cost of providing caregiver services, as they had done previously, counties were required to pay a portion of the IHSS program costs in a specified amount called a maintenance of effort (county contribution). This county contribution was originally based on the amount expended by each county during fiscal year 2011–12. Beginning in 2014, state law adjusted county contributions by a flat percentage rate, known as the inflation factor. In 2017, Finance found that the method for California State Auditor Report 2020-109 9 February 2021 determining county contributions was leading to increased costs for the State’s General Fund; in response, beginning July 1, 2017, the Legislature increased the total amount of county contributions by almost $600 million and, beginning July 1, 2018, it increased the inflation factor from 3.5 percent to 5 percent. Although state law reduced the amounts counties would be responsible for by appropriating a series of offsets—additional state funds appropriated to IHSS—a follow-up report by Finance in 2019 noted that the revenue sources set aside for counties to pay their IHSS contribution were not sufficient to cover this level of increased costs. Beginning July 1, 2019, state law reduced total county contributions by $500 million and beginning in July 2020, it lowered the inflation factor to 4 percent. Table 1 shows an example of the county contribution Kern County paid from fiscal years 2012–13 through 2018–19 as well as the inflation factor set by the State in each year. We found counties that locally negotiate caregiver wage increases pay a greater contribution, as we discuss in more detail in Chapter 1. Table 1 Kern County’s Contribution Increased Based on the State’s Inflation Factor, a Locally Negotiated Wage Increase, and Changes to State Law KERN COUNTY FISCAL YEAR INFLATION FACTOR CONTRIBUTION (millions of dollars) 2012–13 N/A $7.46 2013–14 N/A $7.52* 2014–15 3.5% $7.88* 2015–16 3.5% $8.15 2016–17 3.5% $8.44 {$12.60†} 2017–18 3.5% $10.18 {$13.23†} 2018–19 5% $11.16 Source: State law, Social Services’ communication with counties. * County contribution includes increases of $61,000 in fiscal year 2013–14 and $154,000 in fiscal year 2014–15 for a locally negotiated wage increase in fiscal year 2013–14. † In 2017, the Legislature increased the amount of county contributions, then provided counties with state general funds to reduce the amounts counties would pay. The amounts in brackets show the county contribution before the reductions. The reductions continued during fiscal year 2018–19. Concerns Leading to the Audit Various groups, including the Public Policy Institute of California; the University of California, Berkeley, Center for Labor Research and Education; and the Legislative Analyst’s Office have expressed 10 California State Auditor Report 2020-109 February 2021 concerns with the IHSS program, including concerns related to caregiver shortages, the effect that rapid growth in California’s senior population could have on the program, and the negative financial impact low wages can have on most caregivers. For example, in 2017 the Center for Labor Research and Education noted that low caregiver wages in the home care industry, which includes IHSS, make it difficult to recruit enough workers to meet rapidly growing demand. The report concluded that, unless California addresses low caregiver wages, the elderly and people with disabilities will not get the care they require, caregivers will continue to live in poverty, and the public cost of long-term care will increase. As a result of concerns related to the IHSS program, the Joint Legislative Audit Committee (Audit Committee) directed the California State Auditor’s Office (State Auditor) to perform an audit of the IHSS program. Appendix E outlines the Audit Committee’s objectives and the methods we used to address them. California State Auditor Report 2020-109 11 February 2021 Chapter 1 LACK OF PREPARATION FOR FUTURE IHSS NEEDS AND LOW CAREGIVER WAGES COULD RESULT IN MORE RECIPIENTS NOT RECEIVING SERVICES Chapter Summary Although the IHSS program provides services to the vast majority of its recipients, tens of thousands of recipients lack care each month. In fact, although state law requires counties to ensure that services are provided to recipients during each month, the number of recipients who lacked care grew from 33,000 on average each month in 2015 to more than 40,000 in 2019. Further, counties did not always approve applicants for the program in a timely manner nor ensure that newly approved recipients who came into the program without a chosen caregiver received timely care. Ensuring timely and consistent care is central to the program’s goal of allowing recipients to live safely in their own homes. However, providing timely IHSS care may become more difficult, as the number of recipients is expected to increase dramatically over the next 10 years. Despite the pending increase, the counties and Social Services have not planned for this influx of older Californians needing care. Our projections indicate that a substantial increase in the number of IHSS caregivers will be necessary in the future. However, caregivers throughout the State earn far less than a living wage, and many likely qualify for public assistance. These low wages likely will affect the ability of counties to recruit caregivers to respond to current and future demand for their services. Although counties can negotiate higher caregiver wages, state law creates disincentives for them to do so, as increases in provider wages have an outsized financial impact on the counties that provide them. A Growing Number of Recipients Lack Necessary IHSS Care Each Month State law obligates each county to ensure that services are provided to all eligible recipients during each month of the year in accordance with a county plan. Although the IHSS program was largely effective in meeting this requirement, ensuring that 544,000 recipients (approximately 94 percent of recipients) on average received services each month from 2015 to 2019, the program’s vast size means that when even a small percentage of recipients lack care, thousands of Californians are affected. Specifically, the number of recipients statewide who did not receive 12 California State Auditor Report 2020-109 February 2021 services in a given month increased from about 33,000 per month on average in 2015 to more than 40,000 in 2019. Over the course of the period we reviewed, this represented 132 million hours of services approved but not provided. Appendix B, Table B.1, compares the number of hours approved versus hours not provided in 2015 and 2019. Varying numbers of recipients in all counties experienced these gaps in care, as shown in Appendix B, Table B.2. We surveyed all counties in the State regarding their IHSS programs and their ability to provide caregivers for recipients. With 51 of 58 counties responding, 32 reported that they did not have a sufficient number of caregivers to provide all approved services. The two most common barriers those counties reported were finding caregivers who could provide specific or challenging services, such as bowel and bladder care, and difficulty in matching caregivers with recipients in isolated areas. Appendix A provides selected survey responses by counties throughout the State. The four counties we reviewed—Butte, Kern, San Diego, and Stanislaus—did not ensure that all recipients received services each month. In fact, the average number of recipients who did not receive monthly services in these four counties generally increased over our review period, as Table 2 shows. For example, the average number of recipients who lacked services in Kern County increased from 296 per month in 2015 on average to 923 in 2019, representing an increase from 6.8 percent to 11.1 percent of recipients in the program. The counties provided several reasons why a recipient might not receive services, including extended hospitalizations, an inability to hire a provider, and a move to a new location, requiring a new provider. These gaps in care can represent periods of increased risk of injury or other hardships for IHSS’s elderly and disabled recipients. Table 2 The Average Number of Recipients Who Did Not Receive Services Each Month Increased During Our Testing Period MONTHLY AVERAGE NUMBER OF RECIPIENTS WHO DID NOT RECEIVE SERVICES COUNTY 2015 2016 2017 2018 2019 Butte 378 407 373 384 406 Kern 296 406 531 738 923 San Diego 1,811 1,957 2,042 2,069 2,194 Stanislaus 436 546 649 698 679 STATEWIDE* 32,589 33,674 35,104 36,655 40,290 Source: Auditor analysis of Social Services’ CMIPS II data. * Statewide average number of recipients who did not receive services each month. California State Auditor Report 2020-109 13 February 2021 Some counties took greater steps than others to ensure that recipients received care. About half of the counties that responded to our survey indicated that they assist recipients in interviewing caregivers, and three of the four counties we reviewed stated that they arrange for short-term care through contracts with local care providers, as we describe below. These additional services are an important stopgap for recipients when caregivers are ill or temporarily unavailable. For example, San Diego has a contract with a service provider to render care when a recipient’s regular caregiver is unavailable. Butte stated that it has arranged care, through short-term contracts with local providers, for recipients in hard-to-serve portions of the county and those who require care—such as bowel and bladder care—that makes recruiting a caregiver difficult. If a recipient requests a caregiver and does not wish to participate in the selection process, upon request Stanislaus County will send a caregiver from its registry to that recipient. Kern County informed us that it does not provide these services as they are cost-prohibitive; instead it refers recipients to the registry of caregivers so that recipients can make their own hiring decisions. Despite these efforts, a lack of planning by the counties has contributed to ongoing gaps in care. State law requires that each county develop an annual county plan that specifies the means by which IHSS services will be provided and submit that plan to Social Services for review and, when appropriate, approval. However, according to Social Services, none of the State’s 58 counties have submitted plans for decades. Further, the counties we reviewed could not provide evidence of having created any county plans. The counties that responded to our survey generally indicated that they had performed no analysis to determine their future provider needs. Only two counties indicated that they have performed analysis to determine the number of caregivers they require, either currently or in the future, and only four counties had created a plan to account for future growth in the number of recipients. If counties had completed their mandated care planning, they might have identified care gaps and been able to alleviate or eliminate them. Inaction by Social Services has contributed to the lack of planning throughout the State. Social Services’ own regulations require that it develop a county plan for counties that have not submitted plans within the required time frame. However, for at least 20 years, For at least 20 years, Social Services Social Services has neither enforced the legal requirements that has neither enforced the legal counties develop and submit annual county plans nor created county requirements that counties develop plans for counties that did not do so. As the single state agency and submit annual county plans with full power to supervise every phase of the administration nor created county plans for of the IHSS program, Social Services has failed to comply with counties that did not do so. its own regulations meant to ensure the safety of Californians. When we brought this omission to their attention, Social Services’ representatives indicated that the requirement is outdated and that it is the recipient’s duty to ensure that they receive care. However, 14 California State Auditor Report 2020-109 February 2021 Social Services’ responsibility to ensure proper planning is clear; moreover, this lack of attention to planning increases health risks for individuals who should receive care but do not. Counties Generally Did Not Meet Deadlines for Approving Program Services and Ensuring That Services Were Provided From January 2015 through December 2019, counties throughout the State failed to process applications for the IHSS program in a timely manner, delaying services for thousands of applicants. For recipients to receive necessary services under the IHSS program, a county must make an initial determination of an applicant’s eligibility, generally General IHSS Eligibility Requirements within 30 days following the date of an application, Applicant must: as required by Social Services’ regulations. The • Be eligible for Medi-Cal benefits.* application must include all information necessary • Obtain a health care certification, which must, among to establish eligibility, as noted in the text box. other things, be signed by a licensed health care Despite this requirement, applicants approved in professional. 2019 waited more than 72 days on average for Counties must: counties to approve participation in the program. • Conduct an assessment of the recipient’s needs for This represents an improvement from the statewide supportive services. This needs assessment must average of 82 days in 2015, but it is still well above generally identify the types of services and number of the regulatory requirement. hours of services the recipient needs. Source: Social Services guidance. In 2019 the four counties we reviewed took between * While most recipients receive services through Medi-Cal, 55 and 117 days on average to approve applications, about 1.5 percent of recipients participate in IHSS-residual, and they provided several explanations for the a non-Medi-Cal IHSS program. delays. For example, Butte and Stanislaus counties told us that their delays were caused by a lack of social workers, and all four counties said that getting completed disability determinations from applicants was challenging. However, because the purpose of the IHSS program is to provide the care necessary for recipients to remain safely in their homes, delays in approving them for care increase the risk that they will suffer an injury or other hardship. Table 3 demonstrates that no county met this timing requirement in 2019. We identified a number of counties, including two of the counties we reviewed, that took significantly longer than 72 days on average to approve applicants. For example, seven counties took 90 days or longer to process applications in 2019. Stanislaus County took 117 days on average before approving applicants for service, while Kern County took 83. According to Stanislaus County, its significant delays were the result of a backlog of applications and high turnover in its social worker positions. The county stated that it has worked to overcome these obstacles in 2020 by reassigning social workers to the IHSS program and adjusting social worker responsibilities so they can focus on assessing the care needs of applicants and California State Auditor Report 2020-109 15 February 2021 approving services. However, these changes are recent, and it is too soon to assess whether they have had a positive effect on Stanislaus’ ability to process applications. Appendix B, Table B.3, provides a breakdown of applicant approval delays by county for 2015 and 2019. Table 3 No Counties, on Average, Approved Applications In a Timely Manner in 2019 AVERAGE DAYS TO APPROVAL NUMBER OF COUNTIES Less than 30 0 31–60 24 61–90 27 More than 91 7 Source: Auditor analysis of Social Services’ CMIPS II data. Although Social Services’ regulations generally requires that applications be processed in no more than 30 days, Social Services instead considers 90 days to be a reasonable time frame for processing applications. Social Services said that it based the 90-day timeline on its 30-day regulation, added 45 days for recipients to submit documentation, and “rounded up to the month.” The agency stated that the 30-day requirement is more than 20 years old and does not incorporate more recent changes to the application process, including the requirement added in 2011 for recipients to obtain a health care certification. Social Services stated that it has begun the process of revising its regulations and hopes to complete them in 2021. However, we believe that given the critical nature of these services, 90 days—nearly three months—is too long. First, “rounding up” from 75 days to 90 days does not demonstrate an appropriate level of urgency. Second, Social Services’ calculations assume that two steps—the submission of the application and the health care certification—happen sequentially; however, these steps can happen concurrently; therefore, not all applications require a full 75 days to complete. Until Social Services begins monitoring compliance with its 30-day requirement and the 45-day exception, it will not have sufficient information to establish what a more reasonable regulatory timeline may be. Most recipients were receiving services from a caregiver before entering the IHSS program and being approved for services, more frequently than not from a relative, according to Social Services’ data. However, 18 percent of recipients did not receive services until after they entered the program, and these recipients usually had a nonfamily caregiver. Social Services’ regulations require that services be provided, or arrangements for their provision 16 California State Auditor Report 2020-109 February 2021 made, within 15 days after an approval notice is mailed. However, no county met this requirement for all approved applicants.6 In Almost 58,000 applicants who fact, almost 58,000 applicants who entered the program without a entered the program without a caregiver and who received service for the first time in 2015 through caregiver and who received service 2019 did not receive services for 108 days, on average, after their for the first time in 2015 through county approved their application. Although recipients retain the 2019 did not receive services for right to hire a caregiver, state law obligates each county to ensure an average of 108 days after their that services are provided to all eligible recipients. Thus, counties county approved their application. and recipients share in the responsibility to ensure that required services are provided. Like delays in the approval of applicants, delays in care subject Californians to increased risk of injury or loss of autonomy, as recipients require care to remain safely in their homes. Social Services indicated that it does not monitor counties’ compliance with requirements related to the time it takes for new recipients to receive care. Although the data to perform this monitoring are readily available in its database, Social Services indicated that it is the recipient’s duty to choose and hire his or her own caregiver. The State and Counties Have Not Prepared for Rapid Increases in the Number of IHSS Recipients As we have noted, California is experiencing substantial growth in its senior population, which will significantly increase demand for IHSS services. Already seniors make up the majority—55 percent— of IHSS recipients. According to Finance, the number of seniors in California will increase from 6 million in 2019 to 8.5 million by 2030. In fact, according to Finance projections, individuals 75 years or older will be the fastest-growing age group in the State in the coming decade. As this population continues to age, its members will likely require additional assistance, driving an increase in the need for care hours and caregivers. However, when we surveyed the counties, 49 of the 51 respondents said they had not performed any analysis to identify how many providers they would need in the future and 47 said they had not planned for future recipient growth as we show in Appendix A, Table A. The counties’ lack of planning is of concern in light of the coming increases in the number of IHSS recipients and the current caregiver shortfalls reported by counties. Among the counties responding to our survey, 32 indicated that they currently lack a sufficient number of caregivers to provide each recipient with all of his or her approved services. Because counties assign recipients’ care hours based on the services necessary for them to remain safely in their homes, this existing deficit is already 6 Appendix B, Table B.4 provides a county-level breakdown of the time from approval to service for this population. California State Auditor Report 2020-109 17 February 2021 troubling because a lack of sufficient caregivers increases the risk to recipients who rely on services for their safety. Adding to this concern is the fact that the number of IHSS recipients is growing significantly. Between 2015 and 2019, the number of recipients increased by 18 percent statewide.7 Further, based on current trends, we estimate that the number of IHSS recipients could grow to 951,000 by 2030, a 52 percent increase. According to the Public Policy Institute of California, this rapid growth will occur during a period when family members—the most common type of caregiver—are less available to provide care because more seniors than in previous generations are divorced, never married, or never had children. As a result, the IHSS program will have to plan to address existing gaps in care while simultaneously preparing for a significantly expanded program. Failing to address these issues could result in rapid increases in the number of recipients who need and do not receive care. As we discuss earlier, for decades counties have failed to develop and use annual county plans to ensure that all recipients receive care, despite being required to do so. Although not required, we also would have expected counties throughout the State to have analyzed the needs of their IHSS programs and created strategies to ensure that services are being provided to all eligible recipients during each month of the year. However, they have not. Only two of Only two of the 51 counties the 51 counties responding to our survey had performed an analysis responding to our survey had to identify how many caregivers they need. Of the four counties we performed an analysis to identify reviewed, only Butte County indicated that it had performed this how many caregivers they need. needs analysis although it was unable to provide documentation. Only four of the responding counties have created a plan to account for future growth in the number of recipients. Of the four counties we reviewed, only San Diego County has created such a plan. San Diego’s plan has objectives aimed at building better health in its elderly population and includes performance measures that are specific to the IHSS program, such as the percentage of initial assessments it plans to complete within 45 days through fiscal year 2021–22. Such planning will be critical to ensure that all eligible recipients receive services each month. Counties Do Not Pay Caregivers a Living Wage IHSS caregiver wages vary significantly across California. However, no county paid caregivers a living wage between 2015 and 2019; instead, caregiver wages averaged between 42 percent and 62 percent of a living wage. According to researchers at 7 Appendix B, Table B.5, provides a breakdown of IHSS population changes by county and statewide. 18 California State Auditor Report 2020-109 February 2021 No county paid caregivers a living the Massachusetts Institute of Technology (MIT), living wage wage between 2015 and 2019; calculations represent the salary necessary for a full-time worker instead, caregiver wages averaged to afford basic necessities without public assistance. To determine between 42 percent and 62 percent whether caregivers earned a living wage in each of California’s of a living wage. counties, we used calculations from a model developed at MIT that relies primarily on federal data. The living wage amounts we reference represent costs for a family of two adults with one worker, including those related to food, housing, transportation, and other basic needs such as clothing. The model makes conservative assumptions, including that all meals are prepared in the home using lower-cost food options. Further, the living wage we reference excludes nonessential items such as vacations, entertainment, and all savings. In 2019 the living wage in California ranged from $17.64 an hour in Modoc County to $31 in Marin, San Francisco, and San Mateo counties. We compared the gap between the hourly caregiver earnings in the four counties we reviewed and their respective living wage. As indicated in Figure 3, all four counties established IHSS wages that were well below their living wage. For example, in 2019 the living wage in Kern County was $18.84 per hour, while a caregiver earned $12 per hour, the state minimum wage. In San Diego County, the disparity was greater, with a living wage of $24.62 compared to hourly caregiver wages of $12.50. Appendix C compares the living wage to the caregiver wage in each of the State’s counties. Without access to a living wage, many caregivers and their families may experience food or housing insecurity. In fact, caregiver wages generally satisfy income eligibility requirements for public assistance. The U.S. Department of Health and Human Services revises annually the poverty line and issues poverty guidelines, which were originally calculated in the 1960s and based primarily on the cost of food. Since that time, the guidelines have been determined by multiplying that original calculation by the Consumer Price Index. In 2019 caregivers earned an average of $15,920, about $1,000 less than the federal poverty guideline of $16,910 for a family of two. According to Social Services, California provides CalFresh—the new name for its food stamp program—to residents who earn less than 200 percent of the federal poverty guideline; thus, caregivers throughout the State would generally qualify for food stamps even if they received a 30 percent raise. Because the poverty guidelines are based on 1960s costs and do not fully account for changes in basic expenses or family needs, any caregiver whose compensation is below the poverty line would likely lack sufficient earnings to pay for needs such as rent, transportation, or clothing and would likely have to rely on charitable or public assistance. California State Auditor Report 2020-109 19 February 2021 Figure 3 In 2019 Caregivers Earned a Fraction of the Local Living Wage $24.64 $25 20 $19.44 $18.84 15 10 5 0 Butte Kern San Diego Stanislaus IHSS Wages Local Living Wage egaW ylruoH $20.04 $12.50 $12.00 $12.00 $12.00 Source: Social Services and MIT’s Living Wage Model. Although some caregivers may obtain additional part-time work, the demands associated with working as a caregiver make obtaining alternative full-time employment in addition to caregiving unlikely. On average, caregivers work 23 hours per week. Caregiver workloads reflect the number of hours a county has authorized the recipient to receive, the recipient’s schedule, and the caregiver’s availability. This makes finding multiple caregiving positions difficult. Further, it is unlikely that a caregiver would obtain a full-time position elsewhere for 40 hours per week and retain his or her role in the IHSS program. Doing so would effectively require the caregiver to work 63 hours a week on average. Instead, because the majority of caregivers serve a family member, they must choose between family obligations and full-time employment. Compounding these issues, caregivers in certain localities earn Caregivers in certain localities earn less than the local minimum wage. For example, caregivers in the less than the local minimum wage. city of San Diego earned less than the local minimum wage for a part of 2016 and all of 2017. A City of San Diego ordinance set the 20 California State Auditor Report 2020-109 February 2021 minimum wage within the city at $10.50 and $11.50, respectively, in these years. However, after the city of San Diego established its local minimum wage, Social Services offered guidance to San Diego’s public authority that the ordinance did not apply to IHSS although the guidance did not explain why.8 As a result, IHSS caregivers in the city of San Diego received wages that were between 50 cents and $1 per hour less than the pay of other minimum-wage workers in that city. Had this local minimum wage applied to IHSS workers, they would collectively have been paid about $19 million more over the two-year period. In 2019 the Legislature increased the statewide minimum wage to be no less than $12 per hour, an amount equal Between 2014 and 2019, localities in to the local minimum wage. Between 2014 and 2019, localities in seven counties passed ordinances seven counties passed ordinances that raised local minimum wages that raised local minimum wages by varying amounts; however, these localities declined to grant the by varying amounts; however, increase to local IHSS caregivers. Although this may be permissible, these localities declined to grant the it creates a situation in which IHSS work is not as competitive with increase to local IHSS caregivers. positions that pay the local minimum wage. The State’s Funding Structure and Recent Shortfalls in County Funding Sources Create a Disincentive to Increase Caregiver Pay Many counties and their associated entities, such as public authorities, did not negotiate new caregiver wage increases during the period we reviewed, and we found that the counties that did provide increases were penalized due to changes in state law. Since 2012 state law has treated caregiver wage increases differently than other county IHSS expenditures. From 1991 to 2012, state law required counties to pay a set percentage of the cost of providing IHSS services, and caregiver wage increases were no different from other program expenses that gradually grew in cost. The number of IHSS recipients in a county, the hours of care it authorized, and the amount it paid caregivers all affected how much the county would pay. However, as we describe in the Introduction, state law established a different method of calculating county contributions, based on the actual cost of the program in fiscal year 2011–12, with future adjustments using an inflation factor that the Legislature updates periodically. The Legislature made additional systemwide changes in 2017 and 2019; however, generally only increases to caregiver wages resulting from collective bargaining require an additional increase to the county’s contribution. Furthermore, due to the adjustments to these contributions required by state law, counties that increase caregiver wages continue to pay the increased contribution, even when the State’s 8 As we explain in the Introduction, the public authority performs administrative functions related to caregivers, such as negotiating caregiver wages. California State Auditor Report 2020-109 21 February 2021 minimum wage surpasses their locally negotiated wage. Generally, the amount a county contributes is based on the amount it paid in the prior fiscal year plus the current inflation factor. Counties that do not negotiate wage increases generally do not have their contribution changed when the state minimum wage increases, even if such an increase results in higher caregiver wages in those counties. However, when a county negotiates a local caregiver wage increase, a portion of the cost of that negotiated increase is added to the amount the county must pay each year. Thus, when a county contribution is raised for increased caregiver wages in one year, it is also increasing the amount the county must contribute in every future year, even if the state minimum wage increases.9 For example, in 2016 Contra Costa County increased its caregiver wages to $12 per hour, an increase of 50 cents that brought the pay to $2 above the State’s minimum wage at the time. When the state minimum wage increased to $10.50 an hour in 2017, Contra Costa increased its caregiver wages by another 25 cents to $12.25. Together these two increases by Contra Costa added $2.8 million to the annual amount the county had to pay in fiscal year 2017–18, as we show in Table 4. However, by 2020, the statewide minimum wage had generally increased to $13 per hour, making the previous negotiated wage increases obsolete. Nevertheless, Contra Costa will continue to contribute almost $3 million more annually because its wage increases in 2016 and 2017 created a permanent increase in its contribution. As a result, counties must weigh the impact caregiver wage increases will have on their long-term finances against the benefit they provide caregivers. Moreover, counties that choose to pay caregivers significantly Counties that choose to pay more than the state minimum wage face substantial increases in caregivers significantly more than cost. To limit the State’s share of the costs for locally negotiated the state minimum wage face wage increases, state law since 1999 has limited the State’s required substantial increases in cost. contribution for such increases to a specified dollar amount. The law initially limited the State’s share to 50 cents above the hourly statewide minimum wage for fiscal year 1999–2000. Changes to the law in 2000 generally increased the limit to up to $7.50 per hour, which was $1.75 per hour above the minimum wage at the time. The Legislature continued to increase the limit until it was up to $12.10 per hour by 2007, which was $4.60 per hour above the minimum wage. However, as the state minimum wage increased, the limit did not, and by 2018 the limit was just $1.10 above the general state minimum wage. In 2017 state law generally set future limits to be either $1.10 above specific state minimum wage rates or a cumulative total of up to 10 percent within any three-year 9 The increased amount counties must pay when providing a wage increase is governed by the requirements of the State’s Welfare and Institutions Code. 22 California State Auditor Report 2020-109 February 2021 period. Thus, if caregiver wages increased to more than $1.10 above specified state minimum wage rates in a given year or totaled more than 10 percent within three years, the counties would pay the increased share of those wages. Table 4 Contra Costa Continues to Pay a Larger County Contribution Because of Wage Increases in 2016 and 2017 YEAR 2016 2017 2018 2019 2020 State minimum wage $10.00 $10.50 $11.00 $12.00 $13.00 Contra Costa’s wage 12.00 12.25 12.25 12.25 13.00 (In millions) FISCAL YEAR 2016–17 2017–18 2018–19 2019–20 County contribution* $22.0 $27.2 $29.8 $28.9 County contribution if 19.8 24.4 26.9 26.0 no wage increases Additional amount 2.2 2.8 2.9 2.9 Contra Costa paid Source: State law, Social Services’ communications with counties, IHSS program documents. * In 2017 the Legislature increased the amount of county contributions beginning in fiscal year 2017–18, then in 2019 reduced the amounts beginning in fiscal year 2019–20. Final county contribution amounts for fiscal year 2019–20 were not available as of December 2020. The county contribution amount shown for fiscal year 2019–20 is preliminary, and does not include county funds for administration. For example, in 2018 and 2019, the City and County of San Francisco increased caregiver wages with two $1 raises, to $16 per hour; at that time, the state minimum wage increased from $11 to $12 per hour. The first $1 raise exceeded the 10 percent limit we describe above, and it increased San Francisco’s annual contribution to the State by $8 million. The second $1 also exceeded the 10 percent limit and increased San Francisco’s annual contribution to the State by an additional $13 million. Thus, San Francisco is paying the State $21 million per year because of these raises. Overall, caregiver wages in 2018 and 2019 increased by 14 percent, but San Francisco’s ongoing contributions to the State increased by 20 percent. In addition to the initial and long-term expenses related to hourly rate increases, counties are experiencing shortfalls in the funds they use to pay IHSS costs. For decades, counties have primarily used funds from state sales taxes and vehicle licensing fees to pay their share of IHSS funding. State law allocates the use of these funds to certain purposes, including social services programs such as IHSS. However, according to Finance, as of 2017, revenue from these funds is no longer sufficient to cover counties’ IHSS costs. As a result, any increases to IHSS caregiver wages have to compete with other county priorities for unrestricted county general funds. For California State Auditor Report 2020-109 23 February 2021 example, in 2019 Kern County offered to increase its IHSS caregiver wages by 25 cents an hour and determined that it could bear the more than $400,000 in additional annual cost. However, according to the chief human resources officer (chief) at Kern, the COVID-19 pandemic led the county to withdraw its offer. The chief stated that the emergency forced the county to reduce its discretionary spending, and any additional county spending on IHSS wages would have led to a corresponding decrease in other programs. Because of these factors, coupled with increases to the state minimum wage, by 2019 IHSS caregivers in the majority of counties were working for minimum wage. The number of counties paying more than the minimum wage has decreased substantially since state law changed the required county contributions and increased the minimum wage. As Figure 4 shows, in 2014 52 counties paid caregivers above the state minimum wage. In 2019 the number of counties paying above the state minimum wage had decreased to 20. In 2019 this meant that more than 200,000 IHSS caregivers were no longer paid more than the state minimum wage. Further, in 2019 only two counties paid caregivers more than $2 above In 2019 only two counties paid the minimum wage, compared to 16 counties in 2014. Without caregivers more than $2 above additional action by the State, low caregiver pay will remain a the minimum wage, compared to persistent issue that counties will struggle to address. 16 counties in 2014. As a way to provide incentive to counties to increase wages above the state minimum wage, the Legislature recently amended state law in a manner that assists counties in increasing caregiver pay; however, the effects of the change are limited. Passed in 2017, the law exempts from county contribution adjustments those locally negotiated wage increases contingent on state minimum wage increases. These increases, which we refer to as wage supplements, increase caregiver wages by a negotiated amount whenever the State raises its minimum wage, so that IHSS wages remain above the minimum wage. By treating wage supplements as one-time events and not as a series of subsequent pay increases, the 2017 law allows counties to have their contribution increased only once and not each time the state minimum wage increases. This option limits additional contributions required of counties and, as of December 2020, 44 counties had negotiated wage supplements under the 2017 law. 24 California State Auditor Report 2020-109 February 2021 Figure 4 Between 2014 and 2019, the Number of Counties Paying Above the State Minimum Wage Decreased by More than Half 60 50 40 30 20 10 0 January 2014 January 2019 Percentage of Pay Above State Minimum Wage 0% 0.1% to 9.99% 10 to 19.99% 20 to 29.99% 30% or more seitnuoC fo rebmuN 3 15 20 17 11 52 18 38 8 6 Source: Auditor analysis of Social Services’ data and state law. However, changes to state law added in 2019 will require counties that are below the $1.10 or 10 percent limit that we describe previously to pay a significantly larger contribution—nearly double the existing percentage—for any caregiver wage increases locally negotiated beginning January 1, 2022. Although wage increases could still be negotiated, this change will make such increases vastly more expensive for many counties, some of which already lack sufficient funds to support their share of the IHSS program. As such, it will likely be increasingly difficult to recruit a sufficient number of caregivers to provide services to the expanding IHSS program and counties will struggle to fully serve their recipients. California State Auditor Report 2020-109 25 February 2021 Recommendations The Legislature To balance the need to attract a sufficient number of caregivers into the IHSS program with the need to maintain control over the State’s costs, the Legislature should consider using the annual budget process to allocate additional funds to counties to enable counties to better afford increasing caregiver wages. To ensure that these offset funds are used to best address wage disparities, the Legislature should prioritize their availability to counties where caregivers earn the least, relative to a living wage, and should exempt these wage increases from Welfare and Institutions Code 12306.16, subdivision (d), so that the amounts allocated are not included in adjustments to the county contribution. To limit the disincentive for counties to provide caregiver wage increases, the Legislature should modify the State’s cost-sharing system to eliminate the ongoing costs that counties pay for local wage increases that are nullified by increases to the State’s minimum wage. Social Services To help ensure that all recipients throughout the State receive prompt approval for services and receive all approved services, by August 2021 and annually thereafter, Social Services should require counties to submit required annual plans. These plans should include, at a minimum, a description of how each county will ensure that services are promptly approved and that recipients promptly receive the approved services. To help counties prepare to meet future needs for IHSS services, Social Services should revise its regulations to require counties to include long-range projections and strategies in their annual plans. To help ensure that recipients receive timely care, Social Services should, by August 2021, begin monitoring counties’ compliance with the following: • Approval of IHSS applications within 30 days, unless an extension for obtaining a medical certification applies. • Prompt approval of IHSS applications for which the 45-day extension for a medical certification applies. • Provision of services within 15 days of application approval. 26 California State Auditor Report 2020-109 February 2021 For counties that struggle to comply with its regulations regarding providing timely services, Social Services should require—and regularly follow up on—corrective action plans from these counties. Counties To help ensure that recipients at each county receive prompt approval for services and also receive all approved services, Butte, Kern, San Diego, and Stanislaus counties should, by August 2021 and annually thereafter, complete required plans that include, at a minimum, specific provisions for how each county will ensure prompt approval of services and that recipients promptly receive the approved services. California State Auditor Report 2020-109 27 February 2021 Chapter 2 CHANGES TO THE IHSS FUNDING STRUCTURE AT BOTH THE STATE AND COUNTY LEVELS COULD ADDRESS FUNDING DISPARITIES AMONG COUNTIES Chapter Summary The State’s decision in fiscal year 2012–13 to adjust the contribution each county pays toward the IHSS program by a set percentage— or inflation factor—each year rather than updating each county’s contribution based on its proportion of the IHSS program’s costs has resulted in some counties paying significantly more than their proportional share while others pay less. This approach has effectively increased the State’s share of program costs and penalized counties whose programs did not expand as rapidly as others did. Although in 2017 the State attempted to increase the share all counties paid, its efforts were unsuccessful because counties were unable to rapidly increase their support of the program without state assistance. However, if the State incorporates more modest changes to the way that counties contribute to the IHSS program, it may be able to establish more equitable results. Although we identified issues with the formula used to determine county support of the IHSS program, we found that counties are using their administrative funds for allowable purposes. Further, counties generally spent what they budgeted and used their administrative funds in part to provide mandated training to caregivers. The State’s Formula for IHSS Cost-Sharing Has Led to Inequitable County Contributions and Statewide Funding Disparities The way the State calculates the amount of IHSS costs that counties pay does not account for varying rates of growth among the counties. As we describe in Chapter 1, counties’ contributions to IHSS costs are based on costs incurred in a set fiscal year, and they increase annually at a rate the Legislature sets. By using a set inflation factor across all counties in the State, state law does not account for varying rates of growth in the number of IHSS recipients each county serves or in the number of hours of care those recipients receive. For example, because of the State’s formula, Kern and Butte paid similar county contributions in fiscal year 2018–19, even though the total costs for Kern’s IHSS program were more than $30 million higher than Butte’s, as shown in Table 5. Thus, Kern is receiving a proportionally greater state subsidy for its program and Butte is paying disproportionally more. 28 California State Auditor Report 2020-109 February 2021 Table 5 The State’s Formula for Calculating Counties’ Shares of IHSS Costs Has Led to Inequities (Dollars in Millions) BUTTE’S IHSS COSTS, KERN’S IHSS COSTS, COUNTY CONTRIBUTION, AND STATE SHARE COUNTY CONTRIBUTION, AND STATE SHARE FISCAL YEAR COST COUNTY CONTRIBUTION STATE SHARE COST COUNTY CONTRIBUTION STATE SHARE 2012–13 $40.5 $6.8 $12.5 $45.2 $7.5 $14.2 2018–19 $66.6 $10.6 $20.0 $98.6 $11.2 $34.2 Percent Change +65% +57% +60% +118% +50% +142% Source: State law, Social Services’ communication with counties, county budget documents, IHSS program documents. Note: Costs shown for fiscal year 2012–13 are from fiscal year 2011–12. State law specified that county contributions in fiscal year 2012–13 be based on fiscal year 2011–12 costs. State share amounts for fiscal year 2018–19 are estimated based on statewide averages. The State’s formula for calculating county contributions has created a significant funding disparity at both the state and county levels. Before the 2012 changes to the State’s formula, each county paid the State a set proportion of about 18 percent of their overall IHSS program costs. However, by fiscal year 2018–19, counties paid between 6 percent and 29 percent of their costs, depending on how fast or slow their program costs grew compared to the State’s annual inflation factor. For example, 21 counties paid more than their proportional share of IHSS costs in fiscal year 2018–19 because of the State’s outdated formula. Collectively, these counties paid the State $86 million more that year than their IHSS costs and caregiver wages would have indicated. Some of these counties, including Yuba and Mendocino, paid more because the IHSS costs associated with their programs—for the number of recipients, authorized hours, and caregiver wages—grew more slowly than the inflation factor. Other counties paid more because they increased caregiver wages. For example, even though Marin County increased caregiver wages each year, its actual IHSS costs increased by only 38 percent—5 percent annually—compared to the statewide average of 78 percent from fiscal years 2011–12 through 2018–19. However, because of the State’s formula, Marin paid $1.1 million more in fiscal year 2018–19 than it would have had its contribution been based on its program growth and caregiver wages. Collectively, the remaining 37 counties paid the State $102 million less than they would have if their contributions had been calculated based on actual program costs. In these 37 counties, the growth in the cost of their IHSS programs—from increases in IHSS enrollment, in authorized hours of care, and in the state minimum wage—outpaced the inflation factor that the State’s formula required them to pay. For example, from fiscal years 2011–12 through 2018–19, the costs associated with the IHSS programs at five large counties grew by an average of 11 percent to 14 percent California State Auditor Report 2020-109 29 February 2021 annually while the inflation factor in state law ranged between only 3.5 percent and 5 percent. As a result, by fiscal year 2018–19 these five counties collectively paid $76 million less per year than if their contribution was based on their actual costs. Moreover, because of the continued use of a set inflation factor for all counties, the funding disparity between slow-growing and fast-growing counties is widening each year. The State’s current formula for calculating county contributions has also created a significant funding disparity at the state level. In the last decade, the proportional share of IHSS costs paid by many counties decreased as the State’s formula has not kept pace with their IHSS programs’ growth. Table 6 compares the annual inflation amount to the average statewide growth in program costs. When a county’s IHSS program costs grow faster than the inflation factor, the contribution the county pays the State decreases proportionally. During fiscal years 2012–13 through 2016–17, the first five years the funding formula was in effect, the number of recipients in the IHSS program grew by almost 30 percent as the federal Affordable Care Act and the State’s expansion of Medi-Cal led to expanded eligibility. At the same time, increases in the number of authorized hours per recipient and the state minimum wage added to the overall cost of care. As a result, although many counties pay more than their fair share, in January 2017, Finance estimated that collectively counties would be paying the State about $600 million less in fiscal year 2017–18 than they would have if the State had continued to base their contributions on a percentage of their costs rather than on their fiscal year 2011–12 costs plus the inflation factor. Table 6 Growth in IHSS Program Costs Has Exceeded the Inflation Factor Used to Calculate County Contributions FISCAL YEAR INFLATION FACTOR IHSS PROGRAM COST GROWTH 2012–13 N/A 12% 2013–14 N/A 3% 2014–15 3.5% 24% 2015–16 3.5% 12% 2016–17 3.5% 19% 2017–18 3.5% 7% 2018–19 5% 11% 2019–20 N/A 14% 2020–21 4% 14% Source: State law, Social Services’ local assistance appropriations tables, communication with counties, IHSS program documents, and interviews with Social Services’ staff. Note: Cost growth is based on Social Services local assistance appropriations for IHSS services and administration. IHSS program costs grew significantly in fiscal year 2014–15 due to increased caseload from implementation of the Affordable Care Act and new federal overtime and labor rules. 30 California State Auditor Report 2020-109 February 2021 In recent years the Legislature has attempted to modify the county contribution, but the discrepancies among counties persist. As a result of changes to state law in 2017, the amount counties were to contribute to the IHSS program collectively increased by about $600 million. However, as we mention earlier, the vehicle fees and sales taxes that counties rely on to pay their contributions have not provided sufficient revenue to cover these increases. To offset the additional cost to the counties, the Legislature appropriated funds—almost $400 million in fiscal year 2017–18 and lower amounts in later years. The Legislature made additional changes in 2019 that lowered the inflation factor and made some of its 2017 changes inoperative. In essence, the calculations for county contributions returned to a statewide inflation factor applied to the costs in a base year. Despite these modifications to the county contribution in recent fiscal years, the differences in the shares counties pay persist. Modest adjustments to the State’s However, modest adjustments to the State’s IHSS funding formula IHSS funding formula could result could result in more predictable and equitable program funding. The in more predictable and equitable current contributions state law requires from counties do not consider program funding. changes in IHSS enrollment or the increased costs associated with state minimum wage increases, leading, as noted, to inequitable county contributions. However, if the funding formula took into account actual county IHSS costs, the county contributions would become more equitable. Likewise, if county contributions took into account the availability of the specific funds counties receive through sales taxes and vehicle registration, many counties would more likely be able to pay their proportional contributions. The Legislature could then use the remaining offsets to assist specific counties when the funds are insufficient to cover their proportional share. Taking steps to correct this deficiency now is important because Finance has projected that IHSS expenses will continue to outpace available funds in the future. Appendix D demonstrates the effect reducing the inflation rate could have on counties currently paying more than their proportional share. For example, temporarily eliminating the inflation factor for the 18 counties that are currently contributing more than their proportional share of IHSS costs would reduce the amount those counties collectively pay by $17 million in the first year, although it would take several years without the application of an inflation factor for them to reach parity. The Four Counties We Reviewed Complied With Administrative Funding Use and Training Requirements The four counties we reviewed—Butte, Kern, San Diego, and Stanislaus— used their IHSS administrative funding for allowable purposes. According to Social Services, the State evaluates which county administrative expenses are allowable using federal regulations, state law, and California’s federally approved county cost allocation plan (plan). The plan lists specific types of allowable expenses, such as those related to operating costs and staff, including social workers. The plan also lists categories California State Auditor Report 2020-109 31 February 2021 of unallowable costs, such as fines, penalties, and entertainment expenses. For the counties we reviewed, staff salaries and benefits accounted for between 76 percent and 87 percent of county administrative expenses. Other county administrative expenses included items such as overhead and support, and services and supplies, as shown in Figure 5. The counties we reviewed contracted with various outside service providers such as online hosting companies to provide their IHSS registry, equipment maintenance providers, and legal services companies, all of which are allowable. Although our review identified minor accounting issues, such as a single small payment charged to an incorrect account at one county, we did not identify unallowable expenditures of administrative funds. Figure 5 County IHSS Administrative Costs in Four Counties From Fiscal Years 2014–15 Through 2018–19 Primarily Supported Staff Salaries and Benefits $120 100 80 60 40 20 0 Butte Kern San Diego Stanislaus Salaries and Benefits Overhead and Support Services and Supplies Equipment and Other Charges )snoilliM ni( stsoC evitartsinimdA Source: County IHSS accounting records. 32 California State Auditor Report 2020-109 February 2021 Further, administrative expenditure amounts at the four counties we reviewed appear reasonable, although all four counties are at or above the statewide average for the percentage of costs spent on administration. As Table 7 shows, each of the counties we reviewed had administrative expenses for their IHSS program that ranged from 7 percent to 10 percent of their total IHSS program costs during the five-year period of our review, fiscal years 2014–15 through 2018–19. Overall, 46 counties spent more than the statewide average on administration as a percentage of their total program costs including the four counties that we reviewed. When we followed up with our selected counties on their administrative expenditures, they were able to adequately explain their higher administrative expenditures. For example, while Kern County’s administrative percentage was the highest of the four counties we reviewed, its number of IHSS recipients also increased by the largest percentage—over 100 percent—from 2014 to 2019. According to the administrative services officer at Kern, the county increased its administrative spending in fiscal year 2012–13 in anticipation of this program growth. By 2019 the county’s administrative spending was close to the statewide average. According to the IHSS program accountant at Stanislaus County, the IHSS program and Public Authority moved into new offices in 2016, which increased the county’s IHSS administrative costs. Table 7 Administrative Costs Represented 7 Percent to 10 Percent of Program Costs From Fiscal Years 2014–15 Through 2018–19 in the Counties We Reviewed (Dollars in Millions) COUNTY IHSS COSTS COUNTY ADMINISTRATIVE COSTS ADMINISTRATIVE PERCENTAGE OF COUNTY (Care and Administration) (County and Public Authority) IHSS PROGRAM COSTS Butte $290 $21 7% Kern* 320 33 10 San Diego 1,820 143 8 Stanislaus 380 36 9 STATEWIDE $38,810 $2,768 7% Source: County IHSS accounting records, Social Services’ IHSS program and County Expense Claim system data. * Kern County’s IHSS program doubled in size from 2014 to 2019. Kern’s administrative costs were 7 percent of program costs in fiscal year 2018–19. The counties we reviewed also generally spent what they budgeted. We examined the IHSS administrative budgets and expenses for the county welfare department and public authority at each of the four counties we reviewed. Because Social Services does not inform counties of their state administrative allocations until midway through the fiscal year, the budgets that counties create are estimates and can vary from the approved allocation. Nevertheless, the four counties we reviewed spent about 94 California State Auditor Report 2020-109 33 February 2021 percent of the amounts they budgeted for IHSS administration. The individual amounts the four counties spent ranged from 90 percent to 98 percent of their budgeted amounts for their welfare departments, and from 73 percent to 102 percent for their public authorities, as we show in Table 8. When we followed up on variances between budgets and spending, the rationales the counties provided were reasonable. For example, when we asked Butte County why its public authority expenses were less than the amount it budgeted in 2017, county staff explained that before 2018 the public authority’s small staff had been contract employees likely with fewer benefits than county employees, which made filling vacancies and absences difficult. However, since 2018 Butte County has reclassified its public authority staff as county employees. At Stanislaus County, according to the IHSS program accountant, because the county does not receive its allocation letters from the State until November or later, it is sometimes hard for the county to fully use the allocation. However, the accountant stated that the county has added additional staff to support workload growth, and we observed that the Stanislaus public authority’s administrative salary expenses have recently increased. Table 8 Counties We Reviewed Generally Had IHSS Administrative Expenses That Were Close to Their Budgets From Fiscal Years 2014–15 Through 2018–19 PERCENT OF IHSS ADMINISTRATIVE BUDGETS EXPENDED COUNTY COUNTY WELFARE DEPARTMENT COUNTY IHSS PUBLIC AUTHORITY Butte 91% 73% Kern* 98 102 San Diego 96 93 Stanislaus 90 79 Source: County budget documents. * Kern County public authority expenses greater than 100 percent were primarily due to professional services expenses, including IHSS fraud investigations conducted by the Kern County district attorney. Finally, each of the counties we reviewed provided state-mandated caregiver training. State law requires that caregivers be provided training through a public authority or nonprofit. This law does not generally specify the nature or frequency of this training; however, starting in 2009, another law has required prospective caregivers to complete a caregiver orientation developed by Social Services at the time of enrollment. This orientation must include, among other things, a description of the IHSS program and rules and provider-related processes and procedures, such as properly completing timesheets. All four of the counties we reviewed provided the required training by regularly conducting new caregiver orientations using state-mandated materials. 34 California State Auditor Report 2020-109 February 2021 Furthermore, San Diego also requires its registry caregivers—those who are available to care for IHSS recipients who do not come to the program with a caregiver such as a family member—to complete a three-hour county training and offers all its caregivers a voluntary 18-hour advanced training course. Similarly, Stanislaus recently signed a memorandum of understanding with its local caregiver union and will provide funding to deliver optional supplemental training classes to caregivers. Butte and Kern counties do not generally provide any caregiver training outside of the state-mandated orientations. Recommendation The Legislature To provide for more equitable financial participation by counties, the Legislature should revise the State’s IHSS funding formula to include annual updates based on current program growth and costs and a review of specific funds available to counties. To the extent that some counties’ revenues dedicated to IHSS are insufficient to cover their IHSS contributions, the Legislature should provide counties with assistance as it deems appropriate or designate additional funding sources in state law. We conducted this performance audit in accordance with generally accepted government auditing standards and under the authority vested in the California State Auditor by Government Code 8543 et seq. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on the audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Respectfully submitted, ELAINE M. HOWLE, CPA California State Auditor February 25, 2021 California State Auditor Report 2020-109 35 February 2021 Appendix A SURVEY OF COUNTIES REGARDING IHSS We surveyed directors of county IHSS programs to obtain additional information on how the IHSS program is performing statewide. We received 51 responses, and seven counties did not respond: Fresno, Lassen, Modoc, Placer, San Mateo, Sierra, and Solano. Table A provides a selection of questions and summarizes county answers. Table A Selected Answers From the Survey of Counties Please note that where answers are not Yes/No, respondents were allowed to select more than one answer. Does your county have a sufficient number of IHSS caregivers to provide all approved services to each IHSS recipient? The percentages shown here are out of total respondents, 51. NUMBER PERCENT Yes 19 37% No 32 63 If no, what hurdles exist that prevent your county from having enough caregivers for each recipient to receive all approved services? The percentages shown here are out of total “No” respondents, above, 32. NUMBER PERCENT Insufficient pay rates to attract caregivers. 14 44% Difficulty matching caregivers with recipients in isolated 26 81 geographic areas. Recipients with specific or challenging needs that few caregivers 30 94 can or will satisfy. Recipients are reluctant to hire nonfamily members as caregivers. 10 31 Caregivers do not have enough time to provide services to 16 50 all recipients. Other* 18 56 If no, other than maintaining the mandated registry of caregivers, what activities has the county undertaken to ensure each recipient has a provider? The percentages shown here are out of total “No” respondents, above, 32. NUMBER PERCENT When recipients indicate short-term or specific needs, notify them 26 81% of caregivers who can deliver services as needed. Assist recipients in interviewing caregivers. 25 78 We have taken no additional steps. 1 03 Other† 23 72 continued on next page . . . 36 California State Auditor Report 2020-109 February 2021 Has your county performed any analysis to identify how many caregivers it needs currently and in the future? The percentages shown here are out of total respondents, 51. NUMBER PERCENT Yes 02 04% No 49 96 Does your county actively recruit caregivers? The percentages shown here are out of total respondents, 51. NUMBER PERCENT Yes 45 88% No 06 12 What obstacles, if any, do recipients in your county typically face in hiring caregivers? The percentages shown here are out of total respondents, 51. NUMBER PERCENT Insufficient pay rates to draw applicants. 22 43% Potential caregivers may not have knowledge of the program. 14 27 Potential caregivers do not pass background checks. 011 22 Potential caregivers do not have transportation. 29 57 Potential caregivers are unwilling to provide care in certain 45 88 geographic areas. Potential caregivers are unwilling to provide certain types of care. 42 82 Other‡ 20 39 Has your county created a plan to account for future growth in the number of recipients in your county? The percentages shown here are out of total respondents, 51. NUMBER PERCENT Yes 04 8% No 47 92 Has your county performed any analysis to identify its future budgetary needs for the IHSS program? The percentages shown here are out of total respondents, 51. NUMBER PERCENT Yes 14 27% No 37 73 California State Auditor Report 2020-109 37 February 2021 What concerns, if any, does your county have with its county contribution payments to the State? The percentages shown here are out of total respondents, 51. NUMBER PERCENT None, there are no concerns with the county contribution. 14 27% The county contribution penalizes the county for negotiated 15 29 increases in wages. The county contribution inflation rate is arbitrary and does not 27 53 reflect realities in the county. The county contribution does not reflect actual program costs. 26 51 Other§ 24 47 Source: Auditor analysis of county survey responses. * Counties listed several additional hurdles that prevent them from having enough caregivers, including the COVID pandemic and the caregiver’s inability to complete their background check. † Counties reported several other steps they took to ensure that each recipient has a caregiver, including that the public authority contacts recipients to better understand their hiring needs and providing caregiver recommendations to recipients. ‡ Counties reported several other obstacles that recipients face when hiring caregivers, including that some caregivers are unwilling or unable to pay for a background check. § Counties reported several other concerns with the county contribution, including its unpredictable nature, that it does not correlate to the realignment base, and that state allocations are insufficient. 38 California State Auditor Report 2020-109 February 2021 Blank page inserted for reproduction purposes only. California State Auditor Report 2020-109 39 February 2021 Appendix B COUNTY IHSS POPULATIONS AND PERFORMANCE METRICS The Audit Committee asked us to provide a variety of information related to IHSS populations and performance metrics. The following tables summarize additional or more detailed results of our review of data related to the IHSS populations and performance metrics. Table B.1 The Overall Number of Authorized Hours Not Provided Increased Between 2015 and 2019 2015 2019 PERCENTAGE OF PERCENTAGE OF AUTHORIZED PROVIDED AUTHORIZED AUTHORIZED PROVIDED AUTHORIZED COUNTY DIFFERENCE DIFFERENCE HOURS HOURS HOURS NOT HOURS HOURS HOURS NOT PROVIDED PROVIDED Alameda 27,699,069 26,239,186 1,459,883 5% 34,542,303 32,307,236 2,235,067 6% Alpine 28,670 27,747 923 3 28,546 27,574 972 3 Amador 254,536 241,095 13,441 5 397,265 371,670 25,595 6 Butte 5,179,122 4,958,298 220,824 4 5,364,090 5,063,563 300,527 6 Calaveras 440,439 416,704 23,735 5 589,614 559,765 29,849 5 Colusa 139,063 119,626 19,437 14 340,838 318,370 22,468 7 Contra Costa 9,460,235 9,015,226 445,009 5 14,232,654 13,167,108 1,065,546 7 Del Norte 524,385 501,878 22,507 4 606,537 582,042 24,495 4 El Dorado 1,564,393 1,511,045 53,348 3 2,416,545 2,332,701 83,844 3 Fresno 19,312,101 18,782,620 529,481 3 28,608,173 27,708,588 899,585 3 Glenn 634,768 602,205 32,563 5 769,898 723,391 46,507 6 Humboldt 1,919,902 1,764,651 155,251 8 2,793,535 2,559,540 233,995 8 Imperial 4,857,191 4,755,612 101,579 2 6,606,213 6,468,131 138,082 2 Inyo 163,464 147,506 15,958 10 203,995 182,369 21,626 11 Kern 4,134,188 3,973,487 160,701 4 9,416,063 8,748,498 667,565 7 Kings 2,096,066 2,012,112 83,954 4 3,441,272 3,297,510 143,762 4 Lake 2,754,551 2,631,031 123,520 4 2,968,445 2,812,899 155,546 5 Lassen 179,323 172,317 7,006 4 231,430 217,263 14,167 6 Los Angeles 226,780,272 219,182,471 7,597,801 3 291,929,309 283,021,908 8,907,401 3 Madera 1,946,516 1,860,971 85,545 4 2,758,274 2,645,947 112,327 4 Marin 2,237,161 2,132,082 105,079 5 2,497,071 2,344,087 152,984 6 Mariposa 213,764 209,244 4,520 2 354,342 331,896 22,446 6 Mendocino 2,159,003 2,010,563 148,440 7 2,296,328 2,130,115 166,213 7 Merced 3,131,631 3,009,596 122,035 4 3,799,322 3,648,242 151,080 4 continued on next page . . . 40 California State Auditor Report 2020-109 February 2021 2015 2019 PERCENTAGE OF PERCENTAGE OF AUTHORIZED PROVIDED AUTHORIZED AUTHORIZED PROVIDED AUTHORIZED COUNTY DIFFERENCE DIFFERENCE HOURS HOURS HOURS NOT HOURS HOURS HOURS NOT PROVIDED PROVIDED Modoc 85,172 78,135 7,037 8% 193,411 183,343 10,068 5% Mono 50,665 48,851 1,814 4 52,507 50,304 2,203 4 Monterey 4,392,101 4,249,592 142,509 3 6,303,741 6,115,148 188,593 3 Napa 1,482,768 1,434,300 48,468 3 1,764,120 1,660,626 103,494 6 Nevada 886,464 847,246 39,218 4 844,071 802,553 41,518 5 Orange 26,801,852 25,016,981 1,784,871 7 41,315,549 39,082,983 2,232,566 5 Placer 4,106,491 3,978,314 128,177 3 6,364,662 6,102,582 262,080 4 Plumas 322,901 302,592 20,309 6 399,286 368,843 30,443 8 Riverside 30,153,378 28,942,908 1,210,470 4 50,218,411 48,385,172 1,833,239 4 Sacramento 29,941,130 29,049,376 891,754 3 41,537,689 40,238,254 1,299,435 3 San Benito 760,831 735,011 25,820 3 826,475 789,029 37,446 5 San 31,254,378 30,229,611 1,024,767 3 44,444,956 42,866,454 1,578,502 4 Bernardino San Diego 28,979,647 27,947,145 1,032,502 4 39,463,190 37,948,092 1,515,098 4 San Francisco 24,763,481 23,458,848 1,304,633 5 28,233,554 26,884,997 1,348,557 5 San Joaquin 6,080,578 5,840,280 240,298 4 7,952,765 7,581,942 370,823 5 San Luis 2,203,212 2,091,462 111,750 5 2,742,328 2,624,372 117,956 4 Obispo San Mateo 5,821,686 5,514,749 306,937 5 7,637,085 7,304,711 332,374 4 Santa Barbara 3,572,189 3,405,447 166,742 5 4,382,499 4,125,687 256,812 6 Santa Clara 23,506,657 22,519,972 986,685 4 35,652,022 34,102,657 1,549,365 4 Santa Cruz 3,137,991 2,979,588 158,403 5 3,429,624 3,153,759 275,865 8 Shasta 3,505,889 3,362,997 142,892 4 4,278,714 4,041,440 237,274 6 Sierra 39,601 36,912 2,689 7 53,443 49,496 3,947 7 Siskiyou 532,175 492,243 39,932 8 639,753 595,706 44,047 7 Solano 5,708,046 5,501,307 206,739 4 7,185,453 6,875,431 310,022 4 Sonoma 6,731,314 6,454,524 276,790 4 8,612,697 8,167,172 445,525 5 Stanislaus 6,001,204 5,764,981 236,223 4 8,325,044 7,887,891 437,153 5 Sutter 1,166,519 1,124,526 41,993 4 1,462,948 1,381,572 81,376 6 Tehama 1,105,774 1,053,656 52,118 5 1,570,273 1,470,632 99,641 6 Trinity 202,813 187,877 14,936 7 245,641 226,504 19,137 8 Tulare 2,762,742 2,595,488 167,254 6 6,006,782 5,649,047 357,735 6 Tuolumne 372,870 340,587 32,283 9 572,579 513,943 58,636 10 Ventura 5,919,667 5,647,497 272,170 5 9,438,129 8,992,967 445,162 5 Yolo 2,935,329 2,805,649 129,680 4 3,874,233 3,674,987 199,246 5 Yuba 775,185 746,553 28,632 4 1,075,896 1,000,476 75,420 7 STATEWIDE 583,872,513 561,062,478 22,810,035 4 794,291,592 762,469,185 31,822,407 4 Source: Auditor’s analysis of Social Services’ CMIPS II data. California State Auditor Report 2020-109 41 February 2021 Table B.2 Varying Numbers of Recipients in All Counties Experienced Gaps in Care 2015 2019 MONTHLY MONTHLY MONTHLY AVERAGE MONTHLY AVERAGE COUNTY AVERAGE RECIPIENTS AVERAGE RECIPIENTS RECIPIENTS WITHOUT RECIPIENTS WITHOUT IHSS CARE IHSS CARE Alameda 21,553 1,560 25,388 2,382 Alpine 27 2 24 2 Amador 233 26 330 41 Butte 3,766 378 4,015 406 Calaveras 385 35 445 42 Colusa 164 35 269 35 Contra Costa 8,812 664 11,419 1,268 Del Norte 346 27 381 34 El Dorado 1,022 80 1,392 116 Fresno 16,132 731 21,414 1,148 Glenn 471 40 539 50 Humboldt 1,748 286 2,149 343 Imperial 5,658 219 6,540 217 Inyo 141 29 151 26 Kern 4,382 296 8,319 923 Kings 1,982 163 2,699 205 Lake 2,100 170 2,285 188 Lassen 183 19 216 29 Los Angeles 210,093 9,668 236,443 10,179 Madera 1,884 117 2,281 149 Marin 1,840 168 2,028 222 Mariposa 163 7 247 30 Mendocino 1,802 217 1,845 241 Merced 3,171 235 3,518 239 Modoc 93 15 140 12 Mono 31 4 31 3 Monterey 4,464 278 5,242 273 Napa 1,104 66 1,246 121 Nevada 713 65 708 62 Orange 26,989 2,773 34,509 3,010 Placer 2,632 171 3,627 316 Plumas 319 43 352 51 Riverside 27,392 1,820 37,980 2,513 Sacramento 24,041 1,312 29,955 1,645 continued on next page . . . 42 California State Auditor Report 2020-109 February 2021 2015 2019 MONTHLY MONTHLY MONTHLY AVERAGE MONTHLY AVERAGE COUNTY AVERAGE RECIPIENTS AVERAGE RECIPIENTS RECIPIENTS WITHOUT RECIPIENTS WITHOUT IHSS CARE IHSS CARE San Benito 603 33 654 54 San Bernardino 26,884 1,490 34,200 2,066 San Diego 27,171 1,811 31,797 2,194 San Francisco 23,072 1,721 23,251 1,726 San Joaquin 6,255 471 7,176 553 San Luis Obispo 1,848 197 1,971 185 San Mateo 4,690 389 5,623 426 Santa Barbara 3,272 304 3,704 396 Santa Clara 21,580 1,338 26,114 1,681 Santa Cruz 2,573 272 2,901 444 Shasta 3,052 260 3,439 385 Sierra 32 5 44 8 Siskiyou 570 83 618 86 Solano 4,251 289 5,209 387 Sonoma 5,701 445 6,401 612 Stanislaus 6,507 436 7,687 679 Sutter 1,084 91 1,317 130 Tehama 983 105 1,203 153 Trinity 183 26 236 33 Tulare 3,157 366 4,981 530 Tuolumne 364 63 463 81 Ventura 5,031 414 7,196 583 Yolo 2,471 213 2,816 271 Yuba 720 48 946 106 STATEWIDE 527,890 32,589 628,074 40,290 Source: Auditor analysis of Social Services’ CMIPS II data. California State Auditor Report 2020-109 43 February 2021 Table B.3 Counties Did Not Meet the 30-Day Deadline for Approving Applications for New Recipients 2015 2019 AVERAGE AVERAGE NUMBER OF DAYS FROM NUMBER OF DAYS FROM COUNTY NEW RECIPIENTS APPLICATION NEW RECIPIENTS APPLICATION TO APPROVAL TO APPROVAL Alameda 3,184 82 3,208 61 Alpine 2 12 4 45 Amador 55 47 52 43 Butte 702 51 513 55 Calaveras 84 43 96 54 Colusa 47 43 68 60 Contra Costa 1,216 104 1,763 144 Del Norte 47 41 66 51 El Dorado 221 64 253 73 Fresno 3,010 78 3,427 73 Glenn 84 42 74 44 Humboldt 416 49 370 46 Imperial 697 148 950 123 Inyo 18 44 32 32 Kern 972 69 2,245 83 Kings 346 68 464 84 Lake 401 46 323 53 Lassen 41 55 52 65 Los Angeles 25,329 90 27,480 66 Madera 270 125 373 89 Marin 247 62 261 78 Mariposa 21 36 53 51 Mendocino 302 63 293 66 Merced 551 68 533 74 Modoc 22 35 24 52 Mono 11 62 4 60 Monterey 680 77 863 55 Napa 165 56 171 56 Nevada 148 63 125 58 Orange 4,320 80 4,645 66 Placer 463 75 553 71 Plumas 69 45 69 53 Riverside 5,149 68 6,533 56 continued on next page . . . 44 California State Auditor Report 2020-109 February 2021 2015 2019 AVERAGE AVERAGE NUMBER OF DAYS FROM NUMBER OF DAYS FROM COUNTY NEW RECIPIENTS APPLICATION NEW RECIPIENTS APPLICATION TO APPROVAL TO APPROVAL Sacramento 3,580 97 4,778 63 San Benito 84 81 110 83 San Bernardino 4,281 72 5,445 85 San Diego 3,784 70 5,387 60 San Francisco 2,031 49 2,221 61 San Joaquin 964 117 1,084 156 San Luis Obispo 305 95 326 62 San Mateo 934 50 1,012 54 Santa Barbara 487 56 670 64 Santa Clara 3,116 109 3,585 83 Santa Cruz 352 82 391 81 Shasta 508 49 652 39 Sierra 11 42 8 42 Siskiyou 118 48 121 49 Solano 725 96 721 87 Sonoma 897 84 869 83 Stanislaus 855 115 1,087 117 Sutter 173 50 234 94 Tehama 174 56 218 65 Trinity 31 58 47 85 Tulare 704 79 1,073 131 Tuolumne 47 69 87 65 Ventura 945 54 1,102 55 Yolo 331 78 400 74 Yuba 119 38 143 135 STATEWIDE 74,846 82 87,711 72 Source: Auditor analysis of Social Services’ CMIPS II data. California State Auditor Report 2020-109 45 February 2021 Table B.4 Counties Did Not Meet the 15-Day Deadline for Ensuring Prompt Care for New Recipients Who Did Not Receive Services Until After They Entered the Program 2015 2019 AVERAGE AVERAGE NUMBER NUMBER DAYS FROM DAYS FROM COUNTY OF NEW OF NEW APPROVAL TO APPROVAL TO RECIPIENTS* FIRST SERVICE RECIPIENTS* FIRST SERVICE† Alameda 598 132 602 56 Alpine 0 N/A 1 334 Amador 27 64 11 46 Butte 175 68 121 55 Calaveras 20 59 24 49 Colusa 12 191 18 55 Contra Costa 227 123 224 67 Del Norte 20 29 18 60 El Dorado 51 101 45 59 Fresno 278 89 249 46 Glenn 20 94 25 49 Humboldt 126 157 107 51 Imperial 105 33 90 27 Inyo 12 130 14 50 Kern 159 77 322 58 Kings 57 80 46 54 Lake 88 103 63 48 Lassen 13 44 14 40 Los Angeles 2,366 120 2,369 57 Madera 19 82 32 76 Marin 78 57 61 49 Mariposa 5 67 17 67 Mendocino 80 69 54 63 Merced 95 96 69 36 Modoc 16 47 11 43 Mono 5 31 0 N/A Monterey 75 48 117 41 Napa 36 54 51 49 Nevada 42 52 34 66 Orange 719 153 695 48 Placer 74 80 96 49 Plumas 22 34 17 53 Riverside 664 67 801 51 continued on next page . . . 46 California State Auditor Report 2020-109 February 2021 2015 2019 AVERAGE AVERAGE NUMBER NUMBER DAYS FROM DAYS FROM COUNTY OF NEW OF NEW APPROVAL TO APPROVAL TO RECIPIENTS* FIRST SERVICE RECIPIENTS* FIRST SERVICE† Sacramento 503 87 505 45 San Benito 14 127 15 35 San Bernardino 483 75 609 55 San Diego 752 73 991 50 San Francisco 416 70 459 39 San Joaquin 112 97 113 54 San Luis Obispo 68 72 69 60 San Mateo 203 123 206 42 Santa Barbara 128 76 135 48 Santa Clara 449 111 394 57 Santa Cruz 79 108 86 70 Shasta 143 45 194 34 Sierra 8 25 1 6 Siskiyou 38 48 42 35 Solano 133 114 84 61 Sonoma 204 78 147 58 Stanislaus 125 125 125 52 Sutter 71 44 45 60 Tehama 58 68 52 50 Trinity 7 76 7 56 Tulare 169 96 152 50 Tuolumne 14 52 16 110 Ventura 192 97 159 50 Yolo 76 69 72 50 Yuba 59 44 47 52 STATEWIDE 10,788 98 11,143 52 Source: Auditor analysis of Social Services’ CMIPS II data. * This table only includes new recipients who started receiving services after being approved for IHSS services. † While not shown in the above tables, counties approved more than 12,700 recipients in 2019 who had not yet received services when we reviewed the CMIPS II data in June 2020. Thus the 2019 averages will increase once these recipients receive services. California State Auditor Report 2020-109 47 February 2021 Table B.5 Most Counties Have Experienced Significant Growth In Their IHSS Programs Since 2015 PERCENTAGE COUNTY GROUP 2015 2019 INCREASE FROM 2015 TO 2019 Alameda Caregivers 23,548 26,754 14% Alameda Recipients 24,489 28,618 17 Alpine Caregivers 36 27 -25 Alpine Recipients 32 28 -13 Amador Caregivers 231 320 39 Amador Recipients 295 389 32 Butte Caregivers 4,491 4,583 2 Butte Recipients 4,507 4,829 7 Calaveras Caregivers 453 492 9 Calaveras Recipients 470 531 13 Colusa Caregivers 148 285 93 Colusa Recipients 209 350 67 Contra Costa Caregivers 9,910 12,001 21 Contra Costa Recipients 10,108 13,016 29 Del Norte Caregivers 420 473 13 Del Norte Recipients 406 451 11 El Dorado Caregivers 1,255 1,682 34 El Dorado Recipients 1,224 1,651 35 Fresno Caregivers 17,967 22,923 28 Fresno Recipients 18,536 24,114 30 Glenn Caregivers 545 609 12 Glenn Recipients 562 614 9 Humboldt Caregivers 1,867 2,350 26 Humboldt Recipients 2,147 2,591 21 Imperial Caregivers 5,513 6,393 16 Imperial Recipients 6,320 7,337 16 Inyo Caregivers 131 146 11 Inyo Recipients 178 178 0 Kern Caregivers 5,050 8,468 68 Kern Recipients 5,374 10,106 88 Kings Caregivers 2,163 2,953 37 Kings Recipients 2,337 3,107 33 Lake Caregivers 2,504 2,505 0 Lake Recipients 2,510 2,637 5 Lassen Caregivers 197 233 18 Lassen Recipients 234 278 19 continued on next page . . . 48 California State Auditor Report 2020-109 February 2021 PERCENTAGE COUNTY GROUP 2015 2019 INCREASE FROM 2015 TO 2019 Los Angeles Caregivers 191,913 222,529 16% Los Angeles Recipients 233,346 260,971 12 Madera Caregivers 2,005 2,540 27 Madera Recipients 2,170 2,635 21 Marin Caregivers 1,992 2,052 3 Marin Recipients 2,131 2,313 9 Mariposa Caregivers 215 279 30 Mariposa Recipients 193 293 52 Mendocino Caregivers 1,964 1,962 0 Mendocino Recipients 2,111 2,128 1 Merced Caregivers 3,329 3,839 15 Merced Recipients 3,791 4,126 9 Modoc Caregivers 87 170 95 Modoc Recipients 118 171 45 Mono Caregivers 37 40 8 Mono Recipients 42 40 -5 Monterey Caregivers 4,729 5,560 18 Monterey Recipients 5,192 6,029 16 Napa Caregivers 1,436 1,515 6 Napa Recipients 1,276 1,415 11 Nevada Caregivers 912 838 -8 Nevada Recipients 867 839 -3 Orange Caregivers 25,734 32,847 28 Orange Recipients 30,784 38,870 26 Placer Caregivers 3,340 4,152 24 Placer Recipients 3,151 4,203 33 Plumas Caregivers 342 367 7 Plumas Recipients 396 419 6 Riverside Caregivers 29,057 39,266 35 Riverside Recipients 32,480 43,929 35 Sacramento Caregivers 26,951 34,019 26 Sacramento Recipients 27,380 34,111 25 San Benito Caregivers 703 766 9 San Benito Recipients 688 757 10 San Bernardino Caregivers 28,457 35,805 26 San Bernardino Recipients 31,446 39,384 25 San Diego Caregivers 27,898 32,946 18 San Diego Recipients 31,103 36,417 17 California State Auditor Report 2020-109 49 February 2021 PERCENTAGE COUNTY GROUP 2015 2019 INCREASE FROM 2015 TO 2019 San Francisco Caregivers 23,915 25,520 7% San Francisco Recipients 25,581 25,538 0 San Joaquin Caregivers 6,785 7,760 14 San Joaquin Recipients 7,422 8,369 13 San Luis Obispo Caregivers 1,979 2,169 10 San Luis Obispo Recipients 2,138 2,307 8 San Mateo Caregivers 5,666 6,900 22 San Mateo Recipients 5,591 6,597 18 Santa Barbara Caregivers 3,466 3,764 9 Santa Barbara Recipients 3,833 4,309 12 Santa Clara Caregivers 23,714 29,528 25 Santa Clara Recipients 24,374 29,169 20 Santa Cruz Caregivers 2,899 2,951 2 Santa Cruz Recipients 2,981 3,311 11 Shasta Caregivers 3,483 3,894 12 Shasta Recipients 3,651 4,112 13 Sierra Caregivers 37 52 41 Sierra Recipients 44 54 23 Siskiyou Caregivers 556 609 10 Siskiyou Recipients 703 757 8 Solano Caregivers 5,106 6,050 18 Solano Recipients 5,075 5,971 18 Sonoma Caregivers 6,298 6,660 6 Sonoma Recipients 6,602 7,174 9 Stanislaus Caregivers 6,564 7,573 15 Stanislaus Recipients 7,498 8,700 16 Sutter Caregivers 1,244 1,441 16 Sutter Recipients 1,280 1,595 25 Tehama Caregivers 1,131 1,408 24 Tehama Recipients 1,166 1,455 25 Trinity Caregivers 187 231 24 Trinity Recipients 216 296 37 Tulare Caregivers 3,211 5,113 59 Tulare Recipients 3,800 5,875 55 Tuolumne Caregivers 398 485 22 Tuolumne Recipients 444 554 25 Ventura Caregivers 5,376 7,646 42 Ventura Recipients 5,943 8,263 39 continued on next page . . . 50 California State Auditor Report 2020-109 February 2021 PERCENTAGE COUNTY GROUP 2015 2019 INCREASE FROM 2015 TO 2019 Yolo Caregivers 2,864 3,291 15% Yolo Recipients 2,861 3,222 13 Yuba Caregivers 834 1,026 23 Yuba Recipients 867 1,140 31 STATEWIDE Caregivers 525,166 628,281 20 STATEWIDE Recipients 594,848 701,548 18 Source: Auditor analysis of Social Services’ CMIPS II data. Note: Statewide totals do not equal the county totals because recipients may move between counties and caregivers may provide services to multiple recipients in different counties. California State Auditor Report 2020-109 51 February 2021 Appendix C COMPARISON OF LIVING WAGE TO ACTUAL CAREGIVER WAGES IN CALIFORNIA COUNTIES The Audit Committee asked us to provide information related to caregiver wages. Table C indicates the actual caregiver wages and living wage in all 58 counties as of 2019. Our selected counties Butte, Kern, San Diego and Stanislaus, are indicated in blue shading. Table C Counties Did Not Pay IHSS Caregivers a Living Wage In 2019 AMOUNT BY IHSS CAREGIVER WAGE COUNTY WHICH LIVING COUNTY CAREGIVER AS A PERCENTAGE LIVING WAGE* WAGE EXCEEDS WAGE OF LIVING WAGE CAREGIVER WAGE Alameda $12.50 $25.38 $12.88 49% Alpine $12.00 $18.99 $6.99 63% Amador $12.00 $19.55 $7.55 61% Butte $12.00 $20.04 $8.04 60% Calaveras $12.00 $19.42 $7.42 62% Colusa $12.00 $19.00 $7.00 63% Contra Costa $12.25 $25.38 $13.13 48% Del Norte $12.00 $19.09 $7.09 63% El Dorado $12.00 $20.53 $8.53 58% Fresno $12.00 $19.22 $7.22 62% Glenn $12.00 $18.32 $6.32 66% Humboldt $12.00 $19.19 $7.19 63% Imperial $12.00 $18.98 $6.98 63% Inyo $12.00 $19.26 $7.26 62% Kern $12.00 $18.84 $6.84 64% Kings $12.00 $19.49 $7.49 62% Lake $12.00 $18.99 $6.99 63% Lassen $12.00 $18.38 $6.38 65% Los Angeles $12.60 $23.26 $10.66 54% Madera $12.00 $19.23 $7.23 62% Marin $14.20 $31.00 $16.80 46% Mariposa $12.00 $19.00 $7.00 63% Mendocino $12.00 $19.52 $7.52 61% Merced $12.00 $18.63 $6.63 64% Modoc $12.00 $17.64 $5.64 68% Mono $12.00 $20.38 $8.38 59% Monterey $12.50 $22.31 $9.81 56% continued on next page . . . 52 California State Auditor Report 2020-109 February 2021 AMOUNT BY IHSS CAREGIVER WAGE COUNTY WHICH LIVING COUNTY CAREGIVER AS A PERCENTAGE LIVING WAGE* WAGE EXCEEDS WAGE OF LIVING WAGE CAREGIVER WAGE Napa $12.10 $22.64 $10.54 53% Nevada $12.00 $20.18 $8.18 59% Orange $12.00 $24.89 $12.89 48% Placer $12.00 $20.53 $8.53 58% Plumas $12.00 $19.05 $7.05 63% Riverside $12.00 $20.64 $8.64 58% Sacramento $13.00 $20.53 $7.53 63% San Benito $12.00 $22.86 $10.86 52% San Bernardino $12.00 $20.64 $8.64 58% San Diego $12.50 $24.62 $12.12 51% San Francisco $15.00 $31.00 $16.00 48% San Joaquin $12.00 $19.59 $7.59 61% San Luis Obispo $13.00 $22.03 $9.03 59% San Mateo $13.90 $31.00 $17.10 45% Santa Barbara $12.10 $25.12 $13.02 48% Santa Clara $13.00 $29.39 $16.39 44% Santa Cruz $12.46 $26.29 $13.83 47% Shasta $12.60 $19.15 $6.55 66% Sierra $12.00 $20.63 $8.63 58% Siskiyou $12.00 $18.34 $6.34 65% Solano $12.50 $21.95 $9.45 57% Sonoma $13.00 $23.68 $10.68 55% Stanislaus $12.00 $19.44 $7.44 62% Sutter $12.00 $18.59 $6.59 65% Tehama $12.00 $18.32 $6.32 66% Trinity $12.50 $18.36 $5.86 68% Tulare $12.00 $18.76 $6.76 64% Tuolumne $12.50 $19.40 $6.90 64% Ventura $12.78 $23.12 $10.34 55% Yolo $12.00 $20.84 $8.84 58% Yuba $12.00 $18.59 $6.59 65% Statewide $12.29 $21.19 $8.90 58% Source: Auditor analysis of Social Services’ data and the MIT living wage data. * The living wage framework was created by MIT to identify the minimum employment earnings necessary to meet a family’s basic needs; it uses geographically specific expenditures related to likely minimum food, childcare, health insurance, housing, and other basic costs. California State Auditor Report 2020-109 53 February 2021 Appendix D EFFECT OF REDUCING THE INFLATION FACTOR ON CERTAIN COUNTIES As we note in the main report, since 2012, the State’s method of calculating county contributions for IHSS funding has created significant disparities in the individual proportions of funding that counties provide to the IHSS program. Statewide IHSS costs have increased because of changes such as implementation of the Affordable Care Act and the State’s expansion of Medi-Cal, both of which increased the number of recipients, as well as increases in the number of hours of care recipients receive and increases in caregiver wages. However, although all counties’ IHSS costs have increased, growth in costs has not been proportional across counties because of variations in local populations and local caregiver wages. Despite this, since 2012 the State’s annual inflation factor has applied a flat percentage increase to the amount each county pays the State, regardless of the extent of the growth of its program costs. Over time, these disparities have resulted in some counties paying significantly more or less than their share of the overall IHSS program costs would suggest. Although before 2012 each county paid the State a set proportion of about 18 percent of their overall IHSS program costs, by fiscal year 2018–19, counties paid between 6 percent and 29 percent of their costs, depending on how much faster or slower their costs grew compared to the State’s annual inflation factor. Returning to the pre-2012 funding system would require some counties to pay over $20 million more annually. As the revenues from sources the Legislature dedicated to counties to support the program have not increased as rapidly as the program itself, it is unlikely that counties would be able to bear the expense of these increases, as Finance has noted. However, without state action, these disparities in the proportions that counties pay will continue to grow. Immediately eliminating proportional overpayments by counties would require the State to increase its support of the program by $86 million per year, based on fiscal year 2018–19 ratios. However, by adjusting the IHSS inflation factor annually based on the availability of dedicated county funds and annual county program growth, as we recommend on page 34, the State could gradually move to a more equitable funding model. Selectively reducing the inflation factor for counties paying more than their proportional share would allow the State to gradually reduce overpayments. For example, by temporarily eliminating the inflation factor for 18 counties that pay more than their share, by year five overpayments would be eliminated for 12 of the 18 counties, and reduced for the remaining six counties, at a cost to the State of $215 million. Likewise, an annual review of the 54 California State Auditor Report 2020-109 February 2021 availability of dedicated funds may allow the State to increase the percentage of support paid by those counties not currently paying a proportional share. Table D demonstrates the effect a decrease in inflation factors at selected counties would have on the counties and the associated costs to the State. Table D Eliminating the Inflation Factor for Counties Paying More Than Their Share Would Gradually Reduce Overpayments 18 Counties That Pay More Than Their Share—5-Year Projections IHSS Services Costs County Contributions Proportional Gap Total dollar amount and proportion of Total dollar amount and proportion of Percentage point difference statewide services costs that these statewide contributions that these between proportion of county costs counties' costs represent counties' contributions represent and county contributions Base year $ 1,952,294,834 21.3% $ 428,025,483 28.6% 7.3 fiscal year 2018–19 Year 1 18 Counties Pay More Than Their Share NO CHANGE 4% inflation factor for all counties $ 2,059,546,956 20.7% $ 445,146,502 28.6% 7.9 Year 1 18 Counties Pay More Than Their Share TEMPORARY ELIMINATION of inflation factor for selected counties $ 2,059,546,956 20.7% $ 428,058,890 27.8% 7.1 Year 1 Annual Cost to State: $ 017,087,613 28.6% By year five, temporarily eliminating the inflation factor will have resolved overpayment issues at 12 of the 18 counties and reduced overpayments at the remaining six counties Year 5 18 Counties Pay More Than Their Share NO CHANGE 4% inflation factor for all counties $ 2,557,997,504 18.2% $ 520,758,446 28.6% 10.4 Year 5 6 Counties Pay More Than Their Share TEMPORARY ELIMINATION of inflation factor for selected counties $ 0698,242,262 05.0% $ 156,906,275 09.0% 4.0 Year 5 Annual Cost to State: $ 064,342,009 28.6% Total 5 Year Cost to State: $ 215,492,109 28.6% Source: Social Services’ communications with counties and IHSS program data. Note: This example is based on fiscal year 2018–19 county IHSS costs and contributions. We project future county costs based on historical growth rates, and use the State’s current 4 percent annual inflation factor, which we reduce to 0 percent for counties that pay proportionally more than their share. California State Auditor Report 2020-109 55 February 2021 Appendix E Scope and Methodology The Audit Committee directed the State Auditor to examine the expenditure of state funds for the IHSS program at four counties selected by the State Auditor. Table E below lists the objectives that the Audit Committee approved and the methods we used to address them. Table E Audit Objectives and the Methods Used to Address Them AUDIT OBJECTIVE METHOD 1 Review and evaluate the laws, rules, and regulations significant to Identified and reviewed relevant federal and state laws, rules, and the audit objectives. regulations related to the IHSS program. 2 Analyze the counties’ expenditures of IHSS funding, including the • Interviewed relevant staff at each of the selected counties, IHSS counties’ costs to administer IHSS and the amount of funds paid for public authorities, and Social Services. providers’ wages and benefits. Also, determine whether counties are • Reviewed financial documentation at the selected counties and spending all IHSS funding each year. public authorities. Reviewed Social Services’ IHSS data for the most recent five fiscal years. Determined the following: the percent of budgeted expenditures spent, expenditures on IHSS provider salary and benefits, administrative expenditures, and the costs related to the public authorities. • Reviewed Social Services’ county expense claim system data to compare selected county administrative expenses to statewide averages. 3 Determine whether each county uses IHSS funding for anything • Reviewed state law and found that the State funds IHSS caregivers other than provider wages, benefits, and county administrative costs. wages and benefits, and that counties do not receive this funding If so, assess the rationale for other uses. from the State. • Interviewed relevant staff at each of the selected counties and public authorities. • Reviewed county financial documentation to identify any usage of IHSS funds for purposes not directly related to IHSS administration or benefits during the past five fiscal years. • Reviewed a minimum of 95 percent of the dollar amount of each selected county’s IHSS administrative expenses to determine if the expenses were within allowable categories for IHSS under the State’s claiming rules. Compared counties financial documentation with expenditures they reported to Social Services. continued on next page . . . 56 California State Auditor Report 2020-109 February 2021 AUDIT OBJECTIVE METHOD 4 Identify trends in the number of IHSS providers and recipients within • Interviewed relevant staff at Social Services and their contracted each county. Assess whether each county has a shortage of providers data experts as we developed our methodology and performed given the IHSS hours authorized for recipients. our analysis. • Used data acquired from Social Services’ CMIPS II system as of June 2020 to determine the number of providers, recipients, approved hours, and hours provided at our selected counties for the past five calendar years. Also determined trends for providers, recipients, approved hours, and hour usage. To account for delays in providers submitting timesheets, we included all timesheet data through June 2020 but limited our analysis to services rendered through December 2019. • Interviewed county staff to determine the rationale for differences in budgeted versus actual expenditures and care hours and for any shortages of providers. • Conducted analysis to determine the extent of provider availability and associated trends. • Conducted data reliability assessment testing of CMIPS II data using data from our selected counties and internal dataset verification. • Surveyed counties throughout the State to determine whether gaps in care exist and the extent of current planning efforts, as well as to gain perspective related to their administration, hours utilization, recruitment, retention, and potential best practices. 5 Determine the average minimum wage of each county and compare • Determined minimum wages in all counties for the most recent it to the average wage rate for providers in each county. To the five calendar years. Used Social Services’ data to determine average extent possible, determine the cost of living within each county and provider wages in all counties over the past five fiscal years. compare that to the average provider wage rate in that county. • Reviewed publicly available living wage analysis, including analysis previously conducted at universities. Conducted analysis comparing current wage data and living wage data by county for all counties. Further, compared current wage data to other data sets such as federal per diem, and federal poverty threshold. 6 Identify and assess the biggest challenges to increasing IHSS • Interviewed the provider union for our selected counties to provider wages within each county. determine challenges to IHSS provider wage increases. • Utilized our survey of counties throughout the State to gain perspective on the extent of current planning to increase provider wages at all counties, and on the challenges to increasing IHSS wages. • Reviewed the State’s IHSS funding mechanisms to determine whether they discourage counties from increasing provider wages. 7 Determine the costs incurred by each county to recruit and provide • Interviewed relevant staff, and to the extent it was available training to new IHSS providers. reviewed financial documentation related to recruiting and training efforts at each of the selected counties. • Reviewed available county financial documentation. Determined that counties we reviewed perform minimal recruitment and do not track recruitment expenses. • Determined that training costs in Butte and Kern counties were minimal. Found that Stanislaus has a memorandum of understanding with its caregiver union for the union to provide health and safety training for costs not to exceed $40,000 per year. Found that the San Diego County Public Authority has staff and other resources dedicated for training, but we were unable to determine their costs based on the financial documents the county provided. • Used our survey of counties throughout the state to gain perspective and unaudited data related to recruitment and training issues and expenses. California State Auditor Report 2020-109 57 February 2021 AUDIT OBJECTIVE METHOD 8 To the extent possible, determine what challenges exist for IHSS • Used data obtained from Social Services’ CMIPS II data system recipients including, but not limited, to those without family to determine the average time between selected milestones support—when hiring and retaining providers. Specifically, assess including from application to initial home visit, home visit to the effect of wages on hiring and retention. approval for services, and approval until the provision of initial services. Conducted interviews at our selected counties and Social Services to determine the cause of delays. • Used data obtained from Social Services’ CMIPS II data system to determine retention rate of providers at each counties in the State. To the extent possible, filtered data for recipients to determine turnover rate for those utilizing family support. We found that the providers who were family members had similar retention rates to providers who were not family members. • Identified and interviewed a selection of nonrelated IHSS caregivers who left the program while their associated care recipient remained and determined the reason for their departure. • Analyzed county complaint policies and processes. Requested plans from the four selected counties related to resolving issues with recruiting and retaining providers, including potential increases to wages. Surveyed counties about lack of available planning. • Requested planning documents at our selected counties related to pending increases in recipients. Surveyed counties about lack of planning. • Surveyed counties throughout the State to determine any potential challenges IHSS recipients experienced when hiring and retaining providers. Further, surveyed counties on potential challenges related to collective bargaining agreements. • Analyzed gaps between IHSS provider wages and the living wage. Compared gaps against the retention rates of counties. Reviewed outside analysis related to IHSS worker availability. Our review did not identify a causal link, likely due to the disparity between existing wages and the living wage at all counties. However, we did note that counties with a smaller gap between the living wage and provider wage in some cases had greater retention for paid providers in the later years of our review. 9 Determine how long it takes for new providers, on average, to • Interviewed relevant staff at Social Services and their contracted receive their first timesheet. To the extent possible, assess the impact data experts as we developed our methodology and performed that this timeline has on hiring and recruiting new non-family our analysis. IHSS providers. • Used data from Social Services’ CMIPS II system to determine average time from initial hire until the issuance of timesheets for providers in our selected counties. Reviewed the length of time from initial eligibility to first timesheet, and calculated the average number of hours worked by providers within the selected counties. To the extent possible, filtered Social Services’ data to determine whether providers were non-family providers. • Used data from Social Services’ CMIPS II system to determine the number of approved providers in the selected counties who never received a time card and those that only worked for a limited period. • Reviewed selected county and public authority onboarding materials and related policies and procedures to determine their compliance with state law. • Analyzed the amount of time it took new IHSS caregivers to receive their first timesheets. Interviewed former non-family IHSS caregivers to determine their reasons for leaving the program. No information identified to establish a causal link between potential timesheet delays and caregiver hiring and retention. continued on next page . . . 58 California State Auditor Report 2020-109 February 2021 AUDIT OBJECTIVE METHOD 10 Review and assess any other issues that are significant to the audit. • Reviewed the State’s IHSS funding mechanisms to determine whether incentives exist for counties to limit IHSS services. • Reviewed the State’s IHSS funding mechanisms to determine whether they were equitable and provide for stable county IHSS funding. Source: Audit Committee’s audit request number 2020-109, planning documents, and information identified in the table column titled Method. Assessment of Data Reliability The U.S. Government Accountability Office, whose standards we are statutorily required to follow, requires us to assess the sufficiency and appropriateness of computer-processed information that we use to support our findings, conclusions, and recommendations. In performing this audit, we relied on IHSS program eligibility and timesheet data from Social Services’ CMIPS II system to calculate various program statistics and to evaluate trends about providers and recipients in the program. To evaluate these data, we reviewed existing information about the data, interviewed staff knowledgeable about the data, performed electronic testing of the data, and conducted accuracy testing on a selection of key data elements. We found that these data were of undetermined reliability. Although this determination may affect the precision of the numbers we present, sufficient evidence exists in total to support our audit finds, conclusions, and recommendations. In addition, we obtained electronic expenditure data from each of the four counties we reviewed. We performed data validation and verification through logic testing of key elements. We determined that those data were reliable for the purposes of this audit. California State Auditor Report 2020-109 59 February 2021 February 3, 2021 Ms. Elaine M. Howle, CPA * California State Auditor 621 Capitol Mall, Suite 1200 Sacramento, CA 95814 SUBJECT: CDSS RESPONSE TO CALIFORNIA STATE AUDITOR’S REPORT Dear Ms. Howle: Below you will find the California Department of Social Services (CDSS) response to the recommendations for CDSS in the California State Auditor’s (CSA) Report on the In- Home Supportive Services (IHSS) Program. CSA Recommendations for CDSS: To help ensure that all recipients throughout the State receive prompt approval for services and receive all approved services, by August 2021 and annually thereafter, Social Services should require counties to submit required annual plans. These plans should include, at a minimum, a description of how each county will ensure that services are promptly approved and that recipients promptly receive the approved services. To help counties prepare to meet future needs for IHSS services, Social Services should revise its regulations to require counties to include long-range projections and strategies in their annual plans. For example: 1 To help ensure that recipients receive timely care, Social Services should by August 2021 begin monitoring counties’ compliance with the following:  Approval of IHSS applications within 30 days, unless an extension for obtaining a medical certification applies. Prompt approval of IHSS applications for which the 45-day extension for a medical certification applies.  Provision of services within 15 days of application approval. For counties that struggle to comply with its regulations regarding providing timely services, Social Services should require—and regularly follow up on—corrective action plans from these counties. * California State Auditor’s comments begin on page 69. 60 California State Auditor Report 2020-109 February 2021 Ms. Elaine M. Howle Page 2 CDSS Response: CDSS agrees with the goal of ensuring that all recipients throughout the State receive 2 prompt approval for services and receive all approved services. CDSS plans to repeal the regulation that requires counties to submit annual county plans. The requirement for 3 county plans is an outdated regulation from when services were primarily provided by county homemakers that are employed and directed by the county. As the program evolved to a self-directed model, and recipients became responsible for the hiring and 4 directing of the care provider, county plans were no longer meaningful as the county does not control the service provision of the program. 5 CDSS plans to also repeal the regulation regarding 15 days from application to provision of services. As a self-directed program, IHSS recipients are responsible for managing their own care. Recipients sign an SOC 332 (IHSS Recipient/Employer Responsibility Checklist) at their assessment that states it is the recipient's responsibility to hire and manage their own provider and direct how and when they receive their services. Counties have no authority to hire a provider for a recipient. The county ensures recipients are assessed and authorized for services; it then becomes the recipient’s responsibility to hire a provider. 6 Regarding the requirement to approve IHSS applications in 30 days, CDSS is in the process of revising regulations to include the new statutory requirements for an IHSS applicant to complete a Medi-Cal eligibility determination and health care certification prior to authorization of IHSS. Both requirements allow 45 days for the applicant to complete and run concurrently. 7 Lastly, CDSS has established Quality Assurance and Monitoring Units and a Program Integrity Unit (PIU) which is responsible for monitoring counties in the areas which they are responsible for (application processing, assessing recipients and authorizing hours correctly, conducting reassessments timely, etc.) and will continue to do so. Additional Clarifications The additional responses below provide clarification on the IHSS Program. The following topics are addressed: 1) IHSS Public Authorities 2) IHSS recipients not receiving services; 3) Data referenced; 4) IHSS Maintenance of Effort; 5) Preparation for the future; and 6) IHSS Program Background. California State Auditor Report 2020-109 61 February 2021 Ms. Elaine M. Howle Page 3 IHSS PUBLIC AUTHORITIES Report: Page 9, “Most counties have established public authorities – entities separate from the counties that are deemed the employer of IHSS caregivers to perform various functions related to caregivers.” CDSS Response: Public Authorities (PA) are the employer of record only for purpose of collective 8 bargaining. They are not the employer for any other purpose, the recipient is. Counties and PAs provide supports to assist recipients in their role as employer, such as maintaining a provider registry (operated by the county IHSS PA) to assist recipients in finding a provider if necessary, provider and recipient training, etc.; but counties are not providers’ employer for the purpose of ensuring the provision of services. IHSS RECIPIENTS NOT RECEIVING SERVICES Report: Page 3, “From January 2015 through December 2019, the number of recipients 8 statewide who lacked care grew from 33,000 to more than 40,000 on average each month…County administrators provided several reasons why a recipient would not receive services, including extended hospitalizations, the inability to hire a provider, and recipients moving to a new location and requiring a new provider.” Page 3, “The number of recipients already exceeds the number of caregivers, and as that gap widens, it will likely increase the number of recipients who go without services.” CDSS Response: Calculating the number of recipients who did not receive needed in-home care each 9 month by comparing paid hours versus authorized hours is not an accurate methodology for determining this. Recipients and providers are usually made eligible retroactively. Hours not claimed in a particular month can be claimed in a later month. Furthermore, there are providers who save their timesheets and claim all of their hours in December, causing paid hours to be over 100% of authorized hours in that month. Just because a timesheet was not submitted on time does not mean that a recipient didn't receive care. CDSS would like to supply additional information regarding the reasons provided in the Report for why a recipient would not receive services for clarification. When an IHSS recipient is hospitalized, IHSS services are paused because it would be a duplication of services as the individual is not needing care in the home during that time period. Not receiving services through the IHSS program while a recipient is in the hospital does not 10 mean that the individual wasn’t receiving needed services. It is the recipient’s 62 California State Auditor Report 2020-109 February 2021 Ms. Elaine M. Howle Page 4 responsibility as the employer to hire an IHSS provider. Hours can be claimed at a later date, so when hours are not claimed, it does not necessarily mean services were not received. 11 Many providers that work for multiple recipients. The number of providers has always been lower than recipients. The total number of IHSS providers being lower than the total number of IHSS recipients does not indicate that recipients are going without services. DATA REFERENCED Report: Data tables provided in appendices. Throughout the report, it refers to data derived from these tables. CDSS Response & Questions: 12 The source listed for Tables B.1, B.2, B.3, B.4, B.5 is, “Auditor analysis of Social Services' CMIPS II data.” The columns in the data tables aren’t defined and the source of the data used (fields and tables within CMIPS) is not clearly stated. 12 It is unclear how CSA derived the following:  The 18% of recipients who did not have familial status providers  Number of “new recipients” in each table (it seems to differ)  The calculation of “Average Days from Application to Approval”  The calculation of “Average Days from Approval to First Day of Service”  The Total number of recipients and providers in Table B5 The following issues have been identified with the data: 9 13  It is unclear if the totals are averages or aggregates in the tables. This is problematic and doesn’t provide a complete picture, particularly with authorized versus paid data, considering there are certain months of the year where providers submit timesheets they save. To truly get a picture of what is happening with recipients, and whether or not they are receiving their services, takes much more than authorized versus paid data. 14  The number of “new” recipients differs in Tables B.3 and B.4. To measure how long it takes for “new recipients” to get from application to authorization, and also measure how long it take them to get services, then averages are needed for the entire population. The number of “new recipients” in Table B.4 is different than the number of “new recipients” in Table B.3. There is nothing in the report that states Table B.4 is a subset of the data included in Table B.3.  In Table B.3 the 2019 Total Number of “new recipients” is 87,711. In Table B.4 is 14 states the 2019 number is 11,143, with a footnote that states there was no data California State Auditor Report 2020-109 63 February 2021 Ms. Elaine M. Howle Page 5 for 12,700. This leaves a discrepancy of 63,868 if the Total line is meant to be a 15 total in Table B.4 and not an average.  In Table B.5 the report states that in 2019 there was 701,548 recipients and 628,281 providers. These numbers are higher than the data CDSS has on both a monthly and yearly basis.  If Table B.4 is an average, it is does not align with the average when the 2015 16 and 2019 data are compared.  The total lines in each table do not seem to align. At first glance it seems as though the auditor is using a total in B.3 and B.5, and average in B.4, but the 17 numbers are not correct. CDSS compared the data provided in the tables for Alpine and Sierra counties to the number of applicants in CMIPS. The following was found:  The number of applicants match the numbers included in Table B.3 for Alpine. 18 However, when the data for each of the 4 cases were reviewed in the payroll system, all 4 cases authorized in 2019 have hours paid to the first date when services were authorized. Table B.4 states that there was 1 “new recipient” in Alpine in 2019 and it took 334 days to receive their first service. CDSS could find no recipient where that was the case. When paid hours were reviewed for all 4 cases, there was no recipient who didn’t have timesheet activity dating all the way back to the first pay period they were authorized services. Therefore, the data in Table B.4 is incorrect.  In Table B.3 the report states there were 8 “new recipients” for Sierra. When 19 CDSS reviewed the monthly data in CMIPS, there were 14 applicants in 2019 and of those 10 became eligible for services. Table B.4 states that there was only 1 “new recipient” and it took them 6 days to receive their first services. All cases had timesheet activity back to the first pay period their cases were authorized. Therefore, the data in Table B.4 is incorrect.  Based on the data for just these two counties, it would seem the auditor’s 20 premise that there is a delay between the time a recipient is approved and the day they receive their first services is false and that there is most likely more data issues. The data does not support that there was any delay in services a recipient received when there are timesheet records that claim time back to the first authorized pay period. The timesheet is the proof that the services were provided. It is also important to note that a recipient does not necessarily need to receive services from Day 1 of their authorization. Their services could have started on a Monday, but they scheduled their provider to start on Wednesday. This does not mean that a recipient didn’t receive the services that they needed on Monday and Tuesday; it could be that they didn’t need services those days. 64 California State Auditor Report 2020-109 February 2021 Ms. Elaine M. Howle Page 6 IHSS MAINTENANCE OF EFFORT (PROGRAM FUNDING, INCENTIVE TO NEGOTIATE WAGE INCREASES) Report: Page 27, “The State’s decision in fiscal year 2012-13 to adjust the contribution each county pays toward the IHSS program by a set percentage—or inflation factor—each year rather than updating each county’s contribution based on its proportion of the IHSS program’s costs has resulted in some counties paying significantly more than their proportional share while others pay less. This approach has effectively increased the State’s share of program costs and penalized counties whose programs did not expand as rapidly as others did.” Page 21, “The State’s Funding Structure and Recent Shortfalls in County Funding Sources Create a Disincentive to Increase Caregiver Pay.” Maintenance of Effort (MOE) Background: The 2012 funding structure was a part of the Coordinated Care Initiative (CCI) which contained a trigger that would end it if Department of Finance (DOF) determined that it was not at least cost neutral to the state. In January 2017, DOF made this determination and CCI ended. That legislation included language that if CCI ended the IHSS funding structure would return to the previous sharing ratios. When the trigger was pulled this would have shifted $600 million back to the counties based on the previous sharing methodology. At the time DOF made the decision, they also committed to working with the counties to mitigate this impact. Subsequent discussions between DOF and county representatives resulted in a continued MOE structure that began in FY 2017-18. Under the 2017 County IHSS MOE, the counties’ share of IHSS costs was reset to reflect the counties’ share of estimated 2017-18 IHSS costs based on historical county cost-sharing levels. The 2017 County IHSS MOE increased annually by: (1) counties’ share of costs from locally established wage, health benefit, or non-health benefit increases; and, (2) an annual inflation factor of zero to 7 percent based on 1991 Realignment revenues. In January 2019, the Department of Finance (DOF) found that 1991 Realignment could no longer support county costs of IHSS in its Senate Bill 90: 1991 Realignment Report. As a result, Welfare and Institutions Code (WIC) sections 12306.1 and 12301.16 (SB 80, Chapter 27, Statutes of 2019) were enacted and the new County IHSS MOE became effective on July 1, 2019. Changes to the County IHSS MOE included: • Reduction of the County IHSS MOE base from $2.06 billion to $1.56 billion; California State Auditor Report 2020-109 65 February 2021 Ms. Elaine M. Howle Page 7 • Allocation of state General Funds (GF) for IHSS County and PA administration with no county share up to the allocation amount and 100 percent county cost for the non-federal share of any expenditures above the allocation amount; • Annual inflation factor of 4 percent beginning July 1, 2020 and annually thereafter; • The non-federal sharing ratio will change for any locally established increase in wages or benefits on or after the state minimum wage reaches $15.00 per hour from 65 percent state and 35 percent county to 35 percent state and 65 percent county and the state participation cap is eliminated. Incentives for Counties to Negotiate include: • Wage Supplements - If a county negotiates a wage supplement, the County IHSS MOE shall include a one-time adjustment for the county share. Subsequent application of the wage supplement to the new state minimum wage will not adjust the County IHSS MOE. • 10% option - For a county that is at or above the current state participation cap in combined wages and health benefits, the county may negotiate a contract for combined wages and benefits, and the state shall participate, splitting the cost of the non-federal share 65 percent state and 35 percent county, in a cumulative total of up to 10 percent of the sum of the combined total of changes in wages, health benefits, or both within a three-year period and upon request by the county. • State Participation Cap - The state shall participate in a total of individual provider wages and health benefits up to one dollar and ten cents ($1.10) per hour above the state minimum wage until the state minimum wage reaches $15.00. Once the state minimum wage reaches $15.00, there will be no cap on state participation for approved locally negotiated increases in provider wages and individual health benefits CDSS Response: The MOE does not penalize certain counties or disincentivize counties to negotiate 21 wage increases for IHSS providers. The 2019-20 base MOE is based on each county’s expenditures. The annual inflation 22 factor is to cover caseload growth (caseload growth exceeds the inflation factor, so the state picks up the difference). Some counties are not paying significantly more than 22 their proportional share due to the annual inflation factor because the MOE is based on each county’s expenditures. The items that would potentially create disparities among the counties is the way the offsets, 991 realignment funds and county and PA 22 administration allocations were distributed. The distribution for each of these items was negotiated by the California State Association of Counties (CSAC) and the DOF. CSAC negotiates, on behalf of the counties, how funding for the IHSS program should be 66 California State Auditor Report 2020-109 February 2021 Ms. Elaine M. Howle Page 8 23 distributed; therefore, essentially, the counties have determined how the funding is split between themselves for MOE off-sets, realignment funding and IHSS County and PA admin. Counties have always had a share in the costs of the program. Prior to the MOE, counties paid a percent of all program costs. With the implementation of the MOE, the only adjustments to the amount they pay is the annual inflation factor and a share of any locally bargained increase to wages and benefits. No counties were penalized. Most counties have paid less than they previously would have because the state has covered 24 minimum wage increases and has an increased share of cost via the 10% and wage supplement options. Counties negotiated above minimum wage in prior years because there was no legislation in place for the minimum wage increases that is in place now. Due to this, many counties have utilized the supplemental wage referenced above to continue to pay above the minimum wage with no additional cost to the county. PREPARATION FOR THE FUTURE Report: Page 12, “Providing timely IHSS care may become more difficult, as the number of recipients is expected to increase dramatically over the next 10 years. Despite the pending increase, the counties and the State have not planned for this influx of older Californians needing care.” CDSS Response: 25 The State is constantly planning and preparing for the future to ensure Californians receive needed services. Most recently the IHSS program and its future has been a primary topic of the Master Plan for Aging stakeholder committee that was established by executive order of the Governor. These conversations will continue as a part of ongoing planning. PROGRAM BACKGROUND Report & CDSS Response: Page 7, “IHSS provides services based upon the needs of each recipient, which may include bathing, bowel and bladder care, feeding, and accompaniment to health-related appointments.” 26 Domestic and related services should be mentioned here as the majority of IHSS recipients receive those services. Page 7, “State law allows up to 195 hours per month of care, or 283 hours of services each month for severely impaired individuals.” California State Auditor Report 2020-109 67 February 2021 Ms. Elaine M. Howle Page 9 The statutory maximum is 283 hours. The statutory maximum is 283 hours. However, the maximum number of hours a recipient can receive varies depending on whether they are severely impaired of non-severely impaired, and which Medi-Cal program funds their services. (See WIC §§12303.4, 14132.95, 14132.952 and 14132.956.) RESPONSE FOLLOW UP Questions or requests for clarification regarding the information in this letter should be directed to Debbie Richardson, Chief, Office of Audit Services at Debbie.Richardson@dss.ca.gov. Sincerely, KIM JOHNSON Director 68 California State Auditor Report 2020-109 February 2021 Blank page inserted for reproduction purposes only. California State Auditor Report 2020-109 69 February 2021 Comments CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM THE CALIFORNIA DEPARTMENT OF SOCIAL SERVICES To provide clarity and perspective, we are commenting on the response to our audit report from the California Department of Social Services (Social Services). The numbers below correspond with the numbers we have placed in the margin of its response. The “For example:” in Social Services’ response appears to be an 1 error. Our recommendation does not include an example. Social Services cannot simply repeal its regulations and thereby 2 eliminate counties’ and its responsibilities related to annual plans. State law requires counties to submit annual plans. Specifically, Welfare and Institutions code §12302 states that each county is obliged to ensure that services are provided to all eligible recipients during each month of the year in accordance with the county plan. Moreover, state law requires Social Services to review such plans for compliance with certain other requirements. Although Social Services has failed for decades to comply with state 3 law intended to ensure that counties conduct appropriate planning for people dependent on the IHSS program, the need for such planning is not outdated. As we note on page 12, as of 2019, more than 40,000 recipients on average did not receive in home care each month. Further, as indicated on page 12, 32 of the 51 counties responding to our survey stated that they lacked a sufficient number of caregivers to provide all approved services to each IHSS recipient. Additionally, other county level planning to ensure IHSS care is provided to all recipients is not occurring. For example, of the counties we surveyed only two indicated that they performed any analysis to identify the number of caregivers needed currently or in the future. Similarly, only four counties indicated that they had created a plan to account for future growth in the number of IHSS recipients. Clearly, the need for planning persists. Social Services is using recipients’ responsibilities under the IHSS 4 program as an excuse for it to not hold counties accountable for their responsibilities. In particular, although state law allows recipients to hire their caregivers, as we note on page 16, it also requires counties to conduct planning necessary to ensure care is provided. Further, counties can take a variety of measures to ensure that recipients receive care. For example, three of the four counties we reviewed indicated that they would arrange short-term care for recipients through contracted local providers when necessary. 70 California State Auditor Report 2020-109 February 2021 5 Social Services decision to repeal its longstanding regulation requiring counties to ensure IHSS recipients receive care within 15 days of approval is concerning. As we discuss beginning on page 15, the majority of recipients enter the IHSS program with a caregiver. However, during the period we reviewed nearly 58,000 did not. On average these recipients wait over 100 days after their approval to receive services. Delays of this magnitude put Californians who qualify for in home care at risk. 6 Social Services decision to change its 30-day IHSS application processing requirement to longer than that timeframe is disappointing, particularly given that in 2019 no counties in California met the current requirement, instead taking 72 days on average. We believe Social Services’ decision to increase the processing time requirement does not demonstrate appropriate urgency in providing care for Californians. 7 Although Social Services has established quality assurance and program integrity units, they have failed to monitor compliance with state law related to county planning, application processing, and the legal requirement that counties ensure care is provided to recipients within 15 days of approval. Similarly, on page 16 we note that Social Services advised us that it does not track compliance with its regulations related to the time between approval and care for recipients. 8 We informed Social Services prior to it submitting its response to our draft report that we had already clarified text on page 6 regarding this point. 9 We accounted for the timing of timesheet submission by care providers in our analysis. We understand that providers may delay submitting timesheets which show when authorized services were provided; thus we included all timesheet data that providers submitted to Social Services for payment through June 2020. However, we limited our analysis to the services which would have been rendered through December 2019. Thus, providers had at least six months to submit their timesheets before we received the data for analysis. We believe this is a reasonable time period to expect that the majority of providers would submit their timesheets for payment, particularly since Social Services’ data experts asserted that around 90 percent of all timesheets are completed within 10 days of the timesheet period. 10 Social Services’ response is misleading. On page 12 we note that more than 40,000 IHSS recipients, on average, per month in 2019 did not receive monthly IHSS care. As we indicate on page 12, County administrators detailed several reasons a recipient might not receive monthly care. Some are troubling, such as the inability California State Auditor Report 2020-109 71 February 2021 to hire a caregiver, or delays in obtaining a new caregiver after moving. Others such as hospitalizations may be unavoidable. As such we simply note that gaps in care can represent periods of increased risk of injury or other hardships for IHSS’s elderly and disabled beneficiaries. We note that Social Services did not dispute that gaps in care can result in increased risks to recipients generally. Social Services is correct to point out that many caregivers serve 11 multiple recipients. However, its response fails to acknowledge two critical points. As we note on page 16, expected rapid growth in the number of recipients will likely place increased strain on the IHSS program in the near future. Further, as we note on page 17, this period of rapid growth, which we estimate could result in a 52 percent increase in recipients, coincides with a period where family members will be less available to provide care due to changing demographics. Further, 32 counties responding to our survey have already indicated they lack a sufficient number of caregivers to provide all approved services to each IHSS recipient. It is not our practice to include the detailed steps we take in 12 performing our analysis in the report. However, we worked with Social Services to understand the available data. Social Services referred us to its contracted data experts when we had specific questions related to the system and specific data elements. We worked closely with the contractor and Social Services throughout the audit as we developed our methodology and performed our analysis. Additionally, we shared the results of our analysis with the four counties we reviewed and they did not question the validity of the results. We stand by our analysis. To address this issue and provide 13 additional clarity on our methodology, we included further context for the totals of the tables in Appendix B, beginning on page 39. As we state in the title and footnote for Table B.4 on page 45, the 14 table only includes recipients who began receiving IHSS services after the county approved their case. Further as the title indicates, Table B.3 relates to all new recipients. Social Services did not explain how it calculated the numbers 15 in its response. Our analysis on Table B.5 on page 47 contains the number of caregivers and recipients who either provided or received IHSS care at any point in calendar years 2015 and 2019. We worked closely with Social Services and their contracted data experts throughout the audit as we developed our methodology and performed our analysis. Social Services’ concern is unclear. Each table in Appendix B stands 16 on its own and covers the information presented in the title. 72 California State Auditor Report 2020-109 February 2021 17 The totals in all the tables in Appendix B are correct. However, to provide additional clarity, we included further context for the totals of the tables in Appendix B beginning on page 39. 18 We worked with Social Services to investigate the Alpine case. The research that Social Services conducted in February 2021 showed that the recipient’s providers turned in their timesheets after we obtained the data. As discussed in the Scope and Methodology, Social Services furnished us with a copy of its program data in June 2020. It is reasonable that current data may differ from the June 2020 copy of the data we received and analyzed. 19 The data that Social Services used to draw its conclusions were more current than what we analyzed. Additionally, while these timing issues may affect a limited number of cases, we stand by our analysis and it is unreasonable to discount an entire table that shows more than 11,000 individuals who were approved for care during 2019 but had not received care by June 2020. 20 We stand by our analysis. While there may be a limited number of issues with the timing of when services were reported to Social Services, there is sufficient evidence in total to support our conclusion that there is a delay in providing services for a large number of new recipients. 21 Any county that negotiated a caregiver wage increase before the wage supplement law went into effect in 2017, or which could not take advantage of that law after 2017, is paying an ongoing increase to their county contribution. Such counties will continue to pay more for those wage increases even after the state minimum wage catches up. We provide an example of the fiscal impact of this state law on page 22. 22 Social Services is incorrect. According to the methodology developed by the California State Association of Counties, the fiscal year 2019–20 county contribution amounts are based on the prior fiscal year’s contribution, with adjustments for any locally negotiated wage increases, and a 2 percent reduction per county. As of January 2021 Social Services had not yet published the final fiscal year 2019–20 county contribution amounts. Further, as we indicate on pages 8 and 27, county contributions are based largely on fiscal year 2011–12 county costs, as adjusted for locally negotiated wage increases, and an inflation factor. This does not result in county contributions based on their actual expenditures. Instead, some counties pay more than their proportional share because their IHSS costs grew more slowly than the inflation factor, while others pay less than their share because their costs grew more quickly than the inflation factor. California State Auditor Report 2020-109 73 February 2021 In 2017 the offsets and adjustments which Social Services describes 23 amounted to less than $200 million of the $1.4 billion in county contributions for fiscal year 2017–18. The remaining $1.2 billion was based on the State’s prior methodology. Social Services provides no evidence for its assertion that counties 24 negotiated wages higher than the state minimum in prior years because of a lack of legislation for increases to the minimum wage. If a county’s IHSS caregiver wages are above minimum wage, it was because that county and its IHSS caregivers agreed during collective bargaining that the caregivers should be paid a wage that was above the minimum wage. Moreover, if Social Services assertion was correct, we would not have expected to see the reduced number of counties paying above minimum wage as shown in Figure 4 on page 24. Our remarks, which we have clarified, referenced failures by the 25 counties and Social Services to complete mandatory IHSS county plans for decades. However, our review of The Master Plan for Aging, signed by the Governor and issued in January 2021, indicates that the State acknowledges the need to explore options to increase the stability of IHSS beneficiaries through backup provider systems and registries. Such planning is in line with our recommendations to Social Services on page 25, which includes requiring counties to complete and expand their mandatory planning to include items such as long-range projections and strategies. The examples provided are intended to give readers an 26 understanding of the services provided by the IHSS program and are not meant to be exhaustive. 74 California State Auditor Report 2020-109 February 2021 Blank page inserted for reproduction purposes only. California State Auditor Report 2020-109 75 February 2021 76 California State Auditor Report 2020-109 February 2021 California State Auditor Report 2020-109 77 February 2021 78 California State Auditor Report 2020-109 February 2021 California State Auditor Report 2020-109 79 February 2021 80 California State Auditor Report 2020-109 February 2021 California State Auditor Report 2020-109 81 February 2021