CSA
State of California
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State of California
Federal Compliance Audit Report for the
Fiscal Year Ended June 30, 2023
April 2025
REPORT 2023‑002
CALIFORNIA STATE AUDITOR
621 Capitol Mall, Suite 1200 | Sacramento | CA | 95814
916.445.0255 | TTY 916.445.0033
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Grant Parks State Auditor
Mike Tilden Chief Deputy
April 3, 2025
2023-002
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 required by Government Code section 8543 et seq., the California State Auditor (State
Auditor) presents this audit report concerning the review of the State of California’s internal
controls and compliance with federal laws and regulations for the year ended June 30, 2023.
The State Auditor contracted with Macias Gini & O’Connell LLP (MGO) to perform this audit
for fiscal year 2022–23.
This report concludes that the State did not materially comply with certain requirements
for seven of the 22 federal programs or clusters of programs (federal programs) MGO audited,
including one program for which the noncompliance was pervasive. Additionally, although
MGO concluded that the State materially complied with requirements for the remaining federal
programs it audited, the State continues to experience certain deficiencies in its accounting
and administrative practices that affect its internal controls over compliance with federal
requirements. Deficiencies in the State’s internal control system could adversely affect its
ability to administer federal programs in compliance with applicable requirements.
Respectfully submitted,
LINUS LI, CPA
Deputy State Auditor
621 Capitol Mall, Suite 1200 | Sacramento, CA 95814 | 916.445.0255 | 916.327.0019 fax | www.auditor.ca.gov
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Contents
AUDITOR’S SECTION 1
Independent Auditor’s Report on the Schedule of Expenditures of Federal Awards
Required by the Uniform Guidance 3
Independent Auditor’s Report on Internal Control Over Financial Reporting and
on Compliance and Other Matters Based on an Audit of the Schedule of
Expenditures of Federal Awards Performed in Accordance With Government
Auditing Standards 6
Independent Auditor’s Report on Compliance for Each Major Federal Program and
Report on Internal Control Over Compliance Required by the Uniform Guidance 8
Schedule of Findings and Questioned Costs 15
Schedule of Expenditures of Federal Awards Findings 21
Schedule of Federal Award Findings and Questioned Costs 29
U.S. Department of Agriculture 31
U.S. Department of Labor 34
U.S. Department of Transportation 44
U.S. Department of the Treasury 48
U.S. Department of Health and Human Services 51
Social Security Administration 84
AUDITEE’S SECTION 87
Schedule of Expenditures of Federal Awards 89
Notes to the Schedule of Expenditures of Federal Awards 107
Summary Schedule of Prior Audit Findings 113
Department of Finance Response Letter 147
Management’s Response and Corrective Action Plan 151
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California State Auditor Report 2023‐001 1
April 2025
Auditor’s Section
California State Auditor Report 2023‐001 2
April 2025
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California State Auditor Report 2023‐001 3
April 2025
Independent Auditor’s Report on the Schedule of Expenditures of
Federal Awards Required by the Uniform Guidance
The Governor and the Legislature of the State of California:
Report on the Audit of the Schedule of Expenditures of Federal Awards
Qualified Opinion
We have audited the Schedule of Expenditures of Federal Awards of the State of
California (State) for the fiscal year ended June 30, 2023, and the related notes (the
Schedule).
In our opinion, except for the effects of the matter described in the Basis for Qualified
Opinion section of our report, the accompanying schedule of expenditures of federal
awards presents fairly, in all material respects, the expenditures of federal awards of the
State for the fiscal year ended June 30, 2023, in accordance with the cash basis of
accounting as described in Note 2 to the Schedule.
Basis for Qualified Opinion
We conducted our audit in accordance with auditing standards generally accepted in
the United States of America (GAAS); the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of the
United States (Government Auditing Standards); and the audit requirements of Title 2 U.S.
Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our
responsibilities under those standards and the Uniform Guidance are further described in
the Auditor’s Responsibilities for the Audit of the Schedule section of our report.
We are required to be independent of the State, and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified opinion.
Matter Giving Rise to Qualified Opinion on the Schedule
We were unable to obtain sufficient appropriate audit evidence supporting the eligible
amount of the State’s federal award expenditures for the Unemployment Insurance
program (Assistance Listing Number 17.225) for the fiscal year ended June 30, 2023, due
to the extent and pervasiveness of prior years’ benefit payments made to ineligible
claimants included in the reported expenditures.
Macias Gini & O’Connell LLP
500 Capitol Mall Suite 2200 www.mgocpa.com
Sacramento, CA 95814
California State Auditor Report 2023‐001 4
April 2025
Emphasis of Matters
Basis of Accounting
We draw attention to Note 2 to the Schedule, which describes the basis of accounting.
The Schedule is prepared on the cash basis of accounting, which is a basis of accounting
other than accounting principles generally accepted in the United States of America.
Our opinion is not modified with respect to this matter.
Federal Awards Not Included in the Schedule
As described in Note 1 to the Schedule, the State of California’s basic financial
statements include the operations of the University of California system, a component
unit of the State of California; the California State University system; the California State
Water Resources Control Board Water Pollution Control Revolving Fund; the California
State Water Resources Control Board Safe Drinking Water State Revolving Fund; and the
California Housing Finance Fund of the California Housing Finance Agency, a
component unit of the State of California, which reported $7.0 billion, $2.6 billion,
$225.7 million, $113.9 million, and $14.0 million, respectively, in federal awards, which are
not included in the Schedule for the fiscal year ended June 30, 2023. Our audit, described
above, did not include the federal awards of the University of California system, the
California State University system, the California State Water Resources Control Board
Water Pollution Control Revolving Fund, the California State Water Resources Control
Board Safe Drinking Water State Revolving Fund, and the California Housing Finance Fund
of the California Housing Finance Agency because these entities engaged other auditors
to perform an audit in accordance with the Uniform Guidance. Our opinion is not
modified with respect to this matter.
Responsibilities of Management for the Schedule
Management is responsible for the preparation and fair presentation of the Schedule in
accordance with the cash basis of accounting described in Note 2; this includes
determining that the cash basis of accounting is an acceptable basis for presentation of
the Schedule in the circumstances. Management is also responsible for the design,
implementation, and maintenance of internal control relevant to the preparation and
fair presentation of the Schedule that is free from material misstatement, whether due to
fraud or error.
Auditor’s Responsibilities for the Audit of the Schedule
Our objectives are to obtain reasonable assurance about whether the Schedule as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance but is not absolute assurance and therefore is not a guarantee that an audit
conducted in accordance with GAAS, Government Auditing Standards, and the Uniform
Guidance will always detect a material misstatement when it exists. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Misstatements are considered
California State Auditor Report 2023‐001 5
April 2025
material if there is a substantial likelihood that, individually or in the aggregate, they
would influence the judgment made by a reasonable user based on the Schedule.
In performing an audit in accordance with GAAS, Government Auditing Standards, and
the Uniform Guidance, we
Exercise professional judgment and maintain professional skepticism throughout
the audit.
Identify and assess the risks of material misstatement of the Schedule, whether due
to fraud or error, and design and perform audit procedures responsive to those
risks. Such procedures include examining, on a test basis, evidence regarding the
amounts and disclosures in the Schedule.
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the State’s internal
control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as
well as evaluate the overall presentation of the Schedule.
We are required to communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit, significant audit
findings, and certain internal control-related matters that we identified during the audit.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report
dated March 19, 2025 on our consideration of the State’s internal control over financial
reporting of the Schedule and on our tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements and other matters. The purpose of
that report is solely to describe the scope of our testing of internal control over financial
reporting and compliance of the Schedule, and the results of that testing, and not to
provide an opinion on the effectiveness of the State’s internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the State’s internal
control over financial reporting and compliance of the Schedule.
Sacramento, California
March 19, 2025
California State Auditor Report 2023‐001 6
April 2025
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of the Schedule of Expenditures of
Federal Awards Performed in Accordance With Government Auditing Standards
The Governor and the Legislature of the State of California:
We have audited, in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in
Government Auditing Standards issued by the Comptroller General of the United States;
and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance), the Schedule of Expenditures of Federal Awards of the State of California
(State) for the fiscal year ended June 30, 2023, and the related notes to the Schedule
(the Schedule), and have issued our report thereon dated March 19, 2025. Our report is
qualified because we were unable to obtain sufficient appropriate audit evidence
supporting the eligible amount of the State’s federal award expenditures for the
Unemployment Insurance program (Assistance Listing Number 17.225), and includes
emphasis of matter paragraphs to describe the basis of accounting and those entities
which are audited by other auditors and whose federal award expenditures are not
included in the Schedule. This report does not include the results of the other auditors’
testing of internal control over financial reporting or compliance and other matters that
are reported on separately by those auditors.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the Schedule, we considered the State’s internal
control over financial reporting of the Schedule (internal control) as a basis for designing
audit procedures that are appropriate in the circumstances for the purpose of expressing
our opinion on the Schedule, but not for the purpose of expressing an opinion on the
effectiveness of the State’s internal control. Accordingly, we do not express an opinion
on the effectiveness of the State’s internal control.
A deficiency in internal control exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, misstatements on a timely basis. A material
weakness is a deficiency, or a combination of deficiencies, in internal control, such that
there is a reasonable possibility that a material misstatement of the entity’s Schedule will
not be prevented, or detected and corrected, on a timely basis. A significant deficiency
is a deficiency, or combination of deficiencies, in internal control that is less severe than
a material weakness, yet important enough to merit attention by those charged with
governance.
Macias Gini & O’Connell LLP
500 Capitol Mall Suite 2200 www.mgocpa.com
Sacramento, CA 95814
California State Auditor Report 2023‐001 7
April 2025
Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal
control that might be material weaknesses or significant deficiencies and therefore,
material weaknesses or significant deficiencies may exist that have not been identified.
We identified a certain deficiency in internal control, described in the accompanying
schedule of findings and questioned costs as item 2023-001 that we consider to be a
material weakness.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the State’s Schedule is free
from material misstatement, we performed tests of its compliance with certain provisions
of laws, regulations, contracts, and grant agreements, noncompliance with which could
have a direct and material effect on the Schedule. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we
do not express such an opinion. The results of our tests disclosed an instance of
noncompliance or other matters that is required to be reported under Government
Auditing Standards and which is described in the accompanying schedule of findings
and questioned costs as item 2023-001.
State of California’s Response to Finding
Government Auditing Standards requires auditors to perform limited procedures on the
State’s response to the finding identified in our audit and described in the accompanying
schedule of findings and questioned costs. The State’s response was not subjected to the
auditing procedures applied in the audit of the Schedule and, accordingly, we express
no opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control
and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the entity’s internal control or on compliance. This report is an integral
part of an audit performed in accordance with Government Auditing Standards in
considering the entity’s internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
Sacramento, California
March 19, 2025
California State Auditor Report 2023‐001 8
April 2025
Independent Auditor’s Report on Compliance for Each Major Federal Program and
Report on Internal Control Over Compliance Required by the Uniform Guidance
The Governor and the Legislature of the State of California:
Report on Compliance for Each Major Federal Program
Adverse, Qualified and Unmodified Opinions
We have audited the State of California’s (State) compliance with the types of
compliance requirements identified as subject to audit in the OMB Compliance
Supplement that could have a direct and material effect on each of the State’s major
federal programs for the fiscal year ended June 30, 2023. The State’s major federal
programs are identified in the summary of auditor’s results section of the accompanying
schedule of findings and questioned costs.
Adverse Opinion on the Unemployment Insurance Program
In our opinion, because of the significance of the matter discussed in the Basis for
Adverse, Qualified, and Unmodified Opinions section of our report, the State did not
comply in all material respects, with the compliance requirements referred to above that
could have a direct and material effect on the Unemployment Insurance Program for
the fiscal year ended June 30, 2023.
Qualified Opinion on Certain Major Federal Programs
In our opinion, except for the noncompliance described in the Basis for Adverse,
Qualified, and Unmodified Opinions section of our report, the State complied, in all
material respects, with the compliance requirements referred to above that could have
a direct and material effect on the major federal programs listed in the Basis for Adverse,
Qualified and Unmodified Opinions section of our report for the fiscal year ended
June 30, 2023.
Unmodified Opinion on Each of the Other Major Federal Programs
In our opinion, the State complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on each of
its other major federal programs identified in the summary of auditor’s results section of
the accompanying schedule of findings and questioned costs for the fiscal year ended
June 30, 2023.
Macias Gini & O’Connell LLP
500 Capitol Mall Suite 2200 www.mgocpa.com
Sacramento, CA 95814
California State Auditor Report 2023‐001 9
April 2025
Basis for Adverse, Qualified and Unmodified Opinions
We conducted our audit of compliance in accordance with auditing standards
generally accepted in the United States of America (GAAS); the standards applicable to
financial audits contained in Government Auditing Standards issued by the Comptroller
General of the United States (Government Auditing Standards); and the audit
requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance). Our responsibilities under those standards and the Uniform Guidance are
further described in the Auditor’s Responsibilities for the Audit of Compliance section of
our report.
We are required to be independent of the State and to meet our other ethical
responsibilities, in accordance with relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our adverse, qualified, and unmodified opinions on compliance for
each major federal program. Our audit does not provide a legal determination of the
State’s compliance with the compliance requirements referred to above.
Matter Giving Rise to Adverse Opinion on the Unemployment Insurance Program
As described in the table below and in the accompanying schedule of findings and
questioned costs, the State did not comply with requirements regarding the following:
Assistance State
Finding Listing Federal Program Name or Compliance Administering
Number(s) Number(s) Cluster Requirement(s) Department
2023-004 17.225 Unemployment Insurance Activities Allowed Employment
or Unallowed, Development
Eligibility Department
Compliance with such requirements is necessary, in our opinion, for the State to comply
with the requirements applicable to that program.
Matters Giving Rise to Qualified Opinions on Certain Major Federal Programs
As described in the table below and in the accompanying schedule of findings and
questioned costs, the State did not comply with requirements regarding the following:
Assistance
Finding Listing Federal Program Name or Compliance State Administering
Number(s) Number(s) Cluster Requirement(s) Department
2023-006 20.205 Highway Planning and Subrecipient Department of
Construction Monitoring Transportation
2023-007 21.027 Coronavirus State and Local Subrecipient Community
Fiscal Recovery Funds Monitoring Colleges
Chancellor’s Office
California State Auditor Report 2023‐001 10
April 2025
Assistance
Finding Listing Federal Program Name or Compliance State Administering
Number(s) Number(s) Cluster Requirement(s) Department
2023-008 93.323 Epidemiology and Procurement Department of
2023-009 Laboratory Capacity for and Suspension Public Health
Infectious Diseases (ELC) and
Debarment,
Subrecipient
Monitoring
2023-010 93.489 CCDF Cluster Reporting, Department of
2023-011 93.575 Subrecipient Social Services
2023-012 93.596 Monitoring,
2023-013 Special Tests
2023-014 and Provisions
2023-015 93.767 Children’s Health Insurance Activities Department of
93.778 Program; Allowed or Health Care
Medical Assistance Program Unallowed Services
(Medicaid Cluster)
Compliance with such requirements is necessary, in our opinion, for the State to comply
with the requirements applicable to those programs.
Other Matter – Federal Expenditures Not Included in the Compliance Audit
As described in Note 1 to the Schedule of Expenditures of Federal Awards (Schedule),
the State’s basic financial statements include the operations of the University of California
system, a component unit of the State, the California State University system, the State
Water Resources Control Board Water Pollution Control Revolving Fund, the State Water
Resources Control Board Safe Drinking Water State Revolving Fund, and the California
Housing Finance Fund of the California Housing Finance Agency, a component unit of
the State, which reported $7.0 billion, $2.6 billion, $225.7 million, $113.9 million, and
$14.0 million, respectively, in federal awards, which are not included in the State’s
Schedule during the fiscal year ended June 30, 2023. Our compliance audit, described
above, did not include the federal awards of the University of California system, the
California State University system, the State Water Resources Control Board Water
Pollution Control Revolving Fund, the State Water Resources Control Board Safe Drinking
Water State Revolving Fund, and the California Housing Finance Fund of the California
Housing Finance Agency because these entities engaged other auditors to perform an
audit in accordance with the Uniform Guidance.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and
for the design, implementation, and maintenance of effective internal control over
compliance with the requirements of laws, statutes, regulations, rules and provisions of
contracts or grant agreements applicable to the State’s federal programs.
California State Auditor Report 2023‐001 11
April 2025
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material
noncompliance with the compliance requirements referred to above occurred, whether
due to fraud or error, and express an opinion on the State’s compliance based on our
audit. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with
GAAS, Government Auditing Standards, and the Uniform Guidance will always detect
material noncompliance when it exists. The risk of not detecting material noncompliance
resulting from fraud is higher than for that resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Noncompliance with the compliance requirements referred to above is
considered material, if there is a substantial likelihood that, individually or in the
aggregate, it would influence the judgment made by a reasonable user of the report on
compliance about the State’s compliance with the requirements of each major federal
program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and
the Uniform Guidance, we
Exercise professional judgment and maintain professional skepticism throughout
the audit.
Identify and assess the risks of material noncompliance, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the State’s
compliance with the compliance requirements referred to above and performing
such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the State’s internal control over compliance relevant
to the audit in order to design audit procedures that are appropriate in the
circumstances and to test and report on internal control over compliance in
accordance with the Uniform Guidance, but not for the purpose of expressing an
opinion on the effectiveness of the State’s internal control over compliance.
Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and any significant
deficiencies and material weaknesses in internal control over compliance that we
identified during the audit.
Other Matters
The results of our auditing procedures disclosed other instances of noncompliance which
are required to be reported in accordance with the Uniform Guidance and which are
described in the accompanying schedule of findings and questioned costs as items
2023-002, 2023-003, 2023-005, 2023-017, and 2023-019. Our opinion on each major federal
program is not modified with respect to these matters.
California State Auditor Report 2023‐001 12
April 2025
Government Auditing Standards requires the auditor to perform limited procedures on
the State’s responses to the noncompliance findings identified in our compliance audit
described in the accompanying schedule of findings and questioned costs. The State’s
responses were not subjected to the other auditing procedures applied in the audit of
compliance and, accordingly, we express no opinion on the responses.
Report on Internal Control Over Compliance
Our consideration of internal control over compliance was for the limited purpose
described in the Auditor’s Responsibilities for the Audit of Compliance section above and
was not designed to identify all deficiencies in internal control over compliance that
might be material weaknesses or significant deficiencies in internal control over
compliance and therefore, material weaknesses or significant deficiencies may exist that
were not identified. However, as discussed below, we did identify certain deficiencies in
internal control over compliance that we consider to be material weaknesses and
significant deficiencies.
A deficiency in internal control over compliance exists when the design or operation of
a control over compliance does not allow management or employees, in the normal
course of performing their assigned functions, to prevent, or detect and correct,
noncompliance with a type of compliance requirement of a federal program on a timely
basis. A material weakness in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance
requirement of a federal program will not be prevented, or detected and corrected, on
a timely basis. We consider the deficiencies in internal control over compliance
described in the accompanying schedule of findings and questioned costs as items
2023-004, 2023-006, 2023-007, 2023-008, 2023-009, 2023-010, 2023-011, 2023-012, 2023-013,
2023-014, 2023-015, and 2023-016 to be material weaknesses.
A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of
compliance requirement of a federal program that is less severe than a material
weakness in internal control over compliance, yet important enough to merit attention
by those charged with governance. We consider the deficiencies in internal control over
compliance described in the accompanying schedule of findings and questioned costs
as items 2023-002, 2023-003, 2023-005, 2023-017, 2023-018, and 2023-019 to be significant
deficiencies.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness
of internal control over compliance. Accordingly, no such opinion is expressed.
Government Auditing Standards requires the auditor to perform limited procedures on
the State’s responses to the internal control over compliance findings identified in our
compliance audit described in the accompanying schedule of findings and questioned
costs. The State’s responses were not subjected to the other auditing procedures applied
in the audit of compliance and, accordingly, we express no opinion on the responses.
California State Auditor Report 2023‐001 13
April 2025
The purpose of this report on internal control over compliance is solely to describe the
scope of our testing of internal control over compliance and the results of that testing
based on the requirements of the Uniform Guidance. Accordingly, this report is not
suitable for any other purpose.
Sacramento, California
March 19, 2025
California State Auditor Report 2023‐001 14
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California State Auditor Report 2023‐001 15
April 2025
Schedule of Findings and Questioned Costs
California State Auditor Report 2023‐001 16
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California State Auditor Report 2023‐001 17
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STATE OF CALIFORNIA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Section I – Summary of Auditor’s Results
Financial Statements
Issued under a separate cover. Refer to California State Auditor’s 2023-001.1 report titled
State of California: Internal Control and Compliance Audit Report for the Fiscal Year
Ended June 30, 2023.
Schedule of Expenditures of Federal Awards (Schedule)
Type of report the auditor issued on whether the Schedule
audited was prepared in accordance with the cash basis
of accounting: Qualified
Internal control over financial reporting:
Material weakness(es) identified? Yes
Significant deficiency(ies) identified? No
Noncompliance material to the Schedule noted? Yes
Federal Awards
Internal control over major federal programs:
Material weakness(es) identified? Yes
Significant deficiency(ies) identified? Yes
Type of auditor’s report issued on compliance for the Refer to the tables
major federal programs: that follow.
Adverse Opinion
Assistance
Listing Number Federal Program Name or Cluster
17.225 Unemployment Insurance
Qualified Opinion
Assistance
Listing Number Federal Program Name or Cluster
20.205 Highway Planning and Construction
21.027 Coronavirus State and Local Fiscal Recovery Funds
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
California State Auditor Report 2023‐001 18
April 2025
Assistance
Listing Number Federal Program Name or Cluster
CCDF Cluster:
93.489 Child Care Disaster Relief
93.575 Child Care and Development Block Grant
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund
93.767 Children’s Health Insurance Program
Medicaid Cluster:
93.775 State Medicaid Fraud Control Units
93.777 State Survey and Certification of Health Care Providers and Suppliers (Title
XVIII) Medicare
93.778 Medical Assistance Program
Unmodified Opinion
Assistance
Listing Number Federal Program Name or Cluster
SNAP Cluster:
10.551 Supplemental Nutrition Assistance Program
10.561 State Administrative Matching Grants for the Supplemental Nutrition
Assistance Program
10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and
Children
Food Distribution Cluster:
10.565 Commodity Supplemental Food Program
10.568 Emergency Food Assistance Program (Administrative Costs)
10.569 Emergency Food Assistance Program (Food Commodities)
14.228 Community Development Block Grants/State’s Program and Non-Entitlement
Grants in Hawaii
WIOA Cluster:
17.258 WIOA Adult Program
17.259 WIOA Youth Activities
17.278 WIOA Dislocated Worker Formula Grants
21.023 Emergency Rental Assistance Program
84.126 Rehabilitation Services Vocational Rehabilitation Grants to States
84.424 Student Support and Academic Enrichment Program
84.425 Education Stabilization Fund
93.268 Immunization Cooperative Agreements
93.558 Temporary Assistance for Needy Families
93.568 Low-Income Home Energy Assistance
93.917 HIV Care Formula Grants
93.959 Block Grants for Prevention and Treatment of Substance Abuse
96.001 Disability Insurance/SSI Cluster: Social Security Disability Insurance
Any audit findings disclosed that are required to be reported
in accordance with 2 CFR 200.516(a)? Yes
California State Auditor Report 2023‐001 19
April 2025
Identification of major federal programs:
Assistance
Listing Number Federal Program Name or Cluster
SNAP Cluster:
10.551 Supplemental Nutrition Assistance Program
10.561 State Administrative Matching Grants for the Supplemental Nutrition
Assistance Program
10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and
Children
Food Distribution Cluster:
10.565 Commodity Supplemental Food Program
10.568 Emergency Food Assistance Program (Administrative Costs)
10.569 Emergency Food Assistance Program (Food Commodities)
14.228 Community Development Block Grants/State’s Program and Non-Entitlement
Grants in Hawaii
17.225 Unemployment Insurance
WIOA Cluster:
17.258 WIOA Adult Program
17.259 WIOA Youth Activities
17.278 WIOA Dislocated Worker Formula Grants
20.205 Highway Planning and Construction
21.023 Emergency Rental Assistance Program
21.027 Coronavirus State and Local Fiscal Recovery Funds
84.126 Rehabilitation Services Vocational Rehabilitation Grants to States
84.424 Student Support and Academic Enrichment Program
84.425 Education Stabilization Fund
93.268 Immunization Cooperative Agreements
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
CCDF Cluster:
93.489 Child Care Disaster Relief
93.575 Child Care and Development Block Grant
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund
93.558 Temporary Assistance for Needy Families
93.568 Low-Income Home Energy Assistance
93.767 Children’s Health Insurance Program
Medicaid Cluster:
93.775 State Medicaid Fraud Control Units
93.777 State Survey and Certification of Health Care Providers and Suppliers (Title
XVIII) Medicare
93.778 Medical Assistance Program
93.917 HIV Care Formula Grants
93.959 Block Grants for Prevention and Treatment of Substance Abuse
96.001 Disability Insurance/ SSI Cluster: Social Security Disability Insurance
Dollar threshold used to distinguish between type A and
type B programs: $239,598,103
Auditee qualified as low-risk auditee? No
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Schedule of Expenditures of Federal Awards Finding
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Reference Number: 2023-001
Type of Finding: Material Weakness and Material Instance of Noncompliance
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions
of the Federal award. These internal controls should be in compliance with guidance
in “Standards for Internal Control in the Federal Government” issued by the
Comptroller General of the United States or the “Internal Control Integrated
Framework”, issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart F – Audit Requirements. §200.510 Financial
statements (2 CFR 200.510):
(b) Schedule of expenditures of Federal awards. The auditee must also prepare a
schedule of expenditures of Federal awards for the period covered by the auditee’s
financial statements which must include the total Federal awards expended as
determined in accordance with §200.502 Basis for determining Federal awards
expended. While not required, the auditee may choose to provide information
requested by Federal awarding agencies and pass-through entities to make the
schedule easier to use. For example, when a Federal program has multiple Federal
award years, the auditee may list the amount of Federal awards expended for each
Federal award year separately. At a minimum, the schedule must:
(3) Provide total Federal awards expended for each individual Federal program
and the Assistance Listings Number or other identifying number when the
Assistance Listings information is not available. For a cluster of programs also
provide the total for the cluster.
Condition
The State of California (State) has a decentralized financial reporting process, which
requires State agencies and departments to provide specific financial information to the
California State Auditor Report 2023‐001 24
April 2025
Department of Finance (Finance) in order to annually compile the Schedule of
Expenditures of Federal Awards (Schedule). In its effort to more efficiently and accurately
prepare the Schedule in accordance with the requirements of Title 2 U.S. Code of Federal
Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (Uniform Guidance), Finance developed the
Single Audit Expenditures Reporting Database (Database). Finance developed the
Database to include all of the relevant data fields necessary to compile and produce
the Schedule. Finance also created a Single Audit Database User Manual to provide
specific guidance to users for accessing and navigating through the database.
Employment Development Department
Due to the unprecedented impacts from the COVID-19 pandemic, the Employment
Development Department (EDD) was unable to timely report to Finance through the
Database accurate and reliable federal cash basis expenditures for its largest federal
award program that it administers, the Unemployment Insurance (ALN 17.225) program.
The delay resulted in Finance being unable to compile and produce a complete and
final approved Schedule until May 2024. Although an initial estimated expenditure
amount was reported by EDD of $5.7 billion, the final amount reported in the Schedule
was $5.4 billion. In addition, EDD initially did not report $250.0 million in federal
expenditures for the COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (ALN
21.027) program.
Department of Social Services
The Department of Social Services (CDSS) understated the amount passed through to
subrecipients for the Temporary Assistance for Needy Families (TANF) (ALN 93.558)
program by $429,623,012 for the fiscal year ended June 30, 2023. This amount represents
pass-through amounts to nine counties.
Department of Social Services and Department of Education
CDSS and the Department of Education (CDE) overstated the amount passed through
to subrecipients for the Child Care and Development Block Grant (ALN 93.575), a
component of the Childcare and Development Fund (CCDF) Cluster, by $665,470,225
and $191,925,159, respectively, for the fiscal year ended June 30, 2023. The amount
represents the American Rescue Plan (ARP) Act Stabilization funds for which awards and
payments made to qualified child care providers are considered beneficiary payments
and not subrecipient pass-throughs.
Cause
Employment Development Department
Given the substantial increase in claimants seeking assistance under the Unemployment
Insurance program resulting from the COVID-19 pandemic, EDD was overwhelmed with
the administration of the Unemployment Insurance program. Inadequate controls over
its financial reporting for federally funded unemployment insurance (UI) benefits,
including improperly estimating the total population of ineligible payments, resulted in
California State Auditor Report 2023‐001 25
April 2025
EDD’s challenges in providing complete and accurate information for certain federally
funded accounts within the UI program. In addition, due to the aforementioned
decentralization, EDD was unaware of its responsibility to report the expenditures under
ALN 21.027 into the database.
Department of Social Services
CDSS erroneously assigned an incorrect code for nine counties in the general ledger
system.
Department of Social Services and Department of Education
CDSS misclassified ARP Act Stabilization amounts paid to qualified child care providers as
amounts paid to subrecipients due to insufficient communication regarding grant
requirements between the CDSS Fiscal and Program Operation Divisions.
CDE also misclassified ARP Act Stabilization amounts paid to qualified child care providers
as subrecipient expenditures due to the fluidity of guidance provided by the grantor.
Initially CDE’s understanding was that these funds were considered subrecipient
expenditures. However, subsequent to the award to CDE the guidance was revised
classifying the nature of the funding to beneficiary payments and this change was not
timely identified by CDE. In addition, the CCDF Cluster program administration was
transferred to CDSS on July 1, 2021, and CDE expected communication of funding
changes from CDSS.
Effect
Employment Development Department
The difficulties that EDD encountered from the COVID-19 pandemic resulted in the late
reporting and submission of final federal cash basis expenditures to Finance. The untimely
submission continued to limit and constrain Finance from compiling and producing a final
complete and accurate Schedule.
Department of Social Services
The originally reported subrecipient expenditures of $2,345,367,800 for the TANF program
(ALN 93.558) were understated by $429,623,012, or 15.5% of the corrected amount of
$2,774,990,812.
Department of Social Services and Department of Education
The originally reported subrecipient expenditures of $2,093,528,417 for the CCDF Cluster
were overstated by $857,395,384 or 69.4% of the corrected amount of $1,236,133,033.
California State Auditor Report 2023‐001 26
April 2025
Recommendation
Employment Development Department
EDD should continue to evaluate existing processes and controls related to its ability to
properly report, and timely submit complete and accurate federal award cash basis
expenditures to the Database, which affords Finance the ability to timely compile and
produce a final Schedule pursuant to the Uniform Guidance.
Department of Social Services
CDSS should evaluate existing processes to ensure a correct code is assigned to the
subaward entities in the general ledger system.
Department of Social Services and Department of Education
CDSS should review the criteria of new grant funding to ensure grant requirements are
properly identified and communicated to stakeholders so expenditures are appropriately
classified on the Schedule.
Views of Responsible Officials and Corrective Action Plan
Employment Development Department
EDD agrees with this finding. The deferred transition to FI$Cal and the difficulties
experienced thereafter have continued to cause EDD to be late with submitting year-
end financials and its ability to submit timely the cash basis expenditures into the Single
Audit Expenditures Reporting Database (Database). In addition, the onset of the COVID-
19 pandemic created additional issues which ultimately impacted the EDD’s ability to
submit timely year-end financials. However, the EDD continues to make progress to gain
ground in the department’s efforts to follow the State’s deadlines for submitting year-end
financials and entering the cash basis expenditures into the Database.
EDD took lessons learned from the financial audits from prior fiscal years to update
processes and procedures and applied that knowledge going forward. Also, staff
continue to participate in various trainings offered by the Department of Finance and
the Department of FI$Cal. In addition, staff work with the control agencies when issues
arise that would impact our accounting functions.
While the EDD has been behind in submitting year-end financials for prior years, the
department is making great progress on catching up. The EDD submitted the last of its
fiscal year 2022-23 financials in January 2024 and the last of its fiscal year 2023-24
financials in November 2024. The Department is now working on identifying the ineligible
payment data needed to accurately reflect the cash basis expenditures to enter into the
Database. The EDD’s goal is to submit fiscal year 2024-25 financials in October 2025.
Similar to the 2022-23 financial audit, the EDD will take the knowledge learned during prior
audit seasons and continue to engage with the control agencies and continue to train
and develop staff in order to keep progressing towards the department’s goal of
becoming timely with the submission of the year-end financials and the entering of the
cash basis expenditures into the Database.
California State Auditor Report 2023‐001 27
April 2025
For the $250.0 million for ALN 21.027, this transaction was originally processed through the
state General Fund and then changed through subsequent legislation to be Coronavirus
State and Local Fiscal Recovery Funds. The modification to the original General Fund
transaction was processed later in the fiscal year and not by EDD staff. Due to this, EDD
staff responsible for financial reporting were not aware to report these as federal funds in
the Single Audit Expenditures Reporting Database.
Though this was a unique occurrence, we have added an additional step to the year-
end reporting process to ensure all federally funded expenditures are reported through
SEFA.
Department of Social Services
The CDSS agrees with the finding. On January 14, the Department of Finance (DOF)
reached out to CDSS to inform us that the external auditors had communicated
adjustments for Assistance Listing Number (ALN) 93.558. The subrecipients total was
understated by $429,623,012, with the COVID portion being understated by $3,311,481.
Upon review of the data in which created the SEFA, it was agreed upon, those nine
counties had accidentally been missed when labelling out subrecipients. The CDSS
worked with DOF to reopen the portal and make the necessary adjustments to reflect
the correct information on the same day.
At the time the SFY 22/23 SEFA was being generated, the Federal Reporting Section (FRS)
was new to implementing different Excel formulas to capture all subrecipients
expenditures. Due to human oversight/error, nine counties were missed and were
ultimately reported incorrectly. To prevent the recurrence of this error, the FRS has
implemented additional measures in developing and optimizing the SEFA report
template within Excel. We have formulated the template and added an extra layer to
the VLOOKUP function to extract expenditures paid for all county claims, with the
objective of minimizing human error.
The CDSS also agrees with the finding related to reporting of the Child Care and
Development (CCDF) cluster grant. On February 19, the auditor informed CDSS that 45
CFR 75.2 states that the ARPA Stabilization grant payments cannot be classified as
subrecipients but rather as beneficiaries. By February 24, the SEFA portal had been
reopened and the expenditures for the CCDF grant were corrected to fix the error.
Moving forward, CDSS will review all terms and conditions for federal grants in detail to
ensure how to appropriately classify the grant payments.
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Schedule of Federal Award
Findings and Questioned Costs
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U.S. DEPARTMENT OF AGRICULTURE
Reference Number: 2023-002
Category of Finding: Procurement and Suspension and Debarment
Type of Finding: Significant Deficiency and Instance of
Noncompliance
State Administering Department: California Department of Public Health (Public
Health)
Assistance Listing Number: 10.557
Federal Program Title: Special Supplemental Nutrition Program for
Women, Infants, and Children (WIC)
Federal Award Numbers and Years: 202222W100347, 2022
202221W100347, 2022
202222W100647, 2022
202221W100647, 2022
202222W100247, 2022
202323W100247, 2023
202322W100347, 2023
202323W100347, 2023
202322W100647, 2023
202323W100647, 2023
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions
of the Federal award. These internal controls should be in compliance with guidance
in “Standards for Internal Control in the Federal Government” issued by the
Comptroller General of the United States or the “Internal Control Integrated
Framework”, issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter I – Office of Management and Budget
Government-Wide Guidance for Grants and Agreements. Part 180 – OMB Guidelines to
Agencies on Government-Wide Debarment and Suspension (Non-procurement).
California State Auditor Report 2023‐001 32
April 2025
Subpart C – Responsibilities of Participants Regarding Transactions Doing Business With
Other Persons §180.300 (2 CFR 180.300):
When you enter into a covered transaction with another person at the next lower tier,
you must verify that the person with whom you intend to do business is not excluded or
disqualified. You may do this by:
(a) Checking SAM Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or a condition to the covered transactions with that person.
Condition
We noted that three out of the twelve vendor contract agreements reviewed did not
include a suspension and debarment certification clause indicating the contractor was
not suspended or debarred from participation in federally funded contracts. There was
no other documentation available to demonstrate that the verification of suspension and
debarment was performed prior to entering into the covered transactions. Based on the
subsequent review of the System for Award Management (SAM) exclusions, these
contractors were not suspended or debarred.
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
The WIC program personnel responsible for administering these federal funds were not
fully aware of the suspension and debarment requirements. Additionally, there were no
formal procedures in place to consistently document and retain evidence of suspension
and debarment status checks for vendors.
Effect
Failure to verify suspension and debarment results in noncompliance with 2 CFR §180.300,
as well as a risk that federal funds could be used to pay vendors that are suspended or
debarred.
Questioned Costs
No questioned costs were identified.
Context
The federal funds disbursed to vendors for the fiscal year ended June 30, 2023 totaled
$752,214,598. Three of the twelve samples for the Special Supplemental Nutrition Program
for Women, Infants, and Children program did not have evidence that verification of
suspension and debarment was performed prior to entering into the covered transaction
or include a clause or condition to the covered transaction in the agreement. Total
disbursements made associated with these vendors to totaled $2,185,950 for the fiscal
year ended June 30, 2023.
California State Auditor Report 2023‐001 33
April 2025
Recommendation
Public Health should review and strengthen its procedures for verifying the suspension
and debarment status of vendors before entering into any agreement involving federal
funds and ensure that the verification documentation is maintained. Alternatively,
incorporate a clause in vendor contracts requiring vendors to certify their suspension or
debarment status.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 34
April 2025
U.S. DEPARTMENT OF LABOR
Reference Number: 2023-003
Category of Finding: Activities Allowed or Unallowed
Eligibility
Type of Finding: Significant Deficiency and Instance of
Noncompliance
State Administering Department: California Employment Development
Department (EDD)
Assistance Listing Number: 17.225
Federal Program Title: Unemployment Insurance
COVID-19 Unemployment Insurance
Federal Award Number and Year: UI-34702-20-55-A-6; 2023
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework,” issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Title 22 – Social Security, Division 1 – Employment Development Department,
Subdivision 1 – Director of Employment Development, Division – 1 Unemployment and
Disability Compensation, Part 1 – Unemployment Compensation, Chapter 5
Unemployment Compensation Benefits, Article 1 – Eligibility and Disqualifications
§1256, §1257 and §1326
Eligibility and Disqualifications, §1256 California Code of Regulations:
(a) An individual is disqualified for unemployment compensation benefits if the director
finds that he or she left his or her most recent work voluntarily without good cause or
that he or she has been discharged for misconduct connected with his or her most
recent work.
California State Auditor Report 2023‐001 35
April 2025
Eligibility and Disqualifications, §1257 California Code of Regulations:
(a) An individual is also disqualified for unemployment compensation benefits if: He or
she willfully, for the purpose of obtaining unemployment compensation benefits,
either made a false statement or representation, including, but not limited to, using a
false name, false social security number, or other false identification, with actual
knowledge of the falsity thereof, or withheld a material fact in order to obtain any
unemployment compensation benefits under this division.
Continued Claim for Unemployment Benefits – Filing and Contents, §1326-6 California
Code of Regulations:
(c) The claimant shall, to maintain his or her eligibility to file continued claims during a
continuous period of unemployment, file continued claims at intervals of not more
than two weeks, or such other interval as the department shall require, unless he or
she shows good cause for his or her delay in filing his or her continued claim.
Condition
In EDD’s administration of the Unemployment Insurance program, $198,804,488 in benefit
payments were estimated by EDD to be potentially ineligible payments and have not
been reported in the schedule of expenditures of federal awards. The estimate was
based on data parameters to identify claimants who received benefits that matched
ineligible criteria for identity or eligibility fraud due to misrepresented information.
The Unemployment Insurance Branch of EDD reviews unemployment insurance claims of
claimants for involuntary separation to ensure separations were for valid reasons under
the Unemployment Insurance Code. Out of 138 unemployment insurance benefit
payments tested, there was 1 claimant receiving benefits, whose reasons for involuntary
separation indicated separation was due to misconduct, which was incorrectly
categorized as eligible by EDD.
Identification as a Repeat Finding
Finding 2022-006 was reported in the immediate prior year.
Cause
EDD has acknowledged that the adjudication process for potential eligibility issues, which
includes work separation, was inadequately or not timely performed due to the
significant increase in claims resulting from the COVID-19 pandemic.
Effect
By EDD not performing timely and adequate review for potential eligibility issues, benefit
payments were made to ineligible claimants.
Questioned Costs
Known questioned costs for the one claimant identified was paid unemployment
compensation of $6,975 under Unemployment Insurance Program.
California State Auditor Report 2023‐001 36
April 2025
Context
Benefits paid to claimants under the Unemployment Insurance program for the fiscal year
ended June 30, 2023, totaled $5,383,169,224.
The sample was not a statistically valid sample.
Recommendation
EDD should enhance its adjudication process to support proper eligibility determinations
and decrease improper payments to ineligible claimants.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 37
April 2025
Reference Number: 2023-004
Category of Finding: Activities Allowed or Unallowed
Eligibility
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Employment Development
Department (EDD)
Assistance Listing Number: 17.225
Federal Program Title: COVID-19 Unemployment Insurance
Federal Award Number and Year: UI-34702-20-55-A-6; 2023
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework,” issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Title 20 – Employees’ Benefits, Chapter V, Employment and Training Administration,
Department of Labor, Part 625 – Disaster Unemployment Assistance, §625.6 Weekly
amount; jurisdictions; reductions
Eligibility and Disqualifications,
(b) If the weekly amount computed under paragraph (a) of this section is less than 50
percent of the average weekly payment of regular compensation in the State, as
provided quarterly by the Department, or, if the individual has insufficient wages from
employment or insufficient or no net income from self-employment (which includes
individuals falling within paragraphs (a)(3) and (b)(3) of § 625.5) in the applicable
base period to compute a weekly amount under paragraph (a) of this section, the
individual shall be determined entitled to a weekly amount equal to 50 percent of the
average weekly payment of regular compensation in the State.
California State Auditor Report 2023‐001 38
April 2025
(e) The State agency shall immediately determine, upon the filing of an initial application
for DUA, a weekly amount under the provisions of paragraphs (a) through (d) of this
section, as the case may be, based on the individual’s statement of employment or
self-employment preceding the individual’s unemployment that was a direct result of
the major disaster, and wages earned or paid for such employment or self-
employment. An immediate determination of a weekly amount shall also be made
where, in conjunction with the filing of an initial application for DUA, the individual
submits documentation substantiating employment or self-employment and wages
earned or paid for such employment or self-employment, or, in the absence of
documentation, where any State agency records of employment or self-employment
and wages earned or paid for such employment or self-employment, justify the
determination of a weekly amount. An immediate determination shall also be made
based on the individual’s statement or in conjunction with the submittal of
documentation in those cases where the individual was to commence employment
or self-employment on or after the date the major disaster began but was prevented
from doing so as a direct result of the disaster.
(1) In the case of a weekly amount determined in accordance with paragraph
(e) of this section, based only on the individual’s statement of earnings, the
individual shall furnish documentation to substantiate the employment or
self-employment or wages earned from or paid for such employment or
self-employment or documentation to support that the individual was to
commence employment or self-employment on or after the date the major
disaster began. In either case, documentation shall be submitted within 21
calendar days of the filing of the initial application for DUA.
(3) For purposes of a computation of a weekly amount under paragraph (a)
of this section, if an individual submits documentation to substantiate
employment or self-employment in accordance with paragraph (e)(1), but
not documentation of wages earned or paid during the base period set
forth in paragraph (a)(2) of this section, including those cases where the
individual has not filed a tax return for the most recent tax year that has
ended, the State agency shall immediately redetermine the weekly
amount of DUA payable to the individual in accordance with paragraph
(b) of this section.
Condition
During the fiscal year ended June 30, 2020, EDD implemented the Pandemic
Unemployment Assistance (PUA) program, under the Coronavirus Aid, Relief, and
Economic Security (CARES) Act for COVID-19 relief in unemployment compensation.
Under the CARES Act, the PUA program was to be administered in accordance with the
Disaster Unemployment Assistance (DUA) program under section 625 of Title 20, Code of
Federal Regulations. The amount of PUA payable to an unemployed or unemployed self-
employed individual for a week of total unemployment shall be the weekly amount of
compensation the individual would have been paid as regular compensation, as
computed under the provisions of the applicable State law for a week of total
unemployment. The weekly amount determination is calculated using the wages
California State Auditor Report 2023‐001 39
April 2025
reported by the claimant. Upon receipt of a PUA claim, EDD would verify wages reported
to ensure accurate weekly benefit amounts under PUA.
Out of 138 PUA benefit payments tested, there were 91 claimants with verification issues
(either wages, self-employment, or both).
Identification as a Repeat Finding
Finding 2022-005 was reported in the immediate prior year.
Cause
EDD did not perform timely wage and employment verifications of the claimants due to
the significant increase in claims resulting from the COVID-19 pandemic. Despite ongoing
efforts to address the backlog of claims, EDD was approved by the Department of Labor
(DOL) on May 21, 2024 under Unemployment Insurance Program Letter No. 05-24, to
discontinue pursuing claims older than one year that were not a result of fraud,
misrepresentation or willful nondisclosure.
Effect
EDD did not have adequate oversight controls to ensure that the claimant’s wages were
timely and properly reviewed and approved. Accordingly, there was an increased risk
for the occurrence of overpayment in benefits being provided to individuals, which was
not timely prevented or detected.
Questioned Costs
Known questioned costs for the 91 claimants were $1,708,094.
Context
Benefits paid to claimants under the COVID-19 Unemployment Insurance program for
the fiscal year ended June 30, 2023, totaled $306,150,759, which was offset by prior years’
ineligible benefit payments of $90,034,050 and return of funds from EDD debit cards that
were not activated within 12 months of card issuance of $620,694,399.
The sample was not a statistically valid sample.
Recommendation
EDD should ensure that proper verification procedures are in place to minimize the
number of claimants with wage and/or employment verification issues. Effective and
robust verification procedures should assist EDD in processing unemployment benefits
only to eligible claimants.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective
Action Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 40
April 2025
Reference Number: 2023-005
Category of Finding: Activities Allowed or Unallowed
Eligibility
Type of Finding: Significant Deficiency and Instance of
Noncompliance
State Administering Department: California Employment Development
Department (EDD)
Assistance Listing Number: 17.225
Federal Program Title: COVID-19 Unemployment Insurance
Federal Award Number and Year: UI-34702-20-55-A-6; 2023
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework,” issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Title 20 – Employees’ Benefits, Chapter V, Employment and Training Administration,
Department of Labor, Part 625 – Disaster Unemployment Assistance, §625.14
Overpayments; disqualification for fraud:
(h) Provisions in the procedures of each State with respect to detection and prevention
of fraudulent overpayments of DUA shall be, as a minimum, commensurate with the
procedures adopted by the State with respect to regular compensation and
consistent with the Secretary’s “Standard for Fraud and Overpayment Detection,”
Employment Security Manual, part V, sections 7510 et seq. (Appendix C of this part).
(i) Any individual who, with respect to a major disaster, makes or causes another to make
a false statement or misrepresentation of a material fact, knowing it to be false, or
knowingly fails or causes another to fail to disclose a material fact, in order to obtain
for the individual or any other person a payment of DUA to which the individual or
any other person is not entitled, shall be disqualified as follows:
California State Auditor Report 2023‐001 41
April 2025
(1) If the false statement, misrepresentation, or nondisclosure pertains to an initial
application for DUA –
i. The individual making the false statement, misrepresentation, or
nondisclosure shall be disqualified from the receipt of any DUA with
respect to that major disaster; and
ii. If the false statement, misrepresentation, or nondisclosure was made on
behalf of another individual, and was known to such other individual to
be a false statement, misrepresentation, or nondisclosure, such other
individual shall be disqualified from the receipt of any DUA with respect
to that major disaster; and
(2) If the false statement, misrepresentation, or nondisclosure pertains to a week
for which application for a payment of DUA is made –
i. The individual making the false statement, misrepresentation, or
nondisclosure shall be disqualified from the receipt of DUA for that week
and the first two compensable weeks in the Disaster Assistance Period
that immediately follow that week, with respect to which the individual
is otherwise entitled to a payment of DUA; and
ii. If the false statement, misrepresentation, or nondisclosure was made on
behalf of another individual, and was known to such other individual to
be a false statement, misrepresentation, or nondisclosure, such other
individual shall be disqualified from the receipt of DUA for that week and
the first two compensable weeks in the Disaster Assistance Period that
immediately follow that week, with respect to which the individual is
otherwise entitled to a payment of DUA.
Title 15 – Commerce and Trade, Chapter 116, Coronavirus Economic (CARES Act)
Subchapter II – Unemployment Insurance Provisions, §9023 Emergency Increase in
Unemployment Compensation Benefits
(f) Fraud and Overpayments:
(1) In General – If an individual knowingly has made, or caused to be made by
another, a false statement or representation of a material fact, or knowingly
has failed, or caused another to fail, to disclose a material fact, and as a result
of such false statement or representation or of such nondisclosure such
individual has received an amount of Federal Pandemic Unemployment
Compensation or Mixed Earner Unemployment Compensation to which such
individual was not entitled, such individual—
1. shall be ineligible for further Federal Pandemic Unemployment
Compensation Mixed Earner Unemployment Compensation in
accordance with the provisions of the applicable State unemployment
compensation law relating to fraud in connection with a claim for
unemployment compensation.
California State Auditor Report 2023‐001 42
April 2025
Condition
During the fiscal year ended June 30, 2023, EDD continued its administration of the
Pandemic Unemployment Assistance (PUA) program, under the Coronavirus Aid, Relief,
and Economic Security (CARES) Act for COVID-19 relief in unemployment compensation.
Under the CARES Act, the PUA program was to be administered in accordance with the
Disaster Unemployment Assistance (DUA) program under section 625 of Title 20, Code of
Federal Regulations. Claimants eligible for PUA benefits were paid additional benefits
under the Federal Pandemic Unemployment Compensation program (FPUC).
In EDD’s administration of the PUA and FPUC programs, $90,034,050 in benefit payments
were estimated to be ineligible payments and have not been reported in the schedule
of expenditures of federal awards. The estimate was made by the Unemployment
Insurance Branch and was based on data parameters to identify claimants that received
benefits that matched ineligible criteria for identity fraud or eligibility fraud for
misrepresented information.
Out of 138 PUA benefit payments tested, there was 1 benefit payment to a claimant
determined to be ineligible whose identity was not sufficiently verified.
Identification as a Repeat Finding
Finding 2022-004 was reported in the immediate prior year.
Cause
EDD has acknowledged that there was inadequate or untimely review of claimant due
to the significant increase in claims resulting from the COVID-19 pandemic.
Effect
EDD did not have adequate oversight controls to ensure that benefit payments were not
being made to ineligible claimants. Accordingly, benefit payments were made to
claimants who were not eligible.
Questioned Costs
Known questioned costs were $8,502 for PUA and $7,200 for FPUC.
Context
Benefits paid to claimants under the COVID-19 Unemployment Insurance program for
the fiscal year ended June 30, 2023, totaled $306,150,759 which was offset by prior years’
ineligible benefit payments of $90,034,050 and return of funds from EDD debit cards that
were not activated within 12 months of card issuance of $620,694,399.
The sample was not a statistically valid sample.
Recommendation
EDD should continue to strengthen controls, such as database identification cross-
matches, ID.me verification, partnerships with law enforcement and Thompson Reuters,
as well as system enhancements to mitigate the potential of further employment benefit
California State Auditor Report 2023‐001 43
April 2025
fraud. Such improvements in internal controls should improve EDD’s ability to timely
prevent and detect unemployment benefit fraud.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 44
April 2025
U.S. DEPARTMENT OF TRANSPORTATION
Reference Number: 2023-006
Category of Finding: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Department of Transportation
Assistance Listing Number: 20.205
Federal Program Title: Highway Planning and Construction
Federal Award Numbers and Years: Q101310; 2023
Q101403; 2023
7500257; 2023
P020177; 2023
8801073; 2023
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government”
issued by the Comptroller General of the United States or the “Internal Control
Integrated Framework”, issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Subrecipient Monitoring and Management §200.322 Requirements for pass-through
entities (2 CFR 200.332):
(a) Ensure that every subaward is clearly identified to the subrecipient as a subaward
and includes the following information at the time of the subaward and if any of
these data elements change, include the changes in subsequent subaward
modification. When some of this information is not available, the pass-through
California State Auditor Report 2023‐001 45
April 2025
entity must provide the best information available to describe the Federal award
and subaward. Required information includes:
1. Federal award identification.
i. Subrecipient name (which must match the name associated with its
unique entity identifier);
ii. Subrecipient’s unique entity identifier; Federal Award Identification
Number (FAIN);
iii. Federal Award Date (see the definition of Federal award date in §
200.1 of this part) of award to the recipient by the Federal agency;
iv. Subaward Period of Performance Start and End Date;
v. Subaward Budget Period Start and End Date;
vi. Amount of Federal Funds Obligated by this action by the pass-
through entity to the subrecipient;
vii. Total Amount of Federal Funds Obligated to the subrecipient by the
pass-through entity including the current financial obligation;
viii. Total Amount of the Federal Award committed to the subrecipient
by the pass-through entity;
ix. Federal award project description, as required to be responsive to
the Federal Funding Accountability and Transparency Act (FFATA);
x. Name of Federal awarding agency, pass-through entity, and
contact information for awarding official of the Pass-through entity;
xi. Assistance Listings number and Title; the pass-through entity must
identify the dollar amount made available under each Federal
award and the Assistance Listings Number at time of disbursement;
xii. Identification of whether the award is R&D; and
xiii. Indirect cost rate for the Federal award (including if the de minimis
rate is charged) per § 200.414.
2. All requirements imposed by the pass-through entity on the subrecipient so
that the Federal award is used in accordance with Federal statutes,
regulations and the terms and conditions of the Federal award;
3. Any additional requirements that the pass-through entity imposes on the
subrecipient in order for the pass-through entity to meet its own
responsibility to the Federal awarding agency including identification of
any required financial and performance reports;
4.
i. An approved federally recognized indirect cost rate
negotiated between the subrecipient and the Federal
Government. If no approved rate exists, the pass-through entity
must determine the appropriate rate in collaboration with the
subrecipient, which is either:
1. The negotiated indirect cost rate between the pass-through
entity and the subrecipient; which can be based on a prior
negotiated rate between a different PTE and the same
subrecipient. If basing the rate on a previously negotiated
rate, the pass-through entity is not required to collect
information justifying this rate, but may elect to do so;
2. The de minimis indirect cost rate.
California State Auditor Report 2023‐001 46
April 2025
ii. The pass-through entity must not require use of a de minimis
indirect cost rate if the subrecipient has a Federally approved
rate. Subrecipients can elect to use the cost allocation method
to account for indirect costs in accordance with § 200.405(d).
5. A requirement that the subrecipient permit the pass-through entity and
auditors to have access to the subrecipient’s records and financial
statements as necessary for the pass-through entity to meet the
requirements of this part; and
6. Appropriate terms and conditions concerning closeout of the subaward.
(b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes,
regulations, and the terms and conditions of the subaward for purposes of
determining the appropriate subrecipient monitoring described in paragraphs
(d) and (e) of this section, which may include consideration of such factors as:
(1) The subrecipient’s prior experience with the same or similar subawards;
(2) The results of previous audits including whether or not the subrecipient receives
a Single Audit in accordance with Subpart F of this part, and the extent to
which the same or similar subaward has been audited as a major program;
(3) Whether the subrecipient has new personnel or new or substantially changed
systems; and
(4) The extent and results of Federal awarding agency monitoring (e.g., if the
subrecipient also receives Federal awards directly from a Federal awarding
agency).
(d) Monitor the activities of the subrecipient as necessary to ensure that the subaward
is used for authorized purposes, in compliance with Federal statutes, regulations,
and the terms and conditions of the subaward; and that subaward performance
goals are achieved. Pass-through entity monitoring of the subrecipient must
include:
(1) Reviewing financial and performance reports required by the pass-through
entity.
Condition
The California Department of Transportation (Caltrans) did not clearly identify subaward
agreements made to subrecipients as subawards and did not include all required
elements for 5 of 40 subrecipients sampled. Additionally, the monitoring of the 5 of 40
sampled subrecipients was not sufficient to detect whether the subrecipients’
expenditures were properly reported on the respective subrecipients’ schedules of
expenditures of federal awards.
California State Auditor Report 2023‐001 47
April 2025
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
Due to the decentralized administration of federal-aid highway projects, not all
subaward agreements are administered in a consistent manner throughout various
divisions and district offices.
Effect
Inadequate subaward communication may result in subrecipients being unaware of all
federal laws, statutes and regulations that apply to the funding received and potentially
expending the funds in an unallowable manner. Additionally, subrecipients may fail to
report the expenditures made pursuant to the subawards of their schedule of
expenditures of federal awards.
Questioned Costs
No questioned costs were identified.
Context
Expenditures passed to subrecipients totaled $1,222,104,172. Sampled expenditures
totaled $14,694,125 and $670,937 of the total sampled expenditures related to the
exceptions identified.
Recommendation
Caltrans should develop and implement a consistent policy and process for all divisions
and district offices to use in making and monitoring subawards under the highway
planning and construction program to ensure that all required subaward information is
communicated to subrecipients at the time of the award and the federal funds disbursed
to subrecipients are adequately monitored.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 48
April 2025
U.S. DEPARTMENT OF THE TREASURY
Reference Number: 2023-007
Category of Finding: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Community Colleges
Chancellor’s Office
Assistance Listing Number: 21.027
Federal Program Title: Coronavirus State and Local Fiscal
Recovery Funds
Federal Award Numbers and Years: N/A; 2023
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(c) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government”
issued by the Comptroller General of the United States or the “Internal Control
Integrated Framework”, issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Subrecipient Monitoring and Management §200.322 Requirements for pass-through
entities (2 CFR 200.332):
(d) Evaluate each subrecipient’s risk of noncompliance with Federal statutes,
regulations, and the terms and conditions of the subaward for purposes of
determining the appropriate subrecipient monitoring described in paragraphs
(d) and (e) of this section, which may include consideration of such factors as:
(1) The subrecipient’s prior experience with the same or similar subawards;
California State Auditor Report 2023‐001 49
April 2025
(2) The results of previous audits including whether or not the subrecipient receives
a Single Audit in accordance with Subpart F of this part, and the extent to
which the same or similar subaward has been audited as a major program;
(3) Whether the subrecipient has new personnel or new or substantially changed
systems; and
(4) The extent and results of Federal awarding agency monitoring (e.g., if the
subrecipient also receives Federal awards directly from a Federal awarding
agency).
(e) Monitor the activities of the subrecipient as necessary to ensure that the subaward
is used for authorized purposes, in compliance with Federal statutes, regulations,
and the terms and conditions of the subaward; and that subaward performance
goals are achieved. Pass-through entity monitoring of the subrecipient must
include:
(1) Reviewing financial and performance reports required by the pass-through
entity.
Condition
The California Community Colleges Chancellor’s Office (Chancellor’s Office) did not
assess each subrecipients’ risk of potential noncompliance with the Coronavirus State
and Local Fiscal Recovery Funds (SLFRF) subaward federal statutes, regulations and terms
and conditions and did not adequately monitor its subrecipients (community colleges)
to ensure that the community colleges complied with federal statutes, regulations, and
terms and conditions of the SLFRF subaward. The SLFRF subawards included specific
requirements for eligibility of students receiving SLFRF-funded emergency financial aid,
which included a requirement to request eligibility certifications from students, determine
if any students that received emergency financial aid were ineligible and instructions to
make necessary general ledger entries to ensure any ineligible students’ financial aid was
removed from the SLFRF specific funding and assigned to a nonfederal source. The
Chancellor’s Office did not request or inspect any documentation from the community
colleges to verify that required eligibility certifications and/or necessary general ledger
entries were made by the community colleges.
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
The Chancellor’s Office did not establish sufficient procedures to assess each community
college’s risk, conduct reviews of those community colleges that would be higher risk and
validate that the community college expended the SLFRF subaward in accordance with
federal statutes, regulations and terms and conditions.
California State Auditor Report 2023‐001 50
April 2025
Effect
Inadequate monitoring of subrecipients may result in funds being expended for ineligible
purposes, which may not be detected and corrected in a timely manner.
Questioned Costs
No questioned costs were identified.
Context
Expenditures passed to subrecipients totaled $1,218,447,467, of which $150,000,000 was
passed through by the Chancellor’s Office.
Recommendation
The Chancellor’s Office should develop and implement detailed subrecipient monitoring
procedures, to include assessing each community college’s risk of noncompliance;
conducting a review of supporting documents for those community colleges identified
by the risk assessment to be at risk of noncompliance as defined by the Chancellor’s
Office’s monitoring procedures; and ensuring corrective action is taken for any
deficiencies identified. Regular follow-ups and documented communication efforts
should be part of this process to ensure effective oversight of the SLFRF subawards.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 51
April 2025
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Reference Number: 2023-008
Category of Finding: Procurement and Suspension and Debarment
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Department of Public Health (Public
Health)
Assistance Listing Number: 93.323
Federal Program Title: Epidemiology and Laboratory Capacity for
Program Infectious Diseases (ELC)
Federal Award Numbers and Years: NU50CK000539; 2021
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government”
issued by the Comptroller General of the United States or the “Internal Control
Integrated Framework”, issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter I – Office of Management and Budget
Government-Wide Guidance for Grants and Agreements. Part 180 – OMB Guidelines to
Agencies on Government-Wide Debarment and Suspension (Non-procurement).
Subpart C – Responsibilities of Participants Regarding Transactions Doing Business With
Other Persons §180.300 (2 CFR 180.300):
When you enter into a covered transaction with another person at the next lower tier,
you must verify that the person with whom you intend to do business is not excluded or
disqualified. You may do this by:
(a) Checking SAM Exclusions; or
(b) Collecting a certification from that person; or
California State Auditor Report 2023‐001 52
April 2025
(c) Adding a clause or a condition to the covered transactions with that person.
Condition
We noted that ten out of the ten vendor contract agreements reviewed did not include
a suspension and debarment certification clause indicating the contractor was not
suspended or debarred from participation in federally funded contracts. There was no
other documentation available to demonstrate that the verification of suspension and
debarment was performed prior to entering into the covered transactions. Based on the
subsequent review of the System for Award Management (SAM) exclusions, these
contractors were not suspended or debarred.
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
The ELC program personnel responsible for administering these federal funds were
unaware of the suspension and debarment requirements.
Effect
Failure to verify suspension and debarment results in noncompliance with 2 CFR §180.300,
as well as a risk that federal funds could be used to pay vendors that are suspended or
debarred.
Questioned Costs
No questioned costs were identified.
Context
The federal funds disbursed to vendors for the fiscal year ended June 30, 2023 totaled
$11,816,380. Ten of ten samples for the Epidemiology and Laboratory Capacity for
Program Infectious Diseases program did not have evidence that verification of
suspension and debarment was performed prior to entering into the covered transaction
or include a clause or condition to the covered transaction in the agreement. Total
disbursements made associated with these vendors totaled $7,567,331 for the fiscal year
ended June 30, 2023.
Recommendation
Public Health should review and strengthen its procedures for verifying the suspension
and debarment status of vendors before entering into any agreement involving federal
funds and ensure that the verification documentation is maintained. Alternatively,
incorporate a clause in vendor contracts requiring vendors to certify their suspension or
debarment status.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 53
April 2025
Reference Number: 2023-009
Category of Finding: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Department of Public Health (Public
Health)
Assistance Listing Number: 93.323
Federal Program Title: Epidemiology and Laboratory Capacity for
Infectious Diseases (ELC)
Federal Award Number and Year: NU50CK000539; 2021
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
§200.303 Internal controls (2 CFR 200.303):
The non-Federal entity must:
(e) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government”
issued by the Comptroller General of the United States or the “Internal Control-
Integrated Framework”, issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
§200.332 Requirements for pass-through entities (2 CFR 200.332):
All pass-through entities must:
(a) Verify that the subrecipient is not excluded or disqualified in accordance with
§180.300. Verification methods are provided in §180.300, which include confirming
in SAM.gov that a potential subrecipient is not suspended, debarred, or otherwise
excluded from receiving Federal funds.
(b) Ensure that every subaward is clearly identified to the subrecipient as a subaward
and includes the following information at the time of the subaward and if any of
California State Auditor Report 2023‐001 54
April 2025
these data elements change, include the changes in subsequent subaward
modification. When some of this information is not available, the pass-through
entity must provide the best information available to describe the Federal award
and subaward.
(1) Federal award identification.
(i) Subrecipient name (which must match the name associated with its
unique entity identifier);
(ii) Subrecipient’s unique entity identifier;
(iii) Federal Award Identification Number (FAIN);
(iv) Federal Award Date (see the definition of Federal award date in § 200.1
of this part) of award to the recipient by the Federal agency;
(v) Subaward Period of Performance Start and End Date;
(vi) Subaward Budget Period Start and End Date;
(vii) Amount of Federal Funds Obligated by this action by the pass-through
entity to the subrecipient;
(viii) Total Amount of Federal Funds Obligated to the subrecipient by the
pass-through entity including the current financial obligation;
(ix) Total Amount of the Federal Award committed to the subrecipient by
the pass-through entity;
(x) Federal award project description, as required to be responsive to the
Federal Funding Accountability and Transparency Act (FFATA);
(xi) Name of Federal awarding agency, pass-through entity, and contact
information for awarding official of the Pass-through entity;
(xii) Assistance Listings number and Title; the pass-through entity must
identify the dollar amount made available under each Federal award
and the Assistance Listings Number at time of disbursement;
(xiii) Identification of whether the award is R&D; and
(xiv) Indirect cost rate for the Federal award (including if the de minimis rate
is charged) per §200.414.
(c) Evaluate each subrecipient’s fraud risk and risk of noncompliance with a
subaward to determine the appropriate subrecipient monitoring described in
paragraphs (f) of this section. When evaluating a subrecipient’s risk, a pass-
through entity should consider the following:
(1) The subrecipient’s prior experience with the same or similar subawards:
(2) The results of previous audits. This includes considering whether or not the
subrecipient receives a Single Audit in accordance with Subpart F and the
extent to which the same or similar subawards have been audited as a major
program;
(3) Whether the subrecipient has new personnel or new or substantially changed
systems; and
(4) The extent and results of Federal agency monitoring (for example, if the
subrecipient also receives Federal awards directly from the Federal agency).
(e) Monitor the activities of the subrecipient as necessary to ensure that the subaward
California State Auditor Report 2023‐001 55
April 2025
is used for authorized purposes, in compliance with Federal statutes, regulations,
and the terms and conditions of the subaward; and that subaward performance
goals are achieved. Pass-through entity monitoring of the subrecipient must
include:
(1) Reviewing financial and performance reports required by the pass-through
entity.
(2) Following-up and ensuring that the subrecipient takes timely and appropriate
action on all deficiencies pertaining to the Federal award provided to the
subrecipient from the pass-through entity detected through audits, on-site
reviews, and written confirmation from the subrecipient, highlighting the status
of actions planned or taken to address Single Audit findings related to the
particular subaward.
(3) Issuing a management decision for applicable audit findings pertaining only to
the Federal award provided to the subrecipient from the pass-through entity
as required by §200.521.
(4) The pass-through entity is responsible for resolving audit findings specifically
related to the subaward and not responsible for resolving cross-cutting findings.
If a subrecipient has a current Single Audit report posted in the Federal Audit
Clearinghouse and has not otherwise been excluded from receipt of Federal
funding (e.g., has been debarred or suspended), the passthrough entity may
rely on the subrecipient’s cognizant audit agency or cognizant oversight
agency to perform audit follow-up and make management decisions related
to cross-cutting findings in accordance with section §200.513(a)(3)(vii). Such
reliance does not eliminate the responsibility of the pass-through entity to issue
subawards that conform to agency and award-specific requirements, to
manage risk through ongoing subaward monitoring, and to monitor the status
of the findings that are specifically related to the subaward.
(f) Verify that every subrecipient is audited as required by Subpart F of this part when
it is expected that the subrecipient’s Federal awards expended during the
respective fiscal year equaled or exceeded the threshold set forth in §200.501.
(g) Consider whether the results of the subrecipient’s audits, on-site reviews, or other
monitoring indicate conditions that necessitate adjustments to the pass-through
entity’s own records.
Condition
Public Health did not establish a formal risk assessment process over its subrecipients of
federal awards by which to determine the frequency and extent of subrecipient
monitoring to be performed. While Public Health received reimbursement invoices from
subrecipients, there did not appear to be other financial or programmatic monitoring to
verify subrecipients complied with applicable requirements. In addition, Public Health did
not obtain supporting documentation for any expenditures invoiced by the
subrecipients. Follow-up monitoring for subrecipients with no single audit reports did not
appear to be performed. On-site monitoring visits were not completed. Public Health was
unable to provide evidence that suspension and debarment status of subrecipients was
checked prior to entering into subaward.
California State Auditor Report 2023‐001 56
April 2025
Public Health used a Department Allocation Letter (DAL) for the COVID-19 program
instead of an agreement or contract for the subaward to subrecipients. Certain required
information for the subaward federal award information such as Assistance Listings
number and Title and Federal Award Identification Number (FAIN) were not clearly
identified in the DAL.
Identification as a Repeat Finding
Finding 2022-011 was reported in the immediate prior year.
Cause
Procedures to perform the required subrecipient monitoring were not established nor did
Public Health perform an appropriate level of monitoring.
Effect
By not properly evaluating the risk of noncompliance, Public Health may inadvertently
award grant funds to subrecipients who lack the necessary mechanisms or
understanding to comply with federal statutes. This increases the likelihood of
noncompliance arising during the performance of the grant-funded activities.
Furthermore, failure to obtain and review single audit reports increases the risk of not
properly identifying subrecipient program control weaknesses, noncompliance and
performing sufficient follow-up on any subrecipient corrective action.
Questioned Costs
No questioned costs were identified.
Context
Disbursements to subrecipients for the ELC totaled $282,954,398, or 49% of total reported
program expenditures.
Recommendation
Public Health should establish and document formal procedures for conducting risk
assessments of subrecipient funding, including criteria for evaluating organizational
capacity, financial stability, compliance history, and programmatic capabilities. Public
Health should also develop and implement procedures outlining the process for
obtaining single audit reports from subrecipients. Furthermore, a monitoring mechanism
should be implemented to track compliance with the single audit mandate among
subrecipients, including regular follow-ups and documentation of communication efforts.
Public Health should ensure every subaward includes all requirements imposed on the
subrecipient so that the federal award is used in accordance with Federal statutes,
regulations and the terms and conditions of the federal award.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 57
April 2025
Reference Number: 2023-010
Category of Finding: Reporting
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Department of Social Services
Assistance Listing Number: 93.575
Federal Program Title: Child Care and Development Block Grant
(part of the Child Care and Development Fund
Cluster)
Federal Award Numbers and Years: 2234CACCDD; 2022
2334CACCDD; 2023
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms
and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal
Government” issued by the Comptroller General of the United States or the
“Internal Control Integrated Framework,” issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter I – Office of Management and Budget
Government-Wide Guidance for Federal Financial Assistance. Part 170 – Reporting
Subaward and Executive Compensation Information. Subpart A – General.
§ 170.100 Purpose of this part
This part provides guidance to Federal agencies on establishing requirements for
recipients of Federal awards to report information on subawards and executive total
compensation, as required by the Federal Funding Accountability and Transparency Act
of 2006 (Pub. L. 109-282), as amended by the Digital Accountability and Transparency
Act of 2014 (Pub. L. 113-101) and other Public Laws, hereafter referred to as the
“Transparency Act.”
California State Auditor Report 2023‐001 58
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§ 170.105 Applicability.
(a) Applicability in general. This part applies to a Federal agency’s Federal
financial assistance as defined in § 170.300. This part applies to all recipients
and subrecipients of Federal awards who meet the reporting requirements of
paragraph (c) of this section, unless exempt under Federal statute or by
paragraph (d) of this section.
(b) Non-applicability to individuals. This part does not apply to an individual who
applies for or receives Federal financial assistance as a natural person (that is,
unrelated to any business or nonprofit organization an individual owns or
operates).
(c) Reporting Requirements.
(1) The names and total compensation of an entity’s five most highly
compensated executives must be reported if:
(i) In the entity’s preceding fiscal year, it received:
(A) 80 percent or more of its annual gross revenue in Federal
procurement contracts (and subcontracts) and Federal awards (and
subawards) subject to the Transparency Act, as defined at §170.300;
and
(B) $25,000,000 or more in annual gross revenue from Federal
procurement contracts (and subcontracts) and Federal awards (and
subawards) subject to the Transparency Act, as defined at §170.300;
and
(ii) The public does not have access to information about the
compensation of senior executives of the entity through periodic reports
filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934
(15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code
of 1986.
Appendix A to Part 170 — Award Term. I. Reporting Subawards and Executive
Compensation (2 CFR 170):
(a)(2) Reporting Requirements.
(i) The recipient must report each subaward described in paragraph (a)(1)
of this award term to the Federal Funding Accountability and
Transparency Act Subaward Reporting System (FSRS) at
http://www.fsrs.gov.
(ii) For subaward information, report no later than the end of the month
following the month in which the subaward was issued.
(b)(2) Reporting Requirements.
(i) As part of the recipient’s registration profile at https://www.sam.gov.
(ii) No later than the month following the month in which this Federal award
is made, and annually after that.
California State Auditor Report 2023‐001 59
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Condition
CDSS did not submit its Federal Funding Accountability and Transparency Act (FFATA)
reports timely for the fiscal years ended June 30, 2023 and 2022.
Grant Obligation Submission
Award Year FAIN Date FAIN Due Date Submitted
2022 2234CACCDD 11/2/2021 Not Available 12/30/2021 11/15/2022
2023 2334CACCDF 10/28/2022 2334CACCDF 11/30/2022 12/8/2023
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
CDSS has had turnover in positions responsible for filing the required FFATA reports. In
addition, when CDSS assumed responsibilities over the CCDF Cluster, this function and
responsibility was not clearly identified.
Effect
CDSS is not in compliance with 2 CFR Part 170.
Questioned Costs
Not applicable.
Context
CDSS is responsible for filing an annual FFATA report for pass-throughs to subrecipients
greater than $30,000. We selected both FFATA reports that were submitted during and
for the audit period.
The sample was not a statistically valid sample.
Recommendation
We recommend that CDSS compile a report tracking process and identify all fiscal and
compliance reports to be submitted with clear position responsibilities and workflow to
ensure reports include accurate information and are timely prepared. CDSS should have
a centralized tracking mechanism and assign and document a responsible position
instead of a responsible individual person, which will reduce the risk of reports not being
filed if turnover occurs.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 60
April 2025
Reference Number: 2023-011
Category of Finding: Reporting
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Department of Social Services
Assistance Listing Number: 93.575, 93.596
Federal Program Title: Child Care and Development Block Grant,
Child Care Mandatory and Matching Funds of
the Child Care and Development Fund (part of
the Child Care and Development Fund
Cluster)
Federal Award Numbers and Years: 2001CACCDF; 2020
2101CACCDF; 2021
2234CACCDF; 2022
2334CACCDF; 2023
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(b) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms
and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal
Government” issued by the Comptroller General of the United States or the
“Internal Control Integrated Framework,” issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Title 45 – Public Welfare. Subtitle A – Department of Health and Human Services.
Subchapter A – General Administration. Part 98 – Child Care and Development Fund.
Subpart G – Financial Management. § 98.65 Audits and financial reporting. (45 CFR 98.65)
(d) Lead Agencies shall submit financial reports, in a manner specified by ACF,
quarterly for each fiscal year until funds are expended.
California State Auditor Report 2023‐001 61
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OMB #0970-0510 – Instructions for Completion of Form ACF-696 Financial Reporting Form
for the Child Care and Development Fund (CCDF) State & Territory Lead Agencies
Pursuant to CCDF regulations at 45 CFR 98.65(g), and as part of the terms and conditions
of the grant award, States and Territories are required to complete and submit a quarterly
financial status report (ACF-696) in accordance with these instructions on behalf of the
CCDF Lead Agency.
Condition
For the fiscal year ended June 30, 2023, $2,183,002,451 was reported on the schedule of
expenditures of federal awards (Schedule) for the CCDF Cluster; however, CDSS is unable
to reconcile the ACF-696 reports submitted to the amount reported on the Schedule. The
Schedule is $53,163,387 greater than the cumulative quarterly reports which totaled
$2,129,839,064 for the fiscal year ended June 30, 2023.
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
The expenditures tracked and recorded by CDSS and CDE are reported together on the
ACF-696 quarterly reports. CDSS, the department responsible for filing the reports for the
fiscal year ended June 30, 2023, cannot identify the expenditures at the department level
and therefore is unable to reconcile the discrepancy.
Effect
CCDF Cluster expenditures were not accurately reported in the quarterly ACF-696 reports
submitted.
Questioned Costs
Not applicable.
Context
CDSS does not have an adequate data capture and reconciliation process to support
the preparation of the ACF-696 reports, which should include a year-end reconciliation
to the amount reported in the Schedule.
We did not sample the ACF-696 reports. We reviewed the 1st and 4th quarter reports for
each open grant year and recalculated the cumulative total for the fiscal year ended
June 30, 2023, and compared the result to the Schedule.
Recommendation
We recommend that CDSS review its procedures for capturing and reporting quarterly
information in the AC-696 reports to ensure information is complete and accurate and
maintain documentation supporting the amounts reported. Furthermore, we
recommend that CDSS perform a year-end reconciliation of the ACF-696 reports to the
amount reported in the Schedule.
California State Auditor Report 2023‐001 62
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Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 63
April 2025
Reference Number: 2023-012
Category of Finding: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Department of Social Services
Assistance Listing Number: 93.575, 93.596
Federal Program Title: Child Care and Development Block Grant,
Child Care Mandatory and Matching Funds of
the Child Care and Development Fund (part of
the Child Care and Development Fund
Cluster)
Federal Award Numbers and Years: 2101CACCDF; 2021
2101CACCC5; 2021
2234CACCDF; 2022
2234CACCDD; 2022
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(c) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms
and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal
Government” issued by the Comptroller General of the United States or the
“Internal Control Integrated Framework,” issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Subrecipient Monitoring and Management. §200.332 Requirements for pass-through
entities (2 CFR 200.332):
A pass-through entity must:
California State Auditor Report 2023‐001 64
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(c) Evaluate each subrecipient’s fraud risk and risk of noncompliance with a
subaward to determine the appropriate subrecipient monitoring described in
paragraph (f) of this section. When evaluating a subrecipient’s risk, a pass-
through entity should consider the following:
(1) The subrecipient’s prior experience with the same or similar subawards;
(2) The results of previous audits. This includes considering whether or not the
subrecipient receives a Single Audit in accordance with subpart F and the
extent to which the same or similar subawards have been audited as a
major program;
(3) Whether the subrecipient has new personnel or new or substantially
changed systems; and
(4) The extent and results of any Federal agency monitoring (for example, if the
subrecipient also receives Federal awards directly from the Federal
agency).
(e) Monitor the activities of a subrecipient as necessary to ensure that the
subrecipient complies with Federal statutes, regulations, and the terms and
conditions of the subaward. The pass-through entity is responsible for
monitoring the overall performance of a subrecipient to ensure that the goals
and objectives of the subaward are achieved. In monitoring a subrecipient, a
pass-through entity must:
(1) Review financial and performance reports.
(2) Ensure that the subrecipient takes corrective action on all significant
developments that negatively affect the subaward. Significant
developments include Single Audit findings related to the subaward, other
audit findings, site visits, and written notifications from a subrecipient of
adverse conditions which will impact their ability to meet the milestones or
the objectives of a subaward. When significant developments negatively
impact the subaward, a subrecipient must provide the pass-through entity
with information on their plan for corrective action and any assistance
needed to resolve the situation.
(3) Issue a management decision for audit findings pertaining only to the
Federal award provided to the subrecipient from the pass-through entity as
required by §200.521.
(4) Resolve audit findings specifically related to the subaward. However, the
pass-through entity is not responsible for resolving cross-cutting audit
findings that apply to the subaward and other Federal awards or
subawards. If a subrecipient has a current Single Audit report and has not
been excluded from receiving Federal funding (meaning, has not been
debarred or suspended), the pass-through entity may rely on the
subrecipient’s cognizant agency for audit or oversight agency for audit to
California State Auditor Report 2023‐001 65
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perform audit follow-up and make management decisions related to cross-
cutting audit findings in accordance with section §200.513(a)(4)(viii). Such
reliance does not eliminate the responsibility of the pass-through entity to
issue subawards that conform to agency and award-specific requirements,
to manage risk through ongoing subaward monitoring, and to monitor the
status of the findings that are specifically related to the subaward.
California Code of Regulations. Title 5 Education. § 18023. Compliance Reviews of
Contractors.
(b) At least once every three (3) years and as resources permit, the California
Department of Education shall conduct reviews at the contractor's office(s)
and operating facility(ies) to determine the contractor's compliance with
applicable laws, regulations or contractual provisions.
Child Care and Development Fund (CCDF) Plan for State/Territory California FFY 2022-24,
Amendment 4. Chapter 8 Ensure Grantee Program Integrity and Accountability. 8.1
Internal Controls and Accountability Measures to Help Ensure Program Integrity. 8.1.1
Process to train about CCDF requirements and program integrity.
States and territories are required to describe effective internal controls that are in place
to ensure program integrity and accountability (98.68(a)), including processes to train
child care providers and staff of the Lead Agency and other agencies engaged in the
administration of CCDF about program requirements and integrity.
v. Monitor and assess policy implementation on an ongoing basis.
The Lead Agency conducts announced Categorical Program Monitoring
(CPM)/Contract Monitoring Reviews (CMRs) for each contractor on a three- or four-year
cycle for non-LEAs and LEAs respectively. The Lead Agency’s Governance and
Administration Unit (GAU) conducts ongoing review of individual contractors by sampling
the eligibility and need documentation in family files to estimate and reduce error rates.
Additionally, the Lead Agency provides ongoing training and technical assistance to
contractors in regional sessions, in one-on-one sessions, and/or in cluster with webinars or
during face to-face presentations. These sessions address CCDF program administration,
requirements, and integrity.
Condition
We selected 60 subrecipient contracts (14 local educational agency (LEA) contracts and
46 non-LEA contracts) from 50 subrecipient entities and tested compliance with
subrecipient monitoring requirements. We noted the following:
LEAs
3 LEA contracts/contractors had no records for the receipt of a corrective action plan
or notification of resolution for findings identified in monitoring reports.
1 LEA contract/contractor did not have the quarterly fiscal reports available for
review for the quarter selected for testing.
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Non-LEAs
5 non-LEA contracts/contractors had no records available to demonstrate risk
assessment of the contractor.
4 non-LEA contracts/contractors had no record of on-site monitoring in over 5 years.
7 non-LEA contracts/contractors had no records for the receipt of the corrective
action plan or notification of resolution for findings identified in monitoring reports.
5 non-LEA contracts/contractors did not have the quarterly fiscal reports available for
review for the quarters selected for testing.
The monitoring of the contractors’ single audit reports and follow-up on noted findings
continued to be a shared responsibility between CDSS and the Department of Education
(CDE) during fiscal year 2022-23. The transition of audit report monitoring responsibilities
over LEAs receiving CCDF Cluster program funds is still in process and not yet centralized
with CDSS. Furthermore, subrecipients continue to report the pass-through entity as CDE
and not CDSS.
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
In fiscal year 2021, the administration of the CCDF Cluster program was transitioned from
the California Department of Education (CDE) to CDSS. CDSS has been in the process of
revising certain policies and procedures, including contractor monitoring. In addition,
certain records related to CDE monitoring activities for the contracts selected were
unavailable for review.
Effect
CDSS is at risk for contractor noncompliance if monitoring procedures are not properly
designed or executed, and/or documents demonstrating monitoring are not
maintained.
Questioned Costs
$175,631,433 of $332,931,906 sampled contract expenditures for fiscal year ended June
30, 2023.
Context
CDSS contractors may have multiple contracts with varying contract requirements. We
selected one or more contracts from 50 different contractors for a total of 60 unique
contracts representing $332,931,906 of expenditures incurred during the fiscal year
ended June 30, 2023. The exceptions noted above represented 32 different contracts
administered by 28 contractors and represented $175,613,433 or 52.7% of the total
sampled contract expenditures.
The sample was not a statistically valid sample.
California State Auditor Report 2023‐001 67
April 2025
Recommendation
To enhance the effectiveness of the annual risk assessment process, we recommend a
thorough evaluation that focuses on the identification and inclusion of all subrecipients
and defined risk criteria as mandated in 2 CFR 200.332. Furthermore, it is crucial to
establish and document a transparent basis for risk profiling that directly correlates such
profiles with compliance monitoring activities across fiscal, program, and single audit
requirements.
Furthermore, we recommend CDSS perform a comprehensive post-transition review to
ensure all monitoring responsibilities transferred from CDE have been fully identified and
assigned. This review should validate robust mechanisms are in place for the accurate
documentation and proper retention of records.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 68
April 2025
Reference Number: 2023-013
Category of Finding: Special Tests and Provisions – Child Care
Provider Eligibility for ARP Act Stabilization
Funds
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Department of Social Services
Assistance Listing Number: 93.575
Federal Program Title: Child Care and Development Block Grant
(part of the Child Care and Development
Fund Cluster)
Federal Award Numbers and Years: 2101CACSC6; 2021
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(d) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms
and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal
Government” issued by the Comptroller General of the United States or the
“Internal Control Integrated Framework,” issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
California Assembly Bill (AB) 179 and AB 110 provided designated American Rescue Plan
Act (ARPA) funding to provide supplemental rate payments and stipends to eligible child
care providers. As prescribed by ARPA, to qualify for this funding a child care provider
must apply and meet the following criteria:
On the date of application for the award must either be:
(1) open and available to provide child care services, or
(2) closed due to public health, financial hardship, or other reasons relating to the
COVID-19 public health emergency.
In addition, the child care provider must either:
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(1) be eligible to serve children who receive CCDF subsidies at the time of
application for stabilization funds, or
(2) be licensed, regulated, or registered in the state, territory, or tribe as of March 11,
2021, and meet applicable state and local health and safety requirements at
the time of application for stabilization funds.
In their application for stabilization funds, a child care provider must certify:
a. That the provider will, when open and providing services, implement policies in
line with guidance and orders from corresponding state, territorial, tribal, and
local authorities and, to the greatest extent possible, implement policies in line
with guidance from the CDC.
b. For each employee, the provider must pay at least the same amount in weekly
wages and maintain the same benefits for the duration of the stabilization
funding.
c. The provider will provide relief from copayments and tuition payments for the
families enrolled in the provider’s program, to the extent possible, and prioritize
such relief for families struggling to make either type of payment.
Condition
CDSS uses a third-party service provider to administer payments to child care contractors
and assist with the coordination and collection of certain information required to be
eligible to receive state and federal child care funding. The third-party service provider
is considered a fiduciary and not a subrecipient, thus CDSS is responsible for monitoring
eligibility compliance related to the ARPA Stabilization funding.
Of the 25 samples we selected for testing eligibility criteria related to the ARPA
Stabilization funding, 22 contractors were determined eligible by the third-party service
provider; however, the CDSS did not monitor that the third-party service provider
appropriately discharged its duties and correctly determined that recipients were
eligible.
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
CDSS did not appropriately determine its responsibility for eligibility of ARPA Stabilization
recipients and relied on the determinations of the third-party service provider without
oversight.
Effect
CDSS did not fulfill its responsibilities for determining eligibility of ARPA Stabilization
recipients.
Questioned Costs
$232,082,456
California State Auditor Report 2023‐001 70
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Context
The third-party service provider used CDSS’ survey portal to capture and review
information of the recipients it determined eligible. During the fiscal year ended
June 30, 2023, CDSS paid the third-party service provider $232,082,456 to disburse to
eligible contractors. The third-party service provider does not qualify as a subrecipient
and thus is not subject to the Uniform Guidance requiring a single audit.
Recommendation
We recommend that CDSS review its contract with the third-party service provider and
identify compliance requirements delegated to the provider and develop a monitoring
program to ensure the third-party service provider is accurately fulfilling its responsibilities
in determining compliance of contractors.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective
Action Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 71
April 2025
Reference Number: 2023-014
Category of Finding: Special Tests and Provisions – Health and Safety
Requirements
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Department of Social Services
(CDSS)
Assistance Listing Number: 93.575
Federal Program Title: Child Care and Development Block Grant
(part of the Child Care and Development Fund
Cluster)
Federal Award Numbers and Years: 2101CACCDF; 2021
2101CACCC5; 2021
2101CACDC6; 2021
2234CACCDD; 2022
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(e) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the
Federal award in compliance with Federal statutes, regulations, and the terms
and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal
Government” issued by the Comptroller General of the United States or the
“Internal Control Integrated Framework,” issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Title 42 – Public Welfare. Subtitle A – Department of Health and Human Services.
Subchapter A – General Administration. Part 98 – Child Care and Development Fund.
Subpart E – Program Operations (Child Care Services)—Lead Agency and Provider
Requirements. §98.41 Health and safety requirements:
(a) Each Lead Agency shall certify that there are in effect, within the State (or
other area served by the Lead Agency), under State, local or tribal law,
requirements (appropriate to provider setting and age of children served) that
California State Auditor Report 2023‐001 72
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are designed, implemented, and enforced to protect the health and safety of
children. Such requirements must be applicable to child care providers of
services for which assistance is provided under this part. Such requirements,
which are subject to monitoring pursuant to §98.42, shall:
(1) Include health and safety topics consisting of, at a minimum:
(i) The prevention and control of infectious diseases (including
immunizations); with respect to immunizations, [et. al.]
(ii) Prevention of sudden infant death syndrome and use of safe
sleeping practices;
(iii) Administration of medication, consistent with standards for parental
consent;
(iv) Prevention and response to emergencies due to food and allergic
reactions;
(v) Building and physical premises safety, including identification of and
protection from hazards, bodies of water, and vehicular traffic;
(vi) Prevention of shaken baby syndrome, abusive head trauma, and
child maltreatment;
(vii) Emergency preparedness and response planning for emergencies
resulting from a natural disaster, or a man-caused event (such as
violence at a child care facility), within the meaning of those terms
under section 602(a)(1) of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5195a(a)(1)) that shall include
procedures for evacuation, relocation, shelter-in-place and lock
down, staff and volunteer emergency preparedness training and
practice drills, communication and reunification with families,
continuity of operations, and accommodation of infants and
toddlers, children with disabilities, and children with chronic medical
conditions;
(viii) Handling and storage of hazardous materials and the appropriate
disposal of biocontaminants;
(ix) Appropriate precautions in transporting children, if applicable;
(x) Pediatric first aid and cardiopulmonary resuscitation;
(xi) Recognition and reporting of child abuse and neglect, in
accordance with the requirement in paragraph (e) of this section;
and
(xii) May include requirements relating to:
(A) Nutrition (including age-appropriate feeding);
(B) Access to physical activity;
(C) Caring for children with special needs; or
(D) Any other subject area determined by the Lead Agency to
be necessary to promote child development or to protect
children’s health and safety.
(2) Include minimum health and safety training on the topics above, as
described in §98.44.
California State Auditor Report 2023‐001 73
April 2025
Condition
The CDSS has not established health and safety monitoring procedures to ensure
licensed-exempt providers serving children who receive subsidies comply with all
applicable health and safety requirements. Accordingly, no monitoring procedures were
performed on licensed-exempt providers during the fiscal year ended June 30, 2023.
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
Although CDSS is in process of developing a health and safety monitoring process for
licensed-exempt contractors, finalization and implementation is subject to statutory and
budget actions which delay the process.
Effect
The CDSS is not in compliance with 45 CFR §98.41.
Questioned Costs
No questioned costs were identified.
Context
CDSS was not able to isolate a complete list of subrecipient expenditures related to
contractors receiving CCDF Cluster program funding that were subject to health and
safety compliance for the fiscal year ended June 30, 2023; therefore, the magnitude of
impact to the program cannot be determined. CDSS is in process of developing its health
and safety monitoring program in collaboration with the Federal Administration of
Children and Families and the State legislature.
Recommendation
We recommend CDSS complete its development and implementation of a monitoring
process over the health and safety standards and develop a mechanism to identify and
track all contracts requiring health and safety compliance monitoring.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective
Action Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 74
April 2025
Reference Number: 2023-015
Category of Finding: Activities Allowed or Unallowed
Type of Finding: Material Weakness and Material Instance of
Noncompliance
State Administering Department: California Department of Health Care Services
(Health Care Services)
Assistance Listing Number: 93.767
Federal Program Title: Children’s Health Insurance Program
Federal Award Numbers and Years: 2305CA5021; 2023
2305CA3002; 2023
2205CA5022; 2022
Assistance Listing Number: 93.778
Federal Program Title: Medical Assistance Program
Federal Award Numbers and Years: 2305CA5ADM; 2023
2305CA5MAP;2023
2205CA5ADM; 2022
2205CA5MAP; 2022
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework,” issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
California Welfare and Institutions Code – WIC, Division 9. Public Social Services, Part 3.
Aid and Medical Assistance, Chapter 8.9. Transition of Community-Based Medi-Cal
Mental Health:
California State Auditor Report 2023‐001 75
April 2025
§14705:
(c) With regard to county operated facilities, clinics, or programs for which claims are
submitted to the department for Medi-Cal reimbursement for specialty mental health
services to Medi-Cal eligible individuals, the county shall ensure that all requirements
necessary for Medi-Cal reimbursement for these services are complied with, including,
but not limited to, utilization review and the submission of yearend cost reports by
December 31 following the close of the fiscal year.
§14713:
(b) If the department determines that a mental health plan has failed to comply with the
requirements of Chapter 7 (commencing with Section 14000), Chapter 8
(commencing with Section 14200), Chapter 8.8 (commencing with Section 14600), or
this chapter, the department may impose sanctions and plans of correction pursuant
to Section 14197.7.
Condition
Eighteen of 56 contractor counties of Short-Doyle funding were tested and seventeen
had not submitted their cost reports by the December 31 due date.
Five of the seventeen contractor counties have not submitted their cost reports for fiscal
year 2021-22 (more than 12 months late) and thirteen of the seventeen contractor
counties have subsequently submitted their cost reports for fiscal year 2021-22.
Although the Mental Health Division of Health Care Services did take the required action
of notifying the eighteen contractor counties in writing within 30 days of the
noncompliance, it has not taken any additional action necessary to ensure contract and
performance compliance.
The cost reports are the basis for the allocation of payments made to contractor counties
providing mental health services to eligible beneficiaries and serve to provide the Mental
Health Division with fiscal oversight for contract and performance compliance.
Identification as a Repeat Finding
Finding 2022-008 was reported in the immediate prior year.
Cause
The Mental Health Division did not take additional action for significantly late annual cost
reports because its monitoring and follow-up process does not go beyond emailing the
delinquent subrecipients every 30 days.
Effect
Delays in reviewing cost reports do not comply with the objective of timely and effective
contract monitoring. Inaccurate or untimely cost reports could result in under/over
funding each contractor county and increases the risk of statewide noncompliance with
contract requirements.
California State Auditor Report 2023‐001 76
April 2025
Questioned Costs
Questioned costs were not determinable.
Context
For the fiscal year ended June 30, 2023, disbursements of Short-Doyle funding from the
Medical Assistance Program to the eighteen contractor counties totaled $1,943,410,893,
the seventeen noncompliant contractor counties totaled $1,871,058,835, and all 58
contractor counties totaled $2,338,031,915.
For the fiscal year ended June 30, 2023, disbursements of Short-Doyle funding from the
Children’s Health Insurance Program to the seven contractor counties totaled
$94,521,685, the six noncompliant contractor counties totaled $88,716,942, and all 58
contractor counties totaled $191,348,628.
The sample was not a statistically valid sample.
Recommendation
Health Care Services should develop and follow policies and procedures to take
additional action for significantly late annual cost reports. These policies and procedures
should include imposing sanctions, including, but not limited to, fines, penalties, the
withholding of payments, probationary or corrective actions, or any other actions
deemed necessary to promptly ensure contract and performance compliance.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 77
April 2025
Reference Number: 2023-016
Category of Finding: Special Tests and Provisions – Provider Health
and Safety Standards
Type of Finding: Material Weakness
State Administering Department: California Department of Public Health (Public
Health)
Assistance Listing Number: 93.778
Federal Program Title: Medical Assistance Program
Federal Award Numbers and Years: 2305CA5ADM; 2023
2305CA5MAP;2023
2205CA5ADM; 2022
2205CA5MAP; 2022
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions
of the Federal award. These internal controls should be in compliance with guidance
in “Standards for Internal Control in the Federal Government” issued by the
Comptroller General of the United States or the “Internal Control Integrated
Framework,” issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
Condition
There was no evidence of surveyor signature or supervisor review and approval on Form
CMS-1539 for all 40 surveys of providers tested.
Identification as a Repeat Finding
Finding 2022-012 was reported in the immediate prior year.
Cause
California Department of Public Health (Public Health) did not adhere to their
documented controls due to continued turnover of staff members within Public Health.
California State Auditor Report 2023‐001 78
April 2025
Effect
Nonadherence to internal controls over the review and approval process of the Form
CMS-1539 can result in the risk of statewide noncompliance as providers may not meet
the prescribed health and safety standards. Further, the integrity of the surveys can be
compromised as they are being conducted with no documented oversight.
Questioned Costs
No questioned costs were identified.
Context
A total of 461 surveys were included in the population, which consisted of all surveys
completed by Public Health for Hospitals, Intermediate Care Facilities and Individuals with
Intellectual Disabilities and Nursing Facilities during the fiscal year ended June 30, 2023.
The sample was not a statistically valid sample.
Recommendation
Public Health should update its processes and controls in place to ensure timely review
and approval of the Form CMS-1539, including for situations when staff are on leave
and/or have left the department.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 79
April 2025
Reference Number: 2023-017
Category of Finding: Eligibility
Type of Finding: Significant Deficiency and Instance of
Noncompliance
State Administering Department: California Department of Public Health (Public
Health)
Assistance Listing Number: 93.917
Federal Program Title: HIV Care Formula Grants
COVID-19 HIV Care Formula Grants
Federal Award Numbers and Years: 2 X07HA12778-14-00; 2022
6 X07HA12778-14-01; 2022
6 X07HA12778-14-02; 2023
6 X07HA12778-14-03; 2023
6 X07HA12778-14-04; 2023
6 X07HA12778-14-05; 2023
5 X07HA12778-15-00; 2023
6 X07HA12778-15-01; 2023
6 X07HA12778-15-02; 2023
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework”, issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Title 42 – The Public Health and Welfare. Chapter 6A – Public Health Service. Subchapter
XXIV – HIV Health Care Services Program. Part B – Care Grant Program. Subpart I –
General Grant Provisions. Section 300ff-26 – Provision of Treatments:
California State Auditor Report 2023‐001 80
April 2025
(a) In general
A State shall use a portion of the amounts provided under a grant awarded under section
300ff–21 of this title to establish a program under section 300ff–22(b)(3)(B) of this title to
provide therapeutics to treat HIV/AIDS or prevent the serious deterioration of health
arising from HIV/AIDS in eligible individuals, including measures for the prevention and
treatment of opportunistic infections.
(b) Eligible individual
To be eligible to receive assistance from a State under this section an individual shall:
(1) Have a medical diagnosis of HIV/AIDS; and
(2) Be a low-income individual, as defined by the State.
California State AIDS Drug Assistance Program Guidelines January 2022:
(1.1) AIDS Drug Assistance Program (ADAP) Eligibility Criteria:
To be eligible for the ADAP program, a client must:
Have a positive HIV/AIDS diagnosis.
Be at least 18 years old.
Be a resident of California.
Have an annual Modified Adjusted Gross Income (MAGI) that does not exceed
500 percent Federal Poverty Level (FPL) based on household size and income.
Not be fully covered by Medi-Cal or any other third-party payers (an entity that
reimburses and manages health care expenses such as private insurance or
governmental agencies, employers, etc.).
Health Resources and Services Administration, Policy Clarification Notice 15-04 (Revised
1/11/2019):
The Ryan White HIV/AIDS Program (RWHAP) legislation requires that rebates collected
on ADAP medication purchases be applied to the RWHAP Part B Program with a
priority, but not a requirement, that the rebates be placed back into ADAP. Although
ADAP rebates are neither program income nor refunds, they are subject to the same
regulatory provision regarding expenditure. These rebates must be used for the
statutorily permitted purposes under the RWHAP Part B Program, which are limited to
core medical services including ADAP, support services, clinical quality management,
and administrative expenses (including planning and evaluation) as part of a
comprehensive system of care for low-income individuals living with HIV.
California State Auditor Report 2023‐001 81
April 2025
Condition
All applications must be reviewed internally by ADAP staff via an electronic secondary
review process to confirm eligibility; however, one of sixty applications was not reviewed
by ADAP staff.
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
There was a backlog in the secondary review of applications due to staffing issues in the
ADAP Branch.
Effect
Public Health did not have appropriate oversight controls to ensure that the applicant’s
eligibility was properly reviewed and approved. Accordingly, there is an increased risk for
the occurrence of benefits being provided to ineligible individuals that may not be
prevented or detected in a timely manner.
Questioned Costs
Questioned costs were not determinable because benefit costs were not tracked by
individual participants.
Context
Pharmacy benefits management services are provided by a contractor who received
administrative fees and reimbursements for prescription drug costs to program
participants. Payments to the contractor totaled $106,505,302 for approximately 24,000
program participants for the fiscal year ended June 30, 2023.
The sample was not a statistically valid sample.
Recommendation
The ADAP Branch should continue to monitor compliance with its policies to ensure
secondary reviews of ADAP applications follow the established guidelines.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 82
April 2025
Reference Number: 2023-018
Category of Finding: Activities Allowed or Unallowed
Type of Finding: Significant Deficiency
State Administering Department: California Department of Health Care Services
(Health Care Services)
Assistance Listing Number: 93.959
Federal Program Title: Block Grants for Prevention and Treatment of
Substance Abuse
Federal Award Numbers and Years: 1B08TI084632-01; 2022
6B08TI084632-01M001; 2022
6B08TI084632-01M002; 2022
1B08TI083437-01; 2021
6B08TI083437-01M002; 2021
6B08TI083437-01M003; 2021
6B08TI083437-01M004; 2021
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions
of the Federal award. These internal controls should be in compliance with guidance
in “Standards for Internal Control in the Federal Government” issued by the
Comptroller General of the United States or the “Internal Control Integrated
Framework,” issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
Condition
During our testing of 60 employee timesheets, the Department of Health Care Services
(DHCS) did not have documentation of the approval for time charged to the Prevention
and Treatment of Substance Abuse (SAPT) program for 1 of the samples tested.
Identification as a Repeat Finding
This is not a repeat finding from the immediate prior year.
California State Auditor Report 2023‐001 83
April 2025
Cause
Due to staffing and organizational changes, DHCS has been unable to locate the
requested documentation of timesheet approval.
Effect
Nonadherence to the internal controls over the documentation of employee timesheets
can result in the risk of noncompliance with established policies and procedures.
Furthermore, the integrity of the time charged to the program can be compromised
when proper documentation of approval is not readily available.
Questioned Costs
No questioned costs were identified.
Context
Expenditures related to payroll costs charged to the SAPT program for the fiscal year
ended June 30, 2023 totaled $12,743,522.
The sample was not a statistically valid sample.
Recommendation
DHCS should adhere to its processes and controls in place to ensure all timesheets are
reviewed and approved by a manager or supervisor.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
California State Auditor Report 2023‐001 84
April 2025
SOCIAL SECURITY ADMINISTRATION
Reference Number: 2023-019
Category of Finding: Allowable Costs/Cost Principles
Type of Finding: Significant Deficiency and Instance of
Noncompliance
State Administering Department: California Department of Social Services
(CDSS)
Assistance Listing Numbers: 96.001
Federal Program Title: Disability Insurance/SSI Cluster:
Social Security Disability Insurance
Federal Award Number and Year: 04-2204CADI00; 2022
Criteria
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart D – Post Federal Award Requirements.
Standards for Financial and Program Management. §200.303 Internal controls (2 CFR
200.303):
The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework”, issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Title 2 – Grants and Agreements. Subtitle A – Office of Management and Budget
Guidance for Grants and Agreements. Chapter II – Office of Management and Budget
Guidance. Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards. Subpart E – Cost Principles. §200.403 Factors affecting
allowability of costs.
Except where otherwise authorized by statute, costs must meet the following criteria to
be allowable under Federal awards:
(g) Be adequately documented. See §200.300 through §200.309.
California State Auditor Report 2023‐001 85
April 2025
Condition
The documentation for one of forty samples selected for testing did not agree to the
payment disbursed to a provider for medical evidence of record (MER) services. The
provider was overpaid by $5.
Identification as a Repeat Finding
This was not a repeat finding from the immediate prior year.
Cause
CDSS has represented that the cause was an input error in the Midas subledger when
processing the vendor payment.
Effect
CDSS did not have appropriate oversight controls to ensure that the data entry was
accurate. Accordingly, there is an increased risk for data entry directly affecting the
amount reported on the schedule of expenditures of federal awards to be inaccurate.
Questioned Costs
Questioned costs are projected to be $54,398.
Context
The total MER expenditures for the fiscal year ended June 30, 2023, were $4,432,781,
which represents 1.8% of the total program expenditures of the Disability Insurance/SSI
Cluster of $242,946,482.
The sample was not a statistically valid sample.
Recommendation
CDSS should strengthen its controls over the review for accuracy of the provider invoice
amounts input into Midas.
Views of Responsible Officials and Corrective Action Plan
Management’s response is reported in “Management’s Response and Corrective Action
Plan” included in a separate section at the end of this report.
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Auditee’s Section
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Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2023
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California State Auditor Report 2023‐001 91
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STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
U.S. Department of Agriculture
Agricultural Research Basic and Applied Research 10.001 $ 61,815 $ -
Plant and Animal Disease, Pest Control, and Animal Care 10.025 48,134,066 25,401,255
Inspection Grading and Standardization 10.162 49,148 -
Market Protection and Promotion 10.163 3,021,818 -
Specialty Crop Block Grant Program - Farm Bill 10.170 11,174,576 8,649,791
COVID-19 - Specialty Crop Block Grant Program - Farm Bill 10.170 6,534,694 5,611,481
Total Specialty Crop Block Grant Program - Farm Bill 17,709,270 14,261,272
Organic Certification Cost Share Programs 10.171 1,366,448 -
Trade Mitigation Program Eligible Recipient Agency Operational Funds 10.178 (3) -
Food Insecurity Nutrition Incentive Grants Program 10.331 4,297,260 3,373,288
Cooperative Agreements with States for Intrastate Meat and Poultry Inspection 10.475 238,373 -
Meat, Poultry, and Egg Products Inspection 10.477 25,226 -
Food Safety Cooperative Agreements 10.479 296,155 -
COVID-19 - Farm and Ranch Stress Assistance Network Competitive Grants Program 10.525 410,467 410,467
Supplemental Nutrition Assistance Program (SNAP) Employment and Training (E&T) Data and 10.537
Technical Assistance Grants (6,922) -
Child Nutrition - Technology Innovation Grant 10.541 119,251 -
WIC Special Supplemental Nutrition Program for Women, Infants, and Children 10.557 1,067,105,001 271,697,031
Child and Adult Care Food Program 10.558 545,592,517 542,579,125
COVID-19 - Child and Adult Care Food Program 10.558 (32,554) (32,554)
Total Child and Adult Care Food Program 545,559,963 542,546,571
State Administrative Expenses for Child Nutrition 10.560 32,926,672 -
WIC Farmers' Market Nutrition Program (FMNP) 10.572 2,450,893 150,582
Team Nutrition Grants 10.574 (22,051) (22,051)
Senior Farmers Market Nutrition Program 10.576 91,515 -
COVID-19 - Senior Farmers Market Nutrition Program 10.576 2,747 -
Total Senior Farmers Market Nutrition Program 94,262 -
Child Nutrition Discretionary Grants Limited Availability 10.579 10,267,964 10,267,945
Technical Assistance for Specialty Crops Program 10.604 14,200 -
Pandemic EBT Administrative Costs 10.649 (30,912) (30,912)
COVID-19 - Pandemic EBT Administrative Costs 10.649 97,906,463 49,268,158
Total Pandemic EBT Administrative Costs 97,875,551 49,237,246
Cooperative Forestry Assistance 10.664 6,194,250 1,495,080
Wood Utilization Assistance 10.674 170,524 160,750
Urban and Community Forestry Program 10.675 707,430 389,411
Forest Legacy Program 10.676 1,561,275 1,560,000
Forest Stewardship Program 10.678 70,978 63,647
Forest Health Protection 10.680 308,643 212,176
Good Neighbor Authority 10.691 869,991 443,626
Watershed Restoration and Enhancement Agreement Authority 10.693 87,553 -
State & Private Forestry Cooperative Fire Assistance 10.698 160,589 131,901
Partnership Agreements 10.699 (105,019) -
Environmental Quality Incentives Program 10.912 71,948 71,948
Total Excluding Clusters 1,842,092,989 921,852,145
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 92
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Child Nutrition Cluster
School Breakfast Program 10.553 615,134,551 615,134,551
National School Lunch Program 10.555 1,913,847,506 1,913,847,506
COVID-19 - National School Lunch Program 10.555 115,269,924 115,269,924
National School Lunch Program (Noncash) 10.555 223,600,745 -
Total National School Lunch Program 2,252,718,175 2,029,117,430
Special Milk Program for Children 10.556 115,442 115,442
Summer Food Service Program for Children 10.559 25,949,380 24,673,957
Fresh Fruit and Vegetable Program 10.582 12,888,723 12,888,723
Total Child Nutrition Cluster 2,906,806,271 2,681,930,103
Food Distribution Cluster
Commodity Supplemental Food Program 10.565 9,318,020 9,270,772
Commodity Supplemental Food Program (Noncash) 10.565 39,505,707 -
Total Commodity Supplemental Food Program 48,823,727 9,270,772
Emergency Food Assistance Program (Administrative Costs) 10.568 38,898,595 38,178,583
Emergency Food Assistance Program (Food Commodities) (Noncash) 10.569 155,451,552 -
COVID-19 - Emergency Food Assistance Program (Food Commodities) (Noncash) 10.569 19,015,398 -
Total Emergency Food Assistance Program (Food Commodities) 174,466,950 -
Total Food Distribution Cluster 262,189,272 47,449,355
Forest Service Schools and Roads Cluster
Schools and Roads - Grants to States 10.665 32,535,506 32,535,506
Total Forest Service Schools and Roads Cluster 32,535,506 32,535,506
Research and Development Cluster
Plant and Animal Disease, Pest Control, and Animal Care 10.025 970,041 970,041
Wildlife Services 10.028 3,282 -
Market Protection and Promotion 10.163 2,054,233 -
Specialty Crop Block Grant Program - Farm Bill 10.170 12,087,670 11,900,818
COVID-19 - Specialty Crop Block Grant Program - Farm Bill 10.170 1,409,972 1,301,766
Total Specialty Crop Block Grant Program - Farm Bill 13,497,642 13,202,584
Total Research and Development Cluster 16,525,198 14,172,625
SNAP Cluster
Supplemental Nutrition Assistance Program (Noncash) 10.551 12,306,192,569 -
COVID-19 - Supplemental Nutrition Assistance Program (Noncash) 10.551 4,736,963,475 -
Total Supplemental Nutrition Assistance Program 17,043,156,044 -
State Administrative Matching Grants for the Supplemental Nutrition Assistance Program 10.561 1,285,984,615 1,166,399,964
COVID-19 - State Administrative Matching Grants for the Supplemental Nutrition Assistance Progra 10.561 48,526,369 30,657,859
Total State Administrative Matching Grants for the Supplemental Nutrition Assistance
Program 1,334,510,984 1,197,057,823
Total SNAP Cluster 18,377,667,028 1,197,057,823
Total U.S. Department of Agriculture 23,437,816,264 4,894,997,557
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 93
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
U.S. Department of Commerce
State Digital Equity Planning and Capacity Grant 11.032 196,406 -
Coastal Zone Management Administration Awards 11.419 2,767,753 -
Coastal Zone Management Estuarine Research Reserves 11.420 1,068,387 675,307
Regional Fishery Management Councils 11.441 379,388 -
Unallied Management Projects 11.454 1,094,543 -
Meteorologic and Hydrologic Modernization Development 11.467 736,144 -
Office for Coastal Management 11.473 2,561 -
Total Excluding Clusters 6,245,182 675,307
Economic Development Cluster
Economic Adjustment Assistance 11.307 890,555 -
Total Economic Development Cluster 890,555 -
Research and Development Cluster
Interjurisdictional Fisheries Act of 1986 11.407 216,190 -
Pacific Coast Salmon Recovery Pacific Salmon Treaty Program 11.438 12,687,282 9,548,423
Unallied Management Projects 11.454 231,704 -
Unallied Science Program 11.472 1,172,110 -
Total Research and Development Cluster 14,307,286 9,548,423
Total U.S. Department of Commerce 21,443,023 10,223,730
U.S. Department of Defense
Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a 12.003
Military Installation 352,575 -
Payments to States in Lieu of Real Estate Taxes 12.112 179,335 179,335
State Memorandum of Agreement Program for the Reimbursement of Technical Services 12.113 17,137,009 -
Basic and Applied Scientific Research 12.300 18,419 -
National Guard Military Operations and Maintenance (O&M) Projects 12.401 94,822,220 -
COVID-19 - National Guard Military Operations and Maintenance (O&M) Projects 12.401 55,770 -
Total National Guard Military Operations and Maintenance (O&M) Projects 94,877,990 -
National Guard Challenge Program 12.404 26,449,965 -
Community Investment 12.600 1,699,920 1,362,708
Community Economic Adjustment Assistance for Compatible Use and Joint Land Use Studies 12.610 343,722 89,984
Economic Adjustment Assistance for State Governments 12.617 96,988 54,884
Air Force Defense Research Sciences Program 12.800 30,495 -
Other - U.S. Department of Defense 12.U01 1,281,209 -
Total Excluding Clusters 142,467,627 1,686,911
Total U.S. Department of Defense 142,467,627 1,686,911
U.S. Department of Housing and Urban Development
Manufactured Home Dispute Resolution 14.171 218,162 -
Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii 14.228 119,444,349 102,641,400
COVID-19 - Community Development Block Grants/State's Program and Non-Entitlement Grants i 14.228 37,893,250 33,691,497
Total Community Development Block Grants/State's Program and Non-Entitlement Grants
in Hawaii 157,337,599 136,332,897
Emergency Solutions Grant Program 14.231 12,469,696 11,646,918
COVID-19 - Emergency Solutions Grant Program 14.231 101,458,040 96,730,185
Total Emergency Solutions Grant Program 113,927,736 108,377,103
Home Investment Partnerships Program 14.239 25,700,750 18,412,311
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 94
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Housing Opportunities for Persons with AIDS 14.241 3,995,973 3,870,476
COVID-19 - Housing Opportunities for Persons with AIDS 14.241 19,302 19,302
Total Housing Opportunities for Persons with AIDS 4,015,275 3,889,778
Housing Trust Fund 14.275 29,851,610 26,342,937
Equal Opportunity in Housing 14.400 3,033,218 -
Lead Hazard Reduction Demonstration Grant Program 14.905 266,250 -
Total Excluding Clusters 334,350,600 293,355,026
CDBG - Disaster Recovery Grants - Pub. L. No. 113-2 Cluster
National Disaster Resilience Competition 14.272 7,195,283 7,154,623
Total CDBG - Disaster Recovery Grants - Pub. L. No. 113-2 Cluster 7,195,283 7,154,623
Total U.S. Department of Housing and Urban Development 341,545,883 300,509,649
U.S. Department of the Interior
Energy Community Revitalization Program (ECRP) 15.018 3,381,446 -
Southern Nevada Public Land Management 15.235 255,391 -
Environmental Quality and Protection 15.236 143,306 -
Federal Oil and Gas Royalty Management State and Tribal Coordination 15.427 1,432,858 -
Geothermal Resources 15.434 4,857,569 4,857,569
Minerals Leasing Act 15.437 47,159,855 47,159,855
National Forest Acquired Lands 15.438 30 30
Providing Water to At-Risk Natural Desert Terminal Lakes 15.508 34 -
Central Valley Improvement Act, Title XXXIV 15.512 8,822,798 -
Fish and Wildlife Coordination Act 15.517 2,631,641 16,427
Recreation Resources Management 15.524 1,969,740 -
San Joaquin River Restoration 15.555 466,493 -
SECURE Water Act – Research Agreements 15.560 1,000,000 -
Coastal Wetlands Planning, Protection and Restoration 15.614 5,346,423 5,346,423
Cooperative Endangered Species Conservation Fund 15.615 26,529,101 -
Clean Vessel Act 15.616 2,118,562 656,800
Sportfishing and Boating Safety Act 15.622 372,726 372,726
Coastal 15.630 13,391 -
State Wildlife Grants 15.634 59,318 -
Central Valley Project Improvement Act (CVPIA) 15.648 1,653,298 -
Endangered Species Recovery Implementation 15.657 33,683 -
U.S. Geological Survey Research and Data Collection 15.808 (15,627) -
National Cooperative Geologic Mapping 15.810 425,781 -
National Geological and Geophysical Data Preservation 15.814 4,157 -
Historic Preservation Fund Grants-In-Aid 15.904 2,306,477 300,717
Outdoor Recreation Acquisition, Development and Planning 15.916 9,189,942 9,074,141
National Maritime Heritage Grants 15.925 8,624 8,624
Redwood National Park Cooperative Management with the State of California 15.937 210,663 -
Heritage Partnership 15.939 87,137 -
Natural Resource Stewardship 15.944 221,380 -
Other - U.S. Department of the Interior 15.U02 4,048,792 -
Total Excluding Clusters 124,734,989 67,793,312
Fish and Wildlife Cluster
Sport Fish Restoration 15.605 237,120 -
Wildlife Restoration and Basic Hunter Education 15.611 2,034,268 -
Enhanced Hunter Education and Safety 15.626 209,383 -
Total Fish and Wildlife Cluster 2,480,771 -
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 95
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Research and Development Cluster
Wildlife Resource Management 15.247 2,531 737
Central Valley Improvement Act, Title XXXIV 15.512 4,591,779 -
Fish and Wildlife Coordination Act 15.517 122,686 -
Central Valley, Trinity River Division, Trinity River Fish and Wildlife Management 15.532 859,005 -
Sport Fish Restoration 15.605 15,847,937 328,461
Fish and Wildlife Management Assistance 15.608 72,091 -
Wildlife Restoration and Basic Hunter Education 15.611 18,560,779 359,352
Cooperative Endangered Species Conservation Fund 15.615 3,212,836 2,608,395
State Wildlife Grants 15.634 2,880,655 749,088
Endangered Species Recovery Implementation 15.657 108,708 -
Endangered Species Conservation - Wolf Livestock Loss Compensation and Prevention 15.666 19,552 -
Adaptive Science 15.670 66,530 66,530
Prescott Marine Mammal Rescue Assistance 15.683 64,386 -
White-nose Syndrome National Response Implementation 15.684 2,122 -
Other - U.S. Department of the Interior 15.U03 1,176 -
Total Research and Development Cluster 46,412,773 4,112,563
Total U.S. Department of the Interior 173,628,533 71,905,875
U.S. Department of Justice
Law Enforcement Assistance Narcotics and Dangerous Drugs Laboratory Analysis 16.001 478,315 -
Sexual Assault Services Formula Program 16.017 1,057,513 1,057,513
Justice Systems Response to Families 16.021 163,224 163,224
COVID-19 - Coronavirus Emergency Supplemental Funding Program 16.034 (3,052,498) -
Veterans Treatment Court Discretionary Grant Program 16.043 47,251 -
Services for Trafficking Victims 16.320 292,293 -
Antiterrorism Emergency Reserve 16.321 2,203,968 1,844,045
Juvenile Justice and Delinquency Prevention 16.540 4,094,443 3,558,559
National Criminal History Improvement Program (NCHIP) 16.554 379,903 -
Crime Victim Assistance 16.575 208,951,682 199,225,663
Crime Victim Compensation 16.576 19,080,525 -
Drug Court Discretionary Grant Program 16.585 2,249,152 469,868
Violence Against Women Formula Grants 16.588 13,440,825 12,453,956
Residential Substance Abuse Treatment for State Prisoners 16.593 1,735,690 1,596,667
State Criminal Alien Assistance Program 16.606 131,642,586 -
Bulletproof Vest Partnership Program 16.607 27,612 27,612
Regional Information Sharing Systems 16.610
Pass-Through from The Western States Information Network (BI) 15PBJA-21-GG00349-RI 1,326,457 -
Special Data Collections and Statistical Studies 16.734 4,727,406 -
PREA Program: Strategic Support for PREA Implementation 16.735 15,716 15,716
Edward Byrne Memorial Justice Assistance Grant Program 16.738 10,744,237 10,184,153
DNA Backlog Reduction Program 16.741 2,164,781 -
Paul Coverdell Forensic Sciences Improvement Grant Program 16.742 1,149,109 1,137,458
Criminal and Juvenile Justice and Mental Health Collaboration Program 16.745 162,013 -
Support for Adam Walsh Act Implementation Grant Program 16.750 447,262 -
Edward Byrne Memorial Competitive Grant Program 16.751 (100,438) -
Harold Rogers Prescription Drug Monitoring Program 16.754 672,036 -
John R. Justice Prosecutors and Defenders Incentive Act 16.816 220,703 -
Postconviction Testing of DNA Evidence 16.820 701,747 674,843
STOP School Violence 16.839 660,637 274,847
Equitable Sharing Program 16.922 16,150 -
Other - Department of Justice 16.U04 408,679 -
Total Excluding Clusters 406,108,979 232,684,124
Total U.S. Department of Justice 406,108,979 232,684,124
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 96
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
U.S. Department of Labor
Labor Force Statistics 17.002 7,312,272 -
Compensation and Working Conditions 17.005 697,267 -
Unemployment Insurance 17.225 5,672,183,257 -
COVID-19 - Unemployment Insurance 17.225 (274,865,411) -
Total Unemployment Insurance 5,397,317,846 -
Senior Community Service Employment Program 17.235 4,801,962 4,460,717
Trade Adjustment Assistance 17.245 3,155,950 -
WIOA Pilots, Demonstrations, and Research Projects 17.261 177,500 -
Reentry Employment Opportunities 17.270 67,047 -
Work Opportunity Tax Credit Program (WOTC) 17.271 4,263,329 -
Temporary Labor Certification for Foreign Workers 17.273 1,918,772 -
WIOA National Dislocated Worker Grants / WIA National Emergency Grants 17.277 15,019,475 14,402,270
WIOA Dislocated Worker National Reserve Demonstration Grants 17.280 (220,367) -
Apprenticeship USA Grants 17.285 730,702 -
Hurricanes and Wildfires of 2017 Supplemental – National Dislocated Worker Grants 17.286 1,332,551 1,222,321
Occupational Safety and Health State Program 17.503 29,320,936 -
COVID-19 - Occupational Safety and Health State Program 17.503 2,994,318 -
Total Occupational Safety and Health State Program 32,315,254 -
Consultation Agreements 17.504 6,060,981 -
Mine Health and Safety Grants 17.600 182,233 -
Disability Employment Policy Development 17.720 46 -
Total Excluding Clusters 5,475,132,820 20,085,308
Employment Service Cluster
Employment Service/Wagner-Peyser Funded Activities 17.207 66,588,561 2,359,691
Jobs for Veterans State Grants 17.801 15,770,889 -
Total Employment Service Cluster 82,359,450 2,359,691
WIOA Cluster
WIOA Adult Program 17.258 120,837,199 118,671,861
WIOA Youth Activities 17.259 129,264,851 115,199,098
WIOA Dislocated Worker Formula Grants 17.278 124,002,271 105,646,895
Total WIOA Cluster 374,104,321 339,517,854
Total U.S. Department of Labor 5,931,596,591 361,962,853
U.S. Department of Transportation
Highway Planning and Construction 20.205 3,578,613,205 1,214,877,587
COVID-19 - Highway Planning and Construction 20.205 376,304,106 7,226,585
Total Highway Planning and Construction 3,954,917,311 1,222,104,172
Highway Training and Education 20.215 135,300 -
Recreational Trails Program 20.219 197,732 103,090
Commercial Driver's License Program Implementation Grant 20.232 56,000 -
Fuel Tax Evasion - Intergovernmental Enforcement Effort 20.240 144,338 -
Capital Assistance to States - Intercity Passenger Rail Service 20.317 2,396,326 2,396,326
ARRA - High-Speed Rail Corridors and Intercity Passenger Rail Service – Capital Assistance Grants 20.319 (355,726) -
High-Speed Rail Corridors and Intercity Passenger Rail Service – Capital Assistance Grants 20.319 2,896,357 -
Total High-Speed Rail Corridors and Intercity Passenger Rail Service – Capital Assistance Grants 2,540,631 -
Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research 20.505 64,284,952 49,393,349
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 97
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Formula Grants for Rural Areas and Tribal Transit Program 20.509 29,665,789 27,567,806
COVID-19 - Formula Grants for Rural Areas and Tribal Transit Program 20.509 36,832,605 35,068,975
Total Formula Grants for Rural Areas and Tribal Transit Program 66,498,394 62,636,781
Paul S. Sarbanes Transit in the Parks 20.520 87,209 -
Rail Fixed Guideway Public Transportation System State Safety Oversight Formula Grant Program 20.528 7,335,315 -
Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 40,857,556 25,091,269
National Highway Traffic Safety Administration (NHTSA) Discretionary Safety Grants and 20.614
Cooperative Agreements 776,685 -
Pipeline Safety Program State Base Grant 20.700 11,880,130 -
Interagency Hazardous Materials Public Sector Training and Planning Grants 20.703 817,928 7,650
PHMSA Pipeline Safety Underground Natural Gas Storage Grant 20.725 551,763 -
Total Excluding Clusters 4,153,477,570 1,361,732,637
Federal Motor Carrier Safety Assistance (FMCSA) Cluster
Motor Carrier Safety Assistance 20.218 26,138,509 -
Motor Carrier Safety Assistance High Priority Activities Grants and Cooperative Agreements 20.237 1,782,059 -
Total Federal Motor Carrier Safety Assistance Cluster 27,920,568 -
Transit Services Programs Cluster
Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 10,957,164 10,187,263
COVID-19 - Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 991,318 991,318
Total Enhanced Mobility of Seniors and Individuals with Disabilities 11,948,482 11,178,581
Total Transit Services Programs Cluster 11,948,482 11,178,581
Federal Transit Cluster
Buses and Bus Facilities Formula, Competitive, and Low or No Emissions Programs 20.526 502,599 502,599
Total Federal Transit Cluster 502,599 502,599
Highway Safety Cluster
State and Community Highway Safety 20.600 30,237,599 15,746,382
Incentive Grant Program to Prohibit Racial Profiling 20.611 39,766 -
National Priority Safety Programs 20.616 21,030,438 13,283,620
Total Highway Safety Cluster 51,307,803 29,030,002
Research and Development Cluster
Highway Research and Development Program 20.200 910,627 -
Highway Planning and Construction 20.205 5,975,244 -
State and Community Highway Safety 20.600 55,240 -
National Priority Safety Programs 20.616 2,260 -
Total Research and Development Cluster 6,943,371 -
Total U.S. Department of Transportation 4,252,100,393 1,402,443,819
U.S. Department of the Treasury
Equitable Sharing 21.016 508,239 -
COVID-19 - Emergency Rental Assistance Program 21.023 500,349,371 97,121,072
COVID-19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 7,310,014,099 1,218,447,487
Total Excluding Clusters 7,810,871,709 1,315,568,559
Total U.S. Department of the Treasury 7,810,871,709 1,315,568,559
Equal Employment Opportunity Commission
Other - Equal Employment Opportunity Commission 30.U05 2,610,761 -
Total Excluding Clusters 2,610,761 -
Total Equal Employment Opportunity Commission 2,610,761 -
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 98
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
General Services Administration
Donation of Federal Surplus Personal Property (Noncash) 39.003 394,025 -
Election Reform Payments 39.011 247,399 -
Total Excluding Clusters 641,424 -
Total General Services Administration 641,424 -
National Endowment for the Arts
Promotion of the Arts Partnership Agreements 45.025 1,397,720 400,000
Grants to States 45.310 15,536,814 10,614,996
Total Excluding Clusters 16,934,534 11,014,996
Total National Endowment for the Arts 16,934,534 11,014,996
Small Business Administration
State Trade Expansion 59.061 473,670 62,499
Shuttered Venue Operators Grant Program 59.075 43,432 -
Total Excluding Clusters 517,102 62,499
Total Small Business Administration 517,102 62,499
U.S. Department of Veterans Affairs
Grants to States for Construction of State Home Facilities 64.005 536,403 -
VHA Primary Care 64.047 417,438 -
Burial Expenses Allowance for Veterans 64.101 500,640 -
Veterans Housing Guaranteed and Insured Loans 64.114 186,513,208 -
All-Volunteer Force Educational Assistance 64.124 2,015,017 -
Veterans Cemetery Grants Program 64.203 300,325 -
Total Excluding Clusters 190,283,031 -
Total U.S. Department of Veterans Affairs 190,283,031 -
Environmental Protection Agency
Air Pollution Control Program Support 66.001 7,830,450 -
State Indoor Radon Grants 66.032 96,222 96,222
Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities 66.034
Relating to the Clean Air Act 1,620,428 -
Diesel Emissions Reduction Act (DERA) State Grants 66.040 12,799 -
Geographic Programs - San Francisco Bay Water Quality Improvement Fund 66.126 487,522 487,522
Congressionally Mandated Projects 66.202 608,702 563,615
Multipurpose Grants to States and Tribes 66.204 171,816 -
Water Pollution Control State, Interstate, and Tribal Program Support 66.419 15,329,645 2,058,826
State Public Water System Supervision 66.432 7,123,100 -
State Underground Water Source Protection 66.433 337,084 -
Voluntary School and Child Care Lead Testing and Reduction Grant Program (SDWA 1464(d)) 66.444 2,250,427 -
Water Quality Management Planning 66.454 2,472,989 637,949
Nonpoint Source Implementation Grants 66.460 7,364,908 5,214,564
Regional Wetland Program Development Grants 66.461 47,305 6,298
Beach Monitoring and Notification Program Implementation Grants 66.472 394,748 368,000
Performance Partnership Grants 66.605 2,375,370 -
Environmental Information Exchange Network Grant Program and Related Assistance 66.608 22,391 -
Pollution Prevention Grants Program 66.708 302 -
Hazardous Waste Management State Program Support 66.801 8,248,644 -
Superfund State, Political Subdivision, and Indian Tribe Site - Specific Cooperative Agreements 66.802 1,000,332 -
Underground Storage Tank (UST) Prevention, Detection, and Compliance Program 66.804 232,419 -
Leaking Underground Storage Tank Trust Fund Corrective Action Program 66.805 1,634,060 -
State and Tribal Response Program Grants 66.817 919,527 -
Brownfields Multipurpose, Assessment, Revolving Loan Fund, and Cleanup Cooperative 66.818
Agreements 136,699 -
Targeted Airshed Grant Program 66.956 91,540 89,038
Total Excluding Clusters 60,809,429 9,522,034
Total Environmental Protection Agency 60,809,429 9,522,034
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 99
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
U.S. Department of Energy
State Energy Program 81.041 3,828,330 -
Weatherization Assistance for Low-Income Persons 81.042 6,437,868 5,145,030
Nuclear Legacy Cleanup Program 81.065 1,281,970 -
Environmental Remediation and Waste Processing and Disposal 81.104 262,176 -
Long-Term Surveillance and Maintenance 81.136 26,048 -
Environmental Monitoring/Cleanup, Cultural and Resource Mgmt., Emergency Response 81.214
Research, Outreach, Technical Analysis 47,019 -
Sustainable Energy for Homes and Business 81.U06 23,240 -
Total Excluding Clusters 11,906,651 5,145,030
Total U.S. Department of Energy 11,906,651 5,145,030
U.S. Department of Education
Adult Education - Basic Grants to States 84.002 106,770,494 98,772,485
Title I Grants to Local Educational Agencies 84.010 1,754,060,690 1,733,751,231
Migrant Education State Grant Program 84.011 119,225,282 113,054,057
Title I State Agency Program for Neglected and Delinquent Children and Youth 84.013 2,528,982 2,528,982
Career and Technical Education - Basic Grants to States 84.048 118,242,053 106,977,154
Rehabilitation Services Vocational Rehabilitation Grants to States 84.126 370,922,206 -
Rehabilitation Services Independent Living Services for Older Individuals Who are Blind 84.177 4,025,384 3,711,398
Special Education - Grants for Infants and Families 84.181 52,156,786 -
COVID-19 - Special Education - Grants for Infants and Families 84.181 1,700,520 -
Total Special Education - Grants for Infants and Families 53,857,306 -
Supported Employment Services for Individuals with the Most Significant Disabilities 84.187 3,077,955 -
Education for Homeless Children and Youth 84.196 13,472,360 12,694,011
Charter Schools 84.282 5,454,985 4,922,444
Twenty-First Century Community Learning Centers 84.287 114,675,275 110,083,362
Special Education - State Personnel Development 84.323 2,598,198 2,598,198
Rural Education 84.358 5,511,518 5,273,415
English Language Acquisition State Grants 84.365 157,276,722 153,995,236
Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) 84.367 257,245,556 243,950,697
Grants for State Assessments and Related Activities 84.369 29,809,509 21,044,124
Comprehensive Literacy Development 84.371 6,265,137 5,962,528
Disability Innovation Fund (DIF) 84.421 4,049,967 -
Student Support and Academic Enrichment Program 84.424 145,347,250 144,135,731
Education Stabilization Fund
COVID-19 - Governor’s Emergency Education Relief (GEER) Fund 84.425C 107,644,813 107,644,813
COVID-19 - Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425D 2,825,214,308 2,819,719,017
COVID-19 - Discretionary Grants - Reimagining Workforce Preparation Grants 84.425G 5,033,196 -
COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act 2021 – 84.425R
Emergency Assistance to Non-Public Schools (CRRSA EANS) Program 15,636,633 15,602,786
COVID-19 - American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP 84.425U
ESSER) 5,108,997,749 5,103,319,114
COVID-19 - American Rescue Plan - Emergency Assistance to Non-Public Schools (ARP EANS) 84.425V
Program 32,741,137 32,724,204
COVID-19 - American Rescue Plan - Elementary and Secondary School Emergency Relief – 84.425W
Homeless Children and Youth 20,461,070 20,160,652
Total Education Stabilization Fund 8,115,728,906 8,099,170,586
Randolph-Sheppard – Financial Relief and Restoration Payments 84.426 2,739 -
Disaster Recovery Assistance for Education 84.938 33,322 -
Total Excluding Clusters 11,390,181,796 10,862,625,639
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 100
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Special Education Cluster (IDEA)
Special Education – Grants to States 84.027 1,089,862,737 1,035,820,601
Special Education – Preschool Grants 84.173 32,788,054 30,926,852
COVID-19 - Special Education – Preschool Grants 84.173 8,009,707 8,009,707
Total Special Education – Preschool Grants 40,797,761 38,936,559
Total Special Education Cluster (IDEA) 1,130,660,498 1,074,757,160
Total U.S. Department of Education 12,520,842,294 11,937,382,799
U.S. Election Assistance Commission
Help America Vote Act Requirements Payments 90.401 8,826,495 -
HAVA Election Security Grants 90.404 83,669 -
Total Excluding Clusters 8,910,164 -
Total U.S. Election Assistance Commission 8,910,164 -
U.S. Department of Health and Human Services
Special Programs for the Aging, Title VII, Chapter 3, Programs for Prevention of Elder Abuse, 93.041
Neglect, and Exploitation 504,609 504,609
Special Programs for the Aging, Title VII, Chapter 2, Long Term Care Ombudsman Services for 93.042
Older Individuals 2,073,755 1,937,030
COVID-19 - Special Programs for the Aging, Title VII, Chapter 2, Long Term Care Ombudsman 93.042
Services for Older Individuals 349,462 349,462
Total Special Programs for the Aging, Title VII, Chapter 2, Long Term Care Ombudsman
Services for Older Individuals 2,423,217 2,286,492
Special Programs for the Aging, Title III, Part D, Disease Prevention and Health Promotion Services 93.043 2,231,014 2,231,014
COVID-19 - Special Programs for the Aging, Title III, Part D, Disease Prevention and Health 93.043
Promotion Services 526,846 492,196
Total Special Programs for the Aging, Title III, Part D, Disease Prevention and Health
Promotion Services 2,757,860 2,723,210
Special Programs for the Aging, Title IV, and Title II, Discretionary Projects 93.048 26,532 -
National Family Caregiver Support, Title III, Part E 93.052 18,250,537 17,454,141
COVID-19 - National Family Caregiver Support, Title III, Part E 93.052 3,018,654 2,903,206
Total National Family Caregiver Support, Title III, Part E 21,269,191 20,357,347
Public Health Emergency Preparedness 93.069 34,600,391 21,513,430
Environmental Public Health and Emergency Response 93.070 1,004,398 -
Medicare Enrollment Assistance Program 93.071 2,869,756 2,641,748
Cooperative Agreements to Promote Adolescent Health through School-Based HIV/STD 93.079
Prevention and School-Based Surveillance 88,234 -
Guardianship Assistance 93.090 30,414,222 29,147,856
COVID-19 - Guardianship Assistance 93.090 10,487,340 10,487,340
Total Guardianship Assistance 40,901,562 39,635,196
Affordable Care Act (ACA) Personal Responsibility Education Program 93.092 5,324,386 3,829,374
Food and Drug Administration Research 93.103 4,645,086 -
Maternal and Child Health Federal Consolidated Programs 93.110 97,044 -
Project Grants and Cooperative Agreements for Tuberculosis Control Programs 93.116 8,550,945 4,145,490
Preventive Medicine Residency 93.117 497,750 -
Emergency Medical Services for Children 93.127 78,879 -
Cooperative Agreements to States/Territories for the Coordination and Development of Primary 93.130
Care Offices 688,525 -
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 101
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Injury Prevention and Control Research and State and Community Based Programs 93.136 12,527,469 4,670,367
Projects for Assistance in Transition from Homelessness (PATH) 93.150 5,035,262 4,864,139
COVID-19 - Rural Health Research Centers 93.155 11,885,296 -
Grants to States for Loan Repayment 93.165 999,916 -
Childhood Lead Poisoning Prevention Projects, State and Local Childhood Lead Poisoning 93.197
Prevention and Surveillance of Blood Lead Levels in Children (416,946) -
Traumatic Brain Injury State Demonstration Grant Program 93.234 251,963 -
State Capacity Building 93.240 580,872 -
State Rural Hospital Flexibility Program 93.241 636,842 -
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 10,756,018 9,426,762
Immunization Cooperative Agreements 93.268 29,758,760 11,234,345
COVID-19 - Immunization Cooperative Agreements 93.268 156,358,695 118,975,223
Immunization Cooperative Agreements (Noncash) 93.268 548,442,902 -
Total Immunization Cooperative Agreements 734,560,357 130,209,568
Viral Hepatitis Prevention and Control 93.270 347,547 347,547
Centers for Disease Control and Prevention Investigations and Technical Assistance 93.283
Pass-Through from Colorado Department of Public Health and Environment 840644739 76,230 -
Small Rural Hospital Improvement Grant Program 93.301 1,144,992 -
COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 93.323
Pass-Through from Heluna Health 95-2557063 578,123,169 282,954,398
State Health Insurance Assistance Program 93.324 3,633,620 2,982,866
Behavioral Risk Factor Surveillance System 93.336 413,266 -
COVID-19 - Behavioral Risk Factor Surveillance System 93.336 59,994 -
Total Behavioral Risk Factor Surveillance System 473,260 -
COVID-19 - Public Health Emergency Response - Cooperative Agreement for Emergency 93.354
Response - Public Health Crisis Response 53,010,409 22,176,267
Flexible Funding Model - Infrastructure Development and Maintenance for State Manufactured 93.367
Food Regulatory Programs 940,586 -
ACL Independent Living State Grants 93.369 2,431,549 2,431,549
National and State Tobacco Control Program 93.387 3,028,329 -
COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department 93.391
Response to Public Health or Healthcare Crises 7,058,158 -
Improving the Health of Americans through Prevention and Management of Diabetes and 93.426
Heart Disease and Stroke 3,752,499 -
Every Student Succeeds Act/Preschool Development Grants 93.434 13,208,613 664,677
Well-Integrated Screening and Evaluation for Women Across the Nation (WiseWoman) 93.436 417,485 -
State Physical Activity and Nutrition (SPAN) 93.439 1,034,103 477,613
ACL Assistive Technology 93.464 1,511,647 -
Preventing Maternal Deaths: Supporting Maternal Mortality Review Committees 93.478 444,114 -
COVID-19 - Family Violence Prevention and Services/Sexual Assault/Rape Crisis Services and 93.497
Supports 7,997,513 7,694,899
COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution 93.498 936,140 936,140
Low Income Household Water Assistance Program 93.499 17,203,590 14,446,589
COVID-19 - Low Income Household Water Assistance Program 93.499 19,072,934 18,442,021
Total Low Income Household Water Assistance Program 36,276,524 32,888,610
MaryLee Allen Promoting Safe and Stable Families Program 93.556 39,254,156 36,070,919
COVID-19 - MaryLee Allen Promoting Safe and Stable Families Program 93.556 3,922,440 3,922,440
Total MaryLee Allen Promoting Safe and Stable Families Program 43,176,596 39,993,359
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 102
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STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Temporary Assistance for Needy Families 93.558 3,238,507,836 2,760,410,605
COVID-19 - Temporary Assistance for Needy Families 93.558 14,580,207 14,580,207
Total Temporary Assistance for Needy Families 3,253,088,043 2,774,990,812
Child Support Enforcement 93.563 714,703,139 551,281,279
Child Support Enforcement Research 93.564 193,995 186,480
Refugee and Entrant Assistance State/Replacement Designee Administered Programs 93.566 132,808,616 124,212,557
Low-Income Home Energy Assistance 93.568 280,574,726 267,429,107
COVID-19 - Low-Income Home Energy Assistance 93.568 91,568,753 89,787,120
Total Low-Income Home Energy Assistance 372,143,479 357,216,227
Community Services Block Grant 93.569 71,151,946 66,506,943
COVID-19 - Community Services Block Grant 93.569 11,758,678 11,758,678
Total Community Services Block Grant 82,910,624 78,265,621
Refugee and Entrant Assistance Discretionary Grants 93.576 (145) -
U.S. Repatriation 93.579 108,951 -
Refugee and Entrant Assistance - Targeted Assistance Grants 93.584 (181) -
State Court Improvement Program 93.586 2,741,684 -
Community-Based Child Abuse Prevention Grants 93.590 4,572,979 4,272,979
COVID-19 - Community-Based Child Abuse Prevention Grants 93.590 9,348 9,348
Total Community-Based Child Abuse Prevention Grants 4,582,327 4,282,327
Grants to States for Access and Visitation Programs 93.597 694,788 -
Chafee Education and Training Vouchers Program (ETV) 93.599 3,745,070 -
COVID-19 - Chafee Education and Training Vouchers Program (ETV) 93.599 2,617,660 -
Total Chafee Education and Training Vouchers Program (ETV) 6,362,730 -
Adoption and Legal Guardianship Incentive Payments 93.603 2,117,457 -
Developmental Disabilities Basic Support and Advocacy Grants 93.630 7,679,921 -
COVID-19 - Developmental Disabilities Basic Support and Advocacy Grants 93.630 217,360 -
Total Developmental Disabilities Basic Support and Advocacy Grants 7,897,281 -
Support for Ombudsman and Beneficiary Counseling Programs for States Participating in 93.634
Financial Alignment Model Demonstrations for Dually Eligible Individuals 1,345,832 1,295,156
Section 9813: State Planning Grants for Qualifying Community-Based Mobile Crisis Intervention 93.639
Services 676,128 676,128
Children's Justice Grants to States 93.643 1,262,483 1,132,061
Stephanie Tubbs Jones Child Welfare Services Program 93.645 22,238,261 22,238,261
Foster Care Title IV-E 93.658 1,366,400,914 1,177,200,721
COVID-19 - Foster Care Title IV-E 93.658 32,235,517 32,235,517
Total Foster Care Title IV-E 1,398,636,431 1,209,436,238
Adoption Assistance 93.659 723,264,887 720,744,206
COVID-19 - Adoption Assistance 93.659 76,625,602 76,625,602
Total Adoption Assistance 799,890,489 797,369,808
Social Services Block Grant 93.667 461,835,308 411,332,328
Child Abuse and Neglect State Grants 93.669 8,300,949 8,040,949
COVID-19 - Child Abuse and Neglect State Grants 93.669 1,552,049 1,552,049
Total Child Abuse and Neglect State Grants 9,852,998 9,592,998
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 103
April 2025
STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Family Violence Prevention and Services/Domestic Violence Shelter and Supportive Services 93.671 11,972,051 11,542,347
COVID-19 - Family Violence Prevention and Services/Domestic Violence Shelter and Supportive 93.671
Services 9,061,705 8,390,499
Total Family Violence Prevention and Services/Domestic Violence Shelter and Supportive
Services 21,033,756 19,932,846
John H. Chafee Foster Care Program for Successful Transition to Adulthood 93.674 19,576,940 18,524,103
COVID-19 - John H. Chafee Foster Care Program for Successful Transition to Adulthood 93.674 3,844,201 3,844,201
Total John H. Chafee Foster Care Program for Successful Transition to Adulthood 23,421,141 22,368,304
PPHF: Racial and Ethnic Approaches to Community Health Program financed solely by Public 93.738
Prevention and Health Funds 947,684 751,696
COVID-19 - PPHF: Racial and Ethnic Approaches to Community Health Program financed solely 93.738
by Public Prevention and Health Funds 340,774 340,774
Total PPHF - Racial and Ethnic Approaches to Community Health Program Financed Solely
by Public Prevention and Health Funds 1,288,458 1,092,470
Elder Abuse Prevention Interventions Program 93.747 55,380 55,380
COVID-19 - Elder Abuse Prevention Interventions Program 93.747 4,716,029 4,716,029
Total Elder Abuse Prevention Interventions Program 4,771,409 4,771,409
Children's Health Insurance Program 93.767 2,661,790,942 -
COVID-19 - Children's Health Insurance Program 93.767 175,534,411 -
Total Children's Health Insurance Program 2,837,325,353 -
Opioid STR 93.788 115,220,343 -
Money Follows the Person Rebalancing Demonstration 93.791 10,433,823 -
State Survey Certification of Health Care Providers and Suppliers (Title XIX) Medicaid 93.796 49,476,458 15,542,564
Paul Coverdell National Acute Stroke Program National Center for Chronic Disease Prevention 93.810
and Health Promotion 528 -
COVID-19 - Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities 93.817 1,191,509 1,191,509
Promoting Population Health through Increased Capacity in Alcohol Epidemiology 93.845 220,650 -
Maternal, Infant and Early Childhood Home Visiting Grant 93.870 17,643,076 14,692,865
COVID-19 - Maternal, Infant and Early Childhood Home Visiting Grant 93.870 1,648,015 1,378,626
Total Maternal, Infant and Early Childhood Home Visiting Grant 19,291,091 16,071,491
National Bioterrorism Hospital Preparedness Program 93.889 21,068,403 10,411,876
Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations 93.898 9,970,166 165,029
Grants to States for Operation of State Offices of Rural Health 93.913 286,944 -
HIV Care Formula Grants 93.917 144,561,124 25,882,509
COVID-19 - HIV Care Formula Grants 93.917 2,539 -
Total HIV Care Formula Grants 144,563,663 25,882,509
HIV Prevention Activities Health Department Based 93.940 25,557,752 13,204,436
Human Immunodeficiency Virus (HIV)/Acquired Immunodeficiency Virus Syndrome (AIDS) 93.944
Surveillance 1,254,299 319,856
Tuberculosis Demonstration, Research, Public and Professional Education 93.947 211,947 -
Block Grants for Community Mental Health Services 93.958 93,442,355 75,787,252
COVID-19 - Block Grants for Community Mental Health Services 93.958 43,521,084 22,496,002
Total Block Grants for Community Mental Health Services 136,963,439 98,283,254
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 104
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STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Block Grants for Prevention and Treatment of Substance Abuse 93.959 265,325,610 241,981,652
COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse 93.959 106,034,444 59,794,052
Total Block Grants for Prevention and Treatment of Substance Abuse 371,360,054 301,775,704
Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public 93.967
Health 6,371,769 6,303,327
Sexually Transmitted Diseases (STD) Prevention and Control Grants 93.977 15,683,812 8,736,683
Mental Health Disaster Assistance and Emergency Mental Health 93.982 5,992,925 -
Preventive Health and Health Services Block Grant 93.991 9,643,821 717,198
Maternal and Child Health Services Block Grant to the States 93.994 41,696,319 18,727,888
Other - Department of Health and Human Services 93.U07 27,100,210 -
Total Excluding Clusters 12,839,659,257 7,549,362,291
Aging Cluster
Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.044 44,897,289 42,569,339
COVID-19 - Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and 93.044
Senior Centers 15,082,360 14,702,075
Total Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and
Senior Centers 59,979,649 57,271,414
Special Programs for the Aging, Title III, Part C, Nutrition Services 93.045 70,563,739 65,496,816
COVID-19 - Special Programs for the Aging, Title III, Part C, Nutrition Services 93.045 20,563,060 19,944,026
Total Special Programs for the Aging, Title III, Part C, Nutrition Services 91,126,799 85,440,842
Nutrition Services Incentive Program 93.053 13,680,881 13,680,881
Total Aging Cluster 164,787,329 156,393,137
CCDF Cluster
Child Care Disaster Relief 93.489 (199) -
Child Care and Development Block Grant 93.575 549,286,911 531,973,839
COVID-19 - Child Care and Development Block Grant 93.575 1,311,943,386 444,732,480
Total Child Care and Development Block Grant 1,861,230,297 976,706,319
Child Care Mandatory and Matching Funds of the Child Care and Development Fund 93.596 321,772,353 259,426,714
Total CCDF Cluster 2,183,002,451 1,236,133,033
Head Start Cluster
Head Start 93.600 5,582,649 3,759,388
COVID-19 - Head Start 93.600 103,510 103,510
Total Head Start 5,686,159 3,862,898
Total Head Start Cluster 5,686,159 3,862,898
Medicaid Cluster
State Medicaid Fraud Control Units 93.775 48,609,175 -
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare 93.777 56,860,447 14,083,855
Medical Assistance Program 93.778 81,907,125,487 -
COVID-19 - Medical Assistance Program 93.778 5,529,672,931 -
Total Medical Assistance Program 87,436,798,418 -
Total Medicaid Cluster 87,542,268,040 14,083,855
Total U.S. Department of Health and Human Services 102,735,403,236 8,959,835,214
See accompanying notes to the Schedule of Expenditures of Federal Awards.
California State Auditor Report 2023‐001 105
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STATE OF CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Pass-Through
Federal Agency/ Assistance Entity Amounts Passed
Federal Program or Cluster Title/ Listing Identifying Federal Through To
Pass-Through Entity Number Number Expenditures Subrecipients
Corporation for National and Community Service
AmeriCorps State Commissions Support Grant 94.003 954,386 -
AmeriCorps State and National 94.006 37,841,799 37,182,749
AmeriCorps Commission Investment Fund 94.008 142,092 -
Training and Technical Assistance 94.009 (133) -
Total Excluding Clusters 38,938,144 37,182,749
Foster Grandparent/Senior Companion Cluster
Foster Grandparent Program 94.011 1,153,048 -
Total Foster Grandparent/Senior Companion Cluster 1,153,048 -
Total Corporation for National and Community Service 40,091,192 37,182,749
Executive Office of the President
High Intensity Drug Trafficking Areas Program 95.001
Pass-Through from INCH/LA Police Chief's Association/Riverside County G21LA0007A 29,286 -
Pass-Through from INCH/LA Police Chief's Association/Riverside County G22LA0007A 102,914 -
Pass-Through from LA Clear/LA Police Chief's Association/City of Monrovia G21LA0004A 119,485 -
Pass-Through from LA Clear/LA Police Chief's Association/City of Monrovia G22LA0004A 993,534 -
Total High Intensity Drug Trafficking Areas Program 1,245,219 -
Total Excluding Clusters 1,245,219 -
Total Executive Office of the President 1,245,219 -
Social Security Administration
Disability Insurance/SSI Cluster
Social Security Disability Insurance 96.001 242,946,482 -
Total Disability Insurance/SSI Cluster 242,946,482 -
Total Social Security Administration 242,946,482 -
U.S. Department of Homeland Security
Non-Profit Security Program 97.008 7,710,524 7,710,524
Boating Safety Financial Assistance 97.012 4,453,883 2,812,239
Community Assistance Program State Support Services Element (CAP-SSSE) 97.023 637,260 -
Flood Mitigation Assistance 97.029 306,521 33,544
Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 1,064,634,196 1,033,854,962
Hazard Mitigation Grant 97.039 74,133,412 57,903,591
National Dam Safety Program 97.041 403,575 -
Emergency Management Performance Grants 97.042 25,354,011 14,594,520
COVID-19 - Emergency Management Performance Grants 97.042 3,125,199 1,300,454
Total Emergency Management Performance Grants 28,479,210 15,894,974
Cooperating Technical Partners 97.045 406,616 -
Fire Management Assistance Grant 97.046 20,998,459 4,563,711
BRIC: Building Resilient Infrastructure and Communities 97.047 6,192,340 5,406,223
Presidential Declared Disaster Assistance to Individuals and Households - Other Needs 97.050 (7,316,724) -
Homeland Security Grant Program 97.067 171,258,069 146,495,808
Earthquake State Assistance 97.082 548,758 300,170
Disaster Assistance Projects 97.088 8,495,853 8,495,853
State and Local Cybersecurity Grant Program Tribal Cybersecurity Grant Program 97.137 6,488 -
Total Excluding Clusters 1,381,348,440 1,283,471,599
Total U.S. Department of Homeland Security 1,381,348,440 1,283,471,599
Total Expenditures of Federal Awards $159,732,068,961 $30,835,599,997
See accompanying notes to the Schedule of Expenditures of Federal Awards.
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Notes to the Schedule of
Expenditures of Federal Awards
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STATE OF CALIFORNIA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
1. GENERAL
The accompanying Schedule of Expenditures of Federal Awards (Schedule) presents
the expenditures for all federal award programs received by the State of California
(State) for the fiscal year ended June 30, 2023, except for federal awards received by
the University of California system, a component unit of the State, the California State
University system, the California State Water Resources Control Board Water Pollution
Control Revolving Fund, the California State Water Resources Control Board Safe
Drinking Water State Revolving Fund, and the California Housing Finance Fund of the
California Housing Finance Agency, a component unit of the State. While these
entities’ operations are included in the State’s basic financial statements, these
entities engaged other auditors to perform an audit in accordance with the
U.S. Office of Management and Budget, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Code of Federal Regulations,
Title 2, Subtitle A, Chapter II, Part 200) also referred to as the “Uniform Guidance.”
As noted above, the Schedule presents only a portion of the State’s operations. The
Schedule is not intended to and does not present the financial position, changes in
net position/fund balance, or cash flows of the State.
2. BASIS OF ACCOUNTING
The federal awards expenditures reported in the Schedule are prepared from records
maintained by each state entity and reported on a cash basis. Under the cash basis
of accounting, expenditures are reported when paid by the State. All expenditures
for each program are net of applicable program income and refunds.
State entities’ records are periodically reconciled to the federal receipts and entity
expenditure reports maintained by the California State Controller’s Office. Negative
amounts shown on the Schedule represent adjustments or credits made in the normal
course of business to amounts reported as expenditures in prior years.
3. ASSISTANCE LISTING NUMBER
The Assistance Listing Number (ALN) and federal program titles listed in the Schedule
were obtained from the federal funding agency, the pass-through grantor, or the
U.S. General Services Administration’s System for Award Management (SAM).
The ALN is a five-digit number. The first two digits identify the federal funding agency,
and the last three digits identify the specific federal program. If a valid three-digit ALN
extension is unknown or unavailable, the letter “U” is used to indicate “unidentified”
followed by a two-digit number. COVID-19 Emergency Acts expenditures are
denoted by the prefix COVID-19 in the federal program title.
California State Auditor Report 2023‐001 110
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4. NONCASH FEDERAL AWARDS
The State is the recipient of noncash federal awards that do not result in cash receipts
or disbursements. These noncash federal awards include a variety of items, such as
food and nutritional purchase assistance, commodities, vaccines, or federal excess
property. The noncash federal awards are valued at fair market value at the time of
receipt, or the assessed value provided by the respective federal agency. Noncash
awards administered by the State are included in the Schedule. Noncash awards for
fiscal year ended June 30, 2023 are as follows:
Noncash Awards
Assistance for the
Listing Fiscal Year Ended
Number Federal Program Title June 30, 2023
10.551 Supplemental Nutrition Assistance Program $ 12,306,192,569
10.551 COVID-19 Supplemental Nutrition Assistance Program 4,736,963,475
10.555 National School Lunch Program 223,600,745
10.565 Commodity Supplemental Food Program 39,505,707
10.569 Emergency Food Assistance Program (Food
Commodities) 155,451,552
10.569 COVID-19 Emergency Food Assistance Program (Food
Commodities) 19,015,398
39.003 Donation of Federal Surplus Personal Property 394,025
93.268 Immunization Cooperative Agreements 548,442,902
Total $ 18,029,566,373
5. LOANS AND LOAN GUARANTEES OUTSTANDING, AND INSURANCE IN EFFECT
Loans and loan guarantees outstanding, and insurance in effect at June 30, 2023 are
summarized below.
Assistance Loans/Loan
Listing Guarantees Insurance
Number Federal Program Title Outstanding In Effect
64.114 Veterans Housing Guaranteed and Insured Loans $ - $186,513,208
81.041 State Energy Program 599,591 -
Total $ 599,591 $186,513,208
6. PASS-THROUGH
The State receives the majority of its federal assistance directly from federal awarding
agencies. Federal awards received by the State from a pass-through entity are
included in the Schedule and are italicized.
California State Auditor Report 2023‐001 111
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7. SUBRECIPIENTS
The State awards federal funds to other non-federal entities (subrecipients) to assist
with the implementation and administration of federal programs. Subrecipients are
monitored by the State to ensure federal funds are expended in accordance with
authorized laws, regulations, and the provisions of contracts or grant agreements.
Amounts provided to subrecipients from each federal program are included in a
separate column on the Schedule.
8. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
The regulations and guidelines governing the preparation of federal financial reports
vary by federal agency and among programs. Accordingly, the amounts reported in
the federal financial reports do not necessarily agree with the amounts reported in
the accompanying Schedule, which is prepared on a cash basis as explained in
Note 2.
9. INDIRECT COST RATE
The majority of State entities claim indirect costs in accordance with a federally
approved indirect cost rate plan. State entities that utilize the ten percent de minimis
indirect cost rate as allowed under the Uniform Guidance are as follows:
Governor’s Office of Planning and Research
California Tahoe Conservancy
California Sierra Nevada Conservancy
California Emergency Medical Services Authority
California Department of Veterans Affairs
California Delta Protection Commission
California Coastal Commission
California State Water Resources Control Board
California Department of Rehabilitation
The Governor’s Office of Planning and Research, the California Tahoe Conservancy,
the California Department of Veterans Affairs, the California State Water Resources
Control Board, and the California Department of Rehabilitation also administer other
federal programs that utilize other indirect cost rate methodologies.
10. SUBSEQUENT EVENTS
On December 18, 2024, the State signed Executive Order No. E 24/25 – 141 to transfer
expenditures from Coronavirus State and Local Fiscal Recovery Funds (Assistance
Listing Number 21.027) to the State’s General Fund. The transfer resulted in an
expenditure reduction totaling $1.863 billion, which will be reported in the fiscal year
2024-25 Schedule of Expenditures of Federal Awards (SEFA). This includes $291.2 million
of expenditures reported in the 2022-23 SEFA.
Since January 20, 2025, the President has signed a number of executive orders calling
into question the future availability of funding related to numerous federal programs,
California State Auditor Report 2023‐001 112
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including those related to diversity, equity, and inclusion or funded by the
Infrastructure Investment and Jobs Act and the Inflation Reduction Act. While no
reductions to federal funding have been implemented as of the date of this report,
future funding levels for specific programs could be affected. We will continue to
monitor policy and legislative developments to assess potential impacts on funds the
State received from the federal government.
California State Auditor Report 2023‐001 113
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Summary Schedule of Prior Audit Findings
Prepared by Department of Finance
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SUMMARY SCHEDULE OF 2022 PRIOR AUDIT FINDINGS
Reference Number: 2022-001
State Administering Department: California Employment Development Department
(EDD)
Audit Finding: Material Weakness and Material Instance of
Noncompliance. Due to the unprecedented impacts
from the COVID-19 pandemic, the California
Employment Development Department (EDD) was
unable to timely report to Finance through the Single
Audit Expenditures Reporting Database (Database)
with accurate and reliable federal cash basis
expenditures for its largest federal award program that
it administers, the Unemployment Insurance (ALN
17.225) program. The delay resulted in Finance being
unable to compile and produce a complete and final
approved Schedule until December 2023. Although an
initial estimated expenditure amount of $27.0 billion
was reported by EDD, the final amount reported in the
Schedule was $23.3 billion.
EDD should continue to evaluate existing processes
and controls related to its ability to properly report, and
timely submit complete and accurate federal award
cash basis expenditures to the Database, which
affords Finance the ability to timely compile and
produce a final Schedule pursuant to the Uniform
Guidance.
Status of Corrective Action: Partially Corrected. EDD continues to make significant
progress with this finding. The deferred transition to
FI$Cal and the COVID-19 pandemic have resulted in
delays in obtaining the data needed to submit year-
end financials to the California State Controller’s Office
(SCO) and report in the Database. The delays resulted
in EDD reporting estimated expenditures in the
Database and updating once actual figures were
known.
Below is EDD’s actual and anticipated submittal
timeline for the four most recent fiscal years:
Fiscal Year Ending June 30, 2021:
Financial statements were submitted to SCO in
August 2022.
California State Auditor Report 2023‐001 116
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Expenditures were finalized in the Database in
November 2022.
Fiscal Year Ending June 30, 2022:
Financial statements were submitted to SCO in
May 2023.
Expenditures were finalized in the Database in
July 2023.
Fiscal Year Ending June 30, 2023:
Financial statements were submitted to SCO in
January 2024.
Expenditures were finalized in the Database in
August 2024.
Fiscal Year Ending June 30, 2024:
The goal is to submit financial statements to
SCO in October 2024.
The goal is to finalize the expenditures in the
Database in January 2025.
If there are no delays with the 2023-24 financial
statements, EDD will have submitted them
within two months of the State’s September 3,
2024, deadline. The finalization of expenditures
in the Database depends on EDD’s ability to
gather and validate the ineligible payment
data, enabling the exclusion of these payments
from the expenditures reported in the
Database.
Reference Number: 2022-002
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Material Weakness and Material Instance of
Noncompliance. Public Health understated federal
expenditures and overstated amounts passed through
to subrecipients for the Epidemiology and Laboratory
Capacity for Infectious Diseases (ELC) program. Public
Health was a subrecipient of federal funds provided by
their bona fide agent, Heluna Health, during the fiscal
year ended June 30, 2022. Initially, the ELC program
funds were not identified and recognized as federal
expenditures until January 2023. During its compilation
of federal award expenditures for reporting in
Finance’s Database, Public Health did not properly
analyze and capture all relevant financial transactions
related to the ELC program. Public Health understated
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federal expenditures and overstated amounts passed
through to subrecipients for the ELC program (ALN
93.323).
The error, which was subsequently corrected, is
indicative of a lack of sufficient controls for ensuring
completeness and accuracy prior to submission to
Finance.
Public Health should establish a more thorough internal
review and communication process between ELC
program administration and accounting personnel to
ensure information submitted to Finance for
compilation of the Schedule of Expenditures of Federal
Awards is complete and accurate.
Status of Corrective Action: Fully Corrected. Public Health has developed a more
thorough internal review and communication process,
as recommended. On an annual basis, Accounting
develops the schedule of expenditures report to better
capture activities specific to the ELC Program (ALN
93.323). This report is now reviewed and validated for
the accuracy and completeness of federal
expenditures and the amount passed through to
subrecipients before submitting the final data to
Finance. Accounting has also conducted training for
the development of the annual expenditure report.
Reference Number: 2022-003
Assistance Listing Number: 10.557
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Eligibility. During the fiscal year ended June 30, 2020,
the Special Supplemental Food Program for Women,
Infants and Children (WIC) nutrition program
implemented phase 1 of a new management
information system known as the Women, Infants, and
Children Web Information System Exchange (WIC-
WISE) in a two-phased approach to replace the WIC
Management Information Systems (WIC-MIS). WIC-
WISE is programmed such that updates to eligibility
information overwrite existing data. As a result, key
data and documentation to support the initial
participant eligibility are removed during the
recertification process. Public Health’s WIC Division
requested a correction to WIC-WISE to retain eligibility
California State Auditor Report 2023‐001 118
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history in the “Cert History Report” when subsequent
eligibility information is inputted. The correction had
not been implemented and the system defect still
existed during the fiscal year ended June 30, 2022.
WIC-WISE system updates should be promptly
implemented and tested to ensure that participant
data and eligibility documentation are appropriately
retained within the system.
Status of Corrective Action: Partially Corrected. WIC Division agrees that WIC-WISE
did not store eligibility history in the “Cert History
Report,” and initial eligibility data was overwritten
when subsequent eligibility information was keyed into
the system. However, WIC-WISE includes preventative
internal stops or checkpoints that prevent certification
and benefit issuance to ineligible individuals, including
those who exceed the income limit, with no nutrition
risk factor, or are not California residents. These controls
were vetted through user acceptance prior to the
system’s implementation between 2019 and 2020. On
August 24, 2023, new audit tables were implemented
in WIC-WISE to ensure that participant eligibility data is
no longer overwritten. From this date forward, new
eligibility information is being retained as required. WIC
revised and improved the “Cert History Report,” which
displays a snapshot of the certification information.
Public Health is addressing two remaining identified
defects impacting the certification information
display, which are scheduled for resolution in Release
3.1 in April 2025. Despite the defects, the underlying
data is correctly captured and saved in the system.
Public Health remains committed to ensuring that all
system updates are promptly implemented and
thoroughly tested to maintain accurate retention of
participant data and eligibility information.
Reference Number: 2022-004
Assistance Listing Number: 17.225
State Administering Department: California Employment Development Department
(EDD)
Audit Finding: Activities Allowed or Unallowed and Eligibility. During
the fiscal year ended June 30, 2022, EDD continued its
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administration of the Pandemic Unemployment
Assistance (PUA) program, under the Coronavirus Aid,
Relief, and Economic Security (CARES) Act for COVID-
19 relief in unemployment compensation. Under the
CARES Act, the PUA program was to be administered
in accordance with the Disaster Unemployment
Assistance (DUA) program under section 625 of Title 20,
Code of Federal Regulations. Claimants eligible for
PUA benefits were paid additional benefits under the
Federal Pandemic Unemployment Compensation
program (FPUC). In EDD’s administration of the PUA
and FPUC programs, $3,559,865,590 in benefit
payments were estimated to be ineligible payments
and have not been reported in the schedule of
expenditures of federal awards. The estimate was
made by the Unemployment Insurance Branch and
was based on data parameters to identify claimants
that received benefits that matched ineligible criteria
for identity fraud or eligibility fraud for misrepresented
information. Out of 138 PUA benefit payments tested,
there were 27 benefit payments to claimants
determined to be ineligible whose identity or
employment was not sufficiently verified.
EDD should continue to strengthen controls, such as
database identification cross-matches, ID.me
verification, partnerships with law enforcement and
Thompson Reuters, and system enhancements to
mitigate the potential of further employment benefit
fraud. Such improvements in internal controls should
improve EDD’s ability to timely prevent and detect
unemployment benefit fraud.
Status of Corrective Action: Partially Corrected. As reported to the California State
Auditor, since fiscal year 2020-21, EDD has
implemented various strict anti-fraud measures and
has continued to evaluate and enhance its fraud
detection. EDD has also developed internal fraud
working groups and a multiagency fraud task force
that reviews fraud data and fraud reports continuously
and recommends tools and data filter adjustments as
necessary for further improvement. As a result, EDD has
successfully prevented two large fraud scheme
attempts over the previous two years and continues to
work towards immediate detection and prevention of
fraud attempts. EDD will continue to analyze and
assess the processes to stay ahead of the ever-
evolving fraud landscape.
California State Auditor Report 2023‐001 120
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Specifically, EDD implemented the following measures
to address the nationwide fraud attempts perpetrated
against the new emergency federal benefit programs
in 2020-21:
Implemented additional cross-matches in
September 2020 to detect multiple claims per
address.
Ceased automatically backdating PUA claims
under federal rules in September 2020.
Strengthened identity verification procedures in
October 2020 by implementing ID.me.
Implemented additional cross-matches in
November 2020 against State inmate
information.
Vetted applications against law enforcement
databases and other tools provided by
Thomson Reuters in December 2020 to further
curb identity and non-identity fraud.
Established a 1099-G call center to help victims
of identity theft deal with any tax-related
questions.
Ceased printing of social security numbers on
mailed documents to reduce identity theft risk.
Enhanced benefit card security with Bank of
America.
Partnered with federal, state, and local law
enforcement agencies to support thousands of
criminal investigations, arrests, prosecutions,
and convictions.
The Annual Reassessment is completed and pending
the Governor’s Office review. EDD will continue to
evaluate and enhance the fraud detection/
prevention tools that have been put in place.
Reference Number: 2022-005
Assistance Listing Number: 17.225
State Administering Department: California Employment Development Department
(EDD)
Audit Finding: Activities Allowed or Unallowed and Eligibility. During
the fiscal year ended June 30, 2020, EDD implemented
the PUA program, under the CARES Act for COVID-19
relief in unemployment compensation. The PUA
program was to be administered in accordance with
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the DUA program under section 625 of Title 20, Code
of Federal Regulations. The amount of PUA payable to
an unemployed or unemployed self-employed
individual for a week of total unemployment shall be
the weekly amount of compensation the individual
would have been paid as regular compensation, as
computed under the provisions of the applicable State
law for a week of total unemployment. The weekly
amount determination is calculated using the wages
reported by the claimant. Upon receipt of a PUA claim,
EDD would verify wages reported to ensure accurate
weekly benefit amounts under PUA. Out of 138 PUA
benefit payments tested, there were 67 claimants with
verification issues (either wages, self-employment, or
both).
EDD should ensure that proper verification procedures
are in place to minimize the number of claimants with
wage and/or employment verification issues. Effective
and robust verification procedures should assist EDD in
processing unemployment benefits only to eligible
claimants.
Status of Corrective Action: Fully Corrected. On December 29, 2023, the U.S.
Department of Labor (DOL) issued the Unemployment
Insurance Program Letter (UIPL) 05-24, which defers to
states’ finality laws regarding the CARES Act
Unemployment Insurance (UI) programs. DOL
specified in the UIPL 05-24 that DOL would no longer
exercise its authority to require retroactive actions for
CARES Act Unemployment Compensation programs
where a state’s finality law applies. Based on DOL’s
guidance in UIPL 05-24, EDD notified DOL on February
6, 2024, that EDD is barred from resolving the wage
verification and self-employment/employment
verification items by California Unemployment
Insurance Code (CUIC) section 1376. CUIC section
1376 provides that EDD cannot establish
overpayments more than one year after the close of
the benefit year in which the overpayment was made
unless the overpayment is found to be a result of fraud,
misrepresentation, or willful nondisclosure. Given that
there was no fraud found in these overpayments on
the part of the individuals identified in these
populations, EDD is no longer able to establish
overpayments for these populations.
California State Auditor Report 2023‐001 122
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The claimants identified for this finding due to the lack
of wage verification and/or self- employment/
employment verification are covered under the
March 18, 2024 notification from the DOL Employment
and Training Administration (ETA) Region 6 Regional
Office. DOL ETA approved EDD’s application of
California’s finality law that prevents the establishment
of non-fraud overpayments more than one year after
the close of the benefits year in which the
overpayment was made. Thus, DOL ETA does not
require EDD to take any further action on the wage
verification and self-employment/employment
verification workloads.
Reference Number: 2022-006
Assistance Listing Number: 17.225
State Administering Department: California Employment Development Department
(EDD)
Audit Finding: Activities Allowed or Unallowed and Eligibility. In EDD’s
administration of the Unemployment Insurance
program, $525,494,406 in benefit payments were
estimated by EDD to be potentially ineligible payments
and have not been reported in the schedule of
expenditures of federal awards. The estimate was
based on data parameters to identify claimants who
received benefits that matched ineligible criteria for
identity or eligibility fraud due to misrepresented
Information.
EDD’s Unemployment Insurance Branch reviews
unemployment insurance claims of claimants for
involuntary separation to ensure separations were for
valid reasons under the Unemployment Insurance
Code. Out of 88 unemployment insurance benefit
payments tested, there were 6 claimants receiving
benefits, whose reasons for involuntary separation
indicated separation reasons due to voluntary quitting
without good cause and 6 claimants receiving
benefits that made false statements regarding wages.
In addition to the Unemployment Insurance program,
EDD continued its administration of the Pandemic
Emergency Unemployment Compensation (PEUC)
program for the fiscal year ended June 30, 2022. Under
the CARES Act for COVID-19, the PEUC program
California State Auditor Report 2023‐001 123
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eligibility was determined from individuals who have
exhausted all rights to regular unemployment
compensation (UC) under state or Federal law and
have no rights to regular UC under any other state or
Federal law. A claimant must have an eligible existing
Unemployment Insurance program claim that has
been exhausted prior to being eligible for PEUC. Out of
50 PEUC benefit payments tested, 1 claimant received
benefits, whose reason for involuntary separation
indicated separation reasons due to voluntary quitting
without good cause, 1 claimant received benefits
without completing weekly certifications, and 1
claimant was receiving full benefits while earning
wages.
EDD should enhance its adjudication process to
support proper eligibility determinations and decrease
improper payments to ineligible claimants.
Status of Corrective Action: Fully Corrected. EDD resumed adjudicating all
potential eligibility issues in January 2021 and
completed the retroactive determination workload on
April 30, 2023.
Reference Number: 2022-007
Assistance Listing Number: 21.027
State Administering Department: California Department of Finance (Finance)
Audit Finding: Activities Allowed or Unallowed. Finance included
contributions by State employees to 457(b) and 401(k)
deferred compensation plans in the calculation of
base year revenues. The contributions from State
employees are deposited directly with the third-party
deferred compensation plan administrator and do not
result in revenue reported by the State in its basic
financial statements. Furthermore, the employee
contributions do not represent revenues available to
the State for the provision of government services and
should have been excluded from the calculation of
general revenue for the base year and preceding
fiscal years establishing the average annual growth
rate of general revenues.
Finance should include a reconciliation between
general revenues identified for inclusion in the revenue
loss calculation and the State’s basic financial
California State Auditor Report 2023‐001 124
April 2025
statements to ensure that all revenue recorded in the
identified general ledger revenue accounts are in
compliance with the definition of general revenues as
established by the U.S. Treasury in the Final Rule.
Status of Corrective Action: Fully Corrected. Due to unclear federal guidance
provided at the time, Finance’s original analysis and
screening questions accounted for revenue codes
that constituted revenues to the State from a
budgetary perspective. Finance agrees that this
oversight is a material weakness and has since
adjusted its approach to the revenue loss calculation
by excluding revenue codes that do not constitute
revenues from an accounting perspective.
Contributions by State employees to 457(b) to 401(k)
deferred compensation plans were removed from the
calculation along with other budgetary revenues
generated from similar employee contributions to
retirement plans. After this revision, the new total
estimated revenue loss amount of $16.8 million was
reported to the U.S. Treasury in Finance’s Quarter 4
2023 Project and Expenditures State Fiscal Recovery
Funds Report and included in the Budget Act of 2024
when it was introduced on January 9, 2024.
Reference Number: 2022-008
Assistance Listing Number: 93.767
93.778
State Administering Department: California Department of Health Care Services (Health
Care Services)
Audit Finding: Activities Allowed or Unallowed. Fifteen of 56
contractor counties of Short-Doyle funding were
tested and 10 had not submitted their cost reports by
the December 31 due date. Three of the 10 contractor
counties had not submitted their cost reports for fiscal
year 2020-21 (more than 12 months late) and 7 of the
10 contractor counties have subsequently submitted
their cost reports for fiscal year 2020-21. Although the
Mental Health Division of Health Care Services took the
required action of notifying the 10 contractor counties
in writing within 30 days of the noncompliance, it has
not taken any additional action necessary to ensure
contract and performance compliance. The cost
reports are the basis for the allocation of payments
made to contractor counties providing mental health
California State Auditor Report 2023‐001 125
April 2025
services to eligible beneficiaries and serve to provide
the Mental Health Division with fiscal oversight for
contract and performance compliance.
Health Care Services should develop and follow
policies and procedures to take additional action for
significantly late annual cost reports. These policies
and procedures should include imposing sanctions,
including, but not limited to, fines, penalties, the
withholding of payments, probationary or corrective
actions, or any other actions deemed necessary to
promptly ensure contract and performance
compliance.
Status of Corrective Action: Partially Corrected. Health Care Services is currently
developing policies and procedures to take additional
action for significantly late cost reports and non-
compliant counties. Health Care Services estimates
the implementation will be completed by January 1,
2025.
Reference Number: 2022-009
Assistance Listing Number: 93.959
State Administering Department: California Department of Health Care Services (Health
Care Services)
Audit Finding: Activities Allowed or Unallowed. Expenditures related
to payroll costs charged to the Block Grants for
Prevention and Treatment of Substance Abuse (SAPT)
program for fiscal year 2021-22 totaled $11,606,958.
During our testing of 40 employee timesheets, 19 of the
40 employees did not prepare and submit timesheets
as required by Health Care Services internal control
procedures.
Health Care Services should adhere to its processes
and controls in place to ensure all required employees
submit a timesheet.
Status of Corrective Action: Fully Corrected. The following steps will be completed
each month for the Behavioral Health Administrative
Support (BHAS) Team to ensure all Behavioral Health
programs collect and submit timesheets to the Health
Care Services’ Human Resources (HR) Division.
Specifically, a central digital location is established to
store the employees’ timesheets. The assigned
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April 2025
Personnel Liaison for each program will provide the
most current employee master file to the assigned
Attendance Coordinator (AC) monthly by the tenth of
each month. The AC will use the employee master file
as a checklist to ensure all current staff have submitted
a timesheet to be entered into the leave accounting
system by the fifth working day of the following month.
Once all staff timekeeping is entered into the leave
accounting system and submitted to HR, the AC will
save the documents in the centralized location, using
the employee master file as a coversheet, and confirm
all documents have been collected. Furthermore, the
current policies and procedures to ensure the
allowability and allocability of costs on Substance
Abuse Mental Health Services Administration
(SAMHSA) block grants are outlined in the Substance
Use Block Grant (SUBG) policy manual.
Reference Number: 2022-010
Assistance Listing Number: 93.917
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Eligibility. Our sample of 60 participants from a
population of 25,749 participants who received
benefits during the fiscal year identified 10 participants
who did not submit all required documentation,
including proof of HIV/AIDS diagnosis, proof of
residency, and income documentation to verify their
annual Modified Adjusted Gross Income (MAGI) did
not exceed 500 percent Federal Poverty Level based
on household size and income.
The AIDS Drug Assistance Program (ADAP) Branch
should continue to monitor compliance with its policies
to ensure enrollment workers and secondary reviews of
ADAP applications follow the established guidelines
and retain acceptable documentation to support
eligibility determinations. Applications that have been
granted an eligibility exception (i.e., Temporary Access
Period, Medi-Cal Eligibility Exception Request, or
Eligibility Exception Request) should be reviewed in a
timely manner to ensure clients who do not provide the
required documentation within the approved
extension period are disenrolled in a timely manner.
California State Auditor Report 2023‐001 127
April 2025
Status of Corrective Action: Fully Corrected. In April 2022, the Office of AIDS (OA)
developed and implemented additional internal
quality assurance (QA) processes to ensure that
secondary reviews of ADAP applications consistently
enforce the existing guidelines by retaining
acceptable supporting documentation to support
eligibility requirements.
Prior to this audit period, and through December 2021,
ADAP had issued multiple policy memos to respond to
the COVID-19 pandemic, which enabled staff and
enrollment workers to defer documentation collection,
when necessary, to remain flexible and ensure clients
impacted by the pandemic, and associated site
closures, did not lose eligibility and access to life-saving
medications and comprehensive healthcare. These
flexibilities in Public Health’s guidelines were
implemented based on guidance received from
Public Health’s federal funder, Health Resources and
Services Administration, which encouraged ADAPs to
reassess their eligibility and recertification policies and
procedures and remove any barriers that may impede
social distancing or other public health strategies,
necessary to minimize COVID-19 transmission.
OA terminated the documentation deferral on
December 31, 2021, and full documentation
requirements have been enforced since January 1,
2022. This includes applications that are granted an
eligibility exception (i.e., Temporary Access Period,
Medi-Cal Eligibility Exception Request, or Eligibility
Exception Request). Clients who fail to provide
required documentation within the approved
extension period are now disenrolled in a timely
manner in accordance with established guidelines.
OA’s ongoing efforts will further ensure compliance
and mitigate future findings in ADAP applications.
Reference Number: 2022-011
Assistance Listing Number: 93.323
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Subrecipient Monitoring. Public Health did not establish
a formal risk assessment process over its subrecipients
of federal awards to determine the frequency and
extent of subrecipient monitoring to be performed.
California State Auditor Report 2023‐001 128
April 2025
While Public Health received reimbursement invoices
from subrecipients, there did not appear to be other
financial or programmatic monitoring to verify
subrecipient’s compliance with applicable
requirements. In addition, Public Health did not obtain
Single Audit reports from those subrecipients as
required.
Public Health should establish and document formal
procedures for conducting risk assessments of its
subrecipients, including criteria for evaluating
organizational capacity, financial stability,
compliance history, and programmatic capabilities.
Public Health should also develop and implement
specific subrecipient monitoring procedures and
establish a process for obtaining Single Audit reports
from its subrecipients. Furthermore, a monitoring
mechanism should be implemented to track
compliance with the single audit mandate among
subrecipients, including regular follow-ups and
documentation of communication efforts.
Status of Corrective Action: Partially Corrected. Public Health’s Center for
Preparedness and Response (CPR) is currently drafting
formal procedures for conducting risk assessments
over its subrecipients of federal awards and specific
subrecipient monitoring procedures. CPR will meet
with Public Health’s Office of Compliance to review
completed drafts of risk assessments and subrecipient
monitoring procedures. In addition, CPR will request
the Office of Compliance’s recommendations for
obtaining the Single Audit reports from Public Health’s
subrecipients. Public Health estimates completion by
December 2024.
Reference Number: 2022-012
Assistance Listing Number: 93.778
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Special Tests and Provisions-Provider Health and Safety
Standards. There was no evidence of surveyor signature
or supervisor review and approval on Form CMS-1539
for all 40 surveys of providers tested. Nonadherence to
internal controls over the review and approval process
of the Form CMS-1539 can result in the risk of statewide
noncompliance as providers may not meet the
prescribed health and safety standards.
California State Auditor Report 2023‐001 129
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Public Health should update its processes and controls
in place to ensure compliance with established
procedures and performance of timely review and
approval of the Form CMS-1539, including for situations
when staff is on leave and/or has left the department.
Status of Corrective Action: Partially Corrected. Center for Health Care Quality
(CHCQ) held a meeting with internal stakeholders,
including the Public Policy and Prevention and Data
and Analytics divisions on July 17, 2024, to develop and
plan to comply with the auditor’s recommendation.
These meetings emphasized the importance of timely
review and approval of the CMS-1539 forms and
identified challenges in past compliance.
On July 23, 2024, Public Health distributed a survey to
the district office and CHCQ headquarter employees
to identify training gaps. Based on the survey results,
CHCQ’s training team, in collaboration with the Center
for Medicare and Medicaid Services (CMS) contractor
Healthcare Management Solutions (HMS), is
developing virtual training and materials. This training is
designed to improve staff knowledge of Form CMS-
1539 requirements. However, the training is still in
development and has not yet been implemented.
CHCQ Policy and Prevention is in the process of
creating checklists and job aids to reflect new
compliance expectations. While the policies are in
development, they have not yet been finalized or
implemented. These updates will ensure that CMS-1539
forms are completed timely, even in cases where staff
are on leave or have left the department.
CHCQ Data Analytics has begun random audits of
completed CMS-1539 forms. While these audits are
underway, Public Health is still in the process of following
up with district offices that are not in compliance.
Additional training and corrective measures for non-
compliant offices are planned but not yet fully
implemented.
Public Health is on track to fully correct the issue but
recognizes that additional work is required to ensure
complete and sustainable compliance with CMS-1539
form requirements. Correction is estimated to be
completed by April 2025.
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SUMMARY SCHEDULE OF 2021 PRIOR AUDIT FINDINGS
Reference Number: 2021-001
State Administering Department: California Employment Development Department
(EDD)
Audit Finding: Material Weakness and Material Instance of
Noncompliance. Due to the unprecedented impacts
from the COVID-19 pandemic, the Employment
Development Department (EDD) was unable to timely
report to Finance through the Database with accurate
and reliable federal cash basis expenditures for its
largest federal award programs that it administers, the
Unemployment Insurance (ALN 17.225) and
Presidential Declared Disaster Assistance to Individuals
and Households – Other Needs (ALN 97.050) programs.
The delay resulted in Finance being unable to compile
and produce a complete and final approved
Schedule until December 2022. Although initial
estimated expenditure amounts were reported by EDD
for both programs, $90.6 billion and $7.5 billion,
respectively, the final amounts reported in the
Schedule for both programs were ultimately updated
to $92.7 billion and $6.5 billion, respectively.
EDD should continue to evaluate its existing process
and controls related to its ability to properly account
for, report, and timely submit complete and accurate
federal award cash basis expenditures to the
Database, which affords Finance the ability to timely
compile and produce a final Schedule pursuant to the
Uniform Guidance.
Status of Corrective Action: Partially Corrected. This finding was repeated in fiscal
year 2021-22. Refer to Finding 2022-001.
Reference Number: 2021-002
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Material Weakness and Instance of Noncompliance.
Public Health failed to include $479,996,082 of federal
expenditures and $367,405,431 of subrecipient
expenditures for the Epidemiology and Laboratory
Capacity for Infectious Diseases (ELC) program (ALN
No. 93.323) in the Database, which Finance uses to
prepare the State’s annual Schedule. The error resulted
California State Auditor Report 2023‐001 131
April 2025
in an additional major program that was required to
be audited as a major program in accordance with
the Uniform Guidance and the State having to reissue
its federal compliance audit report for the fiscal year
ended June 30, 2021.
Status of Corrective Action: Fully Corrected. This finding was repeated in fiscal year
2021-22. Refer to Finding 2022-002.
Reference Number: 2021-003
Assistance Listing Number: 10.557
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Eligibility. During the fiscal year ended June 30, 2020,
the Special Supplemental Food Program for Women,
Infants and Children (WIC) nutrition program
implemented phase 1 of a new management
information system known as the Women, Infants, and
Children Web Information System Exchange (WIC-
WISE) in a two- phased approach to replace the WIC
Management Information Systems (WIC-MIS).
WIC-WISE is programmed such that updates to
eligibility information overwrites existing data. As a
result, key data and documentation to support the
initial participant eligibility is removed during the
recertification process.
Public Health, WIC Division requested a correction to
WIC-WISE to retain eligibility history in the “Cert History
Report” when subsequent eligibility information is
entered. This correction will be included in a future
release targeted for May 2023. As such, the system
defect still existed during the fiscal year ended June
30, 2021. Accordingly, sample testing was not
performed.
WIC-WISE system updates should be promptly
implemented and tested to ensure that participant
data and eligibility documentation is appropriately
retained within the system.
Status of Corrective Action: Partially Corrected. This finding was repeated in fiscal
year 2021-22. Refer to Finding 2022-003.
California State Auditor Report 2023‐001 132
April 2025
Reference Number: 2021-004
Assistance Listing Number: 17.225
State Administering Department: California Employment Development Department
(EDD)
Audit Finding: Activities Allowed or Unallowed and Eligibility. During
the fiscal year ended June 30, 2021, EDD continued its
administration of the Pandemic Unemployment
Assistance (PUA) program, under the Coronavirus Aid,
Relief, and Economic Security (CARES) Act for COVID-
19 relief in unemployment compensation. Under the
CARES Act, the PUA program was to be administered
in accordance with the Disaster Unemployment
Assistance (DUA) program under section 625 of Title 20,
Code of Federal Regulations. Claimants eligible for
PUA benefits were paid additional benefits under the
Federal Pandemic Unemployment Compensation
program (FPUC).
In EDD’s administration of the PUA and FPUC programs,
$17,143,006,979 in benefit payments were estimated to
be potentially fraudulent payments. The estimate was
made by the Unemployment Insurance Branch and
was based on data parameters to identify claimants
that received benefits that matched imposter fraud for
identity or eligibility fraud for misrepresented
information.
Out of 138 PUA benefit payments tested, there were 26
benefit payments to claimants determined to be
potentially fraudulent whose identity was not
sufficiently verified.
EDD should continue to evaluate and enhance its
fraud detection and prevention internal controls,
increasing the use of automation features and other
analytical tools in an effort to increase efficiency,
continue to reduce workload, and enhance detection
and timely identification of unemployment benefit
fraud.
Status of Corrective Action: Partially Corrected. This finding was repeated in fiscal
year 2021-22. Refer to Finding 2022-004.
California State Auditor Report 2023‐001 133
April 2025
Reference Number: 2021-005
Assistance Listing Number: 17.225
State Administering Department: California Employment Development Department
(EDD)
Audit Finding: Activities Allowed or Unallowed and Eligibility. During
the fiscal year ended June 30, 2020, EDD implemented
the Pandemic Unemployment Assistance (PUA)
program, under the Coronavirus Aid, Relief, and
Economic Security (CARES) Act for COVID-19 relief in
unemployment compensation. Under the CARES Act,
the PUA program was to be administered in
accordance with the Disaster Unemployment
Assistance (DUA) program under section 625 of Title 20,
Code of Federal Regulations. The amount of PUA
payable to an unemployed or unemployed self-
employed individual for a week of total
unemployment shall be the weekly amount of
compensation the individual would have been paid as
regular compensation, as computed under the
provisions of the applicable State law for a week of
total unemployment. The weekly amount
determination is calculated using the wages reported
by the claimant. Upon receipt of a PUA claim, EDD
would verify wages reported to ensure accurate
weekly benefit amounts under PUA.
Out of 138 PUA benefit payments tested, there were 4
claimants whose wages were not reduced or
suspended due to a lack of wage verification and 8
claimants whose self-employment were not verified.
EDD should continue to look for ways to enhance its
capacity to perform timely wage verifications to
ensure accurate eligibility determinations and
claimant benefit payments.
Status of Corrective Action: Fully Corrected. This finding was repeated in fiscal year
2021-22. Refer to Finding 2022-005.
Reference Number: 2021-006
Assistance Listing Number: 17.225
State Administering Department: California Employment Development Department
(EDD)
California State Auditor Report 2023‐001 134
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Audit Finding: Activities Allowed or Unallowed and Eligibility. In EDD’s
administration of the Unemployment Insurance
program, $1,440,071,129 in benefit payments were
estimated to be potentially fraudulent payments. The
estimate was made by the Unemployment Insurance
Branch and was based on data parameters to identify
claimants that received benefits that matched
imposter fraud for identity or eligibility fraud for
misrepresented information.
The Unemployment Insurance Branch of EDD reviews
unemployment insurance claims of claimants for
involuntary separation to ensure separations were for
valid reasons under the Unemployment Insurance
Code. Out of 138 unemployment insurance benefit
payments tested, there were 4 claimants receiving
benefits, whose reasons for involuntary separation
indicated separation reasons due to voluntary quitting
without good cause.
EDD should continue its work catching up with the
adjudication process to support proper eligibility
determinations and decrease improper payments to
ineligible claimants.
Status of Corrective Action: Fully Corrected. This finding was repeated in fiscal year
2021-22. Refer to Finding 2022-006.
Reference Number: 2021-0071
Assistance Listing Number: 21.019
State Administering Department: California Business, Consumer Services, and Housing
Agency (BCSH) California Department of Education
(CDE) California Department of Social Services (Social
Services)
Audit Finding: Subrecipient Monitoring. For 2 of 60 subawards tested,
the State did not communicate required subaward
information to its subrecipients of the Coronavirus Relief
Fund (CRF) program at the time of the subaward, or
when the State became aware of changes in
subaward information, including identification that the
subaward funds represented federal funding. Also, for
4 of 60 direct costs tested, the transactions were
subsequently determined to be subawards, for which
the required subaward information was not properly
1 This finding was not repeated in fiscal year 2021-22.
California State Auditor Report 2023‐001 135
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communicated to the subrecipients. The 4 direct costs
transactions were from BCSH; 1 of the subawards was
from CDE; and 1 of the subawards was from Social
Services.
The state administering departments identified above
should review all subawards provided which were
funded using CRF program funds, provide the
subrecipients with subaward information required by 2
CFR 200.332(a), and determine whether the
subrecipients properly reported CRF subawards and
related expenditures in their respective Schedule of
Expenditures of Federal Awards pursuant to 2 CFR
200.502. If federal subawards were not reported, the
state administering departments should perform
appropriate follow-up monitoring procedures.
Status of Corrective Action: BCSH – Partially Corrected. The California Interagency
Council on Homelessness (Cal ICH) within BCSH will
conduct mandatory desk reviews of the CRF
subawards to verify that subrecipients properly
reported their CRF awards and related expenditures
pursuant to 2 CRF 200.502.
Additionally, Cal ICH has developed an improved
communication system between the leadership and
program staff to ensure changes are clearly
communicated. This will also ensure Cal ICH’s
subrecipients are notified in a timely manner upon any
changes in subaward information, such as identifying
if subaward funds represent federal funding so that
expenditures are spent in accordance with federal
statutes, regulations, and the terms and conditions of
federal awards. This process has been completed.
As of July 1, 2024, the program was transitioned from
BCSH to the California Department of Housing &
Community Development (HCD), and, therefore, this
finding will be addressed by HCD. As part of the
transition, numerous protocols to increase grantee
transparency and accountability have been
instituted. These protocols include enhanced annual
report requirements, which are due each April
reporting on all activity through the prior calendar
year, a desk audit review process, public posting of
grantee-reported fiscal data and program outcomes,
enhanced technical assistance support to grantees
who are behind on compliance or outcomes, and as
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needed, processes to revoke funds or other
consequences. Due to the programmatic transition
from BCSH to HCD, the full implementation of the desk
reviews was delayed.
HCD will report the results of the first round of desk
reviews and annual reports that take place under its
stewardship by June 2025.
CDE – Fully Corrected. Refer to the State of California
Single Audit Report for fiscal year ended June 30, 2022.
Social Services – Fully Corrected. Refer to the State of
California Single Audit Report for fiscal year ended
June 30, 2022.
Reference Number: 2021-008
Assistance Listing Number: 93.767
93.778
State Administering Department: California Department of Health Care Services (Health
Care Services)
Audit Finding: Activities Allowed or Unallowed. Fifteen of 56
contractor counties of Short-Doyle funding were
tested and seven had not submitted their cost reports
by the December 31 due date. Two of the seven
contractor counties had not submitted their cost
reports for fiscal year 2019-20 (more than 12 months
late) and five of the seven contractor counties have
subsequently submitted their cost reports for fiscal year
2020-21.
Although the Mental Health Division of Health Care
Services did take the required action of notifying the
seven contractor counties in writing within 30 days of
the noncompliance, it has not taken any additional
action necessary to ensure contract and performance
compliance.
The cost reports are the basis for the allocation of
payments made to contractor counties providing
mental health services to eligible beneficiaries and
serve to provide the Mental Health Division with fiscal
oversight for contract and performance compliance.
Health Care Services should develop and follow
policies and procedures to take additional action for
California State Auditor Report 2023‐001 137
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significantly late annual cost reports. These policies
and procedures should include imposing sanctions,
including, but not limited to, fines, penalties, the
withholding of payments, probationary or corrective
actions, or any other actions deemed necessary to
promptly ensure contract and performance
compliance.
Status of Corrective Action: Partially Corrected. This finding was repeated in fiscal
year 2021-22. Refer to Finding 2022-008.
Reference Number: 2021-009
Assistance Listing Number: 93.917
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Cash Management. Out of 25 cash drawdowns
reviewed, one sample did not meet the requirements
to minimize the timing between Public Health’s Office
of AIDS receipt of Federal funds and disbursement of
those funds for program purposes. The funds from this
drawdown were designated to pay 33 vendor
invoices. However, payments for 23 of these invoices
were made between 16 to 175 days after the
drawdown occurred. One invoice was paid 598 days
after the date of the drawdown.
The Public Health’s Office of AIDS (OA) should continue
to monitor compliance with its policies to ensure staff
follow established guidelines to minimize the timing
between drawdown and disbursement of Federal
funds.
Status of Corrective Action: Fully Corrected. Refer to the State of California Single
Audit Report for fiscal year ended June 30, 2022.
Reference Number: 2021-0102
Assistance Listing Number: 93.767
State Administering Department: California Department of Health Care Services (Health
Care Services)
Audit Finding: Eligibility. Out of 40 Children’s Health Insurance
Program (CHIP) beneficiaries tested, there was one
beneficiary where the transaction sent to terminate
2 This finding was not repeated in fiscal year 2021-22.
California State Auditor Report 2023‐001 138
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eligibility failed and eligibility continued in error, and
one instance where the beneficiary remained in a
transitional aid code for an extended period.
Through subawards, Health Care Services has
delegated performance of eligibility determinations to
California county welfare agencies that collect and
record this information in their respective eligibility
systems (collectively known as the Statewide
Automated Welfare System [SAWS]) and the California
Healthcare Eligibility, Enrollment, and Retention System
(CalHEERS), which transmit eligibility data to the Health
Care Services’ Medi-Cal Eligibility Data System (MEDS).
Health Care Services then pays: (1) managed care
plans monthly to provide eligible services for
beneficiaries (Managed Care); (2) medical providers
for services provided directly to beneficiaries (Fee for
Service), and (3) the U.S. Centers for Medicare and
Medicaid Services (CMS) for Medicare premiums
(Premiums).
Health Care Services should continue with the quality
control process used to monitor all MEDS alerts to
ensure that the system has a process of identifying and
alerting caseworkers to the review of beneficiaries that
may be still receiving benefits when deemed ineligible.
Health Care Services should continue its efforts to utilize
focus reviews to assess counties’ risk of delays in
renewal activities. Health Care Services should then
work directly with those county welfare agencies to
implement policies and procedures to improve their
compliance status.
Health Care Services should ensure there are controls
in place to ensure all beneficiaries have the proper
supporting documentation to be eligible.
Status of Corrective Action: Partially Corrected. DHCS will gradually restart
oversight activities and implement enhanced
monitoring practices using a phased approach. During
phase one, counties were notified of the hold harmless
policy, active throughout the public health
emergency, which ended on June 1, 2024.
In October 2024, Health Care Services will begin phase
two by releasing an All County Welfare Director’s Letter
(ACWDL), which updates Health Care Services’ policy
on performance standards associated with MEDS
California State Auditor Report 2023‐001 139
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alerts. In preparation for phase two, Health Care
Services released ACWDL 23-14 to notify the counties
of the MEDS alerts subject to review.
DHCS plans to implement phase three in November
2024 with the resumption of most of the oversight
activities including MEDS alerts monitoring and
focused reviews.
Reference Number: 2021-011
Assistance Listing Number: 93.917
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Eligibility. Our sample of 60 participants from a
population of 28,417 participants who received
benefits during the fiscal year identified 1 participant’s
annual recertification was not conducted in a timely
manner and 16 participants who did not submit all
required documentation, including proof of HIV/AIDS
diagnosis, proof of residency, and income
documentation to verify their annual MAGI did not
exceed 500 percent Federal Poverty Level based on
household size and income.
The AIDS Drug Assistance Program (ADAP) Branch
should continue to monitor compliance with its policies
to ensure enrollment workers and secondary reviews of
ADAP applications follow the established guidelines
and retain acceptable documentation to support
eligibility determinations and timely annual
recertification.
Applications that have been granted an eligibility
exception (i.e., Temporary Access Period, Medi-Cal
Eligibility Exception Request, or Eligibility Exception
Request) should be reviewed in a timely manner to
ensure clients who do not provide the required
documentation within the approved extension period
are disenrolled in a timely manner.
Status of Corrective Action: Fully Corrected. This finding was repeated in fiscal year
2021-22. Refer to Finding 2022-010.
Reference Number: 2021-012
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Assistance Listing Number: 93.044
93.045
93.053
State Administering Department: California Department of Aging (Aging)
Audit Finding: Reporting. We examined the Federal Funding
Accountability and Transparency Act (FFATA)
reporting for the Aging Cluster for the fiscal year ended
June 30, 2021, pertaining to 7 subrecipients of federal
funds out of a population of 33. The required FFATA
reporting submissions pertaining to these subawards
were made; however, the submission occurred in July
2022, 21 months after the official submission due date.
We recommend that Aging update its current
practices for managing subaward reporting under the
FFATA to ensure that applicable subawards are
identified and the required submissions are made
timely.
Status of Corrective Action: Fully Corrected. Refer to the State of California Single
Audit Report for fiscal year ended June 30, 2022.
Reference Number: 2021-0133
Assistance Listing Number: 93.767
93.778
State Administering Department: California Department of Health Care Services (Health
Care Services)
Audit Finding: Reporting. We examined the Federal Funding
Accountability and Transparency Act (FFATA)
reporting for the Medicaid Cluster and Children’s
Health Insurance Program (CHIP) for the fiscal year
ended June 30, 2021. The required FFATA reporting
submissions pertaining to these subawards were not
made.
We recommend that Health Care Services update its
current practices for managing subaward reporting
under the FFATA to ensure that applicable subawards
are identified and the required submissions are made
timely.
3 This finding was not repeated in fiscal year 2021-22.
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Status of Corrective Action: Fully Corrected. Health Care Services has updated
and implemented an FFATA reporting procedure to
identify payment types and to meet FFATA reporting
requirements for Medicaid. Health Care Services
continues to work with program partners to monitor
and identify the subrecipient payments. Health Care
Services will prepare an FFATA report for subrecipients
for Medicaid programs. Per Health Care Services’
review, all Medicaid clusters and CHIPs do not have
subrecipients. FFATA is not required if payments are not
for subrecipients.
Per FFATA reporting requirement, FFATA reporting will
need to occur whenever a sub-award is obligated and
can be at various times throughout the year. Prime
awardees awarded a federal grant must file an FFATA
sub-award report by the end of the month after the
prime awardee awards any sub-grant. Health Care
Services program partners are the administrators of the
grants and are required to submit the FFATA
information to the Financial Management Division
(FMD).
FMD will send program partners a monthly reminder
email about the reporting requirements and ensure
FFATA is submitted timely.
Reference Number: 2021-014
Assistance Listing Number: 93.323
State Administering Department: California Department of Public Health (Public Health)
Audit Finding: Subrecipient Monitoring. Public Health did not establish
a formal risk assessment process over its subrecipients
of federal awards to determine the frequency and
extent of subrecipient monitoring to be performed.
While Public Health received reimbursement invoices
from subrecipients, there did not appear to be other
financial or programmatic monitoring to verify
subrecipients compliance with applicable
requirements. In addition, Public Health did not obtain
Single Audit reports from those subrecipients as
required.
Public Health should establish and document formal
procedures for conducting risk assessments of its
subrecipients, including criteria for evaluating
California State Auditor Report 2023‐001 142
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organizational capacity, financial stability,
compliance history, and programmatic capabilities.
Public Health should also develop and implement
specific subrecipient monitoring procedures and
establish a process for obtaining Single Audit reports
from its subrecipients. Furthermore, a monitoring
mechanism should be implemented to track
compliance with the single audit mandate among
subrecipients, including regular follow-ups and
documentation of communication efforts.
Status of Corrective Action: Partially Corrected. This finding was repeated in fiscal
year 2021-22. Refer to Finding 2022-011.
Reference Number: 2021-015
Assistance Listing Number: 93.767
93.778
State Administering Department: California Department of Health Care Services (Health
Care Services)
Audit Finding: Special Tests and Provisions. The Medical Assistance
Program reporting of overpayments tested did not
reflect the correct federal share because Form CMS-
64 included all CHIP overpayments (42 CFR 433.320).
All 20 CHIP overpayments tested did not reflect the
correct federal share (Federal Financial Participation
or FFP rate) and were not correctly reported on Form
CMS-21 (42 CFR 433.320 via 42 CFR 457.628).
Health Care Services should have a process in place
to ensure that the CMS-64 and CMS-21 reports properly
report CHIP and Medicaid overpayments.
Health Care Services should update the system to
assign the appropriate FFP rate for each overpayment.
With this implementation, CHIP overpayments can be
appropriately identified with the correct FFP rate and
reported on the CMS-21.
Status of Corrective Action: Fully Corrected. Refer to the State of California Single
Audit Report for fiscal year ended June 30, 2022.
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Reference Number: 2021-016
Assistance Listing Number: 97.050
State Administering Department: California Employment Development Department
(EDD)
Audit Finding: Activities Allowed or Unallowed and Eligibility. During
the fiscal year ended June 30, 2021, EDD implemented
the Lost Wages Assistance (LWA) program, which was
funded through the disaster relief funds from the
Federal Emergency Management Agency (FEMA)
under the Presidential Memorandum on Authorizing
the Other Needs Assistance Program for Major Disaster
Declarations Related to Coronavirus Disease 2019
(COVID-19). Under the memorandum, the LWA
program was to be administered in accordance with
the Robert T. Stafford Disaster Relief and Emergency
Assistance Act section 408(e)(2) and (f), Title 42 U.S.C.
§5174(e)(2), (f).
In EDD’s administration of the LWA program,
$1,013,541,600 in benefit payments were estimated by
EDD to represent potentially fraudulent payments. The
estimate was based on data parameters to identify
claimants that received benefits which matched
imposter fraud for identity or eligibility fraud for
misrepresented information.
Out of 223 LWA benefit payments tested, 20 claimants
were determined to be ineligible for LWA benefits.
EDD should continue to evaluate and enhance its
fraud detection and prevention internal controls,
increasing the use of automation features and other
analytical tools in an effort to increase efficiency,
continue to reduce workload, and enhance detection
and timely identification of unemployment benefit
fraud.
Status of Corrective Action: Fully Corrected. Refer to the State of California Single
Audit Report for fiscal year ended June 30, 2022.
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SUMMARY SCHEDULE OF 2020 PRIOR AUDIT FINDINGS
Reference Number: 2020-0084
Assistance Listing Number: 93.767
93.778
State Administering Department: California Department of Health Care Services (Health
Care Services)
Audit Finding: Eligibility. Out of 160 Medi-Cal beneficiaries and CHIP
beneficiaries tested, there were 17 beneficiaries with
instances in which redeterminations had not been
performed within a year. Additionally, in 2018, reports
from the U.S. Department of Health and Human
Services, Office of Inspector General, and California
State Auditor highlighted payments made to ineligible
and potentially ineligible beneficiaries.
Health Care Services should continue looking for ways
to enhance the functionality of the California
Healthcare Eligibility, Enrollment, and Retention System
(CalHEERS) for application and eligibility
redetermination for those individuals who are eligible
on a modified adjusted gross income basis and to
increase the use of automation features to reduce
workload for eligibility caseworkers. In addition, Health
Care Services should continue its practice of
conducting regular focus reviews on county welfare
agencies to identify factors contributing to the delays
and errors in the redetermination process such as
misinterpretations of policies, systems issues, business
practices, etc., and work with county welfare
agencies to provide appropriate training and/or
creating corrective action plans.
Health Care Services should continue with the quality
control process used to monitor all critical and urgent
level Health Care Services’ MEDS alerts to quickly
identify county welfare agencies that are not resolving
MEDS alerts in a timely manner. Health Care Services
should continue its efforts to incorporate into the MEDS
alert functionality the ability to alert county welfare
agencies when eligibility redeterminations are
4 The 2020-21 Single Audit indicated Report Finding Reference Number 2020-008 was partially corrected but
was not included in the 2021-22 Single Audit Report. Due to the COVID-19 public health emergency, CMS
provided an exemption to redeterminations which expired March 2023. Health Care Services provided a
status update on this finding.
California State Auditor Report 2023‐001 145
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required or overdue. Health Care Services should then
work directly with those county welfare agencies that
are not performing eligibility redeterminations in a
timely manner and who may not be correctly verifying
eligibility through training and site visits to implement
policies and procedures to improve their compliance
status.
Status of Corrective Action: Partially Corrected. Health Care Services will gradually
restart oversight activities and implement enhanced
monitoring practices using a phased approach. Phase
one involved notifying counties that the hold harmless
policy, active throughout the public health
emergency, ended on June 1, 2024.
In October 2024, Health Care Services will begin phase
two with the release of an All County Welfare Director’s
Letter (ACWDL) that updates Health Care Services’
policy on performance standards that are associated
with MEDS alerts. In preparation for phase two, Health
Care Services released ACWDL 23-14 that served as
notification to the counties of the MEDS alerts that are
subject to review.
Health Care Services plans to implement phase three
in December 2024 with the resumption of most of its
oversight activities; this includes MEDS alerts monitoring
and focused reviews. The first month subject to
focused reviews was entered as the implementation
date in error. The updated implementation date
includes the time needed to notify counties of the
reviews, release additional guidance, perform the
reviews and issue the final reports to the counties.
Health Care Services estimates the implementation will
be completed by July 2025.
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Department of Finance Response Letter
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Management’s Response and Corrective Action Plan
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STATE OF CALIFORNIA
MANAGEMENT’S RESPONSE AND CORRECTIVE ACTION PLAN
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Reference No. 2023-002:
Public Health’s WIC Division will strengthen its procedures for verifying the suspension and
debarment status of vendors with option “(c) Adding a clause or a condition to the
covered transactions with that person” provided above, to not include vendors in the
contracting process as part of an existing Public Health exhibit that incorporates the
required suspension and debarment clause or condition. For the remaining procurements
not covered by the existing Public Health exhibit, the WIC Division will utilize option “(a)
Checking SAM Exclusions” provided above and attach to the procurement a printout of
the appropriate page from the SAM Exclusion website at the time the package is
submitted into Public Health’s Contract and Purchasing System (CAPS).
Estimated Implementation Date: January 2025
Contact: William Welch, Assistant Division Director, Operations
Center for Family Health, WIC Division
California Department of Public Health
Reference No. 2023-003:
The EDD resumed adjudicating all potential eligibility issues as of January 2021 and
completed the retroactive determination workload on April 30, 2023.
Estimated Implementation Date: Completed April 2024
Contact: Diane Underwood, Division Chief
Unemployment Insurance Branch
California Employment Development Department
Reference No. 2023-004:
As reported in the prior year’s response, given the unprecedented volume of
unemployment insurance claims during the federal disaster—approximately 20 million
claims compared to 3.8 million during the Great Recession—EDD took action to speed
payments to eligible claimants whenever possible. For example, EDD launched in July
2021 a Conditional Payment Program to speed payments to claimants who certified for
benefits and already received at least one week of benefits in the past but whose
payments were later pending for more than two weeks. EDD also boosted its capacity to
process workloads, prioritized timely payments, and employed automation among other
measures.
EDD began automatically cross-matching EDD wage records and Franchise Tax Board
records in November 2020 to assist in verifying the income of PUA claimants who could
not be automatically verified through these procedures. Such claimants were required
to submit additional documentation to EDD for a manual review.
California State Auditor Report 2023‐001 154
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Regarding the manual processing of the income documents to substantiate the PUA
weekly benefit amounts that have been increased above the minimum California WBA
of $167, and the verification of employment or self-employment substantiation (known in
California as “Self-employment/Employment Substantiation” or “SEES”), based on the U.S.
Department of Labor’s (DOL) guidance in Unemployment Insurance Program
Letter 05-24, EDD notified DOL on February 6, 2024, that California Unemployment
Insurance Code (CUIC) section 1376 bars EDD from resolving the wage verification and
self-employment verification items. Section 1376 provides that EDD cannot establish
overpayments more than one year after the close of the benefit year in which the
overpayment was made unless the overpayment is found to be a result of fraud,
misrepresentation, or willful nondisclosure. Given that there is no fraud in creating these
overpayments on the part of the individuals identified in these populations, EDD is no
longer able to establish overpayments for these populations.
On May 31, 2024, DOL notified EDD that the February 6, 2024, submission regarding how
California’s finality laws affect the actions required to correct the wage verification and
self-employment findings is sufficient to close these findings.
Estimated Implementation Date: Completed May 2024
Contact: Diane Underwood, Division Chief
Unemployment Insurance Branch
California Employment Development Department
Reference No. 2023-005:
As reported in the prior year’s response, since fiscal year 2020-21, the Employment
Development Department (EDD) has implemented dozens of strict anti-fraud measures
and has continued to evaluate and enhance its fraud detection. EDD has also
developed internal fraud working groups and a multiagency fraud task force that reviews
fraud data and fraud reports on a continual basis and recommends adjustments to filters
and tools as necessary. EDD has successfully halted two large fraud scheme attempts
over the previous two years and continues to work towards immediate detection and
prevention of fraud attempts. EDD will continue to analyze and assess our processes to
stay ahead of the ever-evolving fraud landscape.
As previously described, EDD implemented the following measures to address the
nationwide fraud attempts perpetrated against the new emergency federal benefit
programs in 2020-21:
• Implemented additional cross-matches in September 2020 to detect multiple claims
per address.
• Ceased automatically backdating PUA claims under federal rules in September 2020.
• Strengthened identity verification procedures in October 2020 by implementing
ID.me.
• Implemented additional cross-matches in November 2020 against state inmate
information.
California State Auditor Report 2023‐001 155
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• Vetted applications against law enforcement databases and other tools provided by
Thomson Reuters in December 2020 to further curb identity and non-identity fraud.
• Established a 1099-G call center to help victims of identity theft deal with any tax-
related questions.
• Ceased printing Social Security numbers on mailed documents to reduce identity
theft risk.
• Enhanced benefit card security with Bank of America.
• Partnered with state, local and federal law enforcement agencies to support
thousands of criminal investigations, arrests, prosecutions and convictions.
Estimated Implementation Date: Completed September 2024
Contact: Diane Underwood, Division Chief
Unemployment Insurance Branch
California Employment Development Department
Reference No. 2023-006:
California Department of Transportation (Caltrans) has determined that federal award
information is not always disseminated to the project managers. Caltrans will review
current policies and procedures of each division and revise, if necessary, so that best
practices are followed.
Caltrans Internal Audits Office will be working with Local Assistance’s single audit report
monitoring process and take on the responsibility to monitor for all Caltrans divisions.
Estimated Implementation Date: June 2025
Contact: Ben Shelton, Chief – Caltrans Internal Audits Office
Division of Risk and Strategic Management
Reference No. 2023-007:
The Chancellor’s Office established and implemented SLFRF emergency financial
assistance grants policies and procedures. The policies and procedures can be found on
the following website: State Fiscal Recovery Funds - Emergency Financial Assistance for
California Community College Students. These policies and procedures included a self-
certification process to certify that students met SLFRF eligibility requirements, expenditure
tracking and management information system data reporting, a monitoring plan, and
state compliance procedures through the annual Contracted District Audit Manual for
the 2021-22, 2022-23, and 2023-24 fiscal years. The Chancellor’s Office intends to include
SLFRF compliance procedures in the upcoming 2024-25 fiscal year Contracted District
Audit Manual. The intent of both the policies and procedures as well as the Audit
requirements are intended to address the Chancellor’s Office need to: (1) maintain
effective internal controls regarding its use of the applicable SLFRF Federal award
funding, (2) assess each community college’s risk of potential noncompliance with SLFRF
subaward federal statutes, regulations and terms and conditions, and (3) validate that
California State Auditor Report 2023‐001 156
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community colleges expended the SLFRF resources in accordance with federal statutes,
regulations and terms and conditions.
The Chancellor’s Office will coordinate with the Department of Finance as needed to
revise the funding source of expenditures that are determined to be ineligible to be
supported by SLFRF resources. The Chancellor’s Office will also work with community
college districts to ensure any SLFRF funds awarded to ineligible students are adjusted in
districts’ accounting records to the proper state funding source.
The Chancellor’s Office will continue to communicate the SLFRF emergency financial
assistance grants policies and procedures to California Community districts as needed.
Additionally, the Chancellor’s Office will continue to receive copies of each district’s
annual audit and audit findings as determined through the Contracted District Audit
Manual process. The Chancellor’s Office will also continue to review and revise the SLFRF
policies and procedures, and memorandums as needed to ensure the required federal
award identification information and retention process information is available to
community college districts.
In conclusion, the Chancellor’s Office appreciates the focus toward ensuring the
successful implementation of the emergency financial assistance grant program and in
support of our students’ success. The SLFRF grants provided low-income students who
were disproportionately impacted by the COVID-19 pandemic emergency support to
continue with their enrollment, improve their economic mobility, complete their
educational goals, and contribute to California’s economy in a meaningful way.
Estimated Implementation Date: December 15, 2025
Contact: Chris Ferguson
Executive Vice Chancellor of Finance and Strategic
Initiatives
California Community Colleges Chancellor’s Office
Reference No. 2023-008:
Public Health agrees with the recommendation. Public Health will review existing
procedures for verifying the suspension and debarment status of vendors before entering
into any agreement involving federal funds, and strengthen procedures as required.
Estimated Implementation Date: May 2025
Contact: Melissa Relles, Assistant Deputy Director
Division of Operations, Center for Preparedness and
Response
California Department of Public Health
Reference No. 2023-009:
Public Health agrees with the recommendation. Public Health will develop a process for
conducting risk assessments of subrecipient funding, develop and implement procedures
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for obtaining single audit reports from subrecipients, as well as a system to monitor and
track compliance with the single audit mandate among subrecipients. Public Health will
ensure each subaward includes all requirements imposed on the subrecipient so that the
federal award is used in accordance with Federal Statutes, regulations, and terms of
conditions of the federal award.
Estimated Implementation Date: May 2025
Contact: Melissa Relles, Assistant Deputy Director
Division of Operations, Center for Preparedness and
Response
California Department of Public Health
Reference No. 2023-010:
The CDSS agrees with the finding and recognizes the importance of effective report
tracking and the timely submission of fiscal and compliance reports, with clearly defined
responsibilities and workflows to ensure accuracy. When the grants were transferred from
CDE to CDSS, no formal guidance was provided during the transition. The delay in
submission was due to multiple factors including training new staff, understanding the
different pieces of the various grants, and the most impactful factor was the information
to produce the Federal Funding Accountability and Transparency Act (FFATA) report. To
produce the FFATA report, the Federal Reporting Section (FRS) had to reach out to every
contractor, vendor, county, etc. and ask for their assistance to fill out the FFATA report
information. This was a labor- and time-consuming process due to the size of the grant.
As a result, it took some time for the FRS to gather the necessary information and become
fully familiar with the procedures required to prepare the FFATA report.
To minimize the risk of late report submission, FRS has ensured that all staff understand the
final deadline and all key milestones along the way. The FRS has broken down the report
into smaller, manageable tasks within individual deadlines which helps to avoid last-
minute rushes and ensure steady progress. The FRS utilizes Microsoft Teams as a project
management tool to track deadlines, monitor progress, and send reminders to keep
everyone on track. The FRS conducts regular check-ins to discuss progress, address any
challenges early, and adjust the plan as needed to prevent delays.
Additionally, FRS has created a standardized template to save time and allow the team
to work efficiently. Staff are now completing their individual reports ahead of time which
gives ample room for review and revisions to ensure the FFATA report is prepared
accurately and timely.
Estimated Implementation Date: Implemented
Contact: Daniel During, Federal Reporting Section Chief
Accounting and Fiscal Systems Branch
Finance and Accounting Division
California Department of Social Services
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Reference No. 2023-011:
The CDSS has sufficient internal controls for the Federal Fiscal Year (FFY) 2022 grants
onward. The CDSS was not the lead agency for the FFY 2020 and 2021 grants. During
those years, the California Department of Education (CDE) held the responsibilities as the
lead agency and had custody of the grants. As such, CDSS cannot be held accountable
for the reports submitted by CDE. The CDSS is unable to validate or provide commentary
on the data or information reported by CDE for those periods. The CDSS is the lead
agency for FFY 2022 grants onward and has assumed full responsibilities for all related
procedures, including the review, preparation, and submission of quarterly reports with
complete and accurate information. The CDSS is diligently monitoring and managing the
process to ensure that future reconciliations are conducted with the utmost accuracy
and timeliness. The CDSS is also collaborating closely with all relevant stakeholders to
ensure that the current data is thoroughly verified and aligned.
The CDSS maintains comprehensive documentation supporting all expenditures,
including the Schedule of Expenditures of Federal Awards (SEFA) report. Furthermore,
CDSS has strengthened our internal checks and improved communication with all
involved parties to mitigate the risk of issues arising in future reconciliations.
Estimated Implementation Date: Implemented
Contact: Daniel During, Federal Reporting Section Chief
Accounting and Fiscal Systems Branch
Finance and Accounting Division
California Department of Social Services
Reference No. 2023-012:
The CDSS agrees with the finding. The Child Care and Development Division's Program
Quality Improvement Branch (PQIB) recognized the need for tracking monitoring
procedures starting from risk assessment identification to closing out of Continuous
Improvement Plans (CIP) to ensure that contractors with the highest risk factors are
prioritized and agencies requiring follow up received a CIP.
Tracking Use of the Risk Assessment: Annually, the PQIB identifies risk criteria for the
upcoming Fiscal Year (FY) monitoring through the Contract Monitoring Protocols
Agreement document. Using the Consultant Caseload Cohorts spreadsheet staff
identify the agencies they will monitor using the FY Monitoring Priorities criteria (risk
assessment criteria). The PQIB Travel Team and Administrators review the
monitoring schedules for each consultant to ensure the risk assessment criteria has
been followed. The risk assessment criteria are reviewed and updated annually
based on trends and support needs of the field. In FY 2023-2024 PQIB implemented
a cohort review cycle to apply the risk assessment criteria to all contracted
programs subject to monitoring reviews.
Maintaining Monitoring Reports: Each Contract Monitoring Report includes a
“Monitoring Summary Page” containing all items reviewed during a Contract
Monitoring Review (CMR). Any item from the Program Integrity Monitoring Tool
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identified during a review as unmet and/or identified for a CIP is automatically
tracked by the analysts for follow-up and resolution. A spreadsheet with all the
reviews scheduled for any contract monitoring visit are maintained by FY and the
findings are recorded for each item on the tool. The PQIB analysts track the review
dates, reports, findings, and CIPs. The analysts meet with the administrators
monthly to track missing reports. All reports are filed by individual agency.
Continuous Improvement Plan (CIP): The PQIB analysts use the Contract
Monitoring Report to determine if a CIP is required. A standard CIP template was
developed, and all staff are required to use the same document. Every CIP has a
45-day corrective action period; however, programs may be granted extensions
if requested in writing. Programs can request up to an additional 180 days to
complete corrective actions. To receive an extension, a plan must be submitted
in writing detailing how the program will address the actions by the end of the
extension period. The PQIB analyst conducts follow-up with the consultant until the
CIP is received. The CIP is not closed until all items identified for corrective action
are resolved. A completed CIP and Resolution Letter are sent to the contractor
and filed in the Common Folder in the agency’s folder.
All spreadsheets, agreements, forms, and records of completed monitoring reports
referenced above are maintained in the Common Folder and on the PQIB SharePoint
page.
Furthermore, CDSS is actively working to fully adopt audit report monitoring responsibilities
of Local Education Agencies (LEA) and certain non-LEAs receiving Child Care and
Development Fund (CCDF) Cluster program funds by July 1, 2025.
Estimated Implementation Date: July 1, 2025
Contact: Jeff Fowler, Staff Services Manager III
Child Care and Development Program
California Department of Social Services
Reference No. 2023-013:
The CDSS disagrees with the finding. California’s subsidized child care system is locally
operated. The CDSS relies on hundreds of local county offices and nonprofit agencies to
administer child care and development programs at the local level, rather than having
the State pay subsidized providers directly. As a result, CDSS required Alternative Payment
Programs, direct-service contractors that administer Family Child Care Home Education
Networks, and fiscal partners to track survey completion as a prerequisite for awarding
American Rescue Plan Act (ARPA) subgrants. This local infrastructure and the size of
California’s subsidized child care and development system separates California from
other states. As a result, CDSS worked very closely with the federal grantor, the
Administration for Children and Families, to ensure that the ARPA survey methodology
met federal monitoring requirements and tracked data elements required by the federal
government. For this reason, CDSS believes it has fulfilled its responsibility and does not
need to further establish a monitoring program.
California State Auditor Report 2023‐001 160
April 2025
Estimated Implementation Date: Will not implement
Contact: Jeff Fowler, Staff Services Manager III
Child Care and Development Program
California Department of Social Services
Reference No. 2023-014:
The CDSS will complete its development and implementation of a monitoring process
over license-exempt health and safety standards in collaboration with the federal
Administration of Children and Families and the State Legislature.
Estimated Implementation Date: July 1, 2027
Contact: Jeff Fowler, Staff Services Manager III
Child Care and Development Program
California Department of Social Services
Reference No. 2023-015:
DHCS implemented a process to impose payment withholds for significantly late cost
reports, which addresses CSA’s recommendations. As of January 1, 2025, DHCS has issued
26 Notices of Delinquency to contracted counties of Short-Doyle funding (two notices for
FY 2015-16, four notices for FY 2016-17, one notice for FY 2018-19, three notices for FY 2019-
20, six notices for FY 2020-21, and ten notices for FY 2021-22). DHCS has received positive
responses from some of the delinquent counties, stating the cost reports should be
submitted shortly. If the counties do not submit their cost reports within 30 calendar days
of the delinquency notice, DHCS will send a Notice of Intent to Impose Temporary
Withhold of Funds with an option to meet and confer. If a county still has not submitted
its cost report within 30 calendar days after Notice of Intent to Impose Temporary
Withhold of Funds, the county will be put on Final Notice of Intent to Impose Temporary
Withhold of Funds with an effective date of 30 days, at which time a withhold of funds
will be processed.
Estimated Implementation Date: January 1, 2025
Contact: California Department of Health Care Services
• Primary – Ryan Whalen, Behavioral Health Interim
Settlement, Section Chief, Audit & Investigations
(A&I) Financial Review Outpatient and Behavioral
Health Division (FROBHD)
• Secondary – Lisa Alder, Behavioral Health Financial
Review, Branch Chief, A&I FROBHD
• Tertiary – Charles Anders, Behavioral Health
Financing Branch, Chief, Local Governmental
Financing Division (LGFD)
California State Auditor Report 2023‐001 161
April 2025
Reference No. 2023-016:
CDPH is addressing the findings of the audit through a combination of outreach and
training for internal stakeholders, updated internal policies, and data verification to
ensure proper review and approval of the Form CMS-1539.
Estimated Implementation Date: April 2025
Contact: Nate Gilmore, Branch Chief
Center for Health Care Quality
California Department of Public Health
Reference No. 2023-017:
Public Health’s Office of AIDS (OA) agrees with the finding and recommendation. OA
introduced and fully implemented an internal Secondary Review (SR) process for all AIDS
Drug Assistance Program (ADAP) applications in March 2018. This SR process enables
ADAP staff to verify that contracted and certified enrollment workers across California
are consistently adhering to eligibility and documentation requirements.
However, due to staffing challenges caused by the redirection of staff during the state
of emergency declared for the COVID-19 pandemic, ADAP faced significant workforce
shortages from March 2020 through much of 2023. This caused a backlog in SR
processing, which delayed tasks, including the review of this client’s application. The
client’s eligibility lapsed after 130 days, before SR could be conducted.
The Eligibility Operations Section (EOS) of ADAP which conducts SR, is now fully staffed
and has successfully addressed the backlog. As of early 2024, SR processing has returned
to normal operations and is current.
Estimated Implementation Date: Already implemented as of April 2024
Contact: Joseph Lagrama, ADAP Branch Chief
California Department of Public Health
Reference No. 2023-018:
DHCS recently implemented and instructed all staff on an improved leave management
and timesheet submission process, effective November 20, 2024, beginning with the
December 2024 pay period. The change addresses the recommendations from CSA by
streamlining the submission, review, and storage of employee timesheets, ensuring
efficient and transparent management of time-related data across DHCS. Furthermore,
the new process ensures a manager or supervisor reviews and approves all timesheets
before submission.
Estimated Implementation Date: November 20, 2024
California State Auditor Report 2023‐001 162
April 2025
Contact: California Department of Health Care Services
• Primary – Erika Cristo Assistant Deputy Director,
Behavioral Health
• Secondary – Wendy Rasmussen, Chief, Office of
Compliance - Internal Audits
Reference No. 2023-019:
The CDSS’ Disability Determination Services Division (DDSD) has implemented corrective
measures to address inaccuracies in the Modernized Integrated Disability Adjudicative
System (MIDAS) and Disability Case Processing System (DCPS) invoice review processes.
This includes an internal quality control process to monitor and review additional invoice
samples from Branches after they have been processed and reviewed by Branch
Program Technicians and Branch Auditors. Additionally, the DDSD Central Support
Services Branch implemented a secondary audit process and created a new Auditor
role to routinely sample additional Medical Evidence of Record (MER) and Consultative
Examination (CE) contracts. Findings are provided to branches to reinforce accuracy
and assure compliance. The DDSD, also transitioned from MIDAS to DCPS, which provides
more sophisticated fiscal controls.
To remediate any inaccuracies, DDSD’s centralized auditor will assess findings and
develop an action plan to prevent erroneous invoices. The CDSS ensures that all
necessary controls are in place to verify the accuracy and proper documentation of
invoices.
The CDSS concludes that the sample size of 15 MER cases does not provide sufficient
audit evidence that controls are not operating effectively resulting in a calculated
$54,398 in potential costs. However, CDSS agrees with the finding and is committed to
the control and mitigation of risk related to the audit recommendation.
Estimated Implementation Date: Implemented
Contact: Bernice Stanfield, Fiscal and Procurement
Section Chief
Central Support Services Branch
Disability Determination Service Division
California Department of Social Services