In accordance with the State High-Risk Government Agency Audit Program regulations, we present a tentative two‑year plan for performing audits between January 2018 through December 2019 regarding state agencies and statewide issues appearing on this state high risk list. The plan is tentative as such audits can only be conducted when resources are available based on current workload and will be updated in accordance with the regulations as resource shifts are needed.
| HIGH RISK ISSUE OR AGENCY | SUMMARY OF CONCERN | PLANNED AUDIT OBJECTIVE |
|---|---|---|
| California Department of Health Care Services | Health Care Services has not verified some eligibility qualifications for Medi‑Cal beneficiaries. As a result, Health Care Services could make inappropriate payments and be liable to the federal government for overpayments of federally funded aid. | Review and evaluate Health Care Services' oversight of the county eligibility offices' federal aid eligibility determinations. |
| Information Technology Oversight | Although the Technology Department has adopted a new project approval process, the actual benefits of the new process may not be fully realized for several years. Some IT projects continue to face significant cost increases and schedule delays, and some departments continue to use inefficient IT systems. |
Examine the Technology Department's oversight of selected IT projects. |
| Kindergarten Through 12th Grade Education | State oversight does not ensure that local educational agencies spend funds in accordance with the local control funding formula. Gaps in the State’s educational performance data may hamper the State’s ability to evaluate school districts’ performance and their implementation of common core state standards. |
Assess oversight by the California Department of Education, State Board of Education, and local educational agencies over districts' local control accountability plans. |
| Water Infrastructure | Many California dams are aging and require major repairs. Although the State has recently made efforts to improve dam safety and increase oversight, implementation of these efforts is still underway. | Review and evaluate Water Resources' oversight of the safety of dams. |
| California Department of Public Health | Despite considerable progress towards implementation, Public Health has not implemented four of our audit recommendations that concern substantial risk of the loss of life, significant injury, or a broad reduction in residents’ overall health or safety if the recommendations remain unimplemented. | In conjunction with our annual follow-up on unimplemented recommendations, examine the underlying causes and negative effects of Public Health's delay in implementing past audit recommendations. |
| Transportation Infrastructure | It is still too early to assess the efforts of CalTrans and the Transportation Commission to ensure efficient and effective use of increased transportation funds. | Evaluate the State's implementation of the Road Repair Act and controls for ensuring that funds are consistent with established guidelines. |
| Information Security | Although the Technology Department is working to clarify the information in the security standards and is developing a new self‑assessment tool to assist reporting entities in achieving compliance with the security standards, it has yet to fully implement all of our recommendations. More than 90 percent of the participants in our information security survey reported that they have yet to achieve full compliance with state information security standards. |
Over the next two years, we will examine compliance with state information security standards, for various information systems. Further, as part of our yearly audit of the State's financial statements, we will examine controls over FI$Cal. |
| Higher Education | The CSU and UC systems have retained policies that limit enrollment of resident students. CSU’s four-year graduation rates remain low, especially in critical fields, adding to the students’ time and cost of obtaining a degree. With increased funding, CCC has improved its ability to provide courses and services to students and is no longer considered high-risk. |
In recent years, the State Auditor has issued various audit reports pertaining to access and affordability of higher education. We will continue to monitor the issue as part of our follow-up on the recommendations from our previous audit reports. |
| California Department of Corrections and Rehabilitation | Corrections has not yet demonstrated that it can adequately manage functions related to inmate medical care and until the Receiver’s Office delegates complete authority back to Corrections, the prison health care system will continue to be a factor contributing to Corrections’ designation as a high‑risk agency. Without a fully‑implemented succession management program in place to help ensure the availability and quality of future leaders, Corrections may struggle to find and retain the leaders it will need, another factor in Corrections’ continuing designation as a high‑risk agency. |
The Receiver's Office publically issues tri-annual updates on the progress of achieving goals established in the prison health care turnaround plan. Although we do not currently anticipate an audit of this issue and Correction's succession management program in the next two years, we will periodically monitor these issues and update our work plan as needed. |
| California State Teachers' Retirement System (CalSTRS) | The additional funding approved to finance the pension liabilities of CalSTRS’ Defined Benefits Program is not expected to decrease the pension plan’s unfunded liability until fiscal year 2029–30, and the plan is susceptible to investment return volatility, changes in actuarial assumptions, and statutory limitations on the State’s contributions. | We monitor the State's pension and liability programs, including CalSTRS' Defined Benefits Program, as part of our annual audit of the State's financial statements. We do not currently anticipate additional audit work beyond this annual review. |
| Other Postemployment Benefits | Although the State has initiated its plan to eliminate its unfunded liability for OPEB, it is in the early stages and the issue will take many years to resolve. | We monitor the State's OPEB liability as part of our annual audit of the State's financial statements. We do not currently anticipate additional audit work beyond this annual review. |
| Workforce and Succession Planning | CalHR has developed and executed a pilot program to assist agencies in developing workforce plans; however, it still needs to finalize and assess the effectiveness of its approach to aiding agencies in their planning efforts. CalHR reported that only 29 of 123 surveyed agencies had completed workforce and succession plans, as of December 2017. Therefore, the State is still at risk that numerous agencies are not adequately prepared for impending retirements. |
As applicable, we will review the workforce planning efforts at the state agencies we audit over the next two years. We will also periodically monitor CalHR's implementation of its pilot program and update our work plan if audit work is needed. |
| Covered California | Covered California has only partially implemented our prior audit recommendation that it analyze the adequacy of its reserve levels, including identifying actions it could take if revenues fall short of projections. With the change in the federal administration, discussions and actions concerning repealing, replacing, or revising the Patient Protection and Affordable Care Act (Affordable Care Act) have been occurring, casting uncertainty on the future of Covered California and insurance exchanges for other states. |
With so much uncertainty regarding the future of the Affordable Care Act, we have not defined the scope of audit work we may conduct related to this issue. However, we will continue to monitor developments at the federal level and update our work plan as needed. |