January 18, 2018 2017-601

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 Chapter 251, Statutes of 2004, the California State Auditor presents this audit report concerning high-risk issues the State and selected state agencies face. Systematically identifying and addressing high-risk issues can contribute to enhanced efficiency and effectiveness by focusing the State’s resources on improving the delivery of services related to important programs or functions.

We believe that the State continues to face nine high-risk issues including aging and deteriorating water infrastructure, information technology oversight, access and affordability in higher education, and workforce and succession planning. We also believe that four state agencies continue to meet our criteria for high risk: California Department of Corrections and Rehabilitation, Covered California, California Department of Health Care Services, and the California Department of Public Health. Finally, we removed electricity infrastructure and the State’s budget from our high risk list because of the steps that responsible state agencies have taken to address the risks.

We will continue to monitor the risks we have identified in this report and the actions the State takes to address them. When the State’s actions result in significant progress toward resolving or mitigating these risks, we will remove the high risk designation based on our professional judgment.

Respectfully submitted,

ELAINE M. HOWLE, CPA
State Auditor