April 1, 2021
2020-612

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

This audit report on a high-risk issue provides an update on our assessment of the State’s management of a portion of the federal funds it received to respond to the COVID-19 pandemic. In August 2020, we designated the State’s management of federal COVID-19 funds as a high-risk issue and determined that the likelihood of mismanagement of these funds is great enough to create substantial risk of serious detriment to the State and its residents.

We assessed the State’s use of approximately $467 million in federal COVID-19 funding with which the California Department of Public Health (Public Health) is supporting statewide and local efforts to address COVID-19. These funds were earmarked for the State’s implementation and enhancement of programs related to the U.S. Centers for Disease Control and Prevention’s (CDC) Epidemiology and Laboratory Capacity for Prevention and Control of Emerging Infectious Diseases (ELC) Cooperative Agreement. The CDC has outlined several critical purposes for grant funds it distributed to the State through this agreement, including expanding COVID-19 testing and contact tracing as well as improving California’s long-term abilities to fight infectious diseases.

We found that the State has met or exceeded targets for testing individuals for COVID-19, but contact tracing throughout the State has lagged behind case surges that have far exceeded Public Health’s initial planning. We additionally found that Public Health has been slow to collect and review required work plans, spending plans, and quarterly update reports from the local entities to which it provided ELC funds, leaving gaps in its knowledge of how those entities are using this new federal funding. Finally, Public Health delayed procuring required independent oversight for the development of an information technology project designed to track COVID-19 data, for which it is using ELC funds, increasing the risk of system errors going undetected.

Although the number of vaccinations is increasing and the number of new COVID-19 cases is decreasing, Public Health must remain focused on the pandemic and on learning ways to better address future public health emergencies.

Respectfully submitted,

ELAINE M. HOWLE, CPA
California State Auditor