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California State Auditor Logo COMMITMENT • INTEGRITY • LEADERSHIP

California Department of Public Health
It Could Do More to Ensure Federal Funds for Expanding the State’s
COVID-19 Testing and Contact Tracing Programs Are Used Effectively

Report Number: 2020-612

Introduction

Background

The California Department of Public Health (Public Health) is responsible for implementing programs that protect and improve the health of people and their communities by detecting, preventing, and responding to infectious diseases; researching disease and injury prevention; and promoting healthy lifestyles. The COVID-19 pandemic has highlighted the importance of this work: Public Health is a key entity responsible for the state-level coordinated response to COVID-19.

Federal Funding for COVID-19 Public Health Activities

To enhance states’ public health efforts, the U.S. Centers for Disease Control and Prevention (CDC) awards grants through its Epidemiology and Laboratory Capacity for Prevention and Control of Emerging Infectious Diseases (ELC) Cooperative Agreement. Recipients of ELC grants include state, local, and territorial governments. Through a series of bills Congress passed in spring 2020, the federal government committed significant funding to combat the spread of COVID-19. To quickly distribute this funding, the CDC used its existing grant applications for the ELC Cooperative Agreement. From March 2020 through mid-December 2020, the federal government provided $555 million in ELC funds to California for state-level efforts related to COVID-19 (ELC COVID-19 funds).

Heluna’s Responsibilities as
Public Health’s Bona Fide Agent

  1. Submit a grant application in lieu of a state application for ELC funding.
  2. Take sole responsibility for the ELC agreement and assure compliance with its requirements.
  3. Perform the administrative tasks needed to obtain funding and implement the ELC agreement, including the following:
    1. Provide overall coordination of ELC grant implementation.
    2. Provide general administrative functions and support.
    3. Recruit, hire, and supervise ELC program staff.
    4. Prepare and submit reports to the CDC.
    5. Assist Public Health in preparing legislative and data summary reports.
  4. Collaborate with Public Health.

Source: 2017 Bona Fide Agent Designation agreement between Heluna and Public Health.

Public Health’s Contract With Heluna Health for ELC Grant Funds

CDC guidance states that health departments can use an administrative partner or bona fide agent—an organization that a state has identified as eligible to apply for and manage grants in its stead—to expedite the federal grant process and increase their competitiveness in applying for federal funding, processing grants, hiring staff, implementing grant activities, and assuring compliance with grant requirements. Several years ago, Public Health designated a nonprofit entity, Heluna Health (Heluna), to be its bona fide agent to receive ELC funds. The text box summarizes Heluna’s responsibilities under its legal agreement with Public Health. In general, Heluna manages the administrative aspects of the State’s ELC grant, such as accounting, reporting, and hiring personnel. According to the chief of Public Health’s Division of Communicable Disease Control (division chief), Public Health is responsible for the strategic direction of the ELC grant by participating in making decisions about the activities that ELC grant funds are used to support.

Because Heluna is Public Health’s bona fide agent for regular ELC grants, the CDC officially awarded the State’s ELC COVID-19 funds to Heluna. According to the division chief, Public Health wanted to participate more directly in managing the ELC COVID-19 funds because the department had identified benefits to doing so. Specifically, Public Health wanted to leverage existing relationships formed through other grant work with local health jurisdictions, including county agencies and some city health departments, and to oversee an IT contract to modernize existing COVID-19 case reporting. Public Health and Heluna therefore entered into a contract—distinct from the bona fide agreement for regular ELC grants—that allowed Public Health to control $467 million of the ELC COVID-19 funds, as Figure 1 shows. Heluna submitted to the CDC a budget and work plan reflecting Public Health’s involvement, which the CDC approved.

Figure 1
Sources and Recipients of California’s Federal ELC COVID-19 Funds as of Mid-December 2020

Figure 1 shows the recipients of ELC COVID-19 funding in California and the amounts each received.

Source: Notices of Award for COVID-19-related ELC grants, Heluna budgets, and the Heluna–Public Health contract.


Figure 1 also shows that Heluna retained $68 million of the ELC COVID-19 funds. It used these funds for grant management and to hire and manage scientific and support staff needed to perform ELC program work. For example, Heluna intends to hire several epidemiologists for Public Health’s Center for Infectious Diseases. We discuss the status of Heluna’s hiring efforts in the Audit Results. Heluna is also responsible for directly distributing $20 million to local health jurisdictions to use in their efforts to combat COVID-19.

CDC’s Goals for ELC COVID-19 Funds

  1. Enhance laboratory, monitoring, and other workforce capacity.
  2. Strengthen laboratory testing.
  3. Advance electronic data exchange at public health labs.
  4. Improve monitoring and reporting of electronic health data.
  5. Use laboratory data to enhance investigation, response, and prevention.
  6. Coordinate and engage with partners.

Source: CDC guidance titled ELC Enhancing Detection Emerging Issues (E) Project: Funding for the Enhanced Detection, Response, Surveillance, and Prevention of COVID-19 Supported through the Paycheck Protection Program and Health Care Enhancement Act of 2020.

Objectives of ELC COVID-19 Funds

The CDC awarded the State’s ELC COVID-19 funds for specific purposes. Of the $555 million California received, $499 million is for expanding its capacity to deliver and process COVID-19 tests of individuals and to use testing data to understand disease frequency and spread, among other uses. In addition, these funds are to support contact tracing—a process that determines when, where, and by whom an infected person may have been exposed to a disease and those with whom the individual has had subsequent contact. The text box lists the six goals the CDC set for the State’s ELC COVID-19 funds. Heluna and Public Health must use these funds by November 2022.

Public Health has developed a plan for using its ELC COVID-19 funding. Its contract with Heluna lists six objectives for the funding, which align with the six goals the CDC established. For example, one of these objectives focuses on improving disease data reporting, case investigation efforts, and surveillance strategies to help identify where COVID-19 outbreaks occur and where COVID-19 is spreading, as well as the populations affected. This Public Health objective ties into the CDC’s goals 3, 4, and 5, which the text box describes. Another Public Health objective focuses on contact tracing and infection control.

ELC Funding for Local Health Jurisdictions

Much of what Public Health intends to accomplish with its ELC COVID-19 funds involves coordination with local health jurisdictions. As Figure 1 shows, Public Health allocated $286 million to local entities, which is more than half of the $467 million it received. For each of the six objectives Public Health outlined in its contract, it calculated an allocation of ELC funding to local health jurisdictions. We reviewed the basis for the allocations that Public Health made to local health jurisdictions, and they seem reasonable. There are 61 local health jurisdictions statewide—which include counties and some cities—and Public Health made allocations to 58 of them.Los Angeles County received ELC funds directly from the CDC and made sub-awards to the cities of Long Beach and Pasadena.

In summer 2020, Public Health advanced to each of the jurisdictions 25 percent of their total allocation. In exchange for receiving this initial allocation, Public Health required each jurisdiction to submit a spending plan and a work plan showing how it would use the ELC COVID-19 funds to achieve Public Health’s objectives in relation to local needs. Public Health made the remaining 75 percent of the funds available to each local health jurisdiction to claim on a reimbursement basis. Public Health requires the local health jurisdictions to submit update reports each quarter to share the status of their spending and progress in meeting its objectives. In the Audit Results, we discuss Public Health’s progress in reviewing and approving the two required plan types and the update reports.

The State’s Additional COVID-19 Funds

The $555 million in ELC COVID-19 funding that Figure 1 outlines is not the only federal money the State will receive for its COVID-19 public health efforts. In January 2021, the CDC awarded California an additional $1.7 billion in ELC COVID-19 funds as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021. This report does not address these additional ELC funds. According to the assistant deputy director of Public Health’s Emergency Preparedness Office, Public Health is still determining whether it will use its existing contract with Heluna to manage these funds or whether it will develop a separate contract.




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