Summary

Audit Highlights . . .

Our assessment of the State’s use of nearly $470 million in ELC COVID-19 funding, highlighted the following:

» Although the State’s testing of individuals for COVID-19 has met or exceeded Public Health’s initial targets, contact tracing statewide has lagged.

By January 2021, only about 12,100 tracing staff were employed statewide rather than the 31,000 that Public Health estimated would be needed.
This total workforce was inadequate to meet the sharp year-end increase in COVID-19 cases.

» Although Public Health allocated $286 million of its ELC COVID-19 funds to 58 local health jurisdictions, its oversight has been insufficient.

As of mid-February, it still had not approved all of the local health jurisdictions’ required work and spending plans.
It did not finalize procedures for quarterly reports until recently and as of mid-February had received required reports from only 16 jurisdictions.

» After IT system issues caused the State to undercount new COVID-19 cases, Public Health developed a new COVID-19 reporting system but delayed procuring independent oversight until after the new system’s critical development period.

Results in Brief

This report 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 funds related to COVID-19 as a high-risk issue and indicated that the likelihood of mismanagement of these funds was great enough to create substantial risk of serious detriment to the State and its residents. This audit focuses specifically on the California Department of Public Health (Public Health) and $467 million in federal funding it received for the State’s efforts to address COVID-19.

In spring 2020, the federal government committed significant funding to combat the spread of COVID-19. To quickly distribute this funding, the U.S. Centers for Disease Control and Prevention used an existing agreement—the Epidemiology and Laboratory Capacity for Prevention and Control of Emerging Infectious Diseases (ELC) Cooperative Agreement—through which it regularly provides funding in the form of grants to support states’ public health efforts. Through the ELC grants currently in place, the federal government provided $555 million to California from March 2020 through mid-December 2020 for state-level efforts related to COVID-19 (ELC COVID-19 funds). Of this amount, $88 million is under the direct management of a nonprofit partner with which Public Health works, Heluna Health. Public Health is responsible for using the remaining $467 million to expand the State’s ability to test individuals for COVID-19 and to conduct contact tracing to track individuals’ exposure to the disease, among other objectives.

We found that although the State’s testing of individuals for COVID-19 has met or exceeded Public Health’s initial targets, contact tracing statewide has lagged well behind original plans. Public Health estimated in early 2020 that contact tracing would require more than 31,000 staff from local health jurisdictions—county agencies and some city health departments—to perform a variety of tasks. Public Health planned to help local health jurisdictions reach that number through the temporary reassignment of 10,000 state employees from different agencies. However, in January 2021, nine months after developing its initial staffing estimates, Public Health calculated that only about 12,100 tracing staff were employed statewide, including both staff hired or redirected by local health jurisdictions and staff reassigned by state agencies. Data show that this total workforce was inadequate to meet the sharp, year-end increase in COVID-19 cases. Public Health is now focusing on increasing the efficiency of the existing workforce’s efforts through case prioritization and through technological improvements that allow tracing staff to more quickly reach and notify people who may have been exposed to COVID-19.

To achieve its objectives, Public Health allocated $286 million of its $467 million ELC COVID-19 funds to 58 local health jurisdictions. However, it has not provided sufficient oversight of the funds it has distributed to these jurisdictions to date. In exchange for an advance of 25 percent of their allocations, the jurisdictions agreed to provide to Public Health work plans and spending plans by August 31, 2020. Although Public Health received all the work and spending plans, it had not approved them all as of mid-February 2021. Further, Public Health set November 2020 as the initial due date for the local health jurisdictions’ quarterly updates to their work plans and spending plans. These quarterly updates are a primary way Public Health can monitor the jurisdictions’ performance, but Public Health did not finalize procedures for its staff to review them until February 2021. Moreover, as of this date, it had received both types of quarterly update reports from only 16 of the 58 local health jurisdictions to which it advanced ELC COVID-19 funds. Overall, the gaps in reporting and review of the necessary update reports have left untracked more than $40 million in ELC COVID-19 funds that Public Health advanced to the jurisdictions.

Finally, Public Health was slow to procure required independent oversight for the development of a new information technology (IT) system to track COVID-19 data, for which it budgeted $15 million in ELC COVID-19 funds. Accurate and timely laboratory results are critical components of the State’s efforts to document the spread of COVID-19 and assess the effectiveness of preventive measures. However, in summer 2020, the California Health and Human Services Agency reported that two IT system issues resulted in the State undercounting new COVID-19 cases. This hastened an existing plan for Public Health to develop a new, stand-alone COVID-19 reporting system, which it completed in February 2021. However, Public Health did not retain an independent verification and validation (IV&V) consultant in time to perform key, early error identification during this urgent project’s most critical development period. This failure was in spite of requirements for IV&V in both state IT policies and in the development contract for the system.

Although Public Health has now entered into an IV&V contract, it did not dedicate the IT consultant to a thorough review of the COVID-19 reporting system. Rather, the contract includes both work on the new COVID-19 reporting system and work on several other systems, allowing Public Health to prioritize which systems the IT consultant reviews. Consequently, we question whether the contract has provided the COVID-19 reporting system with all of the necessary safeguards. Through the development phase, Public Health did not prioritize oversight of the system. As a result, Public Health may have failed to detect potential errors, which creates a risk to future system functionality and the State’s plan for addressing the COVID-19 pandemic.

Selected Recommendations

To better leverage contact tracing as a tool to limit the spread of COVID-19, Public Health should do the following:

By May 15, 2021, reevaluate its contact tracing plan and update it to incorporate efficiencies it has instituted in order to redefine how many tracing staff it believes California needs and for how long it will need them.
By June 15, 2021, create and implement a plan, in partnership with local health jurisdictions, to hire, train, and retain the number of tracing staff it determines is necessary to limit the spread of COVID-19, including expanding the pool of reassigned state employees functioning as tracing staff.

To ensure that it has all the necessary planning information in place related to the allocations it has made to the local health jurisdictions, Public Health should, by April 15, 2021, review and approve all initial work plans that it has received.

To ensure that it is performing necessary oversight and can provide local health jurisdictions with guidance on improving their activities using the ELC COVID-19 funding, Public Health should, by April 15, 2021, put into place procedures to ensure that it receives all required quarterly updates from the local health jurisdictions to which it made grants.

To ensure that the State has accurate COVID-19 data and to help mitigate the risks it caused by not having IV&V during the development phase of the COVID-19 reporting system, Public Health should direct its IT consultant to monitor system performance and Public Health’s data validation efforts and to provide regular reports on the system’s reliability until the IV&V contract expires in December 2021.

Agency Comments

Public Health agreed with our recommendations and noted ways it planned to implement them.