Report 2010-108 All Recommendation Responses

Report 2010-108: Department of Public Health: It Reported Inaccurate Financial Information and Can Likely Increase Revenues for the State and Federal Health Facilities Citation Penalties Accounts (Release Date: June 2010)

Recommendation #1 To: Public Health, Department of

To ensure that citation review conferences are completed expeditiously, Public Health should continue to take steps to eliminate its backlog of appeals awaiting a citation review conference.

Annual Follow-Up Agency Response From November 2015

As of August 2014, CDPH has completed citation review conferences for all appealed citations

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Based on documentation provided by Public Health, it has completed citation review conferences for all appealed citations.

Annual Follow-Up Agency Response From October 2015

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

At the time of the BSA audit, CDPH had a backlog of 607 citation review conferences. As of October 10, 2013, CDPH had a backlog of 152 B citations. All A and AA citations have been completed. CDPH projects it will eliminate the backlog entirely by the end of 2014.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2012

CDPH agrees with the recommendation that the Department should continue to take steps to eliminate its backlog of appeals awaiting a citation review conference.

All AA citations that were pending at the time of the BSA report have been heard in a Citation Review Conference (CRC) hearing. All AA citations are being scheduled when requested and are current. However, there remains a backlog of CRCs. At the time of the BSA audit, approximately 450 B, 150 A and seven AA citations were pending review. Currently, 216 (20 added in 2011-12) B, and 72 (13 added in 2011-12) A citations are pending. Retired annuitant (RA) staff who have been deemed mission critical, thoroughly trained, and dedicated solely to this workload, are continuing work to reduce the backlog of appeals awaiting citation review conferences. As a result, CDPH is making progress to address the backlog.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Recommendation #2 To: Public Health, Department of

To increase revenue for the penalty accounts, Public Health should seek legislation authorizing it to revise periodically the penalty amounts to reflect an inflation indicator, such as the CPI.

Annual Follow-Up Agency Response From June 2018

With the enactment of the 2011 Budget Trailer Bill ABX 1-19, the maximum citation penalty amounts for B citations increased from $1,000, to $2,000. California Department of Public Health (CDPH) reviewed the A and AA citation penalties and determined they were adequate. CDPH will not pursue legislation to further increase penalty amounts.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From May 2017

With the enactment of the 2011 Budget Trailer Bill ABX 1-19, the maximum citation penalty amounts for B citations increased from $1,000, to $2,000. California Department of Public Health (CDPH) reviewed the A and AA citation penalties and determined they were adequate. CDPH will not pursue legislation to further increase penalty amounts.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From June 2016

With the enactment of the 2011 Budget Trailer Bill ABX 1-19, the maximum citation penalty amounts for B citations increased from $1,000, to $2,000. California Department of Public Health (CDPH) reviewed the A and AA citation penalties and determined they were adequate. CDPH will not pursue legislation to further increase penalty amounts.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2015

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

With the enactment of the 2011 Budget Trailer Bill ABX 1-19, the maximum citation penalty amounts for B citations increased from $1,000, to $2,000. CDPH reviewed the A and AA citation penalties and determined they were adequate. CDPH will not pursue legislation to further increase penalty amounts.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Although the Legislature increased penalty amounts for class B citations for certain facilities, Public Health could also take steps to ensure that penalty amounts for other types of citations increase. For example, if Public Health does not want to seek legislation that would establish an automatic increase in penalty amounts, it could revise its policies and procedures to include a periodic review of penalty amounts and, if the review finds the penalty amounts are too low, Public Health can seek appropriate increases through the legislative process.

Annual Follow-Up Agency Response From September 2012

A 2011 budget trailer bill (ABX 1-19) increased B citation penalty amounts for skilled nursing facilities and intermediate care facilities at a range not less than $100 and not to exceed $2,000; an increase of the maximum from $1,000 for each citation. All other long-term care facilities were to remain subject to B citation penalty amounts not less than $100 and not to exceed $1,000. Additional statutory changes would be necessary to increase civil money penalty amounts for category AA, A, and B citations for all long-term care facility categories.

In addition, CDPH continues to explore a legislative proposal to adjust citation penalty amounts to reflect inflation using an indicator such as the Consumer Price Index.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Recommendation #3 To: Public Health, Department of

To increase revenue for the penalty accounts, Public Health should ensure that it conducts all state surveys of facilities every two years, as required by state law.

Annual Follow-Up Agency Response From May 2017

In January 2016, California Department of Public Health implemented a new State Skilled Nursing Facility (SNF) Relicensing Survey. Each District Office will survey 50% of their SNFs in 2017 and the other 50% in 2018. By end of 2018, all SNFs will have a relicensing survey conducted no less than every two years. CDPH continues to post quarterly metrics of licensing surveys completed.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From June 2016

In January 2016, California Department of Public Health implemented a new State Skilled Nursing Facility (SNF) Relicensing Survey (see Attachment A). By March 2016, all district offices were using the new process. Each District Office will survey 50% of their SNFs in 2016 and the other 50% in 2017. By 2018, all SNFs will have a relicensing survey conducted no less than every two years.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From November 2015

In July 2014, CDPH began reviewing its licensing survey methodologies for long-term care facilities to focus on eliminating redundancies between licensing and certification surveys. CDPH anticipates implementing the new survey tool in long-term care facilities by December 2016.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2015

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

In August 2013, CDPH hired a contractor to perform a workload analysis to assess program workload and barriers, perform a gap analysis, and identify immediate actions that CDPH can take to begin to remediate the gaps identified. The contractor will also identify areas that need additional in-depth review and will develop additional scopes of work for additional contracts (with other contractors) to fully assess issues identified and provide recommendations, including identifying staffing levels required to complete the workload and more efficient means of conducting surveys. The contractor will complete the initial assessment by June 30, 2014. The additional contracts will begin in July 2014 and be completed by December 31, 2015. CDPH anticipates implementing all contractor recommendations for completing state and federal workload, resources needed, methods to identify increased efficiencies, and addressing other identified gaps by December 31, 2017.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Although Public Health is performing a workload analysis, we are still concerned that it is not performing inspections as the law requires.

Annual Follow-Up Agency Response From September 2012

CDPH agrees with the recommendation that the Department should ensure that it conducts all state surveys of facilities every two years as required by state law. CDPH is making a concerted effort to comply with this requirement. In fiscal year 2012-2013, Licensing and Certification (L&C) will continue to evaluate its workload to allocate staff resources in an effort to meet this requirement. This evaluation may result in reassigning surveyor activity to determine if additional resources are needed to conduct both federal and state mandated surveys as required.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Recommendation #4 To: Public Health, Department of

To ensure that it complies with current state law and increases transparency, Public Health should adopt regulations for the administration of temporary management companies.

Annual Follow-Up Agency Response From May 2017

California Department of Public Health (CDPH) is developing temporary manager regulations. Due to delays in drafting the proposed regulations, CDPH anticipates the draft regulations will be available for public comment by the mid-2018.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From June 2016

California Department of Public Health (CDPH) is developing temporary manager regulations. CDPH anticipates the draft regulations will be available for public comment by the end of 2016.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From November 2015

Existing law provides the circumstances under which a temporary manager may be needed to safeguard the health and safety of residents. CDPH developed an internal process to select and install a temporary manager, including guidelines for qualifications and a temporary manager template contract that may be modified for each appointment. During its efforts to incorporate the guidelines into CDPH's Licensing and Certification Policy and Procedure Manual, CDPH determined that the guidelines constituted regulations under the rules of the Administrative Procedures Act. In October 2014, CDPH began developing regulations with an anticipated completion date of January 1, 2016.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2015

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

Existing law provides the circumstances under which a temporary manager may be needed to safeguard the health and safety of residents. CDPH developed an internal process to select and install a temporary manager, including guidelines for qualifications and a temporary manager template contract that may be modified for each appointment. By January 30, 2014, CDPH will incorporate these guidelines into Licensing and Certification's Policy and Procedures Manual. Incorporating these processes into the Policy and Procedures Manual will ensure consistency in application and transparency to the public. CDPH believes this fulfills the intent of the recommendation and regulations are not necessary.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

As we noted on page 39 of our report, the California Health and Safety Code, Section 1325.5(m), requires Public Health to adopt regulations for the administration of temporary managers. Until the law is amended to remove this requirement, or Public Health adopts regulations as required, we do not belive that Public Health has implemented the recommendation.

Annual Follow-Up Agency Response From September 2012

CDPH agrees it should adopt regulations for the administration of temporary management companies.

CDPH has added the administration of temporary management companies to its regulations priority list for CDPH. The Department took into account the multiple packages that need to be promulgated and prioritized each package. Currently, the Department operates under a standardized review process for temporary management companies until a completed regulation package is adopted. The Department anticipates completion of a package addressing temporary management companies in 2016 or 2017.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Recommendation #5 To: Public Health, Department of

To increase revenue for the state account, Public Health should seek legislation authorizing it to require facilities that want to contest the monetary penalty to pay the penalty upon its appeal which could then be deposited into an account within the special deposit fund. The original monetary penalty deposited, plus interest accrued in the account, should then be liquidated in accordance with the terms of the decision.

Annual Follow-Up Agency Response From May 2017

California Department of Public Health (CDPH) will not implement this recommendation. As noted previously, CDPH estimates requiring facilities to pre-pay penalties and placing the penalties in an interest bearing account would cost CDPH approximately $65,000 a year to collect and account for these funds until the appeals were exhausted and liquidate them at that time. To cover these administrative costs, CDPH would need to impose a non-refundable administrative fee upon filing of an appeal or increase licensing fees. As shown in Attachment A, State Citation Detailed Report, 3rd Quarter of Fiscal Year 16-17, as of March 31, 2017, CDPH had 409 citations pending appeal with a value of approximately $2.7 million.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From June 2016

California Department of Public Health (CDPH) will not implement this recommendation. As noted previously, CDPH estimates requiring facilities to pre-pay penalties and placing the penalties in an interest bearing account would cost CDPH approximately $65,000 a year to collect and account for these funds until the appeals were exhausted and liquidate them at that time. To cover these administrative costs, CDPH would need to impose a non-refundable administrative fee upon filing of an appeal or increase licensing fees. As shown in Attachment B, State Citation Detailed Report, 3rd Quarter of Fiscal Year 15-16, as of March 31, 2016, CDPH had only 266 citations pending appeal with a value of approximately $3.1 million.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2015

In January 2011, CDPH met with stakeholders to solicit their input on the BSA report. In March 2011, CDPH released those recommendations, as required, via its report to the Legislature. Requiring facilities to pre-pay penalties and placing the penalties in an interest bearing account would cost CDPH approximately $65,000 a year to collect and account for these funds until the appeals were exhausted and liquidate them at that time. To cover these administrative costs, CDPH would need to impose a non-refundable administrative fee upon filing of an appeal or increase licensing fees. Currently, in lieu of contesting a penalty, facilities may pay 65 percent of the penalty within 15 business days of the issuance of the citation. Full payment is due within 30 calendar days of issuance. For these reasons, CDPH will not change the penalty collection process.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2013

In January 2011, CDPH met with stakeholders to solicit their input on the BSA report. In March 2011, CDPH released those recommendations, as required, via its report to the Legislature. Requiring facilities to pre-pay penalties and placing the penalties in an interest bearing account would cost CDPH approximately $65,000 a year to collect and account for these funds until the appeals were exhausted and liquidate them at that time. To cover these administrative costs, CDPH would need to impose a non-refundable administrative fee upon filing of an appeal or increase licensing fees. Currently, in lieu of contesting a penalty, facilities may pay 65 percent of the penalty within 15 business days of the issuance of the citation. Full payment is due within 30 calendar days of issuance. For these reasons, CDPH will not change the penalty collection process.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From September 2012

In January 2011, CDPH met with stakeholders to solicit their input on the BSA report. In March 2011, CDPH released those recommendations, as required, via its report to the Legislature. As a result of the input from those meetings, CDPH does not support the BSA audit recommendation to seek legislation authorizing it to require facilities that want to contest the monetary penalty to pay the penalty upon its appeal, which could then be deposited into an account within the special deposit fund. Changing the collection process to require facilities to pre pay penalties, and placing the penalties in an interest bearing account, would result in a cost to the Department of approximately $65,000 a year. The penalty amount would not be available for use until the appeals were exhausted; therefore, CDPH would need to ensure the proper accounting of funds received, disbursed, and tracked. The administrative cost would need to be paid either by the imposition of a non refundable administrative fee upon filing of an appeal or by an increase in licensing fees. Currently, in lieu of contesting a penalty, facilities may pay 65 percent of the penalty within 15 business days of the issuance of the citation. Full payment is due within 30 calendar days of issuance. CDPH recommends that the penalty collection process remain unchanged and that the time for transmittal of penalties to CDPH be increased from 15 days to 30 days after issuance of the citation. This recommendation offers facilities more flexibility in ensuring they have monies to meet their operational obligations.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Recommendation #6 To: Public Health, Department of

To ensure consistency with federal guidance related to federal requirements, and that it is not creating incentives for facilities to appeal citations issued for noncompliance with state requirements, Public Health should provide guidance to its staff that discourages settling appealed monetary penalties for a better term than had the facility not contested the citation and paid the penalty within the time frame specified in law to receive a 35 percent reduction. If Public Health believes instances occur when it is appropriate to reduce a monetary penalty by more than 35 percent, it should document which statutory or regulatory factors that formed the basis for concluding that the original class of citation and corresponding monetary penalty amount were no longer considered valid or relevant.

Annual Follow-Up Agency Response From May 2017

California Department of Public Health (CDPH) will not implement this recommendation. The right to appeal is a part of the due process afforded to all providers. CDPH does not agree that it inappropriately granted reductions. These reductions are the result of settlement negotiations that took place prior to court hearings CDPH does not view the outcome of negotiations as providing an incentive for facilities to appeal. CDPH must maintain maximum flexibility to individually negotiate citations, which may include the level of the citation and/or the final penalty amount, and weigh all factors in a final settlement. Implementing this recommendation would hinder CDPH's ability to achieve equitable settlements, force CDPH to adhere to a fixed policy that may not be appropriate in all circumstances, and infringe on the Department's deliberative process when considering settlement of the citation.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From June 2016

California Department of Public Health (CDPH) will not implement this recommendation. The right to appeal is a part of the due process afforded to all providers. CDPH does not agree that it inappropriately granted reductions. These reductions are the result of settlement negotiations that took place prior to court hearings CDPH does not view the outcome of negotiations as providing an incentive for facilities to appeal. CDPH must maintain maximum flexibility to individually negotiate citations, which may include the level of the citation and/or the final penalty amount, and weigh all factors in a final settlement. Implementing this recommendation would hinder CDPH's ability to achieve equitable settlements, force CDPH to adhere to a fixed policy that may not be appropriate in all circumstances, and infringe on the Department's deliberative process when considering settlement of the citation.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2015

CDPH will not implement this recommendation. The right to appeal is a part of the due process afforded to all providers. CDPH does not view the outcome of negotiations as providing an incentive for facilities to appeal. CDPH must maintain maximum flexibility to negotiate citations and weigh all factors in a final settlement. Implementing this recommendation would hinder CDPH's ability to achieve equitable settlements and force CDPH to adhere to a fixed policy that may not be appropriate in all circumstances.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2013

CDPH will not implement this recommendation. The right to appeal is a part of the due process afforded to all providers. CDPH does not view the outcome of negotiations as providing an incentive for facilities to appeal. CDPH must maintain maximum flexibility to negotiate citations and weigh all factors in a final settlement. Implementing this recommendation would hinder CDPH's ability to achieve equitable settlements and force CDPH to adhere to a fixed policy that may not be appropriate in all circumstances.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From September 2012

CDPH disagrees with this recommendation to ensure that it is not creating incentives for facilities to appeal citations, and that CDPH should establish a policy that discourages settling appealed monetary penalties for better terms than had the facility not contested the citation and paid the penalty within the timeframe specified in law to receive a 35 percent reduction.

CDPH will not be implementing BSA recommendation. The right to appeal is a part of the due process afforded to all providers. CDPH does not view the outcome of negotiations as providing an incentive for facilities to appeal. CDPH must maintain maximum flexibility to negotiate citations and weigh all factors in a final settlement. Adoption of BSA's recommendation would hinder CDPH's ability to achieve equitable settlements, and force CDPH to adhere to a set policy which may not be appropriate in all circumstances. Moreover, it would put CDPH in an uneven bargaining position if the facility became aware of CDPH's settlement policy.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Recommendation #7 To: Public Health, Department of

To increase revenue for the penalty accounts, Public Health should seek legislation specifying a time frame within which facilities with nonappealed citations that do not qualify for a 35 percent reduction must pay their monetary penalties and allowing Public Health to collect interest on late payments of monetary penalties.

Annual Follow-Up Agency Response From May 2017

California Department of Public Health (CDPH) will not pursue legislation specifying a timeframe within which non-appealed citations must be paid. As stated in our initial response, CDPH does not agree with the recommendation to collect interest on citations that are not appealed and will not seek legislation to do so. CDPH's most recent data indicates that there are approximately 409 citations open and/or under appeal. The value of these citations is approximately $2,714,500. As of March 31, 2017, the Surplus Money Investment Fund (SMIF) interest rate is 0.77%. At this rate, CDPH would only generate approximately $20,900 for those citations under appeal. The salary and benefits for an associate governmental program analyst to oversee this interest bearing account is approximately $113,457 annually, which far exceeds the amount that would be collected under this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From June 2016

California Department of Public Health (CDPH) will not pursue legislation specifying a timeframe within which non-appealed citations must be paid. As stated in our initial response, CDPH does not agree with the recommendation to collect interest on citations that are not appealed and will not seek legislation to do so. CDPH's most recent data (see Attachment B) indicates that there are only 263 citations open and under appeal. The value of these citations is approximately $3,066,000. As of March 31, 2016, the Surplus Money Investment Fund (SMIF) interest rate is 0.46%. At this rate, CDPH would only generate approximately $14,000 for those citations under appeal. The salary and benefits for an associate governmental program analyst to oversee this interest bearing account is approximately $113,457 annually, which far exceeds the amount that would be collected under this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From November 2015

CDPH will no longer pursue legislation specifying a timeframe within which non-appealed citations must be paid. As stated in our initial response, CDPH does not agree with the recommendation to collect interest on citations that are not appealed and will not seek legislation to do so.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2015

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2014

The status of this recommendation is unchanged.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2013

CDPH will continue to look for opportunities for legislation specifying a timeframe within which non-appealed citations must be paid. However, as stated in our initial response, CDPH does not agree with the recommendation to collect interest on citations that are not appealed and will not seek legislation to do so.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2012

As stated in the response to the BSA report, CDPH agrees with the recommendation that the Department should seek legislation specifying a timeframe within which non-appealed citations that do not qualify for a 35 percent reduction must be paid. However, CDPH does not agree with the recommendation to collect interest on citations that are not appealed and that do not qualify for the 35 percent reduction.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Recommendation #8 To: Public Health, Department of

To ensure that the governor’s budget does not overstate funds available for appropriation for the federal account, Public Health should include text in its budget section procedure manual requiring staff to reconcile the revenues, expenditures, and fund balance as supported by Aging’s and Public Health’s accounting records to the fund condition statement prepared for inclusion in the governor’s budget.

1-Year Agency Response

Public Health has updated its budget section procedure manual with the revised fund condition statement procedures. Included in the manual are requirements for budget section staff to reconcile the revenues, expenditures, and fund balance prior to inclusion of the fund condition statement in the governor’s budget. Additionally, Public Health stated that its budget section has implemented the procedures manual and held training for staff in March 2011 related to the revised procedures. (See 2012-406, p. 26)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #9 To: Public Health, Department of

To ensure that the governor’s budget does not overstate funds available for appropriation for the federal account, Public Health should ensure that supervisory review is performed of the reconciliation of the fund condition as supported by Aging’s and Public Health’s accounting records to the fund condition statement prepared for inclusion in the governor’s budget.

1-Year Agency Response

The fund condition statement procedures, included in Public Health’s budget section procedures manual, require that a supervisor review the fund condition and indicate approval with a signature and date. (See 2012-406, p. 26)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #10 To: Public Health, Department of

To increase revenue for the state account, Public Health should update its Electronic Licensing and Management System (ELMS) to use the issuance date of the citation as specified in state law when calculating whether a facility’s payment was received in time to warrant a 35 percent reduction. Further, the division should update its monetary penalty assessment form to ensure it contains language that is consistent with state law. To the extent Public Health believes state law should be revised to reflect the date on which the facility received the citation, rather than the date the citation was issued, it should seek legislation to make such a change.

1-Year Agency Response

In December 2010 Public Health enhanced ELMS to use the citation issuance date when calculating whether a facility’s payment was received in time to warrant a 35 percent reduction. Further, in September 2010, Public Health updated its monetary penalty assessment form with language that is consistent with state law. Finally, Public Health stated that it does not believe that it needs to revise state law to reflect the date on which the facility received the citation, rather than the date the citation was issued. Thus, our related recommendation is not applicable. (See 2012-406, p. 26)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #11 To: Public Health, Department of

To ensure that citation review conferences are completed expeditiously, Public Health should seek legislation amending its citation review conference process to more closely reflect the federal process by prohibiting facilities from seeking a delay of the payment of monetary penalties on the grounds that the citation review conference has not been completed before the effective date of the monetary penalty.

1-Year Agency Response

Chapter 729, Statutes of 2011 (Assembly Bill 641), eliminates the citation review conference from the citation appeals process for long-term care facilities and allows fines to be levied from both state and federal agencies when an incident violates both state and federal laws. (See 2012-406, p. 28)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #12 To: Public Health, Department of

To ensure that citation review conferences are completed expeditiously, Public Health should monitor its progress in processing appealed citations for Class AA and Class B violations as well as OAH’s progress in processing appealed citations for Class A violations.

1-Year Agency Response

Public Health stated that it now has a project manager responsible for tracking and coordinating citation review conferences and noted that it decreased the backlog for Class AA and Class B violations. Public Health stated that the backlog of Class A violations has risen after terminating the OAH contract, but anticipates this number will decrease because three retired annuitants are dedicated to conducting citation review conferences. (See 2012-406, p. 28)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #13 To: Public Health, Department of

To increase revenue for the penalty accounts, Public Health should encourage the CMS to seek changes to federal regulations authorizing CMS to revise periodically the monetary penalty amounts imposed on facilities to reflect the rate of inflation.

1-Year Agency Response

In December 2010 Public Health issued a letter to CMS encouraging it to periodically revise the monetary penalties imposed on facilities that are not compliant with federal requirements to reflect the rate of inflation. (See 2012-406, p. 29)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #14 To: Public Health, Department of

To increase revenue for the penalty accounts, Public Health should submit to the Pooled Money Investment Board a request that the board approve including both the state and federal accounts in the Surplus Monetary Investment Fund (SMIF) in order to increase revenue for both accounts.

1-Year Agency Response

Public Health stated that it submitted a request to the Pooled Money Investment Board to include the penalty accounts in the SMIF in June 2010. The request was approved and the penalty accounts began to accrue interest for the fourth quarter of fiscal year 2009–10. . (See 2012-406, p. 29)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #15 To: Public Health, Department of

To increase revenue for the penalty accounts, Public Health should seek authorization from the Legislature both to impose a monetary penalty and to recommend that CMS impose a monetary penalty when the division determines that a facility is not complying with both state and federal requirements.

1-Year Agency Response

Chapter 729, Statutes of 2011 (Assembly Bill 641), removes the prohibition of the issuance of both a state citation and the recommendation to impose a federal monetary penalty when Public Health determines that a facility is in violation of any state or federal law, regulation, or statutory provision. . (See 2012-406, p. 29)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #16 To: Public Health, Department of

To increase revenue for the penalty accounts, Public Health should increase its coordination with CMS to ensure that it can track CMS’s implementation of the recommendations that the division makes to CMS for the period before receiving training from CMS, and that it effectively use the Automated Survey Processing Environment (ASPEN) to track recommendations after the training.

1-Year Agency Response

Public Health stated that it worked with CMS to increase coordination. Public Health now generates a quarterly report from ASPEN that tracks the recommendations made by the State and related enforcement actions. . (See 2012-406, p. 30)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Recommendation #17 To: Public Health, Department of

To make certain that it fully implements the recommendations made in our April 2007 audit report, Public Health should create written procedures specifying that expenditure reports should be reviewed monthly by an accounting analyst within the division to determine whether all charges apply to temporary manager payments. Further, Public Health should include in its written policies and procedures that general support items should not be charged to the penalty accounts.

1-Year Agency Response

Public Health stated that it finalized and implemented the procedures specifying that expenditure reports should be reviewed by an accounting analyst within Public Health on a monthly basis. Additionally, in June 2010, Public Health circulated written policies and procedures to staff which noted that general support items should not be charged to the penalty accounts. . (See 2012-406, p. 30)

California State Auditor's Assessment of 1-Year Status: Fully Implemented

All Recommendations in 2010-108

Agency responses received after June 2013 are posted verbatim.