Report 2015-507 Recommendation 6 Responses

Report 2015-507: Follow-Up—California Department of Public Health: Laboratory Field Services Is Unable to Oversee Clinical Laboratories Effectively, but a Feasible Alternative Exists (Release Date: September 2015)

Recommendation #6 To: Public Health, Department of

To ensure it can provide effective oversight of labs as state law requires, Laboratory Services should work with Public Health's budget section and other appropriate parties in developing a process to assess the budget act annually and to adjust its fees accordingly. The process should include its management's review and approval of fee adjustments before it posts those fees publicly.

Annual Follow-Up Agency Response From June 2017

Public Health developed an annual process to determine whether Laboratory Field Services' application and renewal fees are sufficient to sustain its operations and meet required responsibilities. In May 2017, this process was approved and management and staff whose duties are impacted by this process were trained. Current fees are adequate to cover state fiscal year 2017-18 expenses for both the Clinical Laboratory Improvement Fund and the Tissue Bank Fund.

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

Public Health provided us with its revised policy related to fee adjustments, as well as evidence that Laboratory Field Services staff have been trained on this new policy. We reviewed the policy and agree that it implements our recommendation.

1-Year Agency Response

Laboratory Field Services (LFS) worked with the Department's Office of Legal Services, the budget section, and with Department management to review its authority to adjust fees on an annual basis. As a result of this review, LFS has recently completed an initial draft of policies and procedures for fees and other administrative aspects of the LFS program. The draft policies and procedures are currently being circulated for review and are anticipated to be finalized by December 2016. Once complete, training will be initiated for staff on the new policies and procedures.

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

6-Month Agency Response

The consultant provided recommendations to address concerns identified by CSA as well as those found during the consultant's own assessment. Laboratory Field Services (LFS) is working internally to identify best alternatives to execute these recommendations. LFS is also working closely with the Department's Office of Legal Services to assess statutory authority related to the program's ability to set fees. This legal assessment, anticipated to be completed in March 2016, will be used to help develop the department's process for setting program fees moving forward.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

CDPH has executed an agreement with a consultant to achieve three deliverables:

1) Assess LFS' budget, fee, revenue, and fiscal structures and identify improvements needed;

2) Provide LFS with a list of recommendations to resolve concerns identified by CSA as well as those found during the consultant's own assessment; and

3) Work with LFS to develop an implementation plan by December 1, 2015, with a corrective action plan in place by December 31, 2015.

The deliverables will be used by CDPH to develop a process to assess the budget act annually and adjust fees accordingly. Several meetings between LFS, the consultant, and the Budget Section's budget analyst have already been held. The CDPH's Office of Legal Services is reviewing related legal issues. A tracking tool was presented to monitor completion of agreement milestones including fiscal document review, budget issues, fee issues and fiscal structure.

California State Auditor's Assessment of 60-Day Status: Pending

The California Department of Public Health (Public Health)'s response discusses various plans for taking corrective action, including hiring a consultant. We will re-evaluate the status of this recommendation once Public Health substantiates the steps it has actually taken.

All Recommendations in 2015-507

Agency responses received are posted verbatim.