Report 2021-046 Recommendation 19 Responses

Report 2021-046: Proposition 56 Tobacco Tax: The Department of Health Care Services Is Not Adequately Monitoring Provider Payments Funded by Tobacco Taxes (Release Date: November 2022)

Recommendation #19 To: Finance, Department of

To ensure that Education can spend the funds that it was allocated in prior fiscal years, Finance should transfer the unspent portion of these funds to an account that Education can access by June 2023. Further, it should inform Education the funds are available to be spent.

1-Year Agency Response

Consistent with the California State Auditor's (Auditor) recommendations in Report 2021-046, the Department of Finance has determined the California Department of Education (Education) is owed $17,910,930.19 for its proportional share of Fiscal Year 2017-18 Proposition 56 funds.

Executive Order NO. E 22/23-135 transferring $15,233,233.08 to Education was submitted to the California State Controller (SCO) on January 20, 2023. On July 5, 2023, Finance submitted Executive Order NO. E 23/24-1 transferring $1,338,848.56 from Fund 3322 to Fund 3321. To complete the audit recommendation and consistent with the plan Finance provided to the Auditor in Finance's November 4, 2022 response to the audit and 6-month Implementation update, Finance will transfer $1,338,848.55 from Fund 3322 to Fund 3321 immediately after July 1, 2024. With this final transfer in July 2024, this audit finding will be fully implemented.

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

Executive Order E 22/23-135 transferred to Education approximately $15.2 million of the $17.9 million in funds Education is owed, and Finance has notified Education that the funds are available to be spent. We will consider the recommendation to be fully implemented after Finance transfers the remaining funds to Education's account.

6-Month Agency Response

Consistent with the California State Auditor's (Auditor) recommendations in Report 2021-046, the Department of Finance has determined the California Department of Education (Education) is owed $17,910,930.19 for its proportional share of Fiscal Year 2017-18 Proposition 56 funds.

Executive Order NO. E 22/23-135 transferring $15,233,233.08 to Education was submitted to the California State Controller on January 20, 2023. To complete the audit recommendation and consistent with the plan Finance provided to the Auditor in Finance's November 4, 2022 response to the audit and 60-day Implementation update, Finance will transfer $1,338,848.56 from Fund 3322 to Fund 3321 on July 1, 2023, and $1,338,848.55 from Fund 3322 to Fund 3321 on July 1, 2024.

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

Executive Order E 22/23-135 transferred to Education approximately $15 of the $17 million in funds Education is owed, and Finance has notified Education that the funds are available to be spent. We will consider the recommendation to be fully implemented after Finance transfers the remaining funds to Education's account.

60-Day Agency Response

Consistent with the California State Auditor's recommendations in Report 2021 046, the Department of Finance has determined the California Department of Education (Education) is owed $17,910,930.19 for it's proportional share of Fiscal Year 2017-18 Proposition 56 funds.

Executive Order NO. E 22/23-135 transferring $15,233,233.08 to Education was submitted to the California State Controller on January 20, 2023. Finance has notified Education the funds are available to be spent. To complete the audit recommendation, Finance will transfer $1,338,848.56 from Fund 3322 to Fund 3321 on July 1, 2023, and $1,338,848.55 from Fund 3322 to Fund 3321 on July 1, 2024.

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

We obtained Executive Order E 22/23-135 from Finance. This executive order transferred to Education approximately $15 of the $17 million in funds it is owed. Further, Finance notified Education that the funds are available to be spent. Once Finance transfers the remaining funds to Education's account, the recommendation will be considered fully implemented.

All Recommendations in 2021-046

Agency responses received are posted verbatim.