Report 2009-501 All Recommendation Responses

Report 2009-501: State Mandates: Operational and Structural Changes Have Yielded Limited Improvements in Expediting Processes and in Controlling Costs and Liabilities (Release Date: October 2009)

Recommendation #1 To: Mandates, Commission on State

To ensure that it resolves sufficiently its backlog of test claims, incorrect reduction claims, and the boilerplate amendment request, the Commission should work with Finance to seek additional resources to reduce its backlog, including test claims and incorrect reduction claims. In doing so, Commission staff should prioritize its workload and seek efficiencies to the extent possible.

Annual Follow-Up Agency Response From October 2013

The Commission worked with the Department of Finance to submit a Budget Change Proposal (BCP) for the addition of two new staff; an Attorney III and a Sr. Legal Analyst. The BCP was included in the adopted 13/14 budget and the new positions were filled in July 2013.

Prior to the BCP approval, the Commission took several steps to reduce the backlog using existing resources. Specifically, since 2001 the Commission has prioritized its workload and sought efficiencies through the preparation of an annual Backlog Reduction Plan. When the BSA audit findings were issued in October 2009, the Commission still had pending 53 test claims, 32 of which were large claims pleading regulations and statutes dating back to 1975 (i.e. the 2002-2003 claims) and 146 incorrect reduction claims (IRCs). As of this writing, there are 25 test claims and 82 IRCs pending, including new filings. Additionally, all test claims prior to 2007 have been decided and all test claims prior to 2010 will be decided by the end of the 2013 calendar year. The plan contemplates presenting all test claims filed through 2012-2013, with the exception of the 10 National Pollutant Discharge Elimination System (NPDES) permit test claims (which are pending litigation), to the Commission for decision by March 2014.

Once the test claims are completed, the Commission will be able to focus its efforts on completely eliminating the IRC backlog. Based on current pending caseload and staffing levels, Commission staff expects that the IRC backlog may be eliminated during the 2016-2017 fiscal year.

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

The Commission has received additional resources and is making significant progress in reducing its backlogs.

Annual Follow-Up Agency Response From September 2012

Commission staff discuss staffing and resource needs with Department of Finance staff and our Commission members on an ongoing basis each year. The Commission has submitted a Budget Change Proposal (BCP) for the 2013-14 budget year requesting additional staff resources.

Please note that the Commission and its staff took several steps to reduce the test claim backlog using existing resources. Beginning in 2011, staff has prepared an annual Backlog Reduction Plan to eliminate the backlog. When the BSA audit findings were issued in October 2009, the Commission still had pending 53 test claims, 32 of which were large claims pleading regulations and statutes dating back to 1975 (i.e. the 2002-2003claims). As of this writing, all 2002 test claims have been decided and the last of the 2003 test claims are scheduled for hearing on December 7, 2012. There are currently 36 test claims pending decision. The workplan indicates that the currently pending backlogged test claims may be decided by 2014 or 2015.

Staff also established a workplan to eliminate the incorrect reduction claim (IRC) backlog. The Commission has made progress on the IRC backlog, completing 61 IRCs since October 2009. Commission staff continues to work with the State Controller's Office and claimants to resolve the remaining 121 incorrect reduction claims. Though this process may take significantly longer than anticipated in the Commission's earlier workplans, we are making positive strides towards completing these claims and will continue to do so.

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

Recommendation #2 To: Controller's Office, State

To ensure that it can meet its responsibilities, including a heightened focus on audits of state mandates, the Controller should work with Finance to obtain sufficient resources.

Annual Follow-Up Agency Response From September 2012

When the final audit report was issued, the SCO had 33 of the 43 mandated cost audit positions filled. The 10 vacancies were held vacant due to economic uncertainties that could negatively impact the SCO's budget. As anticipated, effective June 30, 2010, the SCO lost funding for 11 positions. At that time, the SCO had 25 of the 32 mandated costs audit positions filled.

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

Recommendation #3 To: Controller's Office, State

The Controller should increase its efforts to fill vacant positions in its Mandated Cost Audits Bureau.

Annual Follow-Up Agency Response From September 2012

We worked closely with the Department of Finance to restore funding for the 10 vacant positions, which are identified in the 2010 Budget Act adopted October 8, 2010. However, of the ten positions requested, we lost four General Fund positions effective July 2, 2012, due to salary savings reductions. Consequently, we have 38 authorized positions. We currently have 37 filled mandated costs audit positions and are conducting interviews for the last vacant position.

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

Recommendation #4 To: Mandates, Commission on State

To ensure that it resolves sufficiently its backlog of test claims, incorrect reduction claims, and the boilerplate amendment request, the Commission should implement its work plan to address the Controller’s boilerplate amendment.

1-Year Agency Response

Related to the Controller’s amendment request, the Commission says it has completed amendments for all 49 mandates, determined before 2003, that were included in the request. (See 2011-406, p. 52)

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

Recommendation #5 To: Mandates, Commission on State

To promote the legislatively determined, joint, and Commission processes and to provide the necessary information to assess their success, the Commission should add additional information in its semiannual report to inform the Legislature about the status of mandates being developed under joint and Commission processes, including delays that may be occurring. If the Commission believes it needs a statutory change to implement this recommendation, it should seek it.

1-Year Agency Response

In September 2010 the governor approved Chapter 699, Statutes of 2010, requiring that the Commission’s semiannual report to the Legislature include information on the status of mandates being developed under joint and Commission processes, and any related delays in their development. The Commission also added information about alternative processes to its Web site. (See 2011-406, p. 53).

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

Recommendation #6 To: Mandates, Commission on State

To promote the legislatively determined, joint, and Commission processes and to provide the necessary information to assess their success, the Commission and Finance should inform local entities of these processes by making information about the alternatives readily available on their Web sites.

1-Year Agency Response

In September 2010 the governor approved Chapter 699, Statutes of 2010, requiring that the Commission’s semiannual report to the Legislature include information on the status of mandates being developed under joint and Commission processes, and any related delays in their development. The Commission also added information about alternative processes to its Web site. (See 2011-406, p. 53).

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

Recommendation #7 To: Mandates, Commission on State

The Commission should continue its efforts to work with the legislative subcommittee and other relevant parties to establish a reconsideration process that will allow mandates to undergo revision when appropriate.

1-Year Agency Response

In October 2010 the governor approved Chapter 719, Statutes of 2010, authorizing the Commission to adopt new test claim decisions upon a showing that the State’s Liability for a previously adopted decision has been modified on a subsequent change in law. (See 2011-406, p. 53)

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

Recommendation #8 To: Finance, Department of

To promote the legislatively determined, joint, and Commission processes and to provide the necessary information to assess their success, the Commission and Finance should inform local entities of these processes by making information about the alternatives readily available on their Web sites.

60-Day Agency Response

To provide information regarding reimbursable state mandates, including the processes for seeking a mandate determination, Finance added links on its Web site to the Commission’s and Controller’s Web sites. (See 2011-406, p. 53)

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

All Recommendations in 2009-501

Agency responses received after June 2013 are posted verbatim.