Report 2016-125.1 Recommendation 16 Responses

Report 2016-125.1: The University of California Office of the President: It Has Not Adequately Ensured Compliance With Its Employee Displacement and Services Contract Policies (Release Date: August 2017)

Recommendation #16 To: University of California

To maximize benefits from the systemwide procurement initiative and to ensure that the university uses those benefits for its teaching, research, and public service missions, the Office of the President should, if actual benefits are measurable, implement a process to monitor and report annually to the regents the estimated and actual benefits.

Annual Follow-Up Agency Response From October 2022

As noted in previous updates, UC Procurement Services is now monitoring and reporting on total estimated benefit and total actualized benefits.

UC Health currently provides regular benefit impact reports to the Regents and UC Health senior management.

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

UC demonstrated that this recommendation is fully implemented by providing relevant procedures, and an example report to the regents, from the processes it uses to measure or estimate procurement benefits.

Annual Follow-Up Agency Response From October 2021

As noted in previous updates, UC Procurement Services is now monitoring and reporting on total estimated benefit and total actualized benefits.

UC Health continues to implement approaches to measure actual benefits. Analytic tools have been deployed to delineate actual benefits; however, these tools have not been fully implemented due to the priority emphasis on COVID-19 response. UC Health is continuing efforts to expand and improve tools for reporting actual benefits. UC Health currently provides regular report out on impacts through each fiscal year to both the Regents and UC Health senior management.

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

Annual Follow-Up Agency Response From October 2020

UC Procurement Services is now monitoring and reporting on total estimated benefit and total actualized benefits. The report for Fiscal Year Ending June 30, 2020 is being published in November, 2020.

For UC Health, efforts have been completed to use utilization analytics to evaluate clinical value, which includes reduction in patient days, product usage reduction and improved patient outcomes. However, only a few categories have been implemented. Availability of clinical data and resources continue to be a challenge in order to complete full implementation of the utilization analytics.

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

Annual Follow-Up Agency Response From October 2019

UC Procurement Services is monitoring estimated and actual benefits and prepared to provide the UC Regents with a report for FY 19/20 and annually thereafter as required.

UC Health's benefits tracking application designed to demonstrate procurement-related cost benefit was fully implemented on July 1, 2019. The second phase, which will identify, track and record the clinical benefits is pending. Availability of clinical data and resources to work on this phase has limited the ability to complete this phase of the project.

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

1-Year Agency Response

UC Procurement Services has begun to address the technical requirements to enable this process. Resource availability is a limiting factor and is expected to result in a target completion of Q2, 2019.

UC Health continues to evaluate procurement and cost benefit for each initiative. Two new analytical tools have been identified and full implementation should be completed during the fourth quarter of calendar year 2018. The tools will provide UC Health clinical teams the ability to evaluate the clinical impact, current and future saving opportunities, and potential lost opportunities. The tools will also benchmark our work against other non-UC Health medical centers and this information will hopefully drive more system wide standardization and savings. Data used for the analyses are collected from the UC Health medical centers' procurement and financial databases and therefore, UC Health can evaluate the benefits of any contracting and saving initiatives.

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

6-Month Agency Response

The Office of the President oversees two systemwide procurement functions: UC Procurement Services and UC Health.

UC Procurement Services is striving to develop a reporting process to more clearly identify the reported benefits emanating from definite quantity contracts (contacts governing set quantity purchases) and those benefits emanating from requirement contracts (contracts governing large numbers of future transactions with benefit attainment dependent on forecasted purchases, volumes and contract adoption. This reporting process will include an annual report to the Regents.

Work on this project is anticipated to begin by June, 2018 with a target completion of December, 2018. The initial activity (identifying resources from IT, Campuses, and Systemwide Procurement to define the changes, develop definitions and processes, and make the needed software change) will lead to a project plan and a firmer completion date.

As stated in the responses herein, UC Health maintains a dashboard of its efforts and is currently looking at a new tool to improve its ability to monitor and report system wide and local initiatives. The new dashboard will provide the ability to track, measure, and report the benefits of each initiative. This dashboard will be used to share information with the executives and clinical teams of the UC Health medical centers and will be used as a report for the regents.

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

60-Day Agency Response

The Office of the President will review its reporting process to more clearly identify the reported benefits emanating from definite quantity contracts (contacts governing set quantity purchases) and those benefits emanating from requirement contracts(contracts governing large numbers of future transactions with benefit attainment dependent on forecasted purchases, volumes and contract adoption).

California State Auditor's Assessment of 60-Day Status: No Action Taken

Although the Office of the President indicates it will implement our recommendation, it has yet to take any actions to do so.

All Recommendations in 2016-125.1

Agency responses received are posted verbatim.