Report 2021-102 All Recommendation Responses

Report 2021-102: Indian Gaming Special Distribution Fund: The State Could Better Manage Its Distribution Fund and Its Problem Gambling Programs (Release Date: August 2022)

Recommendation for Legislative Action

To ensure that the distribution fund maintains a prudent balance, the Legislature should require Finance to collaborate with the Gambling Commission to determine an appropriate reserve fund balance. The Legislature should then appropriate the excess reserve consistent with federal and state law. For example, it could increase the funding for the problem gambling prevention and treatment programs or it could return excess funds to tribes by refunding a portion of distribution fund fees.

Description of Legislative Action

As of March 27, 2023, the Legislature has not taken action to address this specific recommendation.

California State Auditor's Assessment of 6-Month Status: No Action Taken

Description of Legislative Action

As of October 21, 2022, the Legislature has not taken action to address this specific recommendation.

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

Recommendation for Legislative Action

To ensure that the distribution fund receives the remaining amount loaned to the Charity Bingo Mitigation Fund, the Legislature should appropriate $1.7 million plus interest from the State's General Fund to repay the loan.

Description of Legislative Action

SB 72 (Skinner, 2023) and AB 221 (Ting, 2023) would both, as part of the Budget Act of 2023, transfer $1,904,000 from the General Fund to the Charity Bingo Mitigation Fund and would appropriate that same amount from the Charity Bingo Mitigation Fund to the Department of Justice.

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

Description of Legislative Action

As of October 21, 2022, the Legislature has not taken action to address this specific recommendation.

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

Recommendation for Legislative Action

To determine the amount for the nontribal activities that the Bureau paid for using the distribution fund during fiscal years 2015-16 through 2019-20, the Legislature should require the Department of Justice's Bureau of Gambling Control to calculate and report that information to the Legislature by April 2023. To compensate the distribution fund for these improper expenditures, the Legislature should then create a special appropriation to reimburse the distribution fund.

Description of Legislative Action

As of March 27, 2023, the Legislature has not taken action to address this specific recommendation.

California State Auditor's Assessment of 6-Month Status: No Action Taken

Description of Legislative Action

As of October 21, 2022, the Legislature has not taken action to address this specific recommendation.

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

Recommendation #4 To: Finance, Department of

To ensure that the conditions requiring tribes to make additional payments into the distribution fund have been fulfilled, Finance should, by December 2022, determine annually whether the distribution fund has satisfied the terms of the relevant compacts and immediately notify the Governor's Office when these provisions have been met.

6-Month Agency Response

Finance has fully implemented the recommendation by having notified the Governor's Office in February 2023 of whether the Indian Gaming Special Distribution Fund has had sufficient funding to fulfill its purposes for at least three consecutive years.

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

60-Day Agency Response

To implement this recommendation, revised Indian Gaming Special Distribution Fund revenues and expenditure data are necessary to determine whether the Fund has had sufficient pro rata funding to fulfill its purposes for at least three consecutive years. The Gambling Control Commission expects to submit this data to the Department of Finance by early December. Upon receipt of this information, Finance can verify whether the Fund has sufficient pro rata funding to fulfill its purposes for at least three consecutive years. Finance expects to provide the Governor's Office with this information by the end of December 2022.

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

Recommendation #5 To: Justice, Department of

To ensure that it compensates the distribution fund for improper charges for nontribal activities including card room and other enforcement activities, by October 2022, the Bureau should do the following:

-Reimburse the funds due to the distribution fund for time that employees spent working on nontribal activities during fiscal years 2020-21 through 2021-22.

-Establish and implement a policy requiring supervisory review and approval of its periodic reimbursements to the distribution fund, as necessary, for time that employees spend on nontribal activities.

6-Month Agency Response

The Bureau has reimbursed the Special Distribution Fund for Fiscal Year 2020-21.

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

60-Day Agency Response

The Bureau has reimbursed the fund for fiscal year (FY) 2021-22. For FY 2020-21, the Bureau has identified the total amount to be reimbursed to the SDF and is in the process of making that adjustment.

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

Because the bureau has not yet reimbursed the distribution fund for 2020-21, it has not yet fully implemented this recommendation.

Recommendation #6 To: Justice, Department of

To ensure that its employees allocate their activities to the correct funding sources, the Bureau should:

-Formalize procedures for employees on how to properly track their time, including which activities may be charged to the distribution fund, and provide training on those procedures by October 2022.

-Conduct quarterly audits of employee timekeeping to ensure that employees appropriately track their time and that supervisors appropriately review and approve employee timesheets, beginning with the first quarter of fiscal year 2022-23.

-Continue with its planned rollout of a new timekeeping system in January 2025 and ensure that the new system does not allow employees to charge nontribal activities to the distribution fund.

1-Year Agency Response

The Bureau continues to work on the new time reporting system.

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

6-Month Agency Response

The Bureau continues to work on the new time reporting system.

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

60-Day Agency Response

In October 2022, the Bureau provided time reporting system training and distributed procedures to its enforcement staff. In addition, the Bureau conducted its first quarterly audit in October 2022. Lastly, the Bureau continues to work on the project to replace its timekeeping system.

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

Although the Bureau addressed the first two portions of our recommendation, because it has not yet implemented its new timekeeping system, we have assessed this recommendation as partially implemented.

Recommendation #7 To: Justice, Department of

To ensure that it uses the distribution fund only for appropriate purposes, the Bureau should cease its use of the fund to pay for nontribal activities and instead pay for those activities using an appropriate source, such as the General Fund.

60-Day Agency Response

The Bureau has provided the updated policy to impacted staff, supervisors, and managers outlining the requirements for properly documenting their time.

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

Recommendation #8 To: Public Health, Department of

To ensure that its training conference expenditures are reasonable, the Office of Problem Gambling should, beginning with its next planned catering expenditure, obtain quotes from multiple vendors, document those quotes, and select the vendor that offers the best value.

6-Month Agency Response

All Substance and Addiction Prevention Branch (SAPB) staff (including those in the Office of Problem Gambling) received guidance on procurement standard operating procedures, including obtaining quotes from multiple vendors, documenting and storing received quotes, and selecting the best value. This was provided in an All-Staff meeting (includes all staff and supervisors) on January 18, 2023. Procurement procedures are documented in the SAPB SharePoint site and will be included as part of on-boarding for new procurement staff. (See Attachment 2 - Contracts-PurchasingSOP.pdf)

The Office continues to have no planned catering expenditures as 2023 conferences will be held online.

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

60-Day Agency Response

To date, the Substance and Addiction Prevention Branch and Office of Problem Gambling (Office) leadership have:

- Reviewed existing Office procurement procedures

- Reviewed best practices in the State Administrative Manual, State Contracting Manual, and Public Health Administrative Manual

- Provided training to all Office staff, covering the Public Health Contract and Purchasing System

The Office has no planned catering expenditures planned for FY 2022-23. All training conferences have been moved online, following the in-person 2020 training.

Between now and November 30, 2022, the Substance and Addiction Prevention Branch will develop standard operating procedures (SOPs) for procurement, contracts, and record-keeping and will provide to Office leadership. SOPs will include guidance on obtaining quotes from multiple vendors, documenting and storing received quotes, and guidance on selecting for best value. By December 30, 2022, all Office staff will be trained on the new SOPs and will apply these procedures for future training conferences.

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

Recommendation #9 To: Public Health, Department of

To ensure that it is able to adequately evaluate its progress toward meeting program goals in its next strategic plan, by February 2023 the Office of Problem Gambling should revise its existing goals. As a part of that process, the office should require staff to do the following:

-Create policies or procedures that guide the quarterly Advisory Group meetings, the development and assessment of its strategic plans, and the evaluation of its programs for these processes.

-Create measurable goals with quantifiable metrics and include them in its strategic plans.

-Evaluate progress toward meeting its goals at least biennially.

-Include any effort remaining to meet program goals in its biennial evaluations.

-Record all Advisory Group meeting minutes and document decisions reached during these meetings.

6-Month Agency Response

The Office of Problem Gambling (Office) has:

- Completed the strategic planning process and finalized a strategic plan for 2023-2027. (See Attachment 3 - OPG_Strategic Plan_2023-2027_Final.pdf)

- Shared the strategic plan with staff and stakeholders.

- Created an evaluation process document to outline requirements, roles, and responsibilities associated with biannual strategic planning. (See Attachment 4 - OPG Program Evaluation Policy 2022_Final.docx)

- Finalized the Advisory Group policies and shared policies with staff and Advisory Group. (See Attachment 5 - OPG Advisory Group Policy 2022_Final.docx)

- Held one new Advisory Group meeting (January 25, 2023) under the new policies. (See Attachemnt 6 - OPG Advisory Group_1.25.23_Minutes_Poll Results_Attendance.pdf)

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

60-Day Agency Response

To date, the Office of Problem Gambling (Office) has:

- Provided all staff with an overview of specific, measurable, attainable, relevant, and time-bound (SMART) objectives to integrate best practices in goal setting throughout Office programs.

- Evaluated and provided clarification, where needed, on the existing informal procedures for holding the Advisory Group meetings; outlined elements to begin drafting protocol documents to guide future Advisory Group meetings.

- Held one Advisory Group meeting (August 30, 2022); while the protocol document is still under development, the Office implemented key elements such as recording the meeting; meeting minutes are under development.

- Developed a scope of work and timeline for Office strategic planning activities.

- Initiated contract (under development) to support strategic planning.

- Initiated plans for biennial evaluation of program, including meeting with the Chief of Substance and Addiction Prevention Branch Epidemiology and Evaluation Unit.

Future steps will include drafting and finalizing protocols to guide the advisory group operations, strategic plan, and biennial evaluation of program.

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

Recommendation #10 To: Public Health, Department of

To ensure that it can better identify which populations need problem gambling prevention or treatment services and the factors that contribute to problem gambling, the Office of Problem Gambling should, as soon as possible, obtain data on the number of Californians who currently suffer or have recently suffered from problem gambling. The office should also update this information annually and use it to identify the locations and populations most in need of program service and to evaluate how well it is serving that population. Until it obtains this information, the office should take additional steps to determine whether it is providing services to a reasonable number of individuals by comparing its programs to those in other states.

1-Year Agency Response

-The Office analyzed pooled data from the 2018, 2020, and 2021 California Behavioral Risk Factor Surveillance Surveys. Of California (CA) adults who responded:

o 1% of the population surveyed reported a problem gambling (PG) behavior in the past year. Extrapolated to CA's adult population, about

304,650 people experienced at least one PG behavior during the past year.

o Of those who reported gambling in the past year, 4.8% reported symptoms of PG.

-The Office is participating in the California Health Interview Survey, providing a larger and more detailed reporting of PG by demographic group. Estimated availability is Spring 2025.

-The Office consulted with the National Association of Administrators of Disordered Gambling Services (NAADGS) to review the 2021 Survey of Publicly Funded PG Services in the U.S. data. CA ranked 2nd in the U.S. for public funds invested in PG services, but 27th in per capita invested in PG services.

-The Office examined the PG treatment rate per 100,000 adults and compared to the per-capita investment in other large states (population of 5 million or more).

-CA's treatment rate (2.85 per 100k adults; per capita investment in PG services $0.22) is comparable to large states with similar per capita investment rates (NY and NC). CA's investment in PG lags behind other large states with higher treatment rates (IL and OH).

-The Office aligns with the NAADGS research, finding the number of problem gamblers treated significantly correlated with total amount spent on PG services. See (Figure 45, pg. 71 of the survey report) of the 2021 Survey of Publicly Funded Problem Gambling Services in the United State.

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

6-Month Agency Response

Activities remain on-track.

- OPG's request to participate in the California Health Interview Survey (CHIS), which will provide a more sufficient sample size to better understand prevalence of problem gambling behaviors in California, was approved.

- The comparison to other state treatment services programs will be complete by June 2023. Substance and Addiction Prevention Branch has identified one staff person to support this effort for the Office.

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

60-Day Agency Response

While the Office has participated in the state's BRFSS survey in 2018, 2020, and 2021, the sample size of BRFSS may be inadequate to accurately estimate population levels of problem gambling behaviors. Therefore, the Office has taken the following additional actions:

- Analyzed existing BRFSS data sets over multiple years. Known as "pooling," this analytic technique would combine data over multiple years to generate a three- or five-year estimate. Pending the results of this analysis, pooled results may be available in Spring 2023.

- Initiated contact with the CHIS, which will provide a more sufficient sample size to better understand prevalence of problem gambling behaviors in California. The request to participate is under review; pending approval, the Office will participate in CHIS in the 2023-24 cycle and will seek out sustainable funding for ongoing annual cycles.

Future steps will involve working with national partners such as NAADGS to evaluate whether California's treatment program provides services to a reasonable number of individuals, by comparing to treatment services provided in other states. Program will prioritize this project as an interim step until population-level survey data are available.

To improve data collection, no later than June 30, 2023, the Office will:

- Conduct a comparison to other state treatment services programs.

- Provide preliminary population-level problem gambling estimates based on pooled BRFSS data over multiple years.

- Work toward a better understanding of population-level problem gambling data through participation in CHIS; note, these data will not be available until 2024/25.

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

All Recommendations in 2021-102

Agency responses received are posted verbatim.