2024-114 State Health Care Staffing Contracts
Contract Workers Are a Small but Growing Proportion of Three State Facilities’ Workforces
Published: December 4, 2025
Audit Recommendations Disclosure
When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor’s assessment of auditee’s response based on our review of the supporting documentation.
Recommendations to the Legislature
Recommendation 1
To maximize the effectiveness of the State’s recruiting efforts, the Legislature should require CalHR to assemble and coordinate a cross-agency collaborative campaign to recruit medical and mental health care staff for state facilities statewide. CalHR should continue, modify, and improve such efforts until the State can achieve and maintain appropriate vacancy rates, as the Legislature determines. This campaign should include, but not be limited to, the following:
- A total compensation analysis, and adjust as appropriate, to ensure that all medical and mental health care classifications’ compensation is commensurate and competitive with similarly situated recruiting entities.
- The provision of online and in-person assistance for candidates during the application and testing process.
- The implementation of targeted efforts, including development of marketing materials, as appropriate, highlighting the benefits of state employment in California, to recruit candidates for specific job classifications and facility locations that are historically difficult to fill.
- The establishment of measurement metrics to track the results of each type of recruiting activity and test modifications to each strategy. These measurements should include, but not be limited to, the number of candidates who express interest, apply, interview, receive, and accept employment offers.
Agency response status:
Pending
Recommendations to California Department of Corrections and Rehabilitation
Recommendation 2
To improve Salinas Valley’s ability to recruit and retain medical and mental health care employees, CDCR should, by June 2026, do the following:
- Develop and implement a process to measure the effectiveness of each of its recruiting strategies and track those strategies’ costs.
Agency response status:
Pending
Recommendation 3
To improve Salinas Valley’s ability to recruit and retain medical and mental health care employees, CDCR should, by June 2026, do the following:
- Evaluate whether offering affordable housing options would improve Salinas Valley’s ability to recruit new state employees, and if so, explore options to develop or obtain additional affordable housing units for Salinas Valley’s staff and seek a funding allocation from the Legislature to do so.
Agency response status:
Pending
Recommendation 4
By December 2026, CDCR with Salinas Valley should comprehensively assess the technical, financial, legal, and operational impacts of implementing flexible shifts, including but not limited to, 8-, 10-, and 12-hour shift options for staff. Using the results of this assessment, they should develop concrete plans to address employee concerns related to scheduling flexibility to the extent feasible.
Agency response status:
Pending
Recommendation 5
To ensure transparency, increase accountability, and allow adequate oversight, CDCR should immediately require its facilities to establish a system to track, tabulate, periodically report to CDCR, and make publicly available the following:
- Staffing levels by shift, including the individuals’ classifications and whether they are state employees or contract workers.
- The number of shifts during which and the number of staff by which the facility fell short of its required shift-staffing minimums, as well as an explanation for why it missed the minimums.
Agency response status:
Pending
Recommendations to California Department of Developmental Services
Recommendation 6
To improve Porterville’s ability to recruit and retain medical and mental health care employees, DDS should do the following:
- With Porterville, develop and implement a process by June 2026 to measure the effectiveness of their recruiting strategies and track those strategies’ costs.
Agency response status:
Pending
Recommendation 7
To improve Porterville’s ability to recruit and retain medical and mental health care employees, DDS should do the following:
- To ensure that Porterville is competitive in the marketplace for health care professionals, conduct a salary survey, by December 2026, that compares the salaries and benefits it offers its health care workers to those offered by local public health care facilities, private health care facilities, and staffing agencies. DDS should use this survey in its discussions with CalHR and Finance.
Agency response status:
Pending
To improve Porterville’s ability to recruit and retain medical and mental health care employees, DDS should do the following:
- By June 2026, pilot and consider permanently implementing one- to three-day recruiting events that allow candidates to apply, interview, and receive a conditional job offer before the event’s conclusion.
Agency response status:
Pending
To improve Porterville’s ability to recruit and retain medical and mental health care employees, DDS should do the following:
- Evaluate by June 2026 whether offering affordable housing options would improve Porterville’s ability to recruit new state employees, and if so, explore options to develop or obtain additional affordable housing units for Porterville’s staff and seek a funding allocation from the Legislature to do so.
Agency response status:
Pending
Recommendation 10
By December 2026, DDS with Porterville should comprehensively assess the technical, financial, legal, and operational impacts of implementing flexible shifts, including but not limited to, 8-, 10-, and 12-hour shift options for staff. Using the results of this assessment, they should develop concrete plans to address employee concerns related to scheduling flexibility to the extent feasible.
Agency response status:
Pending
Recommendation 11
To ensure that its proposed budget accurately reflects its facilities’ operational needs, DDS should, by June 2026, develop comprehensive policies and procedures for its annual budgeting process that include the requirement that staff use appropriate models to evaluate facility staffing needs and seek adjustments to position authority as necessary.
Agency response status:
Pending
To ensure transparency, increase accountability, and allow adequate oversight, DDS should immediately require its facilities to establish a system to track, tabulate, periodically report to DDS, and make publicly available the following:
- Staffing levels by shift, including the individuals’ classifications and whether they are state employees or contract workers.
- The number of shifts during which and the number of staff by which the facility fell short of its required shift-staffing minimums, as well as an explanation for why it missed the minimums.
Agency response status:
Pending
Recommendations to California Department of State Hospitals
To improve Atascadero’s ability to recruit and retain medical and mental health care employees, DSH should do the following:
- With Atascadero, develop and implement a process by June 2026 to measure the effectiveness of their recruiting strategies and track those strategies’ costs.
Agency response status:
Not fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Pending
60-Day Agency Response
DSH-Sacramento identified two available software licenses for use by DSH-Atascadero (DSH-A) Recruitment Team as a pilot initiative to create customizable dashboards to visualize and analyze key metrics such as candidate leads and costs associated with in-person recruitment events (i.e. registration costs, travel costs, etc.). The use of additional technologies and strategies is being discussed, such as leveraging the existing LinkedIn contract, obtaining listings of licensees, and utilizing the existing CPS Human Resources contract to pursue candidate leads and access data to support expanded outreach and recruitment efforts. DSH-A has two full-time recruitment staff dedicated to planning and attending hiring events. DSH- A intends to track and monitor costs associated with recruitment events to determine if employee time and cost yielded the right candidate pool for hire.
To improve Atascadero’s ability to recruit and retain medical and mental health care employees, DSH should do the following:
- To ensure that Atascadero is competitive in the marketplace for health care professionals, conduct a salary survey, by December 2026, that compares the salaries and benefits it offers its health care workers to those offered by local public health care facilities, private health care facilities, and staffing agencies. DSH should use this survey in its discussions with CalHR and Finance.
Agency response status:
Not fully implemented
Date of implementation:
Dec. 2026
State Auditor assessment status:
Pending
60-Day Agency Response
DSH developed its salary survey workplan to include developing a salary survey methodology, meeting with subject matter experts to identify constraints, conducting market research, updating baseline compensation and conducting analysis to identify recommendations and findings to support future salary discussions with CalHR and Finance.
To improve Atascadero’s ability to recruit and retain medical and mental health care employees, DSH should do the following:
- By June 2026, pilot and consider permanently implementing one- to three-day recruiting events that allow candidates to apply, interview, and receive a conditional job offer before the event’s conclusion.
Agency response status:
Not fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Pending
60-Day Agency Response
DSH-Atascadero, in collaboration with the DSH Recruitment Unit in Sacramento, developed a workplan to conduct three to four recruitment/rapid hiring events by June 2026. The first event will be held in March 2026 targeting Registered Dietitians (RD), after obtaining lessons learned from an RD event at Napa State Hospital being held early 2026. In April of 2026, DSH will conduct an in-person and onsite job fair and rapid hire event targeting Psychiatry, Psychology, Clinical Social Work, Psychiatric Technician, Registered Dietitian, and Rehabilitation Therapist classifications. To gain interest of potential candidates outside of the San Luis Obispo county area, DSH intends to hold a virtual information fair for the same classifications mentioned for our in-person event. Similar to the in-person event, the virtual fair will also provide candidates with the opportunity to be interviewed and a contingent job offer presented same day. DSH will also be considering an offsite venue to hold a recruitment event to potentially attract passive candidates.
To improve Atascadero’s ability to recruit and retain medical and mental health care employees, DSH should do the following:
- Evaluate by June 2026 whether offering affordable housing options would improve Atascadero’s ability to recruit new state employees, and if so, explore options to develop or obtain additional affordable housing units for Atascadero’s staff and seek a funding allocation from the Legislature to do so.
Agency response status:
Will not implement
Date of implementation:
N/A
State Auditor assessment status:
Will not implement
60-Day Agency Response
DSH disagreed with the recommendation of evaluating whether additional affordable housing units would improve recruitment as well as seeking funding to develop such housing units. DSH-Atascadero already has some housing it makes available to staff on a temporary basis and includes in job advertisements to assist as a recruitment tool. There is also a project to develop affordable housing on the front part of the campus in accordance with Executive Order N-06-19, which may provide the opportunity for staff to obtain access to the additional housing. Additionally, DSH has other priority infrastructure needs it must evaluate and prioritize for funding such as those impacting patient housing units, e.g. roof projects, water and wastewater treatment, anti-ligature risks, and electrical infrastructure.
Public Reasoning Behind State Auditor 60-Day Assessment
Given Atascadero’s difficulty recruiting and retaining medical and mental health care employees and its high vacancy rates in those positions, and given that the high cost of living in Atascadero creates challenges with recruiting those employees, we are concerned about DSH’s decision to not implement our recommendation to evaluate whether offering affordable housing options would improve Atascadero’s ability to recruit new state employees.
By December 2026, DSH with Atascadero should comprehensively assess the technical, financial, legal, and operational impacts of implementing flexible shifts, including but not limited to, 8-, 10-, and 12-hour shift options for staff. Using the results of this assessment, they should develop concrete plans to address employee concerns related to scheduling flexibility to the extent feasible.
Agency response status:
Not fully implemented
Date of implementation:
Dec. 2026
State Auditor assessment status:
Pending
60-Day Agency Response
DSH-Atascadero will evaluate flexible work schedules across its 24-hour facility and determine if further expansion of alternate work week schedules is operationally feasible. To understand facility impacts, DSH will analyze current staffing needs and determine where coverage is rigid versus adaptable for nursing and clinical team member classifications. DSH-Atascadero will be reviewing workforce data and gathering employee input through focus group discussions and surveys and union collaboration. Patient care and safety primarily define the boundaries of what types of flexible scheduling can be offered to the workforce, however legal requirements, union contracts and fiscal impacts will also be considered. A detailed report will be created explaining our current practice, what we evaluated/analyzed and what changes would be adopted to assist with recruitment and retention efforts for civil service employees.
To ensure that its proposed budget accurately reflects its facilities’ operational needs, DSH should, by June 2026, develop comprehensive policies and procedures for its annual budgeting process that include the requirement that staff use appropriate models to evaluate facility staffing needs and seek adjustments to position authority as necessary.
Agency response status:
Pending
Recommendation 19
To ensure transparency, increase accountability, and allow adequate oversight, DSH should immediately require its facilities to establish a system to track, tabulate, periodically report to DSH, and make publicly available the following:
- Staffing levels by shift, including the individuals’ classifications and whether they are state employees or contract workers.
- The number of shifts during which and the number of staff by which the facility fell short of its required shift-staffing minimums, as well as an explanation for why it missed the minimums.
Agency response status:
Not fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Pending
60-Day Agency Response
DSH partially agreed with this recommendation. It agreed to develop a policy directive that defines the staffing requirements and to implement additional reporting requirements to provide increased oversight on whether hospitals are meeting staffing levels. DSH, however, did not agree with the specified detail level of reporting recommended in the Audit recommendation. DSH developed a policy concept to revise Special Order (SO) 252: Minimum Nursing Staff to Patient Ratios and convert it to a policy directive. This policy concept was approved by the Executive Team on September 18, 2025, and the policy directive is under development. The reviews and approval of the draft policy directive will follow established policy development governance process, consistent with DSH Policy Directive 0200 Development Process for Policy Directives, Operational Procedures, and Informational Bulletins, prior to implementation. Once the policy directives are approved by the Executive Team, training will be rolled out at the hospitals for Executive Teams and the Staffing Offices. Anticipated completion date: March 30, 2026.DSH is actively working on a technology solution to report daily staffing levels at all five (5) facilities. The report will be the Over/Under report and will provide the hospitals and DSH Sacramento Leadership staffing levels for each hospital by unit by shift including the classification to ensure all DSH units are staffed to court ordered minimums. Anticipated completion date: June 30, 2026. DSH is also in the process of revising the Nurse Administrators Bi-Annual Governing Body Report to include a section for Nursing Staffing Ratios Compliance, detailing each hospital’s compliance with minimum nursing staff levels. The report will include the number of shifts by facility when minimum staffing was not achieved and will include the date, unit, shift, classification, and the reason minimums were not achieved. Anticipated completion date: April 30, 2026.
