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:
Not fully implemented
Date of implementation:
1/1/2027
State Auditor assessment status:
Pending
60-Day Agency Response
CCHCS is evaluating and expanding our current tracking mechanisms and analytics. The enhancements will review current tracking metrics to determine, if any, additional information is needed to assess recruitment strategies and costs.
CCHCS is evaluating the recommendation for possible implementation.
6-Month Agency Response
CCHCS marketing and recruiting efforts were implemented with reporting, tracking, and costing analysis in 2025. In 2026, CCHCS prepared and, is in the final stages of launching, its organization-facing marketing and outreach dashboard. Full cost analysis per classification is in further development with planned implementation by January 2027.
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:
Not fully implemented
Date of implementation:
1/1/2027
State Auditor assessment status:
Pending
60-Day Agency Response
CCHCS is evaluating this recommendation regarding the ability to potentially offer affordable housing, the equity of focusing on new to state employees, engaging internal and external stakeholders. Additionally, researching applicable laws, rules, and regulations to determine the regulatory requirements associated with this recommendation.
CCHCS is evaluating the recommendation for possible implementation.
6-Month Agency Response
A six-month timeline is not sufficient to fully conduct a thorough evaluation of affordable housing options due to:
- Preliminary evaluation limitations: Existing space and resource constraints limit the ability to produce a complete analysis within the current timeframe.
- Equity considerations: Targeting only new to state employees for potential affordable housing options would be inequitable and could create unintended disparities among the workforce.
- Budget development timeline: Any request for budgetary resources would require significantly more time to develop, vet, and align with standard budget cycles.
- A determination is still pending, and evaluation efforts remain underway.
Public Reasoning Behind State Auditor 6-Month Assessment
We look forward to reviewing CDCR’s progress implementing our recommendation in its one-year response.
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:
Not fully implemented
Date of implementation:
1/1/2027
State Auditor assessment status:
Pending
60-Day Agency Response
CCHCS is currently assessing the operational feasibility of implementing flexible shifts.
CCHCS is evaluating the recommendation for possible implementation.
6-Month Agency Response
Recommendations are still under evaluation. Comprehensive assessments are in progress and final determinations have not been made.
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:
Not fully implemented
Date of implementation:
1/1/2027
State Auditor assessment status:
Pending
60-Day Agency Response
CCHCS is evaluating current systems and processes for documenting and reporting. CCHCS is evaluating the recommendation for possible implementation.
CCHCS is in the process of evaluating this recommendation and the feasibility of a power application. CCHCS is evaluating the recommendation for possible implementation.
6-Month Agency Response
Recommendations are still under evaluation. Comprehensive assessments are in progress and final determinations have not been made.
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:
Not fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Pending
60-Day Agency Response
The Department has developed a centralized tracking spreadsheet to document recruitment and outreach activities, capturing the type of outreach event, associated costs, number of staff participating, and measurable outcomes such as applications received, interviews conducted, and hires made when applicable. After each event concludes, Porterville will use the data collected from digital sign-in sheets to send follow up communications to all candidates, collect metrics on total leads obtained throughout the year, and cross-reference specific job controls in ECOS against sign in data to evaluate the effectiveness of individual events as they relate to targeted groups. In August 2025 Porterville launched a questionnaire aimed to determine where participants of recruitment fairs learned about employment opportunities with the Department. The Department commits to refining and fully implementing this tracking process for all recruitment activities by June 2026, ensuring consistent documentation, follow-up, and evaluation to improve the efficiency and impact of recruitment efforts.
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:
Not fully implemented
Date of implementation:
Dec. 2026
State Auditor assessment status:
Pending
60-Day Agency Response
The Department has developed a standardized survey, outlining the specific compensation elements and job classifications to be evaluated. The Department has also identified the local and regional health care facilities and agencies to which the survey will be distributed. Survey results will be analyzed to identify market gaps and used to inform discussions with California Department of Human Resources (CalHR) and the Department of Finance regarding potential salary adjustments, recruitment differentials, and other compensation strategies to improve recruitment and retention at Porterville.
In addition, CalHR supports state departments by providing strategies to address hard-to-fill positions, including those identified in the audit report. CalHR has provided guidance on focused recruitment strategies, and the Department will continue to work with CalHR to ensure recruitment efforts remain coordinated and aligned.
Lastly, the Department met with the CalHR on January 22, 2026, to collaborate on the development of a statewide marketing platform. As part of this effort, CalHR will launch a targeted webpage on the Work for California website to attract private and public sector (including displaced federal worker) talent and highlight California loan repayment programs that support the state’s recruitment efforts.
6-Month Agency Response
The Department has initiated outreach to 13 major private-sector hospitals and medical centers surrounding Porterville Developmental Center to obtain compensation and benefits information for comparable health care classifications. The Department will use the information gathered through this salary analysis to better assess market competitiveness and to inform ongoing discussions with CalHR regarding recruitment and retention challenges, compensation considerations, and workforce needs at Porterville Developmental Center.
The Department anticipates completing this salary analysis by December 2026.
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:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Pending, Department did not substantiate its claim of full implementation
60-Day Agency Response
The Department has an existing career fair planned at Department headquarters, and as part of this effort, Porterville classifications will be incorporated into the event. Porterville staff will attend to observe and participate in the facilitation of recruitment activities, including candidate engagement, interviewing, and hiring processes, to support the successful implementation of similar onsite recruitment events at Porterville.
These recruitment fairs will incorporate onsite interviews conducted by dedicated hiring panel members who are trained and authorized to evaluate candidates. During these events, the Department will also perform verification of minimum qualifications and required licenses, when applicable, to ensure candidates meet classification requirements prior to advancing in the hiring process. When feasible, these efforts will support the ability to extend conditional job offers on the same day. Employees will be available onsite to provide hands-on assistance with creating and navigating CalCareers accounts, submitting applications, and responding to job postings, in order to reduce administrative barriers for potential applicants.
Porterville conducted its first expedited hiring event in December 2025, specific to Pre-Licensed Psychiatric Technicians and was successful in extending contingent offers to 23 candidates.
Public Reasoning Behind State Auditor 60-Day Assessment
DDS provided documentation demonstrating that Porterville conducted an application-assistance event in December, 2025. We look forward to reviewing additional information regarding DDS’s planned career fair or other events with DDS’s 6-month submission.
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:
Not fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Pending
60-Day Agency Response
The Department is evaluating available housing and conducting an assessment with the Department of General Services (Project 000000000016399, Project Director Andrew Hortz).
6-Month Agency Response
The Department of General Services continues to develop the housing assessment, which remains on track for completion in June 2026. Once the assessment is received, the Department will review the assessment and explore opportunities to update or construct additional staff housing at PDC.
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:
Fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Pending, Department did not address all aspects of the recommendation
60-Day Agency Response
The department continues assessing the opportunity for flexible shifts. As previously noted, the Department has met with CalHR and will be meeting with Labor organizations when appropriate. Opportunities for shift and day adjustments must be in concert with collective bargaining unit agreements and current structures of post and bid, which offers the flexibility for staff to pick shift and day off rotation based on seniority.
6-Month Agency Response
The department continues its ongoing assessment of assessing the opportunity for flexible shifts. As previously noted, the Department met with CalHR and will be meeting with Labor organizations representing employee concerns when appropriate. The Department considers this recommendation fully implemented, within the context of collective bargaining.
Public Reasoning Behind State Auditor 6-Month Assessment
We will continue to monitor Developmental Services’ efforts to assess the technical, financial, legal, and operational impacts of implementing flexible shifts, and develop concrete plans to address employee concerns related to scheduling flexibility to the extent feasible.
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:
Fully implemented
Date of implementation:
Jan. 2026
State Auditor assessment status:
Pending, Department did not address all aspects of the recommendation
60-Day Agency Response
The Governor’s Budget for 2026-27 was released in early January. The Department continues to budget appropriately to meet its obligations and responsibilities. The proposed budget includes redirection of 70 positions and associated funding within the Department, as described in the online budget displays (https://www.dds.ca.gov/transparency/budget-information/) for transparency.
Public Reasoning Behind State Auditor 6-Month Assessment
The staffing methodology, estimates, and formulas included in the budget documents DDS provided are not a policy, procedures, or requirement for staff to use appropriate models to evaluate facility staffing needs. We would expect to see such policies, procedures, and requirements as part of DDS’s full implementation of our recommendation. We look forward to reviewing any such policies and procedures DDS provides with its 6-month submission.
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:
Will not implement
State Auditor assessment status:
Will not implement
60-Day Agency Response
The Department will not implement this recommendation.
Public Reasoning Behind State Auditor 6-Month Assessment
We are disappointed that DDS has chosen not to implement our recommendation. As we stated in our report, a 1981 court order required DDS’s facilities to meet certain staffing minimums for nursing care, post the minimum staffing requirements for each shift, tabulate the number of people by which each shift fell short, and aggregate this information in a quarterly report to headquarters. Although the court order is likely no longer enforceable, its requirements serve as a best practice for accountability, transparency, and effective oversight of facilities’ medical and mental health staffing. Without such oversight, DDS cannot be certain that its facilities are staffed appropriately for each shift to provide adequate medical and mental health care.
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:
Fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Fully implemented
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.
6-Month Agency Response
The DSH-Atascadero (DSH-A) Hiring & Recruitment team, in partnership with the DSH-SAC Organizational Development Unit, has implemented the use of a software tool to monitor recruitment strategies and expenditures for their effectiveness. Currently, the team operates with two (2) system licenses assigned to the Hiring & Recruitment Manager and the lead Recruitment Coordinator. Comprehensive 2026 event data, including participant engagement metrics and logistical costs, have been integrated into the platform and specialized dashboards and workflows are being developed. While the team is leveraging the software tool to enhance reporting, track strategies’ costs and automate productivity, they have identified specific technical limitations regarding integration with State hiring systems, like CalCareers and the Exam and Cert Online System (ECOS). Consequently, additional manual tracking remains necessary to ensure accuracy as candidates progress through the recruitment process. The team remains committed to exploring advanced platform features to further refine data visualization and operational efficiency.
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.
6-Month Agency Response
Since the last project update in February 2026, a project workplan memorandum was drafted and approved in April 2026. The memorandum provides a clear understanding of the project’s background, purpose, scope, and key deliverables, while also outlining the governance structure, project timeline, and strategic value to the department. The project team collaborated with the Procurement Office to begin developing a matrix that will establish comparison regions, public versus private sector data, and compensation elements related to the contract staff utilized by the department. The Procurement Office provided the requested information to the project team on May 8, 2026, and the project team is currently analyzing the data to develop the matrix framework. The team also worked with DSH-A on the focus classifications identified through the CSA audit, including determining the appropriate class titles and class codes based on the audit categories.
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:
Fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Fully implemented
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.
6-Month Agency Response
DSH-A hosted its annual Career Fair on April 18, 2026. There were 129 total attendees, the largest turnout for a DSH-A-hosted Career Fair post-pandemic. Booths hosted by Subject Matter Experts (SMEs) were available for every department at DSH-A. A computer lab was available for attendees to set up a CalCareers account, complete a state application, take an exam, and apply for vacant positions. Mock interviews were offered to help attendees become familiar with the State merit-based interview process, and multiple presentations on “How to Get a State Job” and “Application and Interview Tips & Techniques” were held. Fast-track hiring was offered for the Staff Psychiatrist, Clinical Psychologist, Clinical Social Worker, Rehabilitation Therapist, Registered Dietitian, and Psychiatric Technician classifications. Interviews were offered on-site for individuals who applied and were eligible. From the fast-track hiring, contingent job offers were made to six individuals: three Clinical Social Workers and three Rehabilitation Therapists. No applications were submitted or interviews held for Psychologist, Psychiatrist, Registered Dietitian, or Psychiatric Technician. A survey of the event was offered, and seventy (70) responses were received, all of which indicated the information and assistance received during the event helped them understand how to start a career with DSH-A. The survey also asked attendees how they heard about the event, with word of mouth from a Friend/Family being the top answer (28), followed by an email from a recruiter (13), and third being social media (Instagram/Facebook) (11).
DSH-A, in collaboration with the DSH-Sacramento, held a Virtual Career Fair with Fast-track hiring on May 19, 2026. The event yielded 14 attendees, including two Psychiatrists, nine Psychologists, and three Registered Dietitians. DSH-A is following up on the leads.
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
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.
6-Month 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-A 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 6-Month 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.
6-Month Agency Response
DSH-A requested employee input through surveys. Surveys were sent out to staff (nursing and clinical team members) in May. DSH-A received 154 responses to Nursing Survey and 69 responses to the Work schedule satisfaction survey. Once the survey results are analyzed DSH-Atascadero will look at established alternate work schedules and review vacancies within these shifts to determine if further alternate work schedules can be offered. For the clinician satisfaction survey, the results will be reviewed for the need and interest of additional alternate schedules.
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:
Not fully implemented
Date of implementation:
June 2026
State Auditor assessment status:
Pending
60-Day Agency Response
DSH has drafted Policy Concepts to cover the annual budgeting process. The subsequent policy directives and corresponding Operational Procedures will be drafted for approval following the established policy development governance process, consistent with DSH Policy Directive 0200 Development Process for Policy Directives, Operational Procedures, and Informational Bulletins, prior to implementation.
6-Month Agency Response
DSH has developed draft Policy Directive and Operational Procedures for Budget Development and Budget Implementation to address the audit recommendation. Policy Directives and Operational Procedures that have been developed include:
- Policy Directive 2209 – Budget Development
- Admin-OP-2209a – State Operations Budget Development
- Admin-OP-2209b – Budget Change Concepts (BCCs) and Budget Change Proposals (BCPs)
- Admin-OP-2209c – Enrollment Caseload and Population (ECP) Estimate Development
- Admin-OP-2209d – Capital Outlay and Five-Year Planning
- Policy Directive 2211 – Budget Implementation
- Admin-OP-2211a – Hospital Allotment Process
- Admin-OP-2211b – Sacramento Allotment Process
These policies are moving through the approval process. The drafts are expected to be approved by the Executive team in June 2026.
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:
July 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.
6-Month 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 detailed 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. A policy directive “Minimum Nursing Staff to Patient Ratios” has been drafted. The draft policy directive is currently under internal review, with Executive Team approval anticipated in July 2026. The revised policy includes minimum staffing ratios and nursing hours required by court order, California Health and Safety Code, and California Code of Regulations Title 22 that are applicable to DSH’s acute, intermediate, skilled nursing facility and enhanced treatment program units. The policy also outlines the hospitals tracking, monitoring, notification and reporting requirements relative to nursing staffing levels.
An “Over/Under Report” has been created and is currently in the development phase for all DSH hospitals to validate the methodology used for the various unit types. The report utilizes threshold parameters aligned with staff-to-patient ratios and nursing care hours for supervisors/managers and executive leadership to ensure daily staffing minimums have been met. Each DSH hospital Central Staffing Office (CSO) populates staff assigned and delivered into the Automated Staff Scheduling and Information Support Tool (ASSIST). The report summarizes staffing by day, shift, and unit, generates alerts when minimum requirements are not met, and allows users to drill down to review individual staff hours and verify data accuracy.
