2024-116 Office of AIDS

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.

Recommendation to California Department of Public Health

Recommendation 1

To ensure that the OA considers implementing feedback from the compliance unit, Public Health should create an oversight mechanism by December 2025 for the compliance unit to communicate with the OA about any issues that it identifies related to the OA’s contract management, for the OA to consider whether it should act on the compliance unit’s feedback, and for the OA to address that feedback in a timely manner.

Recommendations to Office of AIDS

Recommendation 2

To reduce the likelihood that the OA experiences further fraud and to ensure that it pays contractors only for appropriate and supported subcontractor expenses, the OA should establish a policy by December 2025 to require that contractors submit documentation that verifies the cost of the work performed by their subcontractors. OA staff should review this documentation as necessary to determine whether the subcontractor activities indicated in the OA’s contractors’ invoices occurred as described in the invoice.

Recommendation 3

To ensure that its contractors are efficiently using their allocations, the OA should establish guidance for its programs by December 2025 that requires them to develop procedures for evaluating their contractors’ use of funds and to document their conclusions about whether those funds are being used efficiently. The OA should require its programs to establish their procedures by March 2026.

Recommendation 4

To ensure that its staff follow its contract management policies and procedures, by December 2025 the OA should implement management spot checks of program staff performance of contract management duties and require its managers to document the checks.

Recommendation 5

To ensure that its contract award reviewers make informed decisions, the OA should establish a policy to maintain its recently created list of its terminated contracts that requires the list to include at least the following details:

• The name of the contractor
• The contract number of the previously terminated contract
• A clear description of the underlying reason why the contract was terminated

Recommendation 6

To ensure the effectiveness and accountability of its programs, when creating or implementing new programs like the Housing Project, the OA should establish a policy by March 2026 that requires program staff to complete the following activities at least one month before the contract start date of a new program:

• Implement a structured process to regularly monitor program data and assess whether the program is meeting its goals. This process should include establishing and reassessing performance benchmarks, conducting periodic reviews, and implementing corrective action plans to address deficiencies.
• Establish policies and procedures that require its staff to ensure that data collected are accurate, complete, and sufficient for the OA to assess the program’s performance.
• Implement eligibility controls that ensure that only eligible beneficiaries participate in its programs. These controls should include eligibility verification procedures, documentation requirements, and oversight processes for individuals responsible for evaluating eligibility to follow established procedures and requirements.

Recommendation 7

To ensure that counties spent Housing Project funds appropriately, the compliance unit should complete an audit of the Housing Project by March 2026, with a specific focus on verifying whether program funds were spent on eligible clients and for allowable purposes. If the compliance unit identifies instances where counties spent program funds inappropriately, it should recommend that the OA initiate efforts to recover those funds from the counties.