Report 2010-101 Recommendation 4 Responses

Report 2010-101: Department of Resources Recycling and Recovery: Deficiencies in Forecasting and Ineffective Management Have Hindered the Beverage Container Recycling Program (Release Date: June 2010)

Recommendation #4 To: Resources Recycling and Recovery, Department of

The department should weave benchmarks, coupled with metrics to measure the quality of its activities, into the strategic plan for the beverage program to allow it to better measure progress in meeting goals.

Agency Response*

CalRecycle remains committed to carrying out the Act and implementing Program Reform Phase 1 but expects significant program changes due in part to ongoing reform discussions. The estimated completion date is December 2017.

Due to fraud prevention measures begun in November 2013, the department observed decreases in recycling volumes, reduced refund value expenditure, and a lowering of the structural deficit.

BCPs approved for FY 15/16 provided additional resources for processor oversight, the imported material reporting program, and handling fee audits. The department is currently analyzing the impact of these measures.

CalRecycle has contracted with the University of California, Berkeley, to analyze current program costs and subsidies of consumer redemption and to make recommendations on the effectiveness of convenient recycling opportunities.

CalRecycle staff continues to refine its forecasting, including: making projections using monthly data instead of quarterly data, incorporating additional years of historical data, and using a regression framework to build and compare projections based on multiple factors.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: December 2017
  • Response Date: October 2016

California State Auditor's Assessment of Status: Not Fully Implemented


Agency Response*

Based upon the results of program stakeholder workshops in the fall of 2012, CalRecycle received approval in the FY 13/14 state budget for our proposal to implement Program Reform Phase I. Program Reform Phase I implementation, which began in November 2013 included elimination of commingled loads (i.e., mix of CRV and non-CRV containers presented by consumers in the same load) at certified recycling centers, implementation of a pre-certification training/exam process, mandatory use of the Division of Recycling Integrated Information System (DORIIS), reductions in the allowable daily load limits and implementation of reporting and inspection requirements for individuals importing empty beverage container into CA.

As a result of Program Reform Phase I implementation and an improving economy, the structural deficit was reduced to $55.8M in FY 13/14 and is projected to be $37.2M for FY 14/15 and $29.9M for FY 15/16. The Division of Recycling began providing Quarterly Program Updates as part of CalRecycle's Monthly Public Meetings. These quarterly updates provide the general public with comprehensive performance metrics for all operational activities conducted by the Division of Recycling. CalRecycle is also making significant qualitative changes to the legislatively mandated Quarterly Report on the Status of the Beverage Container Recycling Fund in an effort to provide more complete, clear and concise information about fund status and projections for future fund balances.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: December 2015
  • Response Date: September 2015

California State Auditor's Assessment of Status: Not Fully Implemented


Agency Response*

Pursuant to Chapter 452 (AB341, Statutes of 2011), CalRecycle is required to provide a report to the Legislature by January 1, 2014, that provides strategies to achieve a 75% waste diversion policy goal that also includes other specified information. This report is forthcoming. In addition, a structural funding deficit of almost $100M in the Beverage Container Recycling Fund requires that CalRecycle work with stakeholders on a sustainable remedy that involves what could be significant program reforms. The implication of both of these efforts to a comprehensive, detailed and relevant strategic plan is significant. CalRecycle anticipates that the stakeholder processes will result in more specific proposals in the 2014 and 2015 fiscal years and will inform a formal strategic planning process that will take final form in 2015.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: 2015
  • Response Date: October 2014

California State Auditor's Assessment of Status: Not Fully Implemented


Agency Response*

The CalRecycle management team engaged stakeholders in examining Chapter 476 (AB341, Statutes of 2011) goals as well as how to begin addressing the structural deficit in the Beverage Container Recycling Program's (BCRP) Special Fund. As a result of these meetings CalRecycle submitted a Finance Letter in spring 2013 which was approved by the Legislature as part of the 2013 Budget Act. The program will incorporate these efforts into a comprehensive and detailed strategic plan that will take final form in 2014.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: 2014
  • Response Date: November 2013

California State Auditor's Assessment of Status: Not Fully Implemented


Agency Response*

The BSA recommendation is that Department of Resources Recycling and Recovery (CalRecycle) integrate benchmarks and metrics designed to measure the quality of the program's activities into the strategic plan to better measure the progress in meeting the program's goals.

CalRecycle is currently engaged in two stakeholder processes that will significantly influence its future operations. Pursuant to Chapter 452 (AB341, Statutes of 2011), CalRecycle is required to provide a report to the Legislature by January 1, 2014, that provides strategies to achieve a 75% waste diversion policy goal that also includes other specified information. In addition, a structural funding deficit of almost $100M in the Beverage Container Recycling Fund requires that CalRecycle work with stakeholders on a sustainable remedy that involves what could be significant program reforms. The implication of both of these efforts to a comprehensive, detailed and relevant strategic plan is significant. CalRecycle anticipates that the stakeholder processes will result in more specific proposals in the 2013 and 2014 fiscal years that will inform a formal strategic planning process that will take final form in 2014.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: 2014
  • Response Date: September 2012

California State Auditor's Assessment of Status: Not Fully Implemented


All Recommendations in 2010-101

†Response Type refers to the interval in which the auditee is providing the State Auditor with their status in implementing recommendations made in an audit report. Auditees must submit a response 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 or subsequent to one year.

*Agency responses received after June 2013 are posted verbatim.


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