Report 2010-108 Recommendation 5 Responses

Report 2010-108: Department of Public Health: It Reported Inaccurate Financial Information and Can Likely Increase Revenues for the State and Federal Health Facilities Citation Penalties Accounts (Release Date: June 2010)

Recommendation #5 To: Public Health, Department of

To increase revenue for the state account, Public Health should seek legislation authorizing it to require facilities that want to contest the monetary penalty to pay the penalty upon its appeal which could then be deposited into an account within the special deposit fund. The original monetary penalty deposited, plus interest accrued in the account, should then be liquidated in accordance with the terms of the decision.

Agency Response*

California Department of Public Health (CDPH) will not implement this recommendation. As noted previously, CDPH estimates requiring facilities to pre-pay penalties and placing the penalties in an interest bearing account would cost CDPH approximately $65,000 a year to collect and account for these funds until the appeals were exhausted and liquidate them at that time. To cover these administrative costs, CDPH would need to impose a non-refundable administrative fee upon filing of an appeal or increase licensing fees. As shown in Attachment A, State Citation Detailed Report, 3rd Quarter of Fiscal Year 16-17, as of March 31, 2017, CDPH had 409 citations pending appeal with a value of approximately $2.7 million.

  • Response Type†: Annual Follow Up
  • Response Date: May 2017

California State Auditor's Assessment of Status: Will Not Implement


Agency Response*

California Department of Public Health (CDPH) will not implement this recommendation. As noted previously, CDPH estimates requiring facilities to pre-pay penalties and placing the penalties in an interest bearing account would cost CDPH approximately $65,000 a year to collect and account for these funds until the appeals were exhausted and liquidate them at that time. To cover these administrative costs, CDPH would need to impose a non-refundable administrative fee upon filing of an appeal or increase licensing fees. As shown in Attachment B, State Citation Detailed Report, 3rd Quarter of Fiscal Year 15-16, as of March 31, 2016, CDPH had only 266 citations pending appeal with a value of approximately $3.1 million.

  • Response Type†: Annual Follow Up
  • Response Date: June 2016

California State Auditor's Assessment of Status: Will Not Implement


Agency Response*

In January 2011, CDPH met with stakeholders to solicit their input on the BSA report. In March 2011, CDPH released those recommendations, as required, via its report to the Legislature. Requiring facilities to pre-pay penalties and placing the penalties in an interest bearing account would cost CDPH approximately $65,000 a year to collect and account for these funds until the appeals were exhausted and liquidate them at that time. To cover these administrative costs, CDPH would need to impose a non-refundable administrative fee upon filing of an appeal or increase licensing fees. Currently, in lieu of contesting a penalty, facilities may pay 65 percent of the penalty within 15 business days of the issuance of the citation. Full payment is due within 30 calendar days of issuance. For these reasons, CDPH will not change the penalty collection process.

  • Response Type†: Annual Follow Up
  • Response Date: October 2015

California State Auditor's Assessment of Status: Will Not Implement


Agency Response*

In January 2011, CDPH met with stakeholders to solicit their input on the BSA report. In March 2011, CDPH released those recommendations, as required, via its report to the Legislature. Requiring facilities to pre-pay penalties and placing the penalties in an interest bearing account would cost CDPH approximately $65,000 a year to collect and account for these funds until the appeals were exhausted and liquidate them at that time. To cover these administrative costs, CDPH would need to impose a non-refundable administrative fee upon filing of an appeal or increase licensing fees. Currently, in lieu of contesting a penalty, facilities may pay 65 percent of the penalty within 15 business days of the issuance of the citation. Full payment is due within 30 calendar days of issuance. For these reasons, CDPH will not change the penalty collection process.

  • Response Type†: Annual Follow Up
  • Response Date: October 2013

California State Auditor's Assessment of Status: Will Not Implement


Agency Response*

In January 2011, CDPH met with stakeholders to solicit their input on the BSA report. In March 2011, CDPH released those recommendations, as required, via its report to the Legislature. As a result of the input from those meetings, CDPH does not support the BSA audit recommendation to seek legislation authorizing it to require facilities that want to contest the monetary penalty to pay the penalty upon its appeal, which could then be deposited into an account within the special deposit fund. Changing the collection process to require facilities to pre pay penalties, and placing the penalties in an interest bearing account, would result in a cost to the Department of approximately $65,000 a year. The penalty amount would not be available for use until the appeals were exhausted; therefore, CDPH would need to ensure the proper accounting of funds received, disbursed, and tracked. The administrative cost would need to be paid either by the imposition of a non refundable administrative fee upon filing of an appeal or by an increase in licensing fees. Currently, in lieu of contesting a penalty, facilities may pay 65 percent of the penalty within 15 business days of the issuance of the citation. Full payment is due within 30 calendar days of issuance. CDPH recommends that the penalty collection process remain unchanged and that the time for transmittal of penalties to CDPH be increased from 15 days to 30 days after issuance of the citation. This recommendation offers facilities more flexibility in ensuring they have monies to meet their operational obligations.

  • Response Type†: Annual Follow Up
  • Response Date: September 2012

California State Auditor's Assessment of Status: Will Not Implement


All Recommendations in 2010-108

†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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