Report 2010-121 Recommendation 2 Responses

Report 2010-121: Foster Family Home and Small Family Home Insurance Fund: Expanding Its Coverage Will Increase Costs and the Department of Social Services Needs to Improve Its Management of the Insurance Fund (Release Date: September 2011)

Recommendation #2 To: Social Services, Department of

To ensure that the insurance fund makes the most efficient use of the State's limited resources, Social Services should establish a written policy or procedures to guide staff on the appropriate methodology to use when calculating these anticipated liabilities.

Agency Response*

Fully Implemented/Completion Date: July 1, 2013. The CDSS has fully implemented the recommendations from the audit completed on the FSH Fund. Procedures have been developed that not only detail roles and responsibilities, but also describe the methodologies for determining fund appropriation and reserve. These methodologies analyze claims and expenditures data to calculate the amount needed for the fund to cover its anticipated liabilities. Initial application of the methodologies occurred during the 2013-14 budget cycle and reduced the FSH General Fund appropriation amount to $600,000 (a reduction of $140,000). In addition, the adjustment to the FSH Fund reserve also returned $2,300,000 to the General Fund for FY 2013-14. These methodologies will again be used to reevaluate the fund's needs during the FY 2014-15 budget cycle and annually thereafter.

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

California State Auditor's Assessment of Status: Fully Implemented

Agency Response*

The attached CDSS document outlines procedures and identifies responsibilities for CDSS Administration Division and the Foster Care Audits and Rates Bureau (FCARB) within the Children and Family Services Division. The FCARB will be the Department's liaison to the Department of General Services/Office of Risk and Insurance Management (DGS/ORIM). In that capacity, the FCARB will conduct program and contract management over DGS/ORIM. (See Attachment 1.)

The methodologies for determining both the Foster Family Home and Small Family Home Insurance Fund (FSH) fund annual appropriation and the fund reserve requirements are explained in the CDSS Final Draft Procedures. Future adjustments to the fund's balance and appropriation will be conducted as part of the fall budget process (September 2012- December 2012) in conjunction with the Department of Finance's budget development timelines for release of the proposed FY 2013-14 Governor's Budget on January 10, 2013.

  • Response Type†: Annual Follow Up
  • Estimated Completion Date: May 2013
  • Response Date: November 2012

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

All Recommendations in 2010-121

†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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