Report 2011-113 Recommendation 15 Responses

Report 2011-113: Salinas Valley Memorial Healthcare System: Increased Transparency and Stronger Controls Are Necessary as It Focuses on Improving Its Financial Situation (Release Date: March 2012)

Recommendation #15 To: Salinas Valley Memorial Healthcare System

To increase the transparency of its processes for awarding contracts that are not required by law to be selected using a competitive process, the Health Care System should require its employees to fully document the steps they take in selecting contractors and to describe how the selections result in the best value to the Health Care System.

1-Year Agency Response

The Health Care System developed a procurement manual that includes guidance and requirements for its employees to follow when making all organizational procurements, including contracts not required by law to be selected following a competitive process. The procurement manual requires that for these types of contracts that Health Care System employees follow a due diligence process that includes documenting how they chose the contractors and based their decisions on a best value standard.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

The board adopted a revised procurement management policy in June 2012 that directed the Health Care System's executive leadership group to adopt a procurement manual that incorporates, clarifies, and coordinates all Health Care System procurement policies. The Health Care System is in the process of drafting a procurement manual that will include guidance and requirements for Health Care System employees to follow when making all organizational procurements. The guidance and requirements in the procurement manual will address the steps Health Care System staff should follow to document and describe how their selections of contractors result in the best value. The procurement manual is currently being completed and reviewed by legal counsel, with anticipated completion by the end of 2012. According to the revenue integrity and compliance director, the Health Care System started providing training at the department director level on the new procurement policies and procedures since May 2012. (See 2013-406, p. 86)

California State Auditor's Assessment of 6-Month Status: Partially Implemented

All Recommendations in 2011-113

Agency responses received after June 2013 are posted verbatim.